A Fighting Chance

The meeting was held in the Treasury Building in an incredibly fancy room that was loaded with historic furniture, rich draperies, and heavily framed paintings. It looked like a room for kings to negotiate over who was going to get what colony.

People talk about Secretary Geithner’s boyish looks. I guess that’s right, but what struck me about this meeting was that we were in his house. He had invited us here, and it felt as if he owned this big, powerful space and we were his guests, welcome as long as we behaved ourselves. The secretary and his aides sat on one side of a huge, heavy table. The rest of us lined up on the other side: the COP panelists, Naomi Baum, Neil Barofsky, and Gene Dodaro, who represented the GAO.

Secretary Geithner spoke quickly, often dropping his voice into a barely audible monotone, rushing ahead so fast that there was no room for interruptions. He was clearly smart and in command of the facts, but he didn’t offer much opportunity for questions. Maybe he was a little anxious. It probably wasn’t much fun to face more than half a dozen people whose job was to look over your shoulder and second-guess your decisions.

This meeting seemed headed in the same direction as COP’s earlier meetings with the secretary—he would talk and we would listen, and suddenly the session would be over, with little time for questions and answers.

I tried not to fidget. But after we had listened to the secretary go on and on about his department’s cheery projections for the recovery, I finally interrupted with a question about a new topic. Why, I asked, had Treasury’s response to the flood of foreclosures been so small? COP had been sharply critical of Treasury’s foreclosure plan. We thought that the program was poorly designed and poorly managed and provided little permanent help, and we worried that it would reach too few people to make any real difference. After the rush-rush-rush to bail out the big banks with giant buckets of money, this plan seemed designed to deliver foreclosure relief with all the urgency of putting out a forest fire with an eyedropper. As I saw it, millions of people were running out of time—and so was the country.

The secretary seemed annoyed by the interruption, but he quickly launched into a general discussion of his approach to dealing with foreclosures, rehashing the plan that COP had already reviewed. Next he explained why Treasury’s efforts were perfectly adequate—no need to worry. Then he hit his key point. The banks could manage only so many foreclosures at a time, and Treasury wanted to slow down the pace so the banks wouldn’t be overwhelmed. And this was where the new foreclosure program came in: it was just big enough to “foam the runway” for them.

There it was: the Treasury foreclosure program was intended to foam the runway to protect against a crash landing by the banks. Millions of people were getting tossed out on the street, but the secretary of the Treasury believed that government’s most important job was to provide a soft landing for the tender fannies of the banks.

Oh Lord.

What do you say to such a thing? I wish I’d responded with some brilliant comeback, but I didn’t. I felt as if one of us was standing on a snow-covered mountaintop and the other was crawling through Death Valley. Our views of the world—and the problems we saw—were that different.

In the following months, COP wrote more reports about the Treasury’s inadequate response to the foreclosure epidemic, about what the flood of foreclosures meant for mass unemployment and long-term economic growth. And COP wasn’t the only one to sound the alarm; FDIC chair Sheila Bair raised the issue repeatedly and tried to suggest alternative approaches to keep more people in their homes. Leading economists and housing counselors wrote op-eds and gave speeches. Protests sprang up. We did everything we could, but the foreclosures just kept piling up.





Choosing Sides

As the fall rolled into winter, the partisan battles that marked COP’s early days faded into the background. We stayed true to our vision of running a nonpartisan commission, and I think people forgot about who came from what side of the aisle, at least for a while. Even Congressman Hensarling ultimately relented and voted in favor of a few of the COP reports. I was glad to have his vote from time to time.