House of Cards, part 4

Lots of interesting commentary out there on the blogs.

Hank Paulson tells us that we really better give him a blank check for $700 billion, with essentially no oversight.  Is it true that this is the only solution?

“Many Economists Skeptical of Bailout” by Avi Zenilman at politico.com

Arnold Kling posts an open letter to Ben Bernanke, reminding us of an earlier time when a Treasury Secretary performed radical acts on the economy…

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Comments

  • Jim  On September 22, 2008 at 8:06 am

    The WSJ today gives their opinion of the political shenanigans (the peoples shenanigans in our system!) over the past 31 years which have contributed greatly to the problem – in fact I believe they are the greatest contributor! Yes, the greed of society drives us to the problem, but the politics is the enabler. Greed has always been – and will always be – with us.

    http://online.wsj.com/article/SB122204078161261183.html?mod=djemEditorialPage

    If you give this argument any credibility, then it is hard to deny the politicians (that is – US!) the opportunity to bail out the system!

  • Curt  On September 22, 2008 at 9:36 am

    There’s no doubt that there are many causes of the current situation… and it’s not that I believe there should be no bailout. I do think we all need to take a breath and figure out whether this bailout plan will work, and what its impacts will be.

    Here’s an interesting take on whether Hank Paulson’s too powerful at this point…

    http://blogs.wsj.com/deals/2008/09/21/is-hank-paulson-too-powerful/

  • Jim  On September 23, 2008 at 11:15 am

    I would like to see Heidi N. Moore’s bio. The article seems more innuendo than fact. Could be correct, but I would like more facts.

    I think all will agree we are in a potential crisis. Crises take swift action to avoid them. Hank Paulson is the guy on watch – picked by W, so probably not too popular – and I think we have to let him do his thing. Congress does not have time to second guess at the rate they work. If Paulson is not to be trusted, I would suggest voting for Obama and getting a new Treasury Secretary for the next crisis. Let’s let our current guy do his thing!

  • Curt  On September 23, 2008 at 12:00 pm

    A few points:

    1. I don’t doubt that Paulson knows Wall Street and the markets. He is undoubtedly a much more capable Treasury Secretary than, for instance, Bush’s earlier pick, John Snow. But he’s also a short timer – he’s got 4 months left. I haven’t heard McCain say that he wants him stay – it seems like McCain is all over the map on this stuff, and to be honest I don’t have much confidence in his economic advisor Phil Gramm (“nation of whiners”). I don’t know who Obama would pick, but either way it’s going to be a tricky hand-off of a major operation in January.

    2. In any case, I suspect some bill will be passed shortly, and Paulson will get his chance to be the big market-maker on so-called ‘toxic assets’ (with more or less oversight depending on how things shake down). I can only hope it works – if it doesn’t then the underlying situation may be even worse than suspected.

  • Curt  On September 23, 2008 at 6:56 pm

    Jim, I can’t help asking you a couple hypotheticals:

    1. What if this was a Democratic administration? Would you still say “let him do his thing” with $700 billion (about the budget of the Pentagon for a year)?

    2. What if it was a Democratic administration declaring that there was a “climate change crisis” and they wanted an emergency budget of say $70 billion to “fix it” (giving you a three page doc that said there was to be no review of the fix)?

    I guess the bottom line question is do you think you apply the same standards to both parties, or do you perhaps trust Republicans more, thus give more slack?

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