Once again, he nails it. The Bush/Paulson program isnot about fixing the problem, it’s about making sure that no one else does, or as Dr. Krugman puts it:

In particular, the Paulson plan is probably an attempt to take the wind out of Barney Frank’s sails. Mr. Frank, the Democratic chairman of the House Financial Services Committee, has sponsored legislation that would give judges in bankruptcy cases the ability to rewrite mortgage loan terms. But “Bankers Hope Bush Subprime Plan Will Scuttle House Bill,” as a headline in CongressDaily put it.

As it currently stands, a bankruptcy judge cannot rewrite the terms of a mortgage, but Frank’s legislation would allow that.

He makes a compelling case that this is about protectinb banks and bond holders, so go read his OP/ED