Henry Paulson Begins to Trash His Own Reputation

Until recently, Henry Paulson was one of the few Bush appointees of whom it could be said that his service in the Bush administration was "without distinction." That itself was an accomplishment: very few of his fellows could say the same of their tenure.

Now it looks as though Paulson is losing that distinction--that he has decided to support Bush's blocking for ideological reasons of reasonable steps to deal with the mortgage crisis.

Kevin Drum reads Peter Gosselin and comments:

The Washington Monthly: PAULSON'S PLAN....Peter Gosselin reports on the Bush administration's response to the credit crisis:

Treasury Secretary Henry M. Paulson Jr.'s blueprint for regulatory reform, officially unveiled Monday, sets the stage for a confrontation with Congress by offering no relief for troubled homeowners and in many instances advocating less, not more, federal supervision of the nation's financial system.

Paulson proposed the broadest restructuring of federal regulatory institutions in 75 years with a call to merge agencies and redraw lines of authority that in some cases go back to the Great Depression. But the plan would put off for years any attempt to create new regulations for the streamlined system to enforce.

As a result, even if the new structure were eventually adopted, it would do little to prevent a repeat of the current crisis or something similar, the Treasury secretary acknowledged.

No surprise there. After all, Paulson created his plan a year ago, well before the current crisis exploded last summer. Far from being a way to rein in banking industry excesses, it was originally a conservative wish list designed to "streamline" the federal bureaucracy and lighten the regulatory burden on Wall Street, which was, um, slowing down the growth of sophisticated new financial instruments that %u2014 that, er, were needed to keep the American financial industry in its place as the leader of the world.

As it turned out, the regulatory burden on sophisticated new financial instruments wasn't quite the problem that needed to be solved, but Paulson didn't let that stop him. He just kept his pet proposals in place, slapped a fresh speech together, and called it a "sweeping" new vision. Then he looked surprised when no one was buying it.

Streamlining the regulatory bureaucracy is probably a good idea. There's certainly no need to fetishize the jury-rigged alphabet soup of New Deal agencies that we rely on today. But just for once, would it kill the Bush administration to address an actual problem, instead of merely using it as an excuse to jam some long-wished-for piece of money-con flim-flam through Congress?

This is disappointing. I was assured that Paulson wouldn't fall into this trap, and was better than this.

Comments

[phinsuntanning]

Fiscal Year 2007: Capital/Assets

Bear Stearns 3,0%
Morgan Stanley 3,0%
Merril Lynch 3,1%
Lehman 3,3%
Goldman Sachs 4,5%
Citigroup 5,2%
JP Morgan 7,9%
Wells Fargo 8,3%
Bank of America 8,6%
Wachovia 10,2%
fixing this mess is the priority, not easy task

[EL-GRECO]

This is the same plan that Schumer praised, right? the plan he said was a great start but didnt go far enough?

[Mbuna]

re: This is disappointing. I was assured that Paulson wouldn't fall into this trap, and was better than this. -- If Paulson really was better than this he would not have joined the Bush administration. Remember that disagreement with Bush is considered disloyalty. No ideological divergence is allowed!

[Malkiel]

Everyone knows by now that all cabinet-level appointees in the Bush administration are bullied into submission by Bush and Cheney when they decide to launch some policy. Paulson snapped to recently because someone in the background, usually Cheney, made it clear that that's what he was to do. The Bushies have destroyed the careers of a whole generation of Republicans, including Powell and Rice, by treating them as neocon clerical workers. Paulson will at least have a lucrative career to return to after his reputation is broken...

[gaucho]

Yet another area that this administration can screw up.
We have ethanol which has about 10% energy excess for the energy needed to produce it. Bush saw Brazil with sugar cane which has 800% return and decided to take us down this fruitless path. Get did get an explosion is food costs both here and around the world.

WMDS that were BS war rhetoric from the start just to get at 22 Trillion dollars of Iraq oil. It did not work out as planned. The country would not hold still and be raped.

Management of the Iraq war: Self explanatory for all but the totally dense. What the hell are 600,000 dead Iraqis at least we support abortion.

Energy policy: Tax breaks for the suffering oil industry. Uninhibited drilling for gas, yet natural gas prices went through the roof. Cut funding for alternatives. He placed huge bets on hydrogen which is about 15-20 years away if ever. He blocked efforts for energy conservation the most effective with immediate impacts.

Balancing the budget: Cut taxes for the wealthy. Cut taxes for the wealthy. Cut taxes for the wealthy. Etc. It was supposed to trickle down. I guess it did, the lowest 25% got pissed on. Cut taxes for big Oil/GAS/COAL. Spend on the forever war and the military. He did succeed in cutting funding for day care, health care, and education. What the hell he only double the federal debt to 10 Trillion dollars.

Environment: Ain’t no global warming. Stop the government talking about global warming. There may be global warming we are not going to do anything about it because it could hurt my big contributors.

9/11: Blame it on my predecessor Google the video LOOSE CHANGE final version

Hurricane Katrina: Blame it on the people beneath me that I hired.

I could go on but now that the Titanic has struck an iceberg we get a new captain. Now he can blame it on his successor.

Mortgage/financial regulation. Regulation? We ain’t got no regulation. We don’t need no regulation. I ain’t gotta do no stinking regulation.

I could go on and on but I guess it’s better than some guy like Clinton who got a BJ in the white house. Horrible man got a BJ in the white house. Repeated as lead-in 250 nights in a row on CNBC.

[clitosil]

This story makes a lot more sense than the other stuff I have heard. People were falsely claiming that Paulson's plan is a move towards socialism. That is a red herring. It is actually furthering their general agenda of a fascist state. The federal reserve is not a government entity, but is owned and managed by the member banks, so this is actually a move towards less regulation and transparency, not more. At the same time it is a move to essentially eliminate independent banks, by creating a banking hegemony under the guise of the "federal reserve" system.

[Dr A J]

so much for objective reporting