Dean Baker (Beat the Press, 11/12/08) wants to know “Where’s the Ridicule?” since “Treasury Secretary Henry Paulson announced today that he had abandoned… his plan to buy bad assets from banks and other financial institutions.”
Now that Mr. Paulson has himself decided that the Troubled Asset Relief Program is not a good idea (for which he deserves credit), why isn’t the media doing some examination of this recent history? Obviously his claims about the necessity of the TARP were not accurate, and those who repeated them were mistaken.
There were many members of Congress who stuck their necks out to oppose the TARP at the cost of derision from the media and political elites. Even Secretary Paulson now acknowledges that the rescue plan that he presented to Congress was the wrong course of action. The media has an obligation to present these facts clearly to the public.
Baker reminds us that “opponents of the TARP were widely derided in the media as ignorant economic know nothings” at the time when “Paulson said [the plan] was absolutely essential for the economy’s survival.”
But again, financial journalists have largely been wrong on this from the start; see the new issue of FAIR’s magazine Extra!: “Busted Bubble: The Press Fell Down on the Job on Housing Prices” (11-12/08) By Veronica Cassidy
Well, that’s a good realization. I think he need to consider first the advantages and disadvantages of his plan before he put it into act. Apparently, it wasn’t enough to cover the mortgage crisis up with a TARP. No, Treasury Secretary Paulson’s Troubled Asset Relief Program wasn’t the kind of credit repair scores the endangered homeowners needed. Now that Federal Deposit Insurance Corp Chairman Sheila Bair has pushed a new mortgage modification program forward, 1.5 million homeowners will have someone new on their side when they’re facing foreclosure. This $24.4 billion program will be drawn from the $700 billion pool that TARP set up, and it’s a very straightforward system. Lenders will be given a stipend of $1,000 per loan they renegotiate with financially stuck homeowners, and in the event of default on a loan, the FDIC has promised to take on up to 50 percent of the loss. Paulson has condemned this as mere spending that will only bankrupt the FDIC, others view this action on Bair’s part as a needed investment to maintain liquidity in the mortgage industry. While this won’t solve all of the problems at once, it’s certainly a valiant effort to help repair credit, isn’t it? Click to read more on <a title=”What is Credit Repair?” href=”http://personalmoneystore.com/moneyblog/what-is-credit-repair/”>Credit Repair.