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Paul Kiesel
Paul Kiesel
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Bush’s HUD Nominee

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Steve Preston has been given the nod by President Bush to be his housing secretary nominee, according to a senior administration official. Fortunately, this appears to be a bipartisan move, with Democrats hailing Mr. Preston as a “problem solver.” Yet there are some doubts as to whether Mr. Preston can quickly fix the housing mess, if even at all, if he is confirmed.

Mr. Preston, 47, was formerly the head of the Small Business Association. He succeeds Alphonso Jackson, who resigned after allegations that he gave housing contracts to friends in New Orleans and the Virgin Islands after the 2005 hurricanes that hit the Gulf Coast.

This is a very interesting move on President Bush’s part, because Mr. Preston had received much criticism after being appointed to head the SBA. After graduating from the University of Chicago’s MBA program, Mr. Preston worked for several large corporations, like ServiceMaster Company, a multi-billion dollar corporation whose businesses include TruGreen Chemlawn and Terminix, where he served as an executive vice president. Mr. Preston had, in fact, never worked for a small business after receiving his MBA, and it was ironic that a man who had done very well for himself in the corporate sector would be the SBA’s administrator.

Earlier this year, according to The New York Times, Mr. Preston was, “sharply criticized when Democrats in Congress learned that his agency had given a $1.2 million contract to a former Bush Administration official who lacked experience in helping small businesses compete for government contracts,” (4/18/08).

It is unclear whether Mr. Preston will be able to protect the hundreds of thousands of troubled homeowners from the risk of foreclosure by helping them refinance unstable subprime loans, and turning them into stable government-backed mortgages. One could be optimistic that Mr. Preston knows the corporate side to this mess well enough, therefore, he can quarterback what appears to be a losing team (the subrprime mortgage fiasco on both sides) back to .500 or a stable level.

However, if the housing and mortgage crisis isn’t dealt with promptly by Mr. Preston, it might be end up being too late for him to make a big enough difference that the economy and borrowers need right now.