To what extent do you think government should incentivize behavior?
It depends on the behavior. One, it should ban behavior that’s destructive toward other people. Beyond that, if there are things that people can do that have great benefit beyond themselves and have some cost, I think you should incentivize them to do that. Not compel them, but help them economically to do it. But if it’s behavior that’s seen as self-destructive individually, then I think the government should stay the hell out of it. I don’t think we should ban smoking, drinking, marijuana, gambling, any of those things.
But in terms of homeownership, that was an instance where you had the government incentivizing—
I think that was a mistake. I think decent living conditions is important. But not ownership as opposed to rental.
You’ve been fighting a lonely fight supporting rental housing. Given what’s happened in the last few years, have you seen it become more attractive?
It’s become much more common now.
What is it about home ownership? It seems that people on both sides of the
One, it was seen as a way to get wealth. Of course, it turned out the other way. I think it’s just very American, you know. It’s not big in France. It’s this old frontier kind of individualist, everybody needs a home.
But that’s a pretty powerful strain in American life.
And it led to problems. It’s now, however, done so much harm that it’s receding.
You mentioned earlier that you thought race is our most important problem, but in 2008 you supported Hillary, right?
Was that a difficult decision—
You didn’t see Obama’s candidacy as important in terms of the racial—
Well, first of all, the Clintons were wonderful on the race issue. I guess I would say women are not as important as race. I’m very proud of my record for being very supportive on race; I’m going to get the Hubert Humphrey award this year from the Civil Rights Leadership Conference. It will mean as much to me as anything that’s ever happened.
But I worried about Obama and have been somewhat vindicated by his presidency. I think he underestimated the virulence of the right wing and overestimated his ability to govern in a post-partisan manner. I said that gave me post-partisan depression. But I was never virulently against him, and I was an easy convert to him. I was never a bitter ender.
So partisanship is the problem, but post-partisanship is not the solution?
Partisanship is not the problem; excessive partisanship is. You can’t have a democracy without partisanship.
How do you tamp down the excessive partisanship and just get it back to partisanship?
I can’t do that. Only Republicans can. Well, the electorate can. You defeat the people who caused the excessive partisanship. Namely the tea party and the right wing.
Is that something you foresee happening?
I don’t know. I don’t make predictions.
You do, though. I read a prediction you made not long after Obama was elected about how 2010 would be a good year for the Democrats.
I underestimated the depths of the recession. The mortgage crisis was worsened because critical decisions were made during the transition between Bush and Obama. TARP was basically being administered by Hank Paulson as the last man home in a lame-duck presidency. I tried to get them to use the TARP to put some leverage on the banks to do more about mortgages, and Paulson at first resisted—he just wanted to get the money out. And after he got the first chunk of money out, he said, “All right, I’ll tell you what, I’ll ask for a second chunk, and I’ll use some of that as leverage on mortgages, but I’m not going to do that unless Obama asks for it.” This is now December, so we tried to get the Obama people to ask him, and they wouldn’t do it. During the critical period when the TARP was being administered, there was a vacuum of political leadership. At one point, Obama said, “Well, we only have one president at a time.” I said I was afraid that overstated the number of presidents. We had no president.
Then Obama made the same mistake Clinton made. When you try to extend health care to people who don’t have it, people who have it and are on the whole satisfied with it get nervous.
You think Obama overinterpreted his mandate with health care?
The problem with health care is this: Health care is enormously important to people. When you tell them that you’re going to extend health care to people who don’t now have it, they don’t see how you can do that without hurting them. So I think he underestimated, as did Clinton, the sensitivity of people to what they see as an effort to make them share the health care with poor people.