Question Time
Who appointed the G7 (+1) to its perch? The finance ministers for the main protagonists in World War II (1939-1945) met in Rome over the weekend to discuss the world economic crisis. Does a meeting of this nature that excludes India and China truly have a hope of wrapping its collective mind around the problems and their possible solutions?
Is ideology standing in the way of the most elegant solution to the U.S. banking crisis? Give former President George W. Bush his due: when the dimensions of the banking crisis became apparent to him, he scrapped a "market guy" ideology and poured taxpayer money into the banks. Is the Obama Administration willing to take what for them would be a similar ideological leap? Is their unwillingness to do so behind the complex public-private partnership at the center of the Geithner proposal to deal with troubled assets? Is there a similar reason behind the relatively light-handed approach Geithner would take to pushing the banks to resume lending?
Who brought forward the proposals for the public-private bad bank? Appearing on "Fox News Sunday" on February 8, chief White House economic adviser Lawrence Summers said : "You know, it's been very interesting. We've received a whole variety of proposals from private investment firms, from private investors, for how private capital can be part of the solution to this problem." Were those "proposals" the result of "lobbying?" If so, should the public be allowed to know who made those proposals?
What's next for GM and Chrysler? The auto giants' restructuring plans are due to Treasury today. Now that the "Car Czar" has morphed into an "Auto Industry Task Force" headed by Ron Bloom—an investment banker made famous for helping U.S. steelworkers navigate through bankruptcy and restructuring—will the car makers be more likely to seek bankruptcy protection?
How can the Obama Administration craft a targeted mortgage relief program that does not come out looking like a bailout for the "McMansion" crowd? Following the TARP bailout, the news of Wall Street bonuses and other seemingly extravagant expenditures led to tremendous public outrage. How much help can government provide—mortgage principal write-downs, reduced interest rates, or other taxpayer-subsidized modifications—before there is a backlash by people who have been living within their means and paying their mortgages on time? The administration may be forced to offer a broader relief package that includes a perk for those who have "played by the rules" such as a widely available 4.5 percent, 30-year fixed mortgage rate that several Republican Senators advocated including in the stimulus bill. We will find out tomorrow when President Obama announces his foreclosure relief program.
