The three debates between President Obama and former Massachusetts Gov. Mitt Romney, now in the history books, weren't without excitement. In fact, if Romney wins most pundits will probably credit the televised face-offs with changing the course of the election.
In a campaign season often lacking in specifics, the two candidates have even managed to cover a lot of ground. If you're an autoworker, Medicare recipient or small business owner, you've heard your concerns addressed head on. (Even if you didn't necessarily like the answers.) But there were a number of pocket-book issues the candidates never gave much airtime to. In the two weeks remaining before the election, here are three Main Street financial topics SmartMoney would still like to see the candidates take on:
You would think that the housing crisis, the principal cause of the economic downturn, would be one of the central topics of debate. But to a large extent, the candidates sidestepped real estate. "It turns out to be a lose-lose issue for both candidates and therefore gets ignored," says John Vogel, adjunct professor of real estate at Dartmouth's Tuck School of Business.
In the first debate, Obama said that housing has begun to rise and Romney didn't contest the statement. But while prices and sales are picking up in many areas, roughly 22% of homes with a mortgage on them--or nearly 11 million properties--are underwater, meaning the homeowner owes more on the property than it's worth, according to the latest data by CoreLogic. Another 2.3 million homeowners have less than 5% equity in their home, meaning that if home values drop in their neighborhood by even a little, they could fall underwater as well. And nearly 950,000 homes are in the beginning of the foreclosure process, according to RealtyTrac.com.
The president during the first debate talked about risky lending practices of the past as evidence of why regulation is needed. Romney agreed on the need for mortgage regulation, but little else was discussed.
Here's what we do know: To date, the president has pushed for refinancing programs that help struggling homeowners get into more affordable home loans and mortgage modification programs for homeowners to hold onto their houses. The president's campaign says he wants to expand refinancing efforts so that "no responsible borrower is locked out of today's low interest rates." The president also wants to roll out more protections for borrowers, the campaign says, including a clear mortgage disclosure form that the Consumer Financial Protection Bureau is developing. Romney's campaign site mentions several ways he plans to end the housing crisis, but few specifics, including new regulations to hold banks more accountable and to boost lending to borrowers in good credit standing, as well as reforms to the quasi-government agencies Fannie Mae and Freddie Mac.
The Romney campaign did not respond to a request for comment.
What's at stake: If new policies aren't implemented but a low rate environment continues, it could take as long as three to five years for a full housing recovery to occur, says Vogel. But in the meanwhile, millions of struggling homeowners hang in the balance as they wait to see if new programs will be rolled out to help them any sooner.
Investors fled the market during the financial crisis and haven't returned. Even as stocks rocket ahead, they're still yanking money out of stock mutual funds -- nearly $60 billion so far this year -- a key indicator of Main Street investors' confidence. While that certainly has something to do with the weak economy, high-profile events like 2010's flash crash have also taken a toll. Given all the charges and counter charges on the economy and Americans' wealth, it's surprisingly difficult to say precisely what either of the candidates will do to level the playing field for small investors.
While it's generally assumed that Romney favors a lighter regulatory approach than Obama, during the first debate he seemed to go out of his way to soften this stance, proclaiming, "You can't have a free market without regulation." Romney went on to criticize the centerpiece of the Obama Administration's economic reforms the Dodd-Frank bill -- but focused on its treatment of big banks and didn't have much to say on its provisions that more directly affect consumers, like the proposal to hold financial advisers to a tougher ethical standard or the controversial creation of the Consumer Financial Protection Bureau.
For Obama's part, the frustrations of small investors play easily into a narrative that pits Wall Street as the villain in the economy. Among his targets in the first debate: Banks "churning out products that the bankers themselves didn't even understand." But it's not clear what, beyond hurting investment bankers' feelings, the president plans to do about these products if he wins four more years.
During Obama's first term, Securities and Exchange Commission Chairman Mary Schapiro has struggled to accomplish some of her biggest priorities like implementing the above-mentioned fiduciary standard, addressing the risks posed by high-frequency trading, and even reforming money-market funds, something that garners support from liberals and conservatives alike.
What's at stake: Experts say that unless Romney can show that promoting "free markets" isn't just a code word for letting big business lobbyists get their way in Washington, more investors will come to suspect the stock market is a game that's rigged against them. Obama has to make the case he can steer Washington's machinery including Congress and regulators like the SEC more effectively than he has in during his first term.
While the candidates briefly sparred in the second debate about the size of their respective pensions -- something fewer and fewer Americans can relate to -- the candidates barely paid any lip service to the most common retirement savings vehicle: the 401(K) plan.
Seven in 10 large U.S. employers now only offer 401(k) retirement plans to new salaried workers, up from 43% in 2006, according to an analysis by consulting firm Towers Watson. But when left to their own devices, many workers fail to put away enough cash and are unsure of how to invest their savings, says Kevin Wagner, a consultant with Towers Watson. Sixty percent of workers report having less than $25,000 in savings and investments, according to the Employee Benefit Research Institute. Employers are trying to boost savings by automatically enrolling workers in retirement plans and automatically increasing how much workers contribute, but critics say savers need better guidance and a deeper understanding of how much they're paying in fees.
To be sure, investors started getting more information this year thanks to new regulations requiring fund providers to better break out and explain their fees, and that increased transparency has led some fund firms to lower their costs. But some critics say more reform is needed. Many people are often either too conservative or too bold with their retirement savings, and many savers don't know how to pace their withdrawals in a way that it lasts them their entire retirement, advisers say.
Part of the reason these issues have been put on the back burner is that retirement plan fees and conflicts of interest don't get as much attention when the market is rising, says Mike Alfred, co-founder of the co-founder and chief executive of BrightScope, a company that tracks retirement plans and financial advisers. (The Dow Jones Industrial Average has more than doubled since its March 2009 low.) "Going forward, one of the most critical policy issues is how we help retirees create sustainable income with their 401k assets," says Alfred. "I don't expect the issue to get much play this election because it is not front of mind for the candidates."
What's at stake: Two-thirds of workers say they are behind schedule when it comes to saving for retirement, and with baby boomers on the verge of retiring, many experts say the problem could is likely to get worse.