NYT: Paulson loose with money for everyone except homeowners

[bigtree]

Treasury Secretary Henry M. Paulson Jr. was notably absent from the rollout on Tuesday of the Bush administration’s newest foreclosure prevention plan. Maybe he was finally too embarrassed to stand before the American people yet again and offer yet another too-little, too-late solution.

He did send his protégé, the recently appointed bailout czar, Neel Kashkari, who dutifully mouthed the phrases that Mr. Paulson has used for a year now to describe the foreclosure crisis (“a necessary correction”) and to justify the administration’s pathetic responses (“there is no silver bullet”).

The nation’s banks and other financial firms also are undergoing a necessary correction for which there is no silver bullet. But that hasn’t stopped Mr. Paulson from intervening forcefully — using taxpayer dollars — on behalf of an ever-expanding cast of bailout recipients. The tight fist is reserved for homeowners.

That is a huge policy error. The whole point of the bailouts is to stabilize the financial system. But the system will not stabilize until house prices stabilize, and house prices will not stabilize until the government finds a way to stanch foreclosures on a large scale.

>>>

Citigroup, JPMorgan Chase and Bank of America have announced stepped up anti-foreclosure efforts recently. But if history is any indication, their efforts will fall short. That’s because the banks do not directly control most of the loans that require restructuring; rather, the loans have been parceled out in pieces to various investors. The difficulty of getting the often-conflicting parties to agree to modified loan terms has derailed all previous attempts to stem mass foreclosures.

Not only has the government refused to compel the mortgage industry to act, but it has not provided strong incentives for them to do so. As if in tacit acknowledgement that the administration has not gone far enough, a Treasury spokeswoman said on Tuesday that the latest plan is not necessarily the last. Meanwhile, the damage is being done house by house, block by block, neighborhood by neighborhood . . .

read more: http://www.nytimes.com/2008/11/13/opinion/13thu1.html?pagewanted=print

[gratuitous]

1. Paulson denied there was a problem for the first nine months of the year

It was only when his pals on Wall Street started hemorrhaging money that Paulson could be stirred to action at last. So who do you think he's going to start doling out all that lovely, lovely cash to? Remember, when people were being tossed out of their homes and into the street, Paulson couldn't see the problem. When his buddies started taking it in the shorts, Paulson needed money, and he needed it NOW. Tomorrow would be too late, and anything less than half a trillion would be too little.

And the Times actually seems surprised. Aren't they cute little bobos?

[bigtree]

5. yeah, the NYT's concern is a hoot

. . . but they've covered every point that's burning me up today, and they've done it well.

This is clearly a privileged folk's raid on the treasury, dressed up in concern for homeowners. Sure Paulson is taking care of his own. Their faltering bottom lines are the ONLY reason the WH spoke up when it did. We have to "shore up the market," they cried. Never mind the money going out the back door for their buddies' golden parachutes.

And, I heard this morning that Paulson is still mulling over the various proposals which would actually aim to directly help with readjusting the delinquent mortgages. Concern for the plight of the average American is always a miserly afterthought when these cretins are throwing OUR money around.

[pa28]

2. Did you see Paulson's press conference today?

A reporter was under the impression part of the TARP was going to be used to bail out homeowners directly (which we know is not really the case)

Paulson's nearly fell over and said (paraphrasing here) Individual homeowners are basically free to F!*$K themselves under this plan and the treasury was there to give money to banks.

Of course it took him about two minutes to form this idea into socially and politically acceptable terms! It was pretty good stuff.

[Neshanic]

3. This is proof positive that the banks will NOT take the hit on devalued homes...

marked to market. They want the full amount paid come hell or high water, and that means we are on the hook for it.

They are stonewalling to get their way.

[earth mom]

4. Paulson is a god damned criminal!

:grr: