Uh oh, hunting season may have ended here in Montana but seems like the Fudds are still after Bair, Sheila Bair , head of the FDIC.
Geithner Seeks to Push Out Bair

Dec. 4 (Bloomberg) -- Timothy Geithner, President-elect Barack Obama's choice for U.S. Treasury Secretary, is seeking to push Federal Deposit Insurance Corp. Chairman Sheila Bair out of office.

Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn't a team player and is too focused on protecting her agency rather than the financial system as a whole, according to two congressional officials and a person familiar with his thinking. Bair has battled with Geithner and fellow regulators over aid to Citigroup, Inc. and other emergency actions, making her enemies in the Bush administration.

Barney Frank made a remark about Bair that was similar to remarks made about Brooksley Born, former head of the Commodities Future Trading Commission.  Lawrence Summers and  Robert Rubin tried to keep Born from talking about her fears of the credit derivatives back in 1997.

"I think part of the problem now, to be honest, is Sheila Bair has annoyed the 'old boys' club,'" Frank said today. "To some extent, bank regulation and mortgage foreclosure have made a situation where we have several regulators up in the tree house with a 'no girls allowed' sign -- and it's aimed at Sheila Bair - - who's been really good." 

 

I'm not an economist, but why am I thinking I like Bair's ideas better than, say Hank Paulson's?

In 2007, Bair told lawmakers the Fed should use its authority over home-loan standards to tighten oversight and crack down on the practices that contributed to the subprime mortgage mess.

This year, Bair has proposed using taxpayer funds to help refinance loans for struggling homeowners. She told legislators at an Oct. 23 hearing that the Treasury could use its $700 billion financial-rescue fund to set terms for mortgage modifications and offer guarantees for loans that meet the standards.

Senators pressed Neel Kashkari the Treasury official overseeing the Troubled Asset Relief Program, on his department's reaction. "We are looking very hard" on the proposal, he said.

The White House later that month sought to scale back Bair's idea to use as much as $50 billion from the program. Yesterday, an official said Paulson instead is considering a proposal to drive down home-loan rates through purchases of mortgage-backed securities.

Dean Baker thinks we should not be so quick to go with the Paulson plan.  The Banking Industry Wants to Help YOU!

They propose that the federal government should make it so that everyone can get a 4.5 percent mortgage through Fannie and Freddie's financing. I know it's rude to question the wisdom of the people who didn't see the housing bubble, but let's try to think about this one for a moment.

Looking at the story at MSNBC and I found a disturbing fact.  www.msnbc.msn.com/id/28045659

Though he has said a mortgage modification plan proposed by Federal Deposit Insurance Commission Chair, Sheila Bair could help the housing market, Paulson has expressed concerns about whether it would reward borrowers who bought houses they couldn't afford. Bair's plan would use tens of billions in federal funds to modify adjustable-rate mortgages for several million financially troubled homeowners.

The initiative under review at the Treasury would be an alternative. Borrowers would have to meet standards set by Fannie Mae, Freddie Mac or the Federal Housing Administrations that include documenting their income, sources said. Fannie and Freddie were put under government control in September. The Treasury plan would not apply to refinances.

Again, I'm not an economist, but making buying a house cheaper sounds like what we just went through.  It is also being pushed by the National Association of Realtors.  Would this just mean building more homes when e already have a glut?  Gee says, the MSNBC story, "News of the Treasury plan spread quickly through the markets. Shares of home builders rose."  Yah, think?

 So what's the real difference between Bull and Bair?

For a Republican, Bair is very interesting.  By proposing that government help people "afford" their homes, it's almost like a backdoor affordable housing program which we should have been doing for over 50 years? 

Even better is Dean Baker's idea of turning home owners who can't pay back into renters.   Not everybody should buy a house.  Houses take a lot of maintenance.  And there are definitely times in your life where it's just not feasible to take on the huge expense of buying and maintaining a house. 

The Paulson plan continues to reward builders and banks.  Bair, at least, is trying to solve the problem of what to do with people who have lost their jobs or their wages aren't keeping up.  We can't have everybody living in cardboard boxes under viaducts. 

Boys, please let her up into the tree house.  Or better yet, let's give Bair and Born a big old chainsaw.