From the Times, today:
“There is no silver bullet to address the housing downturn,” said Neel Kashkari, the assistant Treasury secretary who oversees the bailout program. “We are experiencing a necessary correction and the sooner we work through it, the sooner housing can again contribute to our economic growth.”
Just as we all suspected from the first, but now in black and white.
A decision was taken early on, perhaps long before the TARP even came to the Hill, that a swift douche, no matter how painful or how unjust, was what the market for housing needed and to shore up lenders with taxpayer dollars, rather than try to blunt the ferociousness of millions of defaults, address the potential for a spiral, the concerns about a housing price overshoot, or buy the banks time to amortize the problem against strong earnings.
Bernanke is on board with this view, too, I very strongly suspect, despite his phraseology to the contrary. :-(
