Looks like Henry Paulson's going to have more than 7 houses on his hands. Yes, it's true. Treasury Secretary Paulson is about to become the most powerful mortgage financier ever.
Paulson's plan has gone from an eco-friendly three pages to over 100 pages of detail, supposedly putting all kinds of restraint and oversight on him, but the dead trees give him mostly what he wanted: $700 billion, and the authority to spend it has he sees fit.
(dream sequence: Sarah Palin calls Henry Paulson: "So, Henry, ya know, Todd's back has been killing him and he wants to get out of the oil fields, so can ya give him about a billion to start a bank with? He doesn't know a thing about banking, ya know, but hey, we can see Russia from our house so that's gotta count fer something." Paulson responds, "Of course, Sarah. I'd do anything for you and First Dude.")
Under the terms of the "compromise", and I use that term loosely,
any firm selling troubled assets to the government would have to give Washington the right to take an ownership stake in the firm -- a more sweeping requirement than had been expected.This doesn't please the administration because they fear that healthy companies will not participate (translation: Paulson can't acquire healthy companies), which will reduce the effectiveness of
On the one hand, the legislation requires him to combat the nationwide wave of home foreclosures by pushing mortgage service companies to rewrite some loans and to cut the interest rates or even the principal for financially strapped homeowners. On the other hand, it gives him the politically explosive power to cut deals with foreign, not just U.S., banks in some cases.
It gives Paulson unprecedented power. And it makes me nervous that the Secretary of the Treasury under George W. Bush, at the end of Bush's disasterous administration, is being given the reins.
"This is not about a bailout of Wall Street," declared House Speaker Nancy Pelosi (D-San Francisco). "It's a 'buy-in' so we can turn our economy around."Geeze, I want what she's been smoking.
The measure's centerpiece -- its "troubled asset relief program" -- Paulson "is authorized to take such actions as the secretary deems necessary" to carry out the effort, including hiring, contracting and assigning companies to act as agents of the government, as well as buying, holding and selling assets.This makes me nervous. Very nervous. To paraphrase the kid in "The Sixth Sense", I see greedy people. I see Halliburton. I see Blackwater marching into banks and taking over. Yes, I own a lovely tin foil hat.
And while the measure requires Paulson to "maximize assistance for homeowners . . . and minimize foreclosures," the very same sentence says the Treasury has to make sure that taxpayers are not stuck with any additional costs, which makes any substantial additional aid to homeowners unlikely.
Hey, I thought Republicans wanted LESS government, not more. If this "compromise" bill is approved, it will extend the Government's reach well into the mortgage business. I'm very nervous.