What's this? Paulson found a bailout he doesn't like
Treasury Secretary Hank "Strong Dollar" Paulson has finally found a bailout plan he can't get behind. Today's Wall Street Journal (subscription might be required), details:
The Bush administration is hardening its opposition to the chorus of Democrats, bankers, economists and consumer advocates calling for a big-money government rescue program for struggling homeowners.
In an interview yesterday, Treasury Secretary Henry Paulson branded many of the aid proposals circulating in Washington as "bailouts" for reckless lenders, investors and speculators, rather than measures that would provide meaningful relief to deserving, but cash-strapped, mortgage borrowers.
Well, maybe Secretary Paulson has been reading this blog and found there was a limit to how much bailing out the federal government should be involved in.... but probably not. I imagine this new hardness against bailouts will be short lived by the Bush administration. As I write this, Bush is on TV asking congress to pass new laws to help people in foreclosure, so I don't think they've gotten a new religion on bailouts.
Apparently, Federal Reserve Chairman Ben Bernanke is a little more flexible in his approach to bailouts:
Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee and typically an ally of Mr. Paulson's, said that, until now, he had supported the Treasury's steps to address mortgage delinquencies and the credit crunch they have spawned. "But they're not helping enough people," Mr. Frank said yesterday. "We're not going to get out of the crunch until we stop this cascade of foreclosures."
The Fed's Mr. Bernanke appeared to take a slightly more flexible position than Mr. Paulson, telling a congressional committee yesterday that the turmoil in the housing market doesn't yet merit large amounts of public money. "I don't think we're at that point, but I do think it's worthwhile to keep thinking about those issues," Mr. Bernanke said.
