FBN Anchor: Treasury’s Misuse of TARP ‘Outrageous’; a ‘Mess’; ‘Does Not Make Sense’

November 13th, 2008 3:23 PM

So what exactly is the government doing with your money? Fox Business Network's Alexis Glick would like to know.

Treasury Secretary Henry Paulson announced Nov. 12 he would be redirecting the $700 billion bailout to focus on propping up financial institutions instead of buying troubled mortgage assets, which was the original intent of the rescue plan.

Glick, the host of FBN's "Money for Breakfast," told the CBS's "The Early Show" Nov 13 that the Treasury Department's move away from the original plan to buy up troubled mortgages "does not make sense" and was "actually pretty outrageous":

[T]he markets responded to that yesterday ... Look, the original intent of this Troubled Asset Relief Program was to purchase troubled assets. And I think the marketplace started to adjust several weeks ago when we started to see the size and magnitude of the capital injections.

Glick said the real problem lies in the fact that Treasury wasn't doing anything to "stem the tide of foreclosures." The anchor made the point that if Treasury made the decision not to purchase troubled assets as the government, then it has no leeway in telling banks they need to start lending again:

They right now have no real guidance or oversight to say it's a must. They've already given the capital injections, so what you see right now is a potpourri of housing conversations between Fannie and Freddie, Hope Now, FHA Securities, the FDIC chairman has a different plan. It is so complicated and it's a mess.

Glick developed her complaints about the use of TARP further on her blog, "The Glick Report" at FoxBusiness.com. She had a lot of questions and criticisms of the bailout plan:

Three, didn't Paulson say the root of the problem is housing? So why are we still arguing about the solution? There's a plan called Hope Now, FHASecure, thru Fannie and Freddie, by the FDIC, by private banks. Are you confused? Is it a mess? Is there one central well thought out solution? No. Ask any borrower or home owner how to figure this out? They're at a loss. Should we do something to help homeowners? Absolutely. Why didn't we address this from the start? How come there wasn't language in the original TARP program that required financial institutions to refinance homeowners if they took TARP funds. It's a mess!!!