Why 2008 Is Looking Like 1992 for Republicans (Update No. 3)

The Wall Street Journal this morning follows up on my post of two weeks ago looking at the way the housing downturn is playing out in key 2008 battleground states. I noted then:

Take Florida, which President Bush won 52 to 47 over John Kerry. In the second quarter, for instance, existing-home sales fell by nearly 30 percent from a year earlier. Building permits are down 60 percent. And guess what? Unemployment is rising, to 4 percent in August from 3.3 percent a year earlier. With housing prices falling and jobless rates rising, the situation looks like a "regional recession," according to JPMorgan Chase.

In its addendum, the Journal notes the following:

Six of the 10 states with the highest foreclosure rates in the country last month are considered by leaders of both parties to be swing states. They include the two biggest prizes of the past two presidential campaigns: Florida, which came in No. 2 on the list, with one foreclosure filing for every 248 households in September; and Ohio, No. 7, with one foreclosure for every 319 households....

Hillary Clinton's campaign sure seems aware of all this. She recently added homeownership to her proposed "basic bargain" with the American people:

Years of progress on this front are threatened by the growing problems in the housing market, and I think we have to address this crisis immediately. If home prices keep falling, many families will soon find themselves with mortgages larger than the value of their homes. At that point, they won't be able to refinance. So we don't have any time to waste.

In addition to a four-part plan to address mortgage industry abuses, Clinton now has a three-part plan to help struggling homeowners, including expanding the ability of Fannie Mae and Freddie Mac to refinance adjustable rate mortgages (the Save Our Homes program) and increasing the size of mortgages Freddie and Fannie can buy (the Realizing the American Dream program). Interestingly, about the only thing Republicans said about the housing implosion at their recent economic debate in Dearborn, Mich., was this brief comment by John McCain: "I do know that this nation has faced some pretty good blows in the last month or so with the credit crunch and the subprime lending."