At least one person appears to understand the problem:
“You can’t just say, ‘Credit isn’t moving through the system,’ ” she [Elizabeth Warren, head of the Congressional oversight panel] said in her first public comments since being named to the panel. “You have to ask why.”
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In that spirit, she promised that Congress would get the panel’s first report on Dec. 10, “laying out the central questions that Treasury should be addressing as it spends the taxpayers’ money.”
Meetings with Treasury officials so far have made her question whether they understand that “household financial health is profoundly tied to the economic health of the nation,” she said. “You cannot repair this economy if you can’t repair those families, and I’m not sure the people directing the bailout see that as their job.”
In her view, the government should be trying to create more reliable customers for those banks by shoring up the fragile finances of the millions of American families that could not save, borrow or spend even if their banks were flush with capital.
“Any effective policy has to start with the households,” she said. “Years of flat wages, low savings and high debt have left America’s households extremely vulnerable.”
Also from the article:
A Harvard law school professor and a consumer bankruptcy expert, Ms. Warren was named by Senate Majority Leader Harry Reid to the new five-member panel, created as part of the $700 billion Troubled Asset Relief Program, known as TARP, enacted in October. She was elected chairwoman at the group’s first meeting last Wednesday.
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