Reform Fannie, Freddie — now!

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Treasury Secretary Timothy Geithner and Troubled Asset Relief Program Inspector General Neil Barofsky were both in the headlines earlier this week. Together, they demonstrate why President Obama’s approach to remedying the causes of the economic meltdown of 2008 virtually guarantees another such crisis in the near future.

Barofsky got the least attention, issuing a barely noticed report late Tuesday on the ineffectiveness of Obama’s $75 billion Home Affordable Modification Program to aid the estimated 8 million people having trouble making their mortgage payments. By offering them a government-paid reduction in their monthly payments, HAMP was supposed to stop the explosion of mortgage foreclosures that has depressed housing prices and retarded economic recovery.

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