Mandel: Paulson's Shift Is Just a Start

The Treasury Secretary's new focus on using bailout money to support frozen consumer loan markets acknowledges reality. But it's only a down payment

Listening to Hank Paulson's Nov. 12 speech, one is impressed both by his flexibility and a barely controlled underlying sense of panic. In a few short weeks, the Treasury Secretary has gone from a bailout plan focused solely on using $700 billion to buy up mortgage-backed securities to one that may not spend any money at all on mortgage-backed securities. Instead, as he announced Wednesday, much of the remaining money will be used to support consumer loan markets that have frozen up—credit-card debt, student loans, and auto loans. That's on top of direct equity injections for banks and money used to help reduce foreclosures.

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