Former Chairmain of the Federal Deposit Insurance Corporation, Sheila Bair, has written a new book about the housing / banking crisis of 2008. As head of the FDIC at the time, Bair had a front row seat during the battle to save the housing market, banking and the economy.
Image by Civil Rights via Flickr.com
Her new book, titled 'Bull By The Horns', 'Fighting to save main street from Wall Street, and Wall Street From Itself', details Bair's experiences working with Bush Treasury Secretary, and former Goldman Sachs Chief, Hank Paulson, Obama Treasury Secretary Timothy Geithner, Fed Chairman Ben Bernanke, and other major players, as they worked to save the economy from bad mortgages and the resulting banking crisis.
In her book Bair says that she felt that the decision makers involved in the crisis were too cozy with Wall Street banking interests. She also wanted the newly elected President Obama to choose a Treasury Secretary such as Paul Volcker, whom she personally recommended. Bair is openly critical of Obama's choice of then President of the New York Federal Reserve Bank, Timothy Geithner, whom Bair felt was much more interested in protecting CitiBank than helping homeowners.
Bair pulls no punches and has many lively and candid comments to make about most of the major players involved in handling the crisis. But she is especially critical of the Obama Administration's plans to help struggling homeowners. She says flatly that the 'rules were stupid' and 'far too complex' for homeowners who had to prove that they could qualify for a new loan, which was pointless, given that the old loan had already been made. Bair goes on to say:
'The Obama administration's 2009 plan to help struggling homeowners 'was doomed to failure,' 'cheated borrowers' and was 'designed to look good in a press release, not to fix the housing market.'
She also says that she was impressed with President Obama and his open minded approach to the crisis, but says that his team of economic advisers were much more interested in helping bankers rather than homeowners.
Bair contends that the choice to focus on bank bailouts rather than making it easier for homeowners to refinance bad mortgages is one of the primary reasons why the housing market is still struggling a full 4 years after the melt-down began.
She also reveals quite a lot of detail about the negotiations during the attempted takeover of Wachovia by Citibank, and how the banks and regulators involved in the decision making ignored the public interest in order to take advantage of the situation.
It's a very personal look inside the biggest economic crisis in U.S. history. Bair is attempting to let the public know what really happened during that time, and also offers advice on what she believes we should do to fix the problems going forward. Perhaps we should send a few copies to each of the presidential candidates and their 'veeps'.
The book was released on September 25th and is available on Amazon.com in hardback and Kindle.
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Donna S. Robinson is a real estate investing consultant and housing market analyst located in Atlanta, GA. Follow her on Twitter at donnaconsults and read her blog at www.RealtyBizConsulting.com
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