The Republican presidential primary entered a new and brutal phase when it rolled into Florida yesterday, with Mitt Romney going sharply negative on the suddenly re-resurgent Newt Gingrich. Romney is trying hard to link Gingrich to Florida’s depressed housing market via Freddie Mac, the bailed-out mortgage company that paid Gingrich $1.7 million to act as its historian and not-lobbyist. It’s a strategy that’s ripe with danger for both candidates, thanks to Florida’s seriously upside-down housing market.
Freddie is already a curse word in GOP circles. But it’s especially toxic in Florida, one of the country’s foreclosure capitals. Romney’s speechwriters know Florida is a place where you can count on a crowd to boo and hiss just by mentioning Freddie.
Here’s how damaged the state’s housing market is. One in ten Freddie Mac-backed loans in Florida are on the road to foreclosure — more than three times the national average. Freddie, which was nationalized in 2008, is sitting on $689 million worth of foreclosed homes in the state. Over the past year, it seized $1.4 billion worth of Florida homes. According to Fannie Mae, home prices in Florida have fallen by 50 percent since the housing bubble peaked; nationwide, they’re only down 21 percent. More than half Florida’s mortgaged homes are worth less than they’re mortgaged for, with a large portion upside-down by at least 125 percent. Home equity used to be a way of papering over stagnant incomes; now, it’s a growing cause of inequality and economic suffering.
Romney is counting on this bleak scene to swallow up Gingrich. Yesterday, he traded teary stories with a group of struggling homeowners, and then accused Gingrich of growing rich on these folks’ misery: “Struggling here. Shouldn’t be. You got the best weather around. Good people, good views.”
Still, it’s far from clear that upside-down homeowners will break for Romney just because he never cashed a check from Freddie Mac. Last fall, Romney was barnstorming through Nevada, criticizing Obama administration initiatives to modify housing bubble-era mortgages. “Don’t try to stop the foreclosure process,” Romney countered. “Get the foreclosures washed through the system,” Romney told the Las Vegas Sun. “Let the market rebound from the bottom that it hits, and get people back into homes.” In a scathing editorial, the paper said Romney was prescribing “even more foreclosures.”
By talking up foreclosures, Romney is inviting the press to drag up those old quotes, which may not play any better in Florida than they did in Nevada. So far, the press is obliging Romney’s invitation. And that’s causing Romney to rethink his stated policy of rushing toward the market’s bottom. He’s already, er, recalibrating his stance on foreclosures, talking in softer tones and making empathetic statements like, “People in Florida have seen home values go down. It’s time to turn that around.”
–PAUL MCMORROW
BEACON HILL
Gov. Deval Patrick gives his sixth state-of-the-state address, focusing on community colleges, health care, and public safety changes, NECN reports. His proposal to consolidate budgeting and oversight of the state’s 15 community colleges was the biggest initiative put forth in the speech. The state GOP says scandals surrounding Lt. Gov. Tim Murray and lawmakers tied to the Probation probe overshadowed the speech. The Globe, in an editorial, chides Patrick for not mention the crisis at the T.
Murray asked state officials yesterday to investigate allegations raised in a Sunday Boston Globe article that former Chelsea housing authority chief Michael McLaughlin may have illegally raised money for his campaign account.
The Plainridge Racecourse will open a campaign office as it ramps up its bid for a slots license.
MUNICIPAL MATTERS
The Eagle-Tribune, in an editorial, slams Lawrence Mayor William Lantigua for allowing a police officer to remain on the force after being convicted of a domestic assault charge and barred from carrying a gun. The paper says the officer hasn’t worked in 18 months while collected $96,000 in pay.
Voting matters: The Republican points to a one-vote margin in the battle over a library project in the town of Shutesbury in Franklin County.
Berkshire County faces budget cuts after revenues fail to match projections.
Authorities caution the public about the dangers of thin ice after two separate accidents last weekend, one of them involving a fatality.
An Illinois-based company is accused of sending Brockton residents bills for advertising in nonexistent school sports calendars, the Enterprise reports.
Two successful challengers in the Fall River City Council elections were among the top three biggest spenders in the race, the Herald News reports.
NATIONAL POLITICS/WASHINGTON
Bruins goalie Tim Thomas comes in for criticism for skipping out on the championship team’s visit yesterday to the White House. Thomas, a Glenn Beck fan, released a statement saying, “I believe the Federal government has grown out of control, threatening the Rights, Liberties and Property of the People.”
ELECTION 2012
US Sen. Scott Brown and Democratic challenger Elizabeth Warren sign a pledge to curb political attack ads by outside groups, the Worcester Telegram reports. Jon Keller doesn’t get it. Meanwhile, Congressman McGovern is endorsing Elizabeth Warren.
Bill Hudak withdraws from the race for the Sixth Congressional District seat, leaving Richard Tisei as the only Republican challenging incumbent John Tierney, the Eagle Tribune reports. Mike Ross won’t challenge Joe Kennedy III for Barney Frank’s old seat.
Mitt Romney’s tax returns indicate he is a member of the 1 percent and also holds investments in Fannie Mae and Freddie Mac, the Lowell Sun reports (via AP). The Washington Post notes none of Romney’s nearly $21 million in income came from wages. All of it came from dividends and interest on investments. Romney paid taxes at a rate of 13.9 percent in 2010 and will pay about 15.4 of his 2011 income in taxes, rates far below those paid by average Americans on wage income, the Globe reports. In advance of likely spin that Romney really pays a lot of taxes, Paul Krugman asks, “How stupid do they think we are?” He pauses, then adds, “Actually, don’t answer that.” Ed Mason recalls that a tax return fiasco almost sank Romney during his 2002 gubernatorial run, and wonders why Romney didn’t learn from the episode.
Mitt invests in a new debate coach.
Where some see a State of the Union address, others see an opportunity for President Obama to set the stage for the 2012 election fight.
The Adelsons pump another $5 million into Newt Gingrich’s super PAC. Related: “The GOP deserves to lose; that’s what happens when you run with losers.” This is not a headline from the Daily Kos, but rather, the Wall Street Journal op-ed page.
BUSINESS/ECONOMY
A123 Systems of Waltham, subsidized by the state of Massachusetts and the federal government, reports sales for 2011 won’t be as high as previously expected, the Lowell Sun reports.
Last year was the worst year for single-family home sales in Massachusetts since 1990.
EDUCATION
School committee members in Lynn say they fear a push to hire a Springfield company to audit the system’s special education department will lead to privatization, but the superintendent tells the Lynn Item that the firm is being hired to only do an audit.
Political consultant Michael Goldman, writing in the Lowell Sun, says he opposes MCAS but acknowledges it’s not going away. He says MCAS should find time for civics and gym classes.
Stanford takes online schooling to the next academic level.
ARTS
Boston’s Institute of Contemporary Art will announce today that is half-way toward an ambitious fundraising goal of $50 million, the Globe reports.
HEALTH CARE
South Shore Hospital is set to receive a record-breaking $5 million donation from a foundation run by a local CEO.
TRANSPORTATION
Thefts on the T rose 26 percent last year, with bikes and smartphones the top targets.
ENERGY/ENVIRONMENT
Plentiful natural gas is making winter heating bills more manageable. NStar seeks a 16 percent drop in rates, the Herald reports.
Maryland Gov. Martin O’Malley is preparing to reintroduce plans to subsidize the development of offshore wind power, Governing reports.
MEDIA
The Globe’s Sean Murphy joins Jim Braude to discuss Lt. Gov. Tim Murray’s expanding troubles.