Nobody elected Hank Paulson. Prior to being named US Treasury Secretary in March 2006, he was the CEO of Goldman Sachs, so his credibility as someone who has the interest of the whole citizenry first and foremost in his mind is not necessarily high. We did, however, elect George W. Bush to be President, back in 2004. He is the one who has to be held responsible for the actions of all members of his administration, who answer to him. That certainly includes Hank Paulson.
So if the country’s financial system is in such a dire situation that it will take $700 billion of taxpayers’ money to sort it out, shouldn’t it have been the president who told us about that last Friday, at the point when the bailout decision was first announced?
Instead of which, Pres. Bush waited until last night– a full five days later– to make any public statements at all about the crisis and the bailout proposal.
I watched his performance on the t.v. last night, and found it terrifying.
If he was trying to “reassure” the markets and the citizenry, I cannot imagine that he succeeded in doing that.
I think Gail Collins was quite right to note this morning that that Bush was,
- reading his lines flatly and stolidly, like an announcer delivering a long public-service message about new parking regulations for the holiday season…
There is, in a way, a kind of talent required to tell the nation that it’s teetering on the brink of disaster in a way that makes the viewers’ attention wander. Bush’s explanation about how the rescue bill would unclog the lines of credit made the whole thing sound less important than a Liquid-Plumr commercial.
Actually, I think his performance was even worse than she described it. Bush (like Wesley Clark, when I saw him talking about the financial crisis last week) seemed to talk about how the sub-prime mortgages got sliced ‘n diced and then atop them was built a whole shaky house of distinctly sleazy “derivatives” cards, as though he had no familiarity with any of these subjects at all, but was sort of talking about them in public for the first time ever.
And Bush has an MBA from Harvard? (And has been in charge of our country’s economy for nearly eight years, already?)
But it was even worse than that. His face was puffy, his hair a little bushy and ill-kempt, his expression that of a scared rabbit, his affect wooden. He looked as if he’d been having a rough day– or a rough week.
Understandable, perhaps. But he is the person whom, for better or worse, we elected to be the one to take charge of the administrative charge in crises like the present one. And he campaigned hard for the job, two times. So he has to take the responsibility.
And now, we’re in the middle of the election for his successor…
I have to say, first, that I think it’s completely inappropriate for any presidential candidate to be injecting himself (and thereby, the whole business of election-campaign politics) into the present situation of crisis-time economic governance. Neither John McCain nor Barack Obama has any responsibility under the law for dealing with the current crisis that is any greateer than that of any of the other 98 US senators. They are not the leaders of– or even, as far as I know, members of– any of the relevant Senate committees. Yes, they need to be kept informed of what’s going on in the negotiations in Washington (which are reported to be nearing completion.) But they are not members of the current congressional leadership. It is that leadership, the leadership of the administrative branch, and the heads of the Federal reserve and SEC who between them need to reach agreement on the size, terms, and modalities of the bailout package.
McCain’s rushing around acting as though he is currently the “leader” of something is childish at best, an active distraction at worst.
Reminds of a certain young member of our family… someone I’ll refer to only as A… who on one occasion when we came back from a family outing to discover raw sewage welling up into the finished basement of the house started rushing around with a face mask and wellington boots on, shouting “Nobody panic! It’s all under control!” … while the rest of us more quietly set about shoveling out the muck, calling the plumber and the water department, and generally cleaning up.
Actually, that was pretty funny both at the time and in retrospect. McCain’s behavior is definitely not funny.
And neither has Bush’s been on this crisis, so far. It seemed for the first five days after last Friday as if it was Hank Paulson calling the shots. Bush was almost completely MIA on the issue.
Reassuring, as an example of Constitution-based good governance of the country at a time of crisis?
I think not. Shades of 9/11 and the “Pet Goat”, or of Bush’s response to Hurricane Katrina (which famously included taking a bunch of time out to present a birthday cake to John McCain.)
And then, when the Hidden Imam of the White House finally did appear last night, his performance was, as noted, distinctly unreassuring, in style and in content.,
Steve Clemons blogged, quite rightly, that Bush’s performance,
- seems like a bad episode of “24.”
