The Crisis on Wall Street -- and Main Street
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The housing bubble is at the root of our financial disaster, which our government has intensified by creating panic through rescuing some financial institutions but not communicating whom it will next support or how.
The short-term anxiety will subside if the market sees a robust plan to stabilize the long-term problem: How do we put a floor under the housing market? The solution is ensuring that subprime mortgages perform and buyers have access to new mortgages.
We must provide low, below-market, fixed-rate loans at around 4 percent either directly to home buyers or through mortgage lenders. The terms should include no second mortgages or home equity lines of credit and allow for a staggered conversion to market-rate interest at some point.
We need swift implementation and, if need be, expansion of the housing rescue bill. Now that we own Fannie Mae and Freddie Mac and most of AIG, we've got to use our market power to covert high-interest, variable-rate loans to low, fixed-rate loans as soon as possible.
We could have put the brakes on this train wreck, but there was no political will from Main Street to rein in the good times. Let's get behind a plan to clean up this mess, learn from our mistakes and make sure that the good sense of Main Street forever controls Wall Street and Pennsylvania Avenue.
BILL McCARTY
Bristow
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