More rules for banks--how's that working out?

Obama loves a straw man, doesn't he? If it's not fat cat CEOs, it's banks, it's lobbyists, or Americans who haven't heard enough of his speeches on healthcare. Anyone but him. On Thursday he proposed more rules that would impede the growth of large banks. In Wednesday's WSJ there was an article about HAMP, Home Affordable Modification Program--the $75 billion mortgage modification program which is suffocating the banks with its accounting rules. I think it's part of ARRA and so far has a 1% success rate. Has there ever been a boondoggle like ARRA with so many billions and so little to show for it? It requires banks to declare a loss when they haven't had one. Now how would you like to step into that cess pool and have the IRS or some regulator 5 years from now send you to jail? And you can bet your old passbook that strategic defaulters will learn how to muck it up and make it work and the plumber or university professor who foolishly bought at the top of the real estate run up won't be able to make it through the red tape, or will just walk away from their mortgage. (Call me a conspiracy theorist, but I don't think any of these programs are designed to work.)

Read Arkadi Kuhlmann's article "Why mortgage modification isn't working."