Does acting quickly have the desired effect of appearing to know what you are doing? In the case of the $700B Wall Street bailout, the answer is apparently, No.
Treasury Secretary Henry Paulson panicked and cajoled Congress into passing a bailout that was identified as needed immediately in order to avert a looming economic crash that would have rivaled the stock market crash of 1929. In hindsight, his plan failed to have any effect and the stock market is still fluctuating wildly. Now, after being given complete control over how that money is to be used, he has changed course. This action has angered many who voted for the measure and has raised the question of his credibility and competence.
The plan was to buy troubled assets. Then the money was used to buy shares in banks. Now it’s going to be used to support financial institutions offering consumer credit. Democrats in Congress want some of the money to go to the auto industry.
The money was to be used to “stabilize” the economy. It didn’t stabilize anything.
The money was supposed to buy “troubled assets”, but it will not buy troubled assets.
The money was supposed to “rescue” Wall Street, but has only rescued some big banks and corporations. (The conspiracy theorist in me wants to think that those who were rescued had some ties to the Bush administration. Another theory has the federal government socializing the banking system. But these are fodder for other posts at another time).
The fact is Henry Paulson doesn’t have a clue how to best use this money and the program that was originally passed has changed. (Sounds an awful lot like a scam, doesn’t it).
The majority of House Republicans didn’t want any part of the original plan without more details and therefore did not vote for it. The plan was voted for by House GOP Leadership defying the wishes of the majority of members of their own House caucus. Now, some members of Congress, republicans and democrats alike, are supporting Bloomberg News in its legal demand that the Federal Reserve provide details of the bailout process.
It is down right scary to know that Congress will vote for a plan without details of that plan and place unprecedented power in the hands of a man who has now clearly shown does not know what to do with the money.
So, what we have is an extremely large pool of money (many say is not large enough), a man in charge of that fund who admittedly does not know what to do with it, and a faltering economy that desperately needs to be stabilized. Would demanding Paulson’s resignation improve things? I doubt it.
People are still loosing their homes and jobs, and our faith in our future is being badly shaken. CEO’s and big oil are walking away with record profits. Politicians grasp at any glimmer of hope to keep things working and no one is truly in control of anything.
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