Monday, December 10, 2007

Subprime rescue plan forgets American families

Paul Krugman writes that :"... there’s a growing consensus among financial observers that the Paulson (subprime mortagage rescue) plan isn’t mainly intended to achieve real results. The point is, instead, to create the appearance of action, thereby undercutting political support for actual attempts to help families in trouble.

In particular, the Paulson plan is probably an attempt to take the wind out of Barney Frank’s sails. Mr. Frank, the Democratic chairman of the House Financial Services Committee, has sponsored legislation that would give judges in bankruptcy cases the ability to rewrite mortgage loan terms. But “Bankers Hope Bush Subprime Plan Will Scuttle House Bill,” as a headline in CongressDaily put it.

As Elizabeth Warren, the Harvard bankruptcy expert, puts it, “The administration’s subprime mortgage plan is the bank lobby’s dream.”

Read Krugman's entire column to see how this plan fails to protect the millions of American families, victims of predatory lending practices, who will lose their homes.

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