Paulson just didn't have a clue

[cal04]

Anatole Kaletsky
http://www.theaustralian.news.com.au/story/0,25197,24399961-23850,00.html

THE Emperor has no clothes. If you want to know why American capitalism is on the brink of disaster, but also want to understand what will save it, then log on to the C-Span congressional website and watch the interrogations of Henry Paulson, the US Treasury Secretary, by the Senate and House banking committees.

Until last week, I was in a minority of one in arguing that Mr Paulson was personally responsible for suddenly turning the painful but manageable credit crunch that had been grinding away 18 months in the background of the US economy into a global catastrophe. Mr Paulson's appearances on Capitol Hill, marked by the characteristic Bush-era combination of arrogance and incompetence, are turning my once-outlandish view into conventional wisdom: Henry Paulson is to finance what Donald Rumsfeld was to military strategy, Dick Cheney to geopolitics and Michael Chertoff to flood defence.

Mr Paulson may be a former chairman of Goldman Sachs, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis, without apparently having any idea of what he would actually do.

The good news - before I return to the perils of Mr Paulson - is that his blunders no longer matter very much. There will still be a huge US government bank bailout, which will probably avert a disastrous slump in the US and global economies. But because Mr Paulson has lost the political initiative, this bailout will now be led by the Democratic leadership in Congress and will be structured around its priorities - relief from mortgage foreclosures, restrictions on bankers' pay and big government shareholdings in US banks. For President Bush it is a disaster, dashing his last faint hope of having a tangible achievement to his name before he leaves office.

(snip)
The people who do not understand the role of government should not be regulating markets any more than they should be fighting wars or managing flood defences. P.J.O'Rourke, the conservative writer, once remarked: “The Republicans are a party that says government doesn't work - and then get elected and prove it.” This should be the epitaph for the Bush Administration - and Mr Paulson.

[Skink]

1. I think they did a good job when it came to Fannie and Freddie..

and by default AIG. Now however having seen how easy that was the admin has seized control of the ship and wishes to give away the treasury. Paulson is now helplessly going along with the Bush Cheney cabal out of some sense of misguided loyalty.

[bemildred]

3. A "good job" would have prevented the wild speculation that caused the collapse.

This is more like accidentally getting an arm whacked off and then getting applause because you got a tourniquet on it before the patient died.

[w4k3upn0w]

2. HELP US!

Dear LORD! I saw this man last night on CSPAN and he looked about as lost as a penguin in the desert, he was totally clueless, after seeing him and listenting to his responses, I am not surprised he turned in a 2 1/2 page explaining NOTHING of what or how they were going to use $700 Billion Dollars, it's as though they just made up a number and ran with it. I sure am glad people everywhere are telling them NO! We have bailed out enough companies in the past week and that is good enough, let the rest suffer and let's just watch what happens. Stop the war in Iraq and use that money or something :)

http://www.youtube.com/watch?v=e7kAniKDOTs

The Sky Is Falling!
$700 Billion Dollars should be enough to patch the hole in the sky and save us all.
Also includes Marcy Kaptur who says no to the bail out by introducing a game called 'Let's Play Wallstreet Bail Out!"

;)