Different Strokes for Different Folks

And all those poor slobs who thought they could actually own a home on a pauper's wages are definitely different folk from the financiers who failed to handle their money wisely.

House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd, saying the U.S. is in a recession, unveiled plans to increase government efforts to prevent foreclosures amid the worst housing slump in a quarter century

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The two lawmakers are leading congressional efforts to tackle the surge in foreclosures, which jumped 60 percent last month after reaching record levels in the fourth quarter of 2007. Their proposal goes beyond the Bush administration's industry-led approach of urging voluntary modifications by lenders and mortgage-servicing companies to help borrowers who can't make their monthly payments.

[...]

Frank's plan would have FHA provide as much as $300 billion in guarantees to help refinance loans for borrowers at risk of foreclosure. Participating lenders or mortgage holders would reduce principal in exchange for a payment from the proceeds of a new FHA loan. The plan could help 1 million to 2 million borrowers, according to a draft of the bill.

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The proposal also includes $10 billion in loans and grants for states to buy and rehabilitate foreclosed homes.

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At today's news conference, Frank rejected criticism of his FHA plan as a taxpayer-funded bailout.

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U.S. Representative Tom Price, a Georgia Republican and a member of Frank's House Financial Services Committee, criticized the proposals, saying they would reduce consumer credit and increase market risk.

"It isn't any surprise to me that they would believe that greater governmental intervention and regulation will solve this problem,'' Price said today in a telephone interview. "It completely distorts any market base for mortgages for at least the short term.''

  Bloomberg

I wonder if Representative Price has any complaints about the government intervention bailing out Bear Stearns distorting the market base for financial institutions.

For weeks, the president and his economic team, led by Treasury Secretary Henry Paulson, have rejected proposals that would have further exposed the government to the housing market. As recently as the end of last month, Mr. Paulson said, "I don't think I've seen any scenario where the American taxpayer needs to be stepping in with more taxpayer dollars."

  WSJ

And then he saw Bear Stearns.

But that’s different.