Julián Castro
Elizabeth Warren
With Hillary Clinton having nailed down the Democratic nomination for November’s election, speculation is running rampant about who she will pick to be her running mate.
Will Clinton’s selection for vice president have implications for the housing market, should Clinton win the presidency? It is highly likely, considering who the two frontrunners are.
The name of Sen. Elizabeth Warren (D-Massachusetts), a champion of Wall Street reform and chief architect of the always controversial Consumer Financial Protection Bureau (CFPB), has been floated recently as a possible running mate for Clinton. Reuters reported earlier in June [1] that Warren is “intrigued” with the possibility of being Clinton’s vice president but the two have not discussed it yet. The two have been in touch throughout Clinton’s campaign.
One of Clinton’s possible concerns about choosing Warren is whether or not two women could defeat Republican candidate Donald Trump. But another major concern for Clinton would be losing her Wall Street donors if she puts Warren, widely thought of as an enemy to Wall Street, on her ticket.
“It's curious to figure out what fight (Clinton) is trying to win,” said Tim Rood, Chairman of business advisory firm The Collingwood Group. “She could win the battle and lose the war, meaning she could win the adoration of her party and further unify them by going to the left and picking up Sanders' supporters. That doesn't do her a darn thing in a national election, quite frankly. It hinders her chances. The Republicans see Elizabeth Warren as the angel of darkness. There's no way that they're going to get beyond the issue with Hillary's donors. There's no way that she's going to get anything done in the first 100 days with a Republican-controlled Congress if Warren is on the other side of that ticket.”
And what would a Clinton-Warren ticket mean for the housing industry? Clinton has announced a plan, the aim of which is to provide a fair shot at homeownership for everyone [2]. But with Warren on the ticket, would everyone get that shot?
“You already have the cost to originate a loan about two and a half times than it's ever been, historically, and a lot of that can be attributed to new rules and regulations of the administration,” Rood said. “That ultimately manifests itself in higher prices and worse terms for borrowers, and I don't see that being rolled back in any way, shape, or form. So at a minimum, it's status quo. Worst case, with Warren on the ticket, you could see another leg up in some sort of enforcement actions in regulations, which ultimately puts downward pressure on the housing market.”
“It's curious to figure out what fight (Clinton) is trying to win.”
Tim Rood, Chairman, The Collingwood Group
Elsewhere, HUD Secretary Julián Castro has publicly endorsed Clinton for president and his name has been rumored for months to be Clinton’s top choice for VP. Castro has consistently deflected questions about whether or not he will be Clinton’s running mate, and he even told DS News in February that he fully expects to be back in Texas next year.
Over the weekend, Castro was the keynote speaker for the Texas Democratic Convention in his hometown of San Antonio. Castro told the audience that he was not being vetted for VP by Clinton’s campaign.
“I am not being vetted right now,” Castro said, according to Texas Public Radio [3]. “That is Senator Clinton's choice and she's run a fantastic campaign. I'm very confident she will make a prudent and great selection for vice president.”
Castro seemed to choose his words carefully, however. On the surface, it may appear that he is no longer being considered for VP by Clinton. Is that what he meant, or did he mean that the vetting is finished and Clinton has chosen him but has just not announced it yet?
“I have not heard that he is no longer in the running,” Rood said. “I suspect that they're just keeping him on ice until they need to do something. But there's no value in them saying that he's got the position or doesn't have the position. I suspect they're just being sufficiently ambiguous. It doesn't serve them to make an announcement one way or the other at this time.”