Washington Resists Calls for Big Fix on Foreclosures - BusinessWeek

Washington Resists Calls for Big Fix on Foreclosures - BusinessWeek

Here's another example of the administration closing the barn door after the cows are out. If they had gone with the so-called "bad bank" idea from the beginning, this current problem might not even exist. With a bad-bank, they could have bought up the troubled mortgage assets for less than they were worth (but more than what the bank would have gotten through foreclosure), refinanced so the owners could at least try to stay in their homes and then sold them back to the industry once the market had stabilized. Possibly even for a profit. Instead they threw that seven-trillion dollars at the bankers and shouted, "YOU FIX IT!" Predictably, throwing wads of cash at the very people who bankrupted the system didn't really accomplish much. So now, when faced with the real-world consequences of this melt-down, the administration has precious little room to maneuver. Of course, the fact that the seven-trillion dollar TARP program was Bush's swan song might lead conspiracy theorists to think this is just want the bankers wanted. But Obama had a ample chance to stop it. Instead, he chose to trust the bankers. Let's hope that TARP turns out to be Obama's Bay of Pigs - a crisis from which he'll emerge a stronger president. Just don't emulate JFK too closely, please.