PhillyDeals: Where are the sweeping changes?

This home-loan crisis that has crippled Wall Street, sliced home values, pushed up borrowing costs, slowed the economy, and started putting Americans out of work - is it so bad we need sweeping reforms in financial markets and policy?

That's the consensus, from the Fed, Treasury and Wall Street. And, from the academy, the scholars are issuing, this campaign year, with their bright ideas.

Robert Shiller, the Arthur M. Okun Professor of Economics at Yale University, became famous when his last book, Irrational Exuberance, rightly pegged the dot.com boom as a stock market bubble.

He was in Philadelphia last week, pitching his new book, The Subprime Solution, arguing we're back in 1932 all over again.

"The immediate fix that is needed is similar to that called for by the Great Depression," he writes. But "unlike the 1930s, nothing fundamental is being done."

How bad could things get? "The last major housing crisis in the United States took place in 1925-33. Home prices fell a total of 30 percent over this interval, and the unemployment rate rose to 25 percent," he writes.

Home prices have sunk 20 percent since their 2006 highs, but the drop slowed this summer, according to the Standard and Poor's Case Shiller Home Price Index for 10 big metro markets, which he helped develop. Unemployment's up, but far below 1930s peaks.

Shiller's short-term prognosis sounds mainstream, in line with what the Fed's Ben S. Bernanke, Treasury Secretary Henry M. Paulson Jr., and Wall Street bankers are recommending: The government should provide a replacement for Fannie Mae as overseer and guarantor of mortgage loans, and bail out failing borrowers and lenders to keep them from dragging down others.

But even Paulson's seizure of Fannie Mae is a stopgap measure, designed to shrink the company's loss exposure until the next administration figures out a more permanent way to fund home loans.

Shiller says the goal shouldn't be to push home prices back up, but to "prevent a fundamental loss of economic confidence in our institutions and in each other," while "preventing distress among people of modest means."

He wants a "Financial Product Safety Commission" tracking loan and investment products, promoting fee-only financial advisers and incentives for private financial planners to reach lower-income people.

And he wants to detach loan and bond prices from the U.S. dollar, whose steady erosion by inflation gives a false sense of its value. Loan prices, Shiller argues, should rise and fall with the value of goods produced and consumed in an economy, while bond prices should be tied to national economic output.

That's radical - more what we'd expect from gold-buying conservatives suspicious of the Federal Reserve and its "fiat money" than an Ivy League policy scholar with liberal values - though some of these products are already in use in Chile and other developing countries.

I'm not saying Shiller's program should be adopted. I'm asking why, if the folks who should know agree our problems are serious, likely solutions aren't dominating the presidential campaigns and the national discourse, up there with our wars in the Middle East.

"McCain is ambiguous," Shiller said. He wants to cut corporate income taxes - Shiller agrees - but he hasn't identified spending cuts. McCain wants to bail out stricken homeowners, but not "speculators," and he doesn't say how you tell the difference.

Obama has hired some prominent economists - Jason Furman, Austin Goolsby - but "his Web site is all about the taxes he's going to cut. Except he wants to increase the windfall-profits tax for oil companies."

Why so vague? "As in any political situation, they're not putting out their best plans," Schiller said. "They're trying to win the election. FDR didn't have time to figure it out, either. After he won, he got Frances Perkins and other economists to work for him. And then they started inventing as they went along," often "taking ideas from private-sector lobbyists."

So professor Shiller wants to go to Washington? "I may be too blunt," he said. "But economists' ultimate goal is to influence policy. Or what good is economics?"