Fool Me Thrice?

We Are Not Fans, generally speaking, of Speaker of the House Nancy Pelosi. In particular, we remember her untimely partisan remarks during the first vote on what ultimately became the Troubled Assets Relief Program [TARP].

But:

We Would like to Offer up Our Compliments for her leadership at yesterday’s press conference concerning a proposed additional bailout of America’s Big 3 automakers. (These automakers, as you probably know, have come to Congress asking for another $3,000,000,000 of taxpayer money, with a promise that this time, the solvency-rescue deal might possibly work.)

Following Treasury Secretary Henry Paulson’s two previous and powerfully urgent appeals for taxpayer handouts—the “bazooka versus squirt gun” incident and the recent TARP “rescue”—Congress now is finally getting wise.

“Until They Show Us the Plan,” said Speaker Pelosi at the press conference, “We cannot show them the money.”

What a Relief It Was to Hear That.

This Congressional Recalcitrance Harkens Back to the early days of the Bush administration, of course, when President George W. Bush famously said, “Fool me once: shame on you. You fool me: we can’t get fooled again.”

You Really Ought to Look at This, which sheds a lighter humor on the currently dark economic situation:

Some Foolish George Bush Moments

It Is Never Clear Whether our lame-duck president has learned any such “fool me twice” lessons. But at least someone apparently has....

America Currently Has a Lame-Duck Presidency, a lame-duck Congress, and a lame balance in the Treasury. The auto industry will probably get its money—and probably it should, if only to retard our downward economic spiral for a while. Maybe by slowing things a bit, the recession heading down may be passed by the next economy recovery, going up.

And If That Next Recovery Doesn’t Come Soon-Enough, then the American auto industry, as well as the general American public, may descend into insolvency anyway.

So: the Auto Industry and We, the People, may be inherently broke. But at least for now—

We’ve Still Got Our Hands on That Three-Billion Dollars!

And We Can Say Thanks to Nancy Pelosi and Harry Reid and the rest of the American Congress for that.

Secretary Paulson Re-Strains Credulity

What in the World Can One Make of Treasury Secretary Henry Paulson? We mean this without rancor or sarcasm, and with all respect due to a member of the cabinet of a sitting president of the United States.

But What Can Anyone Make of It?

Back in September, Channeling Barack Obama™ addressed the confusion created when Secretary Paulson’s testimony before the Senate Banking Committee directly contradicted the contents of his short proposal for bailing out Wall Street. In that circumstance, the man said that his proposal did not try to prevent oversight of the Treasury Department. But the wording of the proposal clearly did just that.

See our previous posting, from 09/24/08, here:

“Treasury Testimony Baffles the Nation”

Either Secretary Paulson Lied, or he is incompetent at understanding the English language. (Which incompetence would beggar belief.)

Now Secretary Paulson, speaking yesterday before the House of Representatives, says that to use the Troubled Assets Relief Program (TARP) for limiting mortgage foreclosures “would violate the intent of the rescue approved by Congress.”

Congressman Barney Frank challenged Secretary Paulson on this statement, pointing to TARP language that allows Treasury to, “use loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.” [Source: The New York Times, 11/19/2008, p. A30]

So What’s Going On? Why does Secretary Paulson's testimony once-again seem to contradict the facts?

What Is the Difference Between capital injected into banks indirectly to encourage “loan guarantees and credit enhancements to facilitate loan modifications” and similar loan modifications made directly to homeowners to facilitate their staying in their homes and paying off their mortgages?

TARP Funds for Homeowners Rather Than to Banks

One Proposal for Mortgage Modifications would place a TARP agency in an intermediary position between homeowner and mortgage-holder. The agency would extend the term of the original mortgage to a greater length, lessening the homeowner’s monthly payments, while yielding a greater total payment over all. The agency would collect the homeowner’s monthly payment, add to it the difference between this payment and what the mortgage-holder gets, and make the full, original payment.

The Basic Premise Underlying this proposal is that, over time, the underlying value of the home will appreciate in value above what is owed, including any additional principal resulting from the TARP contribution. At sale or transfer, the American taxpayer is made whole—including a profit on the additional money.

This Proposal Allows More Americans to stay in their homes and protect their own financial interests, as well as those of the taxpayer.

The Fewer the Foreclosures, the higher the “floor” that is placed under the prices of American houses overall. Which leads to a shortening of the current economic recession and credit crisis.

How Does This Proposal Mesh with Secretary Paulson’s ideas for loaning funds to troubled banks, so that they in turn can buy up other distressed banks? Under the Paulson plan, housing prices will continue to go lower for quite a while, and it is the banks—not the risk-taking American taxpayers—who benefit the most from the taxpayers' risk.

We Are Looking for Some Guidance, some evidence of any kind, to show that current Secretary of the Treasury Henry Paulson is neither a flagrant liar nor a profoundly incompetent public servant.

Here, We Invite Secretary Paulson to contact us and explain the apparent discrepancies between his previous testimonies in relation to the Troubled Assets Relief Program:

Secretary Paulson, the Floor Is Yours.

And Regardless of Any Appearances to the Contrary, we appreciate your service efforts on behalf of the American people.