Probably the worst U.S. Treasury Secretary of all time, Henry Paulson, now wants to try and revive the housing market by forcing banks to cut interest rates on mortgages.
Paulson should quit now. There’s no telling how much more damage he could inflict on the economy before President Bush leaves office on January 20.
It’s worth noting that the Bloomberg News article linked to above contains a quotation from a naive staffer at Barclays Capital in New York. Rajiv Setia is quoted saying, “Over 90 percent of the mortgage universe out there would be refinancable, but you can’t force banks to lend to people.”
Not true. The government has been doing just that for decades through the Community Reinvestment Act.