Sep 20 2008
Henry Paulson is the only shiny coin in the Bush Administration fountain
The Bush Administration will go down in history as one of the worst Presidencies in our great American history. The list of failures is quite lengthy and these failures and blunders will have long-term ramifications to the health of this great nation. George W. Bush, simply stated, is incompetent. He is in street terms a fu—p. Excuse my broken French.
There is little to praise here: just go down the line. The Iraq War, tax breaks for the wealthy, a no-growth economy, a short-sighted energy policy, little regard for the health needs of Americans. It sickens me. But I saw it coming back in 2000. I couldn’t believe the 2000 election was that close. He screwed up in the oil business, couldn’t run a baseball team and then made his mark executing innocent people when he was governor of Texas.
But occasionally a light shines in the darkest places. In 2006, George W. Bush named Henry Paulson as his Secretary of the Treasury. Paulson’s predecessor’s, Paul O’Neil and John Snow both served uneventful terms early in the Bush Administration. History will one day show that it was Henry Paulson’s presence that save George W. Bush from being ranked the worst President of all time.
With President Bush, frozen like a deer in headlights (see photo below of President Bush after being informed of the crisis), Paulson clearly took charge of the situation and met with the Fed Chairman and Congressional leaders (Democrats and Republicans). Where this will lead is uncertain at the moment, but it is clear Congress will pass a comprehensive plan shortly. My hope is there will be relief not just for the mortgage companies but for individuals caught in this mortgage trap.
Henry Paulson’s proposal is for the government to purchase the bad mortgage debt in the market is similar to the savings and loan bailout of the late 1980’s, in the form of a Resolution Trust Corporation (read Street.com explanation of the Resolution Trust and how it will differ today).
WASHINGTON — An enormous, taxpayer-financed program to buy up bad mortgages and other distressed debt is necessary to protect the savings and aspirations of millions of Americans, President Bush and Treasury Secretary Henry M. Paulson Jr. said on Friday.
“We’re talking hundreds of billions” of dollars, Mr. Paulson said at a briefing in which he underscored the depth of the problem, pledged to work with Congress to address it quickly and voiced optimism that, in the end, the country would emerge from the financial chaos.
Seeking to dispel any impression that the bailout would amount to a rescue of greedy Wall Street executives by Main Street Americans, Mr. Paulson said the program would “cost Americans far less than the alternative.”
Because Henry Paulson, the Secretary of the Treasury, saved this nation and the world from certain economic collapse by this decisive action he took, he saved George W. Bush from being ranked as the worst President of all time competing with the likes of James Buchanan, Herbert Hoover and Warren G. Harding.
It is interesting to note that Paulson’s former firm, Goldman Sachs, has survived this crisis. Goldman Sachs has a tradition of former executives serving in government, such as Jon Corzine, Stephen Friedman, and Robert Rubin. Each have made their mark in the business world and in government. While the road toward a mortgage recovery will be long and winding and nothing is certain at this time, it took this former Goldman Sachs CEO to take the initiative in this necessary first step, in spite of a President “caught in the headlights.” Reading on Walden Bookstore.
2 Responses to “Henry Paulson is the only shiny coin in the Bush Administration fountain”
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Er, I hate to bring this up, but:
“(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
So essentially the Treasury Secretary can buy any assets he wants on any terms he likes, he can hire anyone he wants to do it, and he can write any kind of regulation he wants. The Treasury Secretary is now essentially in charge of oversight of the Treasury Secretary, and Congress is abdicating once again its own oversight powers, only getting a report from the Treasury Secretary twice a year.”
Again, from the language of the Bill:
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
That scares the crap out of me, even more than the federal reserve does as it is.