The Bair Essentials

Somebody help me out on this. Democratic lawmakers are fairly united in thinking that the Treasury Department is doing a terrible job helping homeowners avoid foreclosure, and they are threatening to hold back the second half of the bailout funds until something meaningful is done.

In early October, Congress authorized the Treasury to use $700 billion of taxpayer money to buy soured assets from banks to ease a financial panic. But a week later, the Treasury balked on that plan, saying it would instead try to strengthen the financial system by buying shares in the banks.

"We gave them money for one thing and then they used it for another," said Rep. David Scott, a member of the House of Representatives Financial Services Committee.

"They said we'd have more oversight; no oversight is in place. These are lies. We've been bamboozled. The Treasury secretary owes us an explanation," said the Georgia Democrat [...]

Rep. Maxine Waters, a California Democrat who had supported the $700 billion program, pressed Kashkari for actions that would throw troubled homeowners a lifeline.

"Please don't come here and ask for another penny because if you do, I'm going to work 24 hours a day with the same people I worked with to support you to make sure that they do not support giving you another dime," she said.

(Scott is mistaken in the sense that it's a GOOD thing they didn't go forward with the initially iteration of the TARP, but he's generally right on the bamboozlement.)

But the only official in the government who is offering any kind of a plan to deal with foreclosures is Sheila Bair, the head of the FDIC. I understand why the current White House would have a problem with that:

More than any administration official, Mrs. Bair has called publicly for using billions of taxpayer dollars to finance the modification of loans threatened by default. But her advocacy has contributed to a battle that is pitting White House and Treasury officials against the F.D.I.C. and lawmakers in Congress. The discord has influenced programs that have so far proved insufficient to stem a tide of foreclosures that Moody’s Economy.com expects will affect 10 million homeowners over the next five years. And it is drawing personal conflicts and animosities into the policy-making process.

White House and Treasury officials argue that Mrs. Bair’s high-profile campaigning is meant to promote herself while making them look heartless. As a result, they have begun excluding Mrs. Bair from some discussions, though she remains active in conversations where the F.D.I.C.’s support is needed, like the Citigroup rescue [...]

“I’ve heard the stories of people who are suffering and can stay in their homes if there is just a small adjustment to their loans,” said Mrs. Bair, a Republican who was appointed to her post by President Bush two years ago. “There are some people in the Republican Party who resent the idea of helping others,” she added. “But the market is broken right now, and unless we intervene, these people and the economy won’t be helped.”

But last week we learned that Tim Geithner is trying to push Bair out of her FDIC post in a new Obama Administration.

I mean, it seems to me that Bair is a perfect candidate to head the foreclosure modification program, which Obama says he favors. She's a Republican who is pragmatic and wants to get something done for the average American. Obama wants to focus on "what works" instead of partisan ideology. Well, here you go. If it's a personality problem between Geithner and Bair then that's a really bad sign, because it just blows up the whole idea that personnel doesn't matter and ideas are paramount at this time.

The Times article didn't address the tension between Geithner and Bair. Someone needs to straighten this out.