On to Bailout #2 - Is the Hubbard Plan next?

Earlier this month The $700b Bailout was passed into law. Labeled the Emergency Economic Stabilization Act of 2008, it provides Paulson & Co. $700b with which to purchase any type asset from any investor it deems worthy of its favor (among other things).

Not only did it receive a considerable backlash from the general public and quite a few government representatives, but it also drew criticism from a significant number of economists around the country. One of those economists was Jeff Miron of Harvard, who suggested that the banks and investors who purchased all of these risky, non-performing assets bear the responsibility and file for bankruptcy if need be and the American taxpayer should not bail them out.

Another such economist (though not on the list linked above) is Glenn Hubbard, current dean of the Columbia University Graduate School of Business and former chair of the Council of Econimic Advisors. Mr. Hubbard has come up with his own plan which he presented in an editorial in the Wall Street Journal on October 2nd:

First, Let's Stabilize Home Prices

"We propose that the Bush administration and Congress allow all residential mortgages on primary residences to be refinanced into 30-year fixed-rate mortgages at 5.25% (matching the lowest mortgage rate in the past 30 years), and place those mortgages with Fannie Mae and Freddie Mac. Investors and speculators should not be allowed to qualify."

In addition to focusing on the very real problem in the housing market, the plan could be implemented immediately. As a result of the U.S. government's conservatorship of Fannie Mae and Freddie Mac, origination of new mortgages can be financed quickly. Congress would have to raise the overall borrowing limit and approve the new federal purchases of negative equity loans. But it will likely take the Treasury much longer to buy troubled assets than Fannie and Freddie, and it would have to seek the involvement of many additional private actors, as opposed to using vehicles already in place. The decline in housing prices remains the elephant in the room in the discussion of the credit market deterioration. Let's start there."

The Hubbard plan was also covered by NPR:
Bailout Critics Say It Won't Fix Underlying Problem, NPR Morning Edition 10/3

Is this a viable and/or appropriate solution for our ailing economy? Or is Hubbard just trying to score a few points on Bernanke (the guy who took his spot at the Fed)?