The Obama - Clinton Disaster Message Board

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Politics : The Obama - Clinton Disaster

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From: TimF	11/6/2008 4:46:58 PM
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"What can President Obama do to help these home-price middle-class voters? Now I know that he is going to stop the sea levels from rising, but that may be easy compared to the bigger challenge of stopping house prices from falling. Economic markets are governed by natural laws of supply and demand, just as the sea levels are governed by natural laws. And it seems like there aren't too many very good options available here. Either can allow markets to continue to readjust and allow house prices to fall back to their equilibrium level, in which case he risks the wrath middle-class voters in Florida, Nevada, and Virginia. If he tries to maintain home prices at an artificially high level, then of course he simply prolongs the market re-equilibration process. Thee are some very difficult political and economic decisions to make here. I don't have any good advice, but one possibility for Obama would be to just let prices bottom out as quickly as possible, take the lumps that will be coming in the 2010 midterm elections and then try to get the housing market back on track by 2012 (sort of like Reagan did with squeezing out inflation in the 1981-82 period)." volokh.com

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