Paulson’s Regulatory Strategy in Full

Treasury secretary Henry Paulson’s ambitious plan to overhaul the US regulatory structure appears to draw more than a page or two from previous Bush administration misadventures.

1. The False Premise

Iraq: Claim Saddam Hussein has weapons of mass destruction and helped al-Qaeda stage the 9/11 attacks.
Paulson: Claim securities industry regulation is the principal cause of an alleged decline in US competitiveness in global financial markets.

2. The Invasion

Iraq: Win military victory. Announce “Mission Accomplished.”
Paulson: Set up Committee on Capital Market Regulation to deliver preconceived recommendations. Announce “Mission Accomplished.”

3. Katrina Intervenes

Bush: Pretend to give a rat’s ass as almost 2000 people die, and more than 1 million people are forced from their homes. “Heck of a job, Brownie.”
Paulson: Pretend to give a rat’s ass as credit chaos forces hundreds of thousands from their homes. “Subprime mortgage problem is contained.”

4. Exit strategy

Iraq: Kick can down the road, paying lip service to the loss of American and Iraqi lives, while winking at military-industrial complex corruption. Bequeath problem to next administration. Retire to farm in Crawford, Tex.
Paulson: Kick can down the road, paying lip service to the little people, while encouraging investment banks to lie about portfolio marks. Bequeath problem to next administration. Retire to farm in Illinois (with occasional trips to New York as a recently appointed director of the recently enhanced JP Morgan Chase (JPM)).

Blueprint for a Modernized Financial Regulatory Structure
US Treasury Mar. 31 2008

Comments

[iThinkBig]

Hi Greg, I suppose in your skewed opinions Socialized everything and voting in Obama will solve all the problems right? The Fed should have moved harder and faster back in August. Other then that, their actions are nothing short of heroic. Paulson has got it right here on accountability. The confidence of the global investor has to be restored.

Want to cry about the little guy losing his home to foreclosure? Ask the Democratic Congressmen/women why they created a set of laws to lend to people whom should never have qualified for a loan in the first place. Paulson is doing damage control here buddy with the second party responsible being the lenders themselves, who ran shadow banking practices betting on an indefinate housing bubble. This is Bush's fault? The guy did seem to take his boots off and act like he was retired for a time, but I see the President all over the place right now.

The friends I know in this camp of foreclosure spent well beyond their means. They were either builders whom refused to listen to me about bubbles and how markets work and overspent or were flipping houses and got caught with their pants down, again overleveraged. They squatted in foreclosed homes for a year and I repeatedly advised them to call their bank and offer half their mortgage payment for a year to stay in the home. Did any of them call? No. Finally a Sherrif arrives when they refuse to show up for court and escorts them physically out. I am sad? NO! I didn't eat lobster and steaks, do drugs and waste time in June when I knew what was coming, I preserved cash and advised these people to do the same.

Iraq was a painful lesson to this Administration to do your research prior to going in. Every President since 1946 has had a policy to secure our energy supply as a matter of national security. Now my opinion on this is Iraq should have been ignored after 911 and America should have invested hundreds of billions into our own domestic drilling, on shore and offshore. Nuclear plants should have been built, at least twenty in my opinion and biodiesel and coal liquification/plants should have sprang up everywhere. To get out of tidal waves of financial calamity, we must do this in America. It's a bit hard to accomplish when politicians and constituents alike are making billions in investment profits and these include both Republikrats & Demopubs alike but it's a matter of time before the quickly becoming poor middle class vote in leadership and sadly, this will not be this election. All candidates stink, although I'll take Republican over Socialized tax increase/wealth redistribution any day of the week.