I just got done watching Hank Paulson (Treasury Secretary) on Meet the Press. I really like Tom Brokaw in charge of the evening News Desk, but boy – I miss Tim Russert!!! Tom’s good, but he lacks the depth of knowledge, the pre-show preparation, and the ability to think on his feet like Russert did. Oh well….I guess Tim’s not coming back, so you play the hand you’re dealt!
Paulson says that excesses have been building up for a long time. There were irresponsible lending and borrowing practices, and ultimately this lead to the mess. My Questions: If this was building up for a long time, why didn’t Paulson warn the administration and the public? Why did Bush keep saying that there wasn’t a big problem with the financial system?? Paulson called the financial system “fragile” and “critical”. How did we go from being the strongest economy in the world to “fragile” and “critical”??
From what I understand, the problem is that banks and financial institutions have unknown and unidentified connections with bad mortgage loans. So banks didn’t know if the other banks that they were lending money to would collapse overnight, leading to a freeze of the credit markets. So in order to unfreeze the credit markets, the Feds are using our money to buy up these bad loans. Paulson does not know how bad these loans are, how much they are really worth, or how much risk is associated with mortgages. Brokaw did ask is the Goldman Sachs board would allow Paulson to spend $85B to acquire AIG with all these unknowns and risk. Paulson beat around the bush, and again – I miss Russert!!! Brokaw was not able to think on his feet to press further, or was just not willing to push this further!
Brokaw asked if it was a good time to start working on new regulations and policies to strengthen practices and improve the financial framework. Paulson says NO!!! He says that we should fix the current problems, and that we do not have time to work on regulations. I agree that we need to fix the current problems, but not wanting to start working on regulations is just plain DUMB!!! I am left with the impression that the Bush administration wants to do just enough to make sure that this does not turn into a complete disaster so that the Republicans get creamed in November, and then leave the really big tasks to the next President and administration.
Paulson just does not inspire confidence!!! He was part of the problem at Goldman Sachs until Bush appointed him the Treasury Secretary. Now we are supposed to trust him with tax payer money to essentially discipline his cohorts on Wall Street!! Isn’t that the fox guarding the hen house??????
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