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PhillyDeals: Key legislator weighs in on Obama's financial agenda

Trying to divine how President Obama's agenda for toughening financial-industry rules is going to survive the turf wars between the Federal Reserve, regulators, and industry groups, I sorted last week's statement from U.S. Rep. Paul Kanjorski (D., Pa.), a key Democrat from a conservative district and No. 2 to Rep. Barney Frank (D., Mass.) on the House Banking Committee.

A better bowl of porridge: Rep. Paul Kanjorski, No. 2 on the House Banking Committee, wants to strike a balance in regulating the financial industry.
A better bowl of porridge: Rep. Paul Kanjorski, No. 2 on the House Banking Committee, wants to strike a balance in regulating the financial industry.Read moreDAVID BRODY / Bloomberg News

Trying to divine how

President Obama's

agenda for toughening financial-industry rules is going to survive the turf wars between the

Federal Reserve

, regulators, and industry groups, I sorted last week's statement from

U.S. Rep. Paul Kanjorski (D., Pa.),

a key Democrat from a conservative district and No. 2 to

Rep. Barney Frank (D., Mass.

) on the House Banking Committee.

Kanjorski, whose district includes Wilkes-Barre, is famous for understanding this stuff better than the average member of Congress, and for staying on the fence until he's heard from all sides, which guarantees lots of attention from lobbyists.

He came down off the fence, mostly, and declared what he likes and doesn't.

According to Kanjorski, parts of the administration's plan are like Goldilocks' porridge:

Too hot - "I must reiterate my deep and profound concerns about the selection of the Federal Reserve as the primary entity in charge of systemic risk. I believe that we need someone with real political accountability in this role, like the Treasury secretary."

Too cold - "Rating agencies turned horse manure into fool's gold. We must do more, much more" than the administration proposes, to watchdog Standard & Poor's and Moody's and their peers. "We must consider radical reforms," like maybe taxing securities trades to fund oversight. That would get Wall Street's attention.

Just right - "I am pleased that the administration calls for establishing an Office of National Insurance, an idea I first originated," though it's still not clear if this agency will step on rogue operators like the folks who wrecked AIG, or just keep score.

Also, "I commend efforts to regulate the advisers of hedge funds [and] derivatives and swap markets. These reforms are long overdue."

Kanjorski didn't declare himself on one high-profile Obama proposal, a plan for a consumer financial-protection agency, which the Fed is resisting, because Fed Chairman Ben Bernanke wants to keep that power, which his predecessor, Alan Greenspan, refused to use.

On this issue Kanjorski lines up with his congressional superior - on the fence: "Chairman Frank has wisely determined that we need to take some additional time to thoroughly understand how the proposed consumer-protection changes would be implemented," Kanjorski told me.

Maybe Frank and Kanjorski will decide the Fed is too independent to protect all of us from systemic risk, but not too independent to protect consumers.

Buy or rent?

Remember, during the late real estate bubble, when down payments became scarce and thousands of working Philadelphians figured out it cost less to own a home for a month than to rent one?

The left-leaning Center for Economic and Policy Research, which counts economist Joseph Stiglitz among its backers, says apartments are now cheaper than homes for many people in metro areas.

The center is using this as an argument for "Right to Rent" legislation, which would let courts keep busted homeowners in their homes as renters, and convert their creditors into their landlords, as an alternative to foreclosure. It's a long shot: Codirector Dean Baker acknowledges the proposal is still looking for a sponsor in Congress.

But the report is interesting in itself. It won't help Obama's attempt to restart the real estate industry. But it might give some buyers second thoughts on the wisdom of tying themselves to a house and a mortgage just on principle.

The report compares 30-year fixed-rate mortgage payments on a home worth 75 percent of the median housing price in your area, to the Department of Housing and Urban Development's "fair-market rent" for two-bedroom apartments in the same areas.

In "bubble-inflated" California and metro New York, monthly ownership costs roughly double what comparable rentals charge. Boston and Baltimore are also a lot more affordable for renters.

Metro Philadelphia is not so far out of whack. Monthly ownership lists at less than $1,200 (after taxes) vs. $1,000 for rentals, in the center's calculation.