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Clinton: Get Greenspan Working on this Mess, Stat

We’re not kidding, either — in remarks to be delivered today in Philadelphia, Democratic presidential hopeful Hillary Rodham Clinton (D-NY) called on President Bush to create a so-called “emergency working group on foreclosures,” as part of Capitol Hill’s latest ploy to do something about the U.S. housing crisis. From the Associated Press:

The New York senator said the panel should be led by financial experts such as Robert Rubin, who was treasury secretary in her husband’s administration, and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.

Clinton is set to back two seperate proposals that have been floating around the Hill: one, a proposal to establish a federally-backed agency that will buy up distressed debt, as proposed by Senate Banking Committee Chairman Chris Dodd (D-Conn.); another, a a tort reform proposal by Congressmen Michael N. Castle (R-DE) and Paul E. Kanjorski (D-PA) that wants to shield servicers from any legal liability that might arise in modifying loan agreements. Both proposals have been covered extensively by HW in the past. The inclusion of Greenspan in Clinton’s latest proposal — she has also recently railed for a nationwide foreclosure moratorium — would seem sure to ruffle some feathers. Plenty of economic experts see Greenspan as the one to blame for the recent housing woes now facing the U.S. economy. MSN Money columnist Bill Fleckenstein has written a book about the notorious “Greenspan put,” which advocates argue created the massive housing bubble in the United States. In his book, Greenspan’s Bubbles, Fleckenstein argues that the former Fed chief wasn’t the only reason that both the tech and housing bubbles existed, but that “without his sponsorship it could never have grown anywhere near as large or dangerous as it did.” I’ll bet more than a few people would cringe at the thought of having Greenspan on a presidential committee designed to solve the foreclosure problem, as a result.

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