Put Away the Kool Aid Financial Blogosphere
I wanted to take a minute and offer my own humble advice to the financial blogosphere:
Put Away the Kool Aid and Get Back to Work
Up front you have to understand that I am in no way a George Bush Administration lover. History will judge, and I am sure it will be pretty unkind. But blaming economic issues on one guy is pretty wild, and now has reached fever pitch.
There are many blogs in the "Must Read" list to the right that have gone off the deep end blaming Bush for the actions of Henry Paulson and Ben Bernanke. While there is a TON of blame and criticism for those two clowns, how much of their actions are a direct order from Bush? I mean is he not supposed to be so dumb he can barely walk, now he controls the mind of Bernanke and Paulson? Please. Get off this juvenile line of thinking.
Leading contenders for Obama for the Treasury include Jon Corzine, another Goldman Sachs head, just like Paulson. Think things would change then? OK. Another is the current NY FED head. Again, are we going to see new thinking there? If I remember correctly it was congressional DEMOCRATS that screamed bloody murder to get the TARP bill passed. Think when Bush is gone they will oppose such measures? The FED thinks they answer to nobody and will not disclose lending information. Do you think Bernanke is just waiting for Bush to leave so he can open up the books?
Get back to work guys. We need good solid ripping of our leaders, not fantasies that Bush is single handedly responsible for every move at the FED and Treasury. I know you can do better.
Hank Paulson is Now a Rogue Agent; Stop or Detain at any Cost
Today Treasury Secretary Hank Paulson went out and gave an update regarding the TARP program. You can get a transcript elsewhere, but I will summarize as such:
"You know that business about buying "troubled" (you know, the T in TARP) assets at inflated prices that I was so sure was the way back to Nirvana? Turns out, not so much! It seems the prices needed for worthless paper was so high I would have needed a TARP about 5X bigger! My bad. Well now I have this plan to use the TARP funds (what's left of em, wink wink, hint hint) to directly inject money into banks, non banks, well anything you can think of and really ask them to loan it out. While I have single handedly kept the Universe from imploding thus far, my new step will assure happiness for all. Well, at least some. HAHAHAHAHA"
And thus Hank Paulson has lost whatever credibility he might have had. This man has no idea what to do, and now it should be clear to any and all. Instead of stopping the misuse of immense amounts of money, Paulson is rearing to throw even more money away. The man is clueless and it shows.
Right now Paulson is operating without control and without strings. Paulson is running by the seat of his pants moving mountains of taxpayer money towards whatever goal comes to him on a whim. Frankly, Hank Paulson has become a rogue agent. His actions cannot be predicted, his thinking is unknown, and he answers to no one. As with all rogue agents, Hank Paulson must be stopped. Immediately.
The US congress is scheduled to meet yet again in November (the 19th I think) and here is what must happen:
-No more funding can be approved for the TARP
-Hank Paulson must resign
-Ben Bernanke must resign
-No more bailouts of any kind can be approved until the new President and new Congress are sworn in
That's right, no more action until late January. Obama can speed up his process of appointing new positions, and those guys (or girls) can be ready to go in late January. Everything must stop. The daily running around like headless chicken dance has to end right now.
In the meantime, the congress will simply have to do actual work this holiday season. If this is indeed a crisis as big as the Great Depression, I feel it is required that the LEADERS OF OUR NATION spend the coming months time doing the following:
-Get full disclosure on ALL LOANS made by the FED and Treasury
-Make this disclosure public and available
-Have an open and televised debate with a panel of REAL WORLD economists to get alternate views than just Keynesian number cramming baloney (sorry Krugman)
-Settle on two or three programs to stabilize (in theory) the financial system or to minimize the damage
-Have the new congress vote on their choice with Presidential input
This plan is how clear thinking people go about things. This is how rash decisions and spur of the moment actions are avoided. No more one week fake discussion about how to save the universe. It may take two weeks to come up with a plan. Maybe three.
Right now is the last chance for any kind of end to the lunacy of the last 3 months. Congress must stop Hank Paulson and detain Ben Bernanke. Money must stop being hemorrhaged into failed plans and failed companies (hello AIG). Some kind of reason must be restored. The USA right now looks like a nation led by clowns thanks to the hi jinks of Paulson today. Only decisive action right now can stop a panic from setting in. I really cannot believe how confused and lost the US treasury secretary seemed today. He needs a break. Let's give it to him.
American Express becoming a bank? GE sort of doing the same? The US government getting set up to be the public and private loaner of only resort? Too much to follow. What I will say is that in a post from a while ago, I stated the US consumer and US companies are now set up in such a way that they cannot operate in an environment where money is not basically free. Only at historical low interest rates can 90% of the US economic structure function. Anything higher and they go bust. This is now readily apparent.
The move by the Treasury towards lending money to all at less than market rates is a reflection of this fact. Many companies could get financing right now, but they choose to not do so because the higher rates they would have to pay would cut into any profits, and they do not have to pay those rates thanks to the FED/Treasury actions. I think you can figure out how this is going to go.
Have a good night and detain Hank Paulson on sight!