It's always worth remembering the famous question that Dsquared posed back in February 2003:
Can anyone, particularly the rather more Bush-friendly recent arrivals to the board, give me one single example of something with the following three characteristics:
1. It is a policy initiative of the current Bush administration.
2. It was significant enough in scale that I'd have heard of it (at a pinch, that I should have heard of it).
3. It wasn't in some important way completely fucked up during the execution.
Now, do I have more faith in Hank Paulson than in Don Rumsfeld? Yes. But given the panicky and incoherent noises that John McCain has been making about the economy over the past week, I can't say the same thing about Paulson's successor. (According to InTrade, there's still a good 48% chance that McCain will be the man in charge of staffing that key position.)
Here's Brad DeLong:
There is no way in hell that anybody should give any extra power to any Treasury Secretary chosen by John McCain.
I beg the Democrats in congress: write a bill that makes sense.
And here's Paul Krugman, today:
Some are saying that we should simply trust Mr. Paulson, because he's a smart guy who knows what he's doing. But that's only half true: he is a smart guy, but what, exactly, in the experience of the past year and a half -- a period during which Mr. Paulson repeatedly declared the financial crisis "contained," and then offered a series of unsuccessful fixes -- justifies the belief that he knows what he's doing? He's making it up as he goes along, just like the rest of us.
To allow the Bush Administration free rein in prosecuting one trillion-dollar initiative may be regarded as a misfortune. To do it twice looks like carelessness.
Endless torrents of bilge have been thrown at everything he has ever touched, and at the entire country solely because he is in charge of it for the time being.
And none of it has ever been anything but utter chutzpa and lies.
Scream as loud as you like, it won't destroy the country. Nothing on earