Clinton Fairy Tales On The Mortgage Crisis

The previous post reports that has found Clinton’s attack on Obama for not having the same plan as her for helping homeowners in danger of foreclosure to be misleading. There’s a good reason that Obama has not proposed the same plan as Clinton’s: It is a terrible plan. Two economists reviewed the plan for The New Republic. They begin:

Senator Hillary Clinton presents herself as a policy expert and declares her readiness to govern from “day one.” But her recent prescriptions for the housing market should cause doubts for thoughtful observers.

They review the plan in detail and find many faults. They note, “Senator Clinton’s proposal might appeal to homeowners with adjustable rate mortgages scheduled for a rate increase. But, as with most offers that look too good to be true, this one comes with many problems.” The article concludes:

Senator Clinton’s policy amounts to a command-and-control approach to economic policy in which the government announces prices and tells suppliers what to produce. Undertaking such an intervention can only raise interest rates on mortgages (and maybe other interest rates as well) as markets attempt to incorporate risk premiums to cope with possible future interventions. Promising the American people that you can fix things by just lowering their interest rates is dishonest, a fairy tale that won’t come true.

Clinton’s tendency to go overboard in using big government solutions even when not appropriate or effective is a commonly seen difference between her and Obama, which I previously reviewed here.

Clinton Campaign Still Using Dishonest Mailers

After Iowa and New Hampshire there was a lot of talk about how Clinton was using dishonest mailers which distort Obama’s positions on Social Security and abortion rights in order to pick up support. Lorna Brett Howard, the former President of Chicago NOW (National Organization of Women), changed her support from Clinton to Obama after she found that Hillary Clinton was lying about Obama’s record on choice. She makes the case for supporting Obama in these videos. Clinton has continued using this type of dishonest tactic.

Yesterday Marc Ambinder posted a copy of a mailer which contains inaccurate information on Obama’s positions. responded this evening finding three areas in which the mailer “twists Obama’s words and gives a false picture of his proposals.” From their summary:

A direct-mail piece sent to voters by the Clinton campaign twists Obama’s words and gives a false picture of his proposals:

It says he “wants to raise Social Security taxes by a trillion dollars,” a big distortion. Obama has said a “good option” would be to apply Social Security payroll taxes to incomes over $97,500 a year, but that would only affect taxes paid by 6.5 percent of individuals and couples. And he hasn’t formally proposed such a move anyway.

The Clinton mailer says Obama has “no plan” for a moratorium on foreclosures such as the one Clinton has proposed. That’s true, but Obama has his own plan for homeowner relief. The mailer leaves the impression that Obama has “no plan” at all, which is false.It says Obama “voted for Dick Cheney’s energy bill that gives huge tax breaks to oil companies,” another distortion. By the time Congress passed the 2005 energy bill, it raised taxes on the oil industry more than it decreased them and also contained billions for alternative fuels research and subsidies for energy-efficient buildings and vehicles.

The remainder of the article provides further details on how these claims distort Obama’s actual positions. On Social Security, Clinton is misleading as to the impact of increasing the cap as Obama has discussed using a “donut hole” so that only those earning over $200,000 or possibly $250,000 would be affected. Clinton has also discussed a similar proposal, but after deciding it would be politically beneficial to attack Obama on this has avoided giving any specific answers as to what she would do with regards to Social Security.

Update: Clinton Fairy Tales On The Mortgage Crisis

The Shape of the Race After Super Tuesday

There is still no exact count of how the Super Tuesday delegates will be divided but the consensus now seems to be that Obama won slightly more delegates than Clinton, with estimates in the neighborhood of a ten delegate advantage for Obama. This would continue the trend from the start of the nomination battle that Obama has beaten or tied Clinton each day they competed for delegates. Previously Obama beat Clinton for delegates in Iowa, Nevada, and South Carolina, and tied in New Hampshire.

Considering the strength of the Clinton political machine and Clinton’s huge leads in the national polls going into these contests, this is an impressive achievement for Obama. The next series of states favors Obama, which should place him in the lead in the delegate count despite Clinton’s current overall lead due to super delegates. Clinton is counting on wins in larger states such as Ohio and Pennsylvania towards the end of the primaries. There are two problems with this strategy. A string of wins for Obama could give him the momentum to win in these states. Even if he should lose, Obama has an excellent chance of keeping Clinton’s margin of victory low enough to prevent her from gaining a significant edge in proportionally allocated delegates. The Politico outlines why Clinton should be worried.

Another problem for Clinton is financial. Obama brought in over twice as much money in donations in January. Clinton’s problem might be that her donors maxed out early. In contrast Obama keeps bringing in new donors, and he has a larger number of contributors who are giving small sums and are free to continue doing so. Obama is projected to raise another $30 million in February. It was revealed today that Clinton has loaned her campaign $5 million. Some of her staff are even working without pay. It was one thing for John Kerry to mortgage his home before the primaries began to become competitive in 2003. To need to use personal money at this stage, while Obama is bringing in record contributions, looks like a sign of weakness. Highlighting the fortunes made by the Clintons after Bill left the White House might also be damaging as they court downscale voters in a manner similar to the stories about John Edwards’ mansion and $400 haircuts.

The Clinton campaign also has a habit of miscalculations in trying to win the spin war. Today they made themselves look foolish by trying to portray Obama as the “establishment candidate.”

Despite Obama’s high profile endorsements, Obama fits the usual pattern of an insurgent candidate taking on the establishment candidate–who is clearly Hillary Clinton. She tried to run as virtually an incumbent, with her campaign being based upon displaying an aura of inevitability. Obama breaks from the pattern of insurgent candidates only in that he has the chance to be successful. In a typical election year, the insurgent candidate would have fallen seriously behind the establishment candidate after an event such as Super Tuesday. Instead Obama has shown that he would make a better president than Clinton and has managed to beat her for both delegates and contributions.

Between the number of super delegates, and the disqualification of the Michigan and Florida delegates, it is looking questionable as to whether either candidate will go into the convention with enough delegates to win. Howard Dean has expressed hope that the candidates will “make some kind of an arrangement” if neither has enough delegates to win the nomination. It is difficult to see what type of agreement could be reached. Should neither candidate pick up enough delegates to win we might see a bitter floor fight over the fate of the Michigan and Florida delegates. The nomination might also be decided by the super delegates.

Should Obama continue to win the majority of delegates in primaries and caucuses and should the super delegates in the party establishment give Clinton the nomination there are two words for this outcome: “President McCain.” It is hard to see the young voters, independent voters, or black voters who have supported Obama turn out to support Clinton should the party establishment hand the nomination to Clinton. Clinton did receive the support of those super delegates who committed to a candidate early, but the bulk of them remain uncommitted. There is an excellent chance that those who did not commit to Clinton early had reservations about her, or would be willing to consider the advantages to the party in giving the nomination to the candidate who has won more delegates due to support in both the blue states and in the red states.

Obama Well on Track

With California still outstanding. the night is going very well for Obama. He’s not doing as well as in the exit polls I mentioned earlier, with considerable skepticism, and therefore the race will go on. At the moment he is in a better position than Clinton. Here’s how the states are projected so far:

  • Clinton: Arkansas, Oklahoma, Tennessee, New York, Massachusetts, New Jersey, Arizona
  • Obama: Delaware, Georgia, Illinois, Alabama, North Dakota, Utah, Kansas, Connecticut, Minnesota, Idaho, Colorado

Obama is winning more states and, more importantly, might wind up with more delegates. Clinton won some of the larger states but Obama kept it close enough to still receive a good share of the delegates. Chuck Todd was on MSNBC estimating that Obama was ahead in the delegate count so far. Obama’s campaign estimates a lead of 606 to 534 in the delegate count, with The Politico noting that they earned credibility by getting the delegate prediction right after the Nevada caucus. This could still even out by the end of the night but regardless of who wins the most delegates, Obama will either lead or at worst be close behind Clinton.

Remaining close to Clinton might be all Obama needs to eventually win the nomination. The schedule now favors Obama, who has an excellent chance of winning the next few primaries and increasing his momentum. Even in the states which are still toss ups, Obama benefits from a calendar in which there are only a couple of states voting a week. One trend we have seen is that the more the voters see Obama the more likely they are to vote for him, while the opposite is often true with Clinton. It also helps Obama that he raised almost three times as much money as Clinton in January.

Obama is winning a combination of blue and red states. While he couldn’t get the hoped for upset in states such as New Jersey he is still performing reasonably in the large blue states and will prevent Clinton from taking a meaningful lead in delegates in the states she has won. Obama has won more red states than Clinton, some by large margins, and overall looks like he is picking up significantly more votes than Clinton in the red states. People who vote for a candidate in the primaries will come out to voe for them in the general election, and Obama is showing he can compete in the red states while Clinton cannot. Hopefully factors such as that will influence many of the super delegates, who might make the final decision if the race remains close.

Update: Add California to Clinton’s list. Obama picks up Alaska by a large margin and narrowly wins the bellwether state of Missouri. New Mexico is not yet accounted for. It looks like Obama will come out with a narrow lead in delegates from Super Tuesday after California is factored in. The conventional wisdom was that Obama would have the edge in the nomination battle if he kept Clinton from picking up less than one hundred more delegates than him. It looks like Obama is going to do much better than that. Obama has the edge going into the second half of the battle, but his recent momentum left him short of what he needed to definitely stop Clinton.