@John I don’t think Obama did what the public wanted managing the financial crisis. He didn’t think so either. In his own words, he stood athwart the pitchforks. If by democracy you include plutocracy, the monied interests putting pressure on him, explaining to him in pseudotechnical terms what he had to do or else, sure, but i see little exoneration in that. He had the power to make different choices. He seriously considered making different choices. He did what he did.

@John Congress had nothing at all to do with it. This wasn’t ACA.

The choices Obama made surrounding the financial crisis were purely executive. It was purely an executive decision not to take banks into receivership. He had the power. (There was a hooha over maybe not “bank holding companies”, but they had no negotiating power to resist if he played hardball with bank subsidiaries.) 1/

@John Congress, in TARP, had insisted on programs intended to help struggling homeowners. That law was passed, and funded. The Obama administration never spent the money! Instead, they used those programs to, in Geithner’s words, “foam the runway” for the banks. What that meant in practice is they encouraged borrowers to apply, which slowed banks’ recognition of bad loans. 2/

@John But the banks preferred that the principal relief those programs were intended to provide never was provided. They did not want to render malleable mortgage principal, on the theory of “moral hazard”, that would invite borrowers who could pay to seek relief. Ironically, they harmed homeowners by advising them to do just that, to fall into delinquency, jacking up penalties and late fees, to apply for the programs. 3/

@John But Geithner went along with the banks, and the programs basically denied all the relief, just slowed the process. Congress allocated the money, Obama didn’t spend it because “financial stability”, the banks thought it would harm them. Instead homeowners were made often worse off through the Obama Administration’s management of programs designed to help them. Obama *defied* Congress to be bad on this stuff. /fin

@John I think we’re just going to have to disagree about this one. I endured the Obama presidency, particularly his first term, as a painstaking catastrophe, betrayal in drips on the issues I followed most and most cared about.

I think he destroyed the moral fabric of the country. He ran so beautifully, so eloquently, as a change agent, the defended and reinforced and imposed brutal economic arrangements when they were collapsing under their own contradictions. 1/

@John By doing so, in my view, he discredited idealism, the possibility of positive change rather than zero-sum victory of my people over yours. I think that is what gave us Trump, quite directly. If there are going to be winners and losers in a stratified society, what team do I have to join so my kids will be among the winners? Trump’s racism was one answer to that question. 2/

@John Anyway, you’ll probably find it unfair and tiresome, but you can read me longform on this. My whole archive is full of the agony in real time, but a recent take is here. https://drafts.interfluidity.com/2023/11/30/obama-was-the-most-destructive-political-figure-of-my-lifetime/index.html /fin

@BenRossTransit @matthewstoller i don’t think it’s accurate that everywhere the market is competitive for -plexes. technically, it should be. but every jurisdiction has procedural quirks (besides zoning) that serve as barriers to entry. small firms have to be specialists. i’m glad newer DC builders are competing on quality. any new construction restrains price growth, a bit, over time. but are builders competing for share at the expense of price? might they bid down margins? i doubt it.

@BenRossTransit @matthewstoller ( if you are feeling quite masochistic, i’ve recently penned by most exhaustive take on these issues https://drafts.interfluidity.com/2024/06/13/yimboree/index.html )

@BenRossTransit @matthewstoller Sure. We’re painting in broad strokes. But where exurbs are distinct markets, it’s easier, not harder, for homebuilders to exercise market power. In places with a lot of old, underutilized supply, things get complicated, whether an older unit is plausible substitute for a home in the suburbs depends on a lot on things like crime, the state of the home and the state of neighboring homes.

@BenRossTransit @matthewstoller The key point is that it’s hard to find places where new private supply responds to consistent demand to bring down prices. Austin is perhaps an example, at least in its rental market. But developers and home builders are profit-motivated and cautious. They try to exercise pricing power in a forward-looking way, not to meet demand until price falls to marginal cost. Barriers to entry are high enough they usually succeed.

@BenRossTransit @matthewstoller It’s precisely because they’re substitutes that their price is relevant as well. That is, to support high costs, it wouldn’t be enough to for, say, urban apartment supply to be constrained, if imperfect-but-decent substitute single family home supply were price elastic. And vice versa! If urban apartment supply were price elastic, sitting on suburban land would be much less profitable. 1/

@BenRossTransit @matthewstoller I’m not so interested in a pissing match over what the “main” barrier to price elastic supply is. I think the way to think about it is a wide variety of actors, from incumbent homeowners to the most prodigious suppliers of new homes, have a strong interest in preventing price elastic supply of homes, and all dutifully do their part. 2/

@BenRossTransit @matthewstoller I doubt national home builders “coordinate” tacitly or otherwise with “NIMBY” incumbents, urban or suburban. But each party doing the naive thing of resisting pr putting a high price on new supply is a Nash equilibrium — as long as everybody else is doing it, it’s the best thing to do for everyone (except buyers, of course). 3/

@BenRossTransit @matthewstoller It’s an easy equilibrium to find and sustain —each subsector acts like there are no substitutes to worry about, acts like they alone have pricing power, then collectively they do as long as no subsector defects and goes for quantity rather than margin. US housing has fallen into and put a moat around a lucratively sluggish groove. /fin