Treasury's Waffling Rattles Confidence

Paulson also said on Wednesday that the administration is exploring other options for the unused bailout funds. One option is injecting more capital into banks, while requiring them to match public funds with private ones. Another is to use some portion of the money to further bolster efforts to help mortgage borrowers who are at risk of default.

One such approach favored by Federal Deposit Insurance Corp. Chairman Sheila Bair is to guarantee reworked mortgages to reduce monthly payments for borrowers, though Paulson did not say it would be adopted. Michal Ann Strahilevitz, an associate professor of marketing at Golden Gate University, says homeowners and taxpayers who need support don't have much faith in the system themselves.

"More and more Americans are losing their confidence in the 'expert' policy makers who are not only seen by the viewing public as partly responsible for the current economic crisis, but who are also seen as inept in their attempt at fixing the mess they helped create," Strahilevitz says in an email message. She added that "to restore confidence, there will need to be either far better communication from the policy makers to the public, or a clear change in who appears to be calling the shots."

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