Paulson's Panic
The Washington Post
By Robert J. Samuelson
Wednesday, September 24, 2008; Page A23

Call it Paulson's Panic. That's both unfair and accurate. It's unfair because Treasury Secretary Hank Paulson didn't create the underlying conditions that led to today's financial turmoil, and the failure for not quelling it is shared by Federal Reserve Chairman Ben Bernanke. But it's also accurate, because as world financial markets verged on panic, Paulson himself panicked. He saw no remedy except a massive bailout: having the government buy up to $700 billion worth of risky bonds.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092302326.html?wpisrc=newsletter&wpisrc=newsletter

Historians will judge whether his outsized proposal was necessary, but the notion that its congressional enactment -- assuming that happens -- would magically end the crisis seems like wishful thinking. Americans often delude themselves that all problems can be "solved" if only government would act "boldly." This may be another example.

But it wouldn't automatically stimulate new lending, revitalize "securitization" or prevent more "deleveraging." Time is needed. The rescue is being constructed so hastily that it may include all manner of flawed provisions: too much power for the Treasury secretary; authority for bankruptcy judges to modify mortgages. Congress faces a wrenching dilemma, imposed on it by financial markets and Paulson. If it dawdles, it may invite the panic that Paulson has brazenly predicted. But if it acts quickly, it may create a monster whose full implications emerge only with time.

They are not 'risky' bonds, its $700 BILLION of worthless paper.

Well .... Isn't it risky to buy almost a trillion dollars of worthless pieces of paper? *moue**smile*

I would have thought so, but everyone else seems to think the idea is so swell, how could I be wrong?

No, dear man, not everyone. A few of us have actually written to congressmen and senators in the past day or so to demand that they do not approve this "recovery" pakage. And no, I'm not talking about a pre-fab email. Just a FAB! one.

But, from all I've read it seems like the hard-sell on the approval will come from the Pubs.

Yeah, maybe it's the old "Hannibal at Cannae" trick where you feign retreat and hope the enemy follows your retreat into the waiting jaws of am envelopment. But, still, there might be some hope here that the DC-crew doesn't totally give all the architects of this a totally free-pass. And doesn't let one of the biggest gung-ho CEOs to approve it, Paulson, bail out his firm and all the other's and their admins who got this house of cards so high in the first place.

One hopes.

Oh yeah, its like asking Hugh Heffner to head up a study to reduce masterbation by teen age males.

Now McCain want to 'suspend' the campaign (which we never did during the Civil War, the Great Depression, WW I and II by the way....)  Could it be that he's losing?

Come on, its the Pub's that are not going along with this massive bail out, So, a situation created by these same people over a matter of decades, has a solution thought out over the course of like 48 hours?  And we should just go along and vote for this. 

FOR THIS?

Look at the language used in the bill....


"may not be reviewed by any court of law or any administrative agency."

Good god, your kidding me right?  This is beyond insane. 

Yeah, that little "non-review, this is our idea and you damn well keep your paws off it" is the most troubling thing about it. Yet another firm brick in that wall that seems to be an attempt to simply do away with any semblence of balancing governmental duties. I can imagine Nixon having wet-dreams of that, but never imagining he could make the Presidency THAT imperial.

Just one laugh after another with the Paulson/Bush/Cheney?McSame "ideas", eh?

$700 Billion, no sort of going back or detemination of its constitutionality or feasibility or being able to stop it once it starts and you better pass it today or the sky will fall!!

O, wait, there's a report on the radio just now, NPR!! The Reichstag is burning!!!

Nikki

Amazing.  Let's give the money away!  Let's not review it!  If they wanted to take the $700 BILLION with a B and go out and spend it like a rock star on hookers and blow, you could not do anything about it.

Your right about this being a Nixon wet-dream. 

Oh, and we had to ignore all this for years, decades - you know, its private enterprise, mustn't do anything about it, but now, all of a sudden, open up the money.

You know this amounts to like $81K per taxpayer.  So, we're all going into 81 thousand dollars of debt each, but have no right to say anything about it.

"You're welcome" I think would be the appropriate thing to say. Just that, over and over again, because there will surely be no "Thank you" that precedes it.

Nikki

My new bumper sticker is "Obama, at least he'll give you lube!"

This is a crime, the biggest robbery in history, right before our eyes, and not a cop in sight. 

See: once you knew the people could be sucked out of this (See: Savings and Loans in the 80s, which McCain had a role in) then it was only a matter of jacking the numbers.  So this year, well charge you $81K, and next year, you think they are not coming back for more?  Why do I doubt that.

Let me see if I got this right. The feds allow easy credit so people can buy houses and cars they can not afford. Then the banks complain they can not lead any more money because people can not pay it back. So then the feds lend the banks more 700B so they can lend to people to buy more houses and cars they can not afford so they do not lose there jobs making houses and cars. This is what you call Bush logic? No wonder the heads of these banks make 26 million a year.