Financial Bailout This and That

FDIC Chairman Sheila Bair, in disagreement with Treasury Secretary Henry Paulson, told a congressional committee yesterday that the bailout money needs to be used "to prevent unnecessary foreclosures." Up until now, a foreclosure was "necessary" when a homeowner could not repay a loan he had taken out, even with the help of bankruptcy protection. Evidently, Ms. Bair has a different definition. Ms. Bair stands out as one bipartisan appointment that President Bush should not have made.

Meanwhile, those who took out mortgages they were able to pay are turning out not to be the only suckers in the current debate. According to the Dallas Morning News, community banks that did not make risky subprime loans are now finding themselves at a competitive disadvantage because larger banks that engaged in that hazard, moral and otherwise, have access to the bailout money, and the community banks do not.

Finally, with reports increasingly describing the leaders of the big three auto companies as beggars "pleading" to be put on the government dole, George Will makes an excellent case for why they should not be. One cannot say that the auto makers are too big to fail when they already have.