Has the White House Changed Its Tune on the Nature of the Recession?

A really interesting (in a deeply wonky sort of way) article about how and why shifting conceptual positions regarding the recession is going to actually help people policy-wise. Emphasis is mine

There’s a mini-debate going on over the relationship between the housing crash and weak demand. As Cardiff Garcia of FT Alphaville recently summarized it: “This reminded us of the debate last year about whether the sluggishness in consumer spending was the result of households wanting to deleverage or was caused by the big negative wealth effect caused by the huge crash in home prices.” See this from James Surowiecki on the wealth effect and the Q&A I did with Amir Sufi on deleveraging. Which is the main driver, deleveraging balance sheets or a wealth effect?
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Garcia noted that the Federal Reserve looks like it is considering joining team balance sheet. It discussed three studies at its most recent meeting, all credit and balance sheet related. One of the studies “used data on borrowing, debt repayments, and other credit factors for individual borrowers; this study found that movements in leverage — resulting from voluntary loan repayments and from loan charge-offs — have had a substantial effect on the cash flow of many households over time, and thus presumably on their spending.” I’d really like to see that study!
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When Noam Scheiber wrote about how the administration viewed the economy in late 2010, he explicitly contrasted its wonks’ opinions with that of the balance sheet recession theorist Richard Koo. So is this a revolution within the administration? Is this why it is now pushing for writedowns and refinancing, after having left housing on the side for the past three years? Let’s hope so, since I consider being three years late to the party better than never showing up.
http://www.newdeal20.org/2012/02/24/has-the-white-house-changed-its-tune-on-the-nature-of-the-recession-72830/