TARP
Phyllis Caldwell’s back. Panel members (left to right) J. Mark McWatters, Sen. Ted Kaufman, and Damon Silvers from the Christian Science Monitor 10/29/10.
On Wednesday, the 27th, the Congressional Oversight Panel (COP) held a hearing on the impact of foreclosures on the economy. The subjects of the hearing were not so broad, and included specific government programs like TARP (Trouble Assets Relief Program) and, within that, HAMP (Home Affordable Modification Program), as well as the mortgage and lending firms that are tied up in them through Treasury investment, such as AIG, Bank of America, Fannie Mae, Freddie Mac, and Citigroup. But the impact on the whole economy thing seemed to be the overall theme of the hearing.
Senator Ted Kaufman (from Delaware who replaced Biden and who will be replaced by either Christine O’Donnell or Chris Coons in the next term, since he chose not to run) is the Chairman of the COP (a position previously occupied by none other than Elizabeth Warren, the recently [about a month ago] appointed Special Advisor to President Obama in charge of establishing the Consumer Financial Protection Bureau) opened the hearing with three right-frame-of-mind setting questions addressed to witness Phyllis Caldwell, Chief of the Treasury Department’s Homeownership Preservation Office.
- How many foreclosure must be prevented? (In order to avoid another crisis on top of the last one, like a multiple orgasm of depressive economic opportunity, since a period of rapid foreclosures and massive fraud is how this whole thing began in the first place.)
- What re-default rates can we expect?
- How many temporary modifications will convert to permanent status?
The government, most of all Treasury Secretary Tim Geithner, as well as analysts are claiming that TARP was essentially a success. (the whole referencing experts contrivance, like “most medical professionals think” or “economists say” or “expert analysts have been saying” or even the head-scratcher, “some people”, is just sort of done-and-done at this point because everyone’s been on the internet and tried to research an issue and pulled up opposing evidence from two sides that annihilatingly contradicts each other proposed by so-called experts with seemingly legitimate credentials, or at least legitimate as far as we can tell since, clearly we are not savvy to the particulars of the issue nor the academic field that envelopes them or else we wouldn’t be going to the internet to research it, enough times for it to be conventional wisdom that you can pretty much find an expert opinion to back up any position or theory on an issue. The point I’m making is that it isn’t solely the government positing this argument, but that there is some reception to it and I’m drawing from my personal cognizance to the public discourse rather than from an actual expert.) However, HAMP, which was established to prevent foreclosures, seems to be a really fucking important component of TARPs overall strategy and justification (again, the impact on the whole economy thing which…again, again…began its spiral down the shitter with that initial massive flush of foreclosures. I guess the analog to fecal matter here would be the fraud and bad mortgages.) is apparently a pretty big failure.
Sen. Kaufman said that the initial goal was to modify the mortgages of 3-4 million home owners, which was only about half of the 8 million projected to be foreclosed in the fallout and “modest compared to the incredible scale of the problem, certainly modest compared to the boldness shown in rescuing AIG, Fannie Mae, Freddie Mac, Citigroup, Bank of America, and the auto companies.” (Not that these companies aren’t at all integral to our economy as well and important to maintain. [Furthermore, not that people’s need to not be homeless isn’t the bedrock of the economy and important just for the sake of not having people having to live homeless.)
According to an article on the hearing published in the NY Times on Wednesday “Fewer than 470,000 households have gotten permanent modifications under the Home Affordable Modification Program, which began in 2009 and is voluntary but gives lenders incentives to participate.”
-Matt
P.S.
If you’d like to watch the hearing, here’s a link. It might be good just to check it out for a few minutes and get a look at some of the people in charge of handling TARP.
Two Barbers 