Gross: Crisis needs ‘Rooseveltian’ response

Prominent bond fund manager Bill Gross said the subprime-mortgage crisis needs a federal response of “Rooseveltian proportions.” In a commentary posted on PIMCO's website, Mr. Gross, the founder and director of Pacific Investment Management Co., said the Bush administration should create a Reconstruction Mortgage Corporation, along the lines of the depression-era Reconstruction Finance Corporation, to bail out desperate homeowners. Fiscal policies alone can't solve the housing crunch, he said. “Why is it possible to rescue corrupt S&L buccaneers in the early 1990s ... yet throw 2,000,000 homeowners to the wolves in 2007?” Mr. Gross asked. “If we can bail out Chrysler, why can’t we support the American homeowner? The time has come to acknowledge that there are precedents aplenty,” he said. “Write some checks, bail ‘em out, [and] prevent a destructive housing deflation that Ben Bernanke is unable to do,” Mr. Gross said. “After all “W”, you’re “The Decider,” aren’t you?”