We got a housing bubble strategy

Addressing local Rotary clubs today at a Holiday Inn in Fredericksburg, Va., President Bush said "the housing issue has changed" but "I just want to let you know we got a strategy."

As Wall Street investors today expressed their skepticism with the Federal Reserve's response to the credit crunch with another sell off of U.S. stocks, the president summed the whole mess up in terms we can all understand.

"We've been building a lot of homes, and all of a sudden fewer buyers are showing up. And it's going to take a while to work through the housing bubble," he said -- perhaps unwittingly giving bubble blogs everywhere the presidential seal of approval (remember when the term "housing bubble" was fightin' words?).

So what's the strategy -- pop the bubble? Some critics say the administration's approach to the housing downturn -- help some delinquent borrowers refinance out of ARM loans and into FHA backed, fixed-rate mortgages, while encouraging lenders to rewrite the terms of up to 1.2 million other loans -- is too hands off. Credit markets have broken down, making it too hard for prospective homebuyers and even corporations to get loans, they say, and we may headed for a recession.

The president's attempt to explain all the changes that have taken place in lending since he bought his first house in Midland, Texas, probably didn't do much to restore faith in the credit markets, either. Whoever put together the official White House transcript felt obligated to insert no less than three "sics" where the president had some language usage issues.

"I remember going down to the savings and loan and sitting down with the savings and loan officer and negotiating with the savings and loan officer. Well, this day and age you're going to use -- mortgages have been bundled, so the savings and loan doesn't own the mortgage anymore, or the bank doesn't loan [sic] the mortgage anymore, the local lending institute doesn't loan [sic] the mortgage anymore: it's owned by some international group, perhaps, or it's been bundled into an asset. And so there's hardly anybody to negotiate with. And so some lenders [sic] aren't sure where to turn. They have credit-worthiness, they may get pinched as their interest rates reset."

Could it be the president is just trying to make it easier for Jay Leno and Conan O'Brien when they go back to work without their writers? This might be an area -- presidents helping comedians develop jokes about the economy's dismal prospects -- originally pioneered by Jimmy Carter. Or was it FDR? Carter's undoubtedly been trying to get through to the White House to remind W. about that nasty bug that was going around in the '70s, stagflation.

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