"Obama...guarantees another...crisis in the near future."

[WhiskeyGirl]

Reform Fannie, Freddie -- now!

Examiner Editorial
March 25, 2010

TARP Inspector General Neil Barofsky issued a barely noticed report late Tuesday on the ineffectiveness of Obama’s slow-moving, $75 billion mortgage relief program. (Haraz N. Ghanbari/AP)

Treasury Secretary Timothy Geithner and Troubled Asset Relief Program Inspector General Neil Barofsky were both in the headlines earlier this week. Together, they demonstrate why President Obama's approach to remedying the causes of the economic meltdown of 2008 virtually guarantees another such crisis in the near future.

Barofsky pointed out in his latest report, however, that HAMP has moved with glacial speed. A mere 169,000 homeowners have received help, leaving a mere 7.8 million in distress. At that rate, it will be years before HAMP puts a serious dent in the foreclosure crisis. A major reason for the program's slow pace, according to Barofsky: repeated changes in regulations that have caused massive bureaucratic "confusion and delay." Imagine that, in Washington, D.C., of all places.

Geithner told the House panel that Fannie and Freddie must be reformed, but he also said there is a "strong public-policy case for preserving, designing some form of guarantee by the government to help facilitate a stable housing finance market." But wait a minute, wasn't ensuring stability in the mortgage market why the government created the GSEs in the first place? And didn't those same government guarantees against failure encourage widespread irresponsible financial risk-taking by Wall Street and mortgage lenders? Won't doing it all over again get the same disastrous results? Shouldn't a treasury secretary, and his boss in the Oval Office, understand such elementary economics?

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/Reform-Fannie_-Freddie----now_-89020452.html#ixzz0j8lhTkV8