GWB’s embattled Secretary for Housing and Urban Development is expected to resign tomorrow according to the Journal.
HUD, usually a backwater federal agency, has been at the heart of the administration’s attempts to ease problems for homeowners. Although Treasury Secretary Henry Paulson has taken the lead on many initiatives, Mr. Jackson has been a partner on many, including programs such as Hope Now, an administration-backed industry plan to loosen the terms on hundreds of thousands of subprime mortgages.
HUD also runs the Federal Housing Administration, a big government division that insures mortgages for low-income homeowners and first-time home buyers. Many Democrats and Republicans have envisioned expanding the power of FHA to play a bigger role in stabilizing the mortgage market.
Mr. Jackson’s problems stem from his refusal to answer questions about his role in a Philadelphia redevelopment deal. The city’s housing authority has filed a lawsuit charging that Mr. Jackson tried to punish the agency for nixing a deal involving music-producer-turned-developer Kenny Gamble, a friend of Jackson.
Separately, a report from the department’s inspector general found what it called “some problematic instances” involving HUD contracts and grants, including Mr. Jackson’s opposition to money for a contractor whose executives donated exclusively to Democratic candidates.
Could this be good news? I think Jackson is one of Bushie’s original team of advisers, the one driven by loyalty more than competence–Rumsfeld, Tenet, Brown (at FEMA), Gonzales, Miers (who he nominated for the supreme court before it was learned she couldn’t complete an English sentence). The others didn’t survive so long, perhaps because they had higher profile jobs. I’m guessing it’s easier to hide incompetence or cronyism at HUD.
I say this could be good news because it could be an opportunity for Bush to get a ringer to do the job. The present economic crisis has been described by even the most sober observers as the worst economic disaster in generations. We’ll need steady, smart hands to get us through it.
We are VERY fortunate, I think, to have Bernanke and Paulson leading the charge here. Bernanke may be America’s greatest living scholar of the Great Depression. Particularly at this moment, when we face the largest banking crisis since the Great Depression, it’s good to have an expert at the helm.
The same is true of Hank Paulson. If the American housing crash is the underlying catalyst causing the earthquake in the world financial system, it could be argued that Wall Street is at its epicenter. Before going to Treasury, Paulson was the CEO of Goldman Sachs. He knows Wall Street. We know this because Goldman under his leadership always outperformed it…
Indeed Bernanke’s and Paulson’s actions have so far proven very prudent. They’re taking appropriately aggressive action while doing a good job to avert overt government bailouts. Some of their solutions have been totally original and almost ingenious. The “bailout” of Bear Stearns wasn’t much of a bailout, what with equity holders getting completely wiped out. And the Fed’s various lines of credit to Wall Street and Main Street are only that: credit lines. The Fed is NOT “printing” money in a misguided attempt to recklessly inflate our way out of this crisis.
HUD is more important than ever. Hopefully Bush finds another accomplished technocrat to fill the job….and quickly.
[If you didn't follow the Harriet Miers link above, here's another opportunity. It's hilarious.]