What is shocking about the presentation by Bush — and the deal that is unfolding is that we don’t see any acceptance of responsibility for the failure of his team’s stewardship of the economy…
We didn’t hear Bush say that it’s time to reverse the tax cuts that he put in place to help those who have already benefited from the perverse finance and housing bubble that was pumped up.
We didn’t hear a firm commitment from Bush to help the working families who hold these sub-prime and adjustable rate mortgages to stay in their homes and to help stabilize the lives of hard-hit Americans, their neighborhoods and their jobs. All the while, the macro players and big firms and their stakeholders are bailed out…
Well, let’s hope the Democratic (and GOP) leaders in Congress have succeeded in working out a much more equitable form for the bailout than the one Paulson presented them with last Friday.
The big international players in the global economy don’t seem reassured by Washington’s performance on the crisis so far, either. That matters a lot, given the deep interconnections between the US and the rest-of-the-world’s economies.
Steven Mufson and Anthony Faiola wrote in the WaPo today,
- As the world watched Congress struggle yesterday with a plan to bail out the U.S. financial system, foreign leaders balked at similar fixes for their own economies, a few even dismissing the credit meltdown as an American problem. Some foreign investors who had previously provided crucial injections of capital remained on the sidelines.
Senior U.S. officials, notably Treasury Secretary Henry M. Paulson Jr., have in recent days urged the leaders of other industrialized countries to help prop the global financial system. But the appeals have fallen short…
The NYT’s Eric Pfanner has some even worse news for Washington about the reaction from Germany to Bush’s speech last night.
He wrote,
- Trans- Atlantic sniping over the global financial crisis intensified Thursday after President Bush cited an influx of foreign money into the United States as one of the root causes of the tight credit market.
Peer Steinbrück, the German finance minister, countered in a speech in Berlin that the conditions that gave rise to the current turmoil in the markets were allowed to develop because of a reckless pursuit of short-term profit and huge bonuses in “Anglo-Saxon” financial centers — along with a lack of political backbone to stand up to what he characterized as bankers’ greed.
“Investment bankers and politicians in New York, Washington and London were not willing to give these up,” he said. “The financial market crisis is above all an American problem”
The long-term consequences, Mr. Steinbrück added, could be serious for the United States. “The U.S. will lose its status as the superpower of the world financial system,” he told the Bundestag. “The world financial system will become multipolar.”
That sounds very serious to me.
The Wall Street Journal published a much broader article today (p.A3, behind their paywall), in which it looked at the reaction in numerous foreign capitals to the US financial crisis so far. The bottom line of the reporters who reported that one from Beijing, Berlin, and Seoul: “The troubles of the past several weeks seem to have done more than any downturn in recent decades to sow doubt about the U.S. approach.”
I’ll say.
The whole idea that anyone “has been in charge of our country’s economy” is scary. The United States is supposed to be a democracy, with our representatives in Congress making laws (as stipulated in Article I of the US Constitution) and the executive President executing and administering those laws (Article II). That’s a fairly simple construct, one in which the people are in charge through their representatives, as it should be in a democracy.
Simple though it may be, it isn’t working. What we have is a Decider, a President who in “in charge,” with the Congress rubber-stamping what the President decides, and playing catch-up when he decides the wrong thing. (It’s actually more complicated, with corporate and banking lobbyists involved with drafting laws and so on, but I won’t go into that).
Now we’re told that we’re in another “crisis.” The greedy people who are running things need more money; what we’ve given them isn’t enough. Supposedly nobody knew that this “crisis” was coming, just like supposedly nobody knew that 9/11 was coming. They were both a big surprise, September Surprises, and they both have required that the administration be given lots and lots of money, with few strings attached. Curious.
Aitch of Australia summed it up well on The Washington Note: “Big thanks from the rest of the world for stuffing it up for all of us. It’s not often you see a first world country become a laughing stock in two presidential terms but you’ve managed it. You used to be just loud and bad-mannered tourists easily distracted by our unique wildlife. But now you’re seriously annoying those of us who have our stool in a pile. You are absolutely screwed beyond all shadow of a doubt, with or without a bail-out package. This latest “Do What I Say Or Bad Things Will Happen” pitch from Clueless George is typical of the way America conducts itself on the world stage . . .”
We have a deep structural sickness in the country, and a New Messiah, a new Decider, isn’t the cure. We need to “Re-Engage” domestically before we attempt it internationally. If we can’t bring sense to our own domestic affairs how can we do it internationally? If democracy doesn’t work at home how can we foist it on the world? Non-Americans aren’t stupid, in fact they’re often better informed than Americans are. They don’t buy it and neither should Americans accept it.
We need to get back to the Constitution and hold our representatives responsible for their follies, and stop blaming that fool Bush exclusively. We need, above all, is to curtail the foolishly wasteful spending on the military, their expensive toys and their destructive wars, especially when it causes an economic crisis like the present one supposedly is.
“No man is wise enough to be another man’s master. Each man’s as good as the next — if not a damn sight better.”–Edward Abbey
It is to be hoped that all those “shareholder activists,” who criticised the banks and financiers for the largesse they provided to congressional and Presidential candidates, will now cease their whining.
Was ever money more wisely employed? Did ever a few million produce a bigger return?
There are few questions till now we have no answers to it at all
Where is all the money gone from these big banks?
How these ECO having no a single word tilling the public why they didn’t intervene before the situations went to the deadly zone and bankrupts?
Why any of these big financial firms not resigning with obvious mismanagement skills of top managerial admin should hold account to this crisis?
Are there any secrets that GWB and his administration with these crises? Or it’s some sort hidden game (Financial controlled Chaos) in international financial market?
Hank Paulson’s Secret Life
Years ago it occurred to me that the best response to the Cultivated Despisers of elephants and donkeys might be to ask them where they would begin in explaining U.S. politics to an intelligent Martian: is it absolutely certain that “legislative, executive, judicial” is more basic or more important than “Democrats and Republicans”?
Here in the former Real World, of course, Commanderissimo McCain is indeed “currently the Leader of something.” ’Tis not a Somethin’ that appeals to many of us, possibly, but the militant extremist Republican Party is definitely some kind of a Somethin’ all the same.
Moreover, JSM has been formally designated their Leader by the Somethin’ Folk themselves, who even went on to provide for an Unterhauptführerin in the shape of Governess S. L. Putin (sp?) of Alaska.
Formally the Senatorino from Illinois and the Senator from Delaware are in much the same position as J. Sidney and S. Louise, but this being one’s own invisible something, one is willing to loosen up a little and misquote Will Rogers from memory: “I belong to no organised political party myself. I’m a Democrat.”
Happy days.
Friedman’s fantasy letter To Iraqi government:
What a joke you are lair fanatics
“Hank” Paulson was CEO of Goldman SAchs before becoming Secretary of Treasury. In his last two years at GS he received bonuses of $30 million and $35 million for presiding over the repackeging and selling of billions of dollars of semi-worthless mortgages for enomous profit for GS. And we are supposed to listen to him on how to solve this crises? No wonder his package provided full rescue for the firms, no limits on executive compensation (Which he has backed off on a little) and absolutely no “clawback” provisiona to recover unwarranted executive bonuses bases on “misleading” ( read as fraudelent) valuations of these garbage assets. And we are supposed to buy the bailout proposed by this person?
Martin Luther King, Jr., January, 1968: “I never intend to adjust myself to economic conditions that will take necessities from the many to give luxuries to the few. I never intend to adjust myself to the madness of militarism…”
I am rereading Sbignew Brzezinski’s “The Choice” (2004 Basic Books) to understand what US Foreign Policy might be after an election of Obama.
I found this and thought you might enjoy it.
Paradoxically it is China’s embrace of globalisation, rather than rejection of it that could harm America’s worldwide economic dominance. As noted earlier China is the favourite child of globalisation’s most enthusiastic boosters. It is not only attracting American capital, which sees declining prospects for America’s own home industries, it is rapidly becoming the most aluring magnet for foreign direct investment in general, drawn by the low cost and increasing productivity of China’s abundant labour force. If that trend were to be coupled with a serious downturn in foreign direct investment n America, which currently offsets the negative US trade balances, and with with a progressive decline in in the profitability of American industry, globalisations success in turning China into the world’s prime industrial factory could become a major fator in America’s industial undoing.
Finally the anti-globalsit argument has a more immediate and quite practical dimension. The counter ideologuesrealise thatthe American economy is the locomotive of global developmentand that American power is the foundation of global stability. A significant economic downturn in America, with its resulting disruptive global impact, could reverse the trend toward increasingly free worldwide trade, (strongly favoured by Washington located global institutions). Given that American power is inseparable from a vital American economy, an economic crisis couldweaken America’s global influence, upend the seemingly positive connection between globalisation and America’s security interests and stir up menacing nationalistic economuic rivalries.
This morning as I watch the ongoing haggling about the Paulson plan, I begin to empathise with the German tribes of the fifth century sitting on their ponies and waiting for the Rhine to freeze.
Chronology of the 5th century invasions
401: Alaric king of the visigoths penetrates in Italy
405: The Ostrogoths and other german tribes cross the Danube and the Alps heading to Italy but they where destroyed by the romans near Florence
406: Menaced by the Huns, the Vandals, suaves, burgundies and Alans cross the Rhine river
408: The Visigoths penetrate in Italy, where they siege the emperor in Ravenna
409: Suaves, Vandals and Alans invade Spain
410: The Visigoths with help of some ostrogoths sack Rome
411: The Visigoths march through France
412: The Visigoths Settle in southern France
415: The Visigoths conquer Aquitania
422: The Vandals march to southern Spain
428: The Vandals march to North Africa to aid its governor
431: The Vandals conquer North Africa
435: The romans sign a treaty with the Vandals accepting them as federated in North Africa
436: Aecio organizes the Gaul establishing the French in the north, the Alamans in the south and the Burgundies in the lands surrounding the Rhode river
439: The romans leave Britain. The Vandals rebel and take Carthage
451: The Huns invade Gaul but are defeated in Campos Catalaunicos
452: The Huns regroup and invade Italy but the pope convinced them not to sack Rome
455: The Vandals attack Sicily and other isles, and sack Rome
461: The Visigoths establish their hegemony in the Gaul
465: Vandal rule in the Mediterranean they attack Greece, Epirus and Ilyria
471: Burgundy expansion
474: The Vandals sign a peace treaty
476: The germanic troops in Italy rebel and claim Odoacro as king of Italy. End of the western roman empire
While McCain is keeping America’s attention focused on his ‘reported’ patriotic activities in Washington, who is watching the Rovian members of his entourage as they check and double-check the Diebold voting machines and voter access lists around the country? I think we are headed for a November 4th surprise–Mc Cain is not stupid–just clumsy.
Take of your heroes from Iraq that will save your face and money….
President George W.Bush has spoken,long awaited speech from president of troubled nation.
There will be another speech as USA is in free fall
financially,economically,diplomatically and as a Supper Power
MISSION ACCOMPLISHED!
Sergi
Guys & Girls, I don’t love Hank Paulson. He presided over much of the mess that we’re in right now, taking multi-million dollar bonuses for his troubles. I don’t love the seizure of 700 million in tax payer money. But our society (not simply our economy) needs credit in order to run. If you think that’s not the case, you’re deluding yourself. So we need some sort of entity to buy up the toxic assets, or the walls will come tumbling down a fare shade quicker than anything seen in Jericho. Acting like we can let all these investment banks fail because they fucked this all up, is both fair & nice… but it’s not reality.
Guys & Girls, I don’t love Hank Paulson. He presided over much of the mess that we’re in right now, taking multi-million dollar bonuses for his troubles. I don’t love the seizure of 700 million in tax payer money. But our society (not simply our economy) needs credit in order to run. If you think that’s not the case, you’re deluding yourself. So we need some sort of entity to buy up the toxic assets, or the walls will come tumbling down a fare shade quicker than anything seen in Jericho. Acting like we can let all these investment banks fail because they fucked this all up, is both fair & nice… but it’s not reality.