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Hank Paulson, My Hair Stylist: What They Have In Common

CNBC.com

First off I want to apologize for my lack of blogging on Friday. I meant to get back to my desk in the early afternoon, but that didn’t happen. You see, when you’re in the TV business, every now and again you get the call from the official network “stylist” who wants to “rework” your hair and makeup and “freshen up” your wardrobe. In other words, the bosses think you need some work.

I’ve been in this business close to 20 years, and I’ve had 20+ mandated hairstyles. It’s a necessary evil.

So there I was at the salon, thinking it would be a short visit with me smiling and nodding and getting some new bangs or something, when the hairdresser pulled the towel off my head, revealing a color that, if I could put it bluntly, does not exist in nature: Jet black, with the oddest hint of orange.

As the blood rushed to my neck and my heart threatened to burst right through the plastic gown, I had this curious fleeting thought, as only I can, that perhaps this is how Treasury Secretary Paulson felt in the hours after he announced his plan to save the subprime borrower. The good news for me was that the black “glaze” washed out. The bad news for him is the plan sticks, and now he has to sell it.

Secretary Paulson is on the road today, meeting with local business owners as well as subprime borrowers in Orlando, Florida, talking up a plan that has received more criticism than, well, anything Paris Hilton does. Some call it a band-aid, others call it a political ploy, others just cite the facts: The plan relies on a case by case analysis of close to two million loans, it relies on borrower outreach, it is not an automatic nor a permanent freeze for all eligible borrowers, and it has not been agreed to by many investors and industry players necessary to make it work.

Yesterday, former Fed Chairman Alan Greenspan jumped on the "negative" bandwagon, saying he would rather see a government bailout than the Paulson Plan. Using government cash is the answer he claims, because “It’s far less damaging to the economy to create a short-term fiscal problem, which we would, than to try to fix the prices of homes or interest rates. If you do that, it’ll drag this process out indefinitely.”

I don’t envy Secretary Paulson. Here’s a guy who inherited a problem. Essentially an entire industry had let itself go, fallen into dangerous disrepair, and much like our network stylist, facing my dried out, over highlighted head, he was sent in to save it.

Trouble is, like her, he had a limited budget and not much time to work. He is trying to put a new face on the mortgage market, a kinder, gentler, more flexible, work-with-you kind of face, but it is essentially an exercise in damage control, and for many borrowers out there, much like for us rapidly aging, female TV types, the end of the tunnel is dark.

Questions? Comments? RealtyCheck@cnbc.com

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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