by Tula Connell, Dec 4, 2007

Today’s Wall Street Journal provides more vindication for progressive economists who have been warning us over these past months about the faltering state of our nation’s economy. Seems a new Wall Street Journal/NBC News poll finds voters more worried about the economy and health care than terrorism.

Fifty-two percent of Americans say the economy and health care are most important to them in choosing a president, compared with 34% who cite terrorism and social and moral issues, according to the latest Wall Street Journal/NBC News poll. That is the reverse of the percentages recorded just before the 2004 election. The poll also shows that voters see health care eclipsing the Iraq war for the first time as the issue most urgently requiring a new approach.

The Journal precedes this new polling data with a profile of a Republican lawyer so worried about the economy, he’s voting Democratic in 2008.

Bolstering the poll is a Wall Street Journal investigation published yesterday that finds far more home owners affected by the nation’s subprime debacle are in the middle- or upper-income brackets.

The surprisingly high number of subprime loans among more credit-worthy borrowers shows how far such mortgages have spread into the economy—including middle-class and wealthy communities where they once were scarce.

Suddenly, it’s not just the fault of foolish low-income home owners for taking out loans they ultimately can’t afford. If the upper income are involved, it must be more than home owner negligence.

The analysis also raises pointed questions about the practices of major mortgage lenders. Many borrowers whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals—and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms

Funny. In much of the media coverage over the past few months describing the deleterious effects of the subprime crisis on lower-income Americans, many of those interviewed said the same thing: Lenders and brokers aggressively, and sometimes duplicitously, marketed them loans. They could do so unhindered by regulatory laws or federal oversight. But rather than supporting their statements, the media often followed up with moralistic tsk-tsking about how low-income people taking a risk should have known better. Not so now.

As Princeton economist Paul Krugman notes, mainstream policymakers ignored the warning signs along the way to the subprime chaos. But at least now we can all rest assured. With the Bush administration-driven economic morass seeping into the handsomely groomed homes of the nation’s well-to-do, policymakers and the media will start to take seriously our economic woes.

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