Monday, December 10, 2007
Henry Paulson’s Priorities
By PAUL KRUGMAN
By Bush administration standards, Henry Paulson, the Treasury secretary, is a good guy. He isn’t conspicuously incompetent; and he isn’t trying to mislead us into war, justify torture or protect corrupt contractors.
But Mr. Paulson’s actions reflect the priorities of the administration he serves. And that, ultimately, is what’s wrong with the mortgage relief plan he unveiled last week.
The plan is, as a Times editorial put it yesterday, “too little, too late and too voluntary.” But from the administration’s point of view these failings aren’t bugs, they’re features.
In fact, there’s a growing consensus among financial observers that the Paulson plan isn’t mainly intended to achieve real results. The point is, instead, to create the appearance of action, thereby undercutting political support for actual attempts to help families in trouble.
In particular, the Paulson plan is probably an attempt to take the wind out of Barney Frank’s sails. Mr. Frank, the Democratic chairman of the House Financial Services Committee, has sponsored legislation that would give judges in bankruptcy cases the ability to rewrite mortgage loan terms. But “Bankers Hope Bush Subprime Plan Will Scuttle House Bill,” as a headline in CongressDaily put it.
As Elizabeth Warren, the Harvard bankruptcy expert, puts it, “The administration’s subprime mortgage plan is the bank lobby’s dream.” Given the Bush record, that should come as no surprise.
More thoughtless confusion directed at the public meant to obscure the big payoff to the banking industry while most borrowers get shoved into the street.
P.T.Barnum was soooo right! We are all being played for suckers in the money games of the mortgage industry. The real savior here is the banks cannot prove they hold the mortgages so they cannot foreclose due to the mortgage money being spread around in other financials. Tsk, tsk.
Since 2000 and the election of the most worthless(to the American people) Administration has screwed with every aspect of everything that is money related.
And it continues unabated, Congress has lost their cahones to make them accountable.
Until that changes it will be one hell of a year ahead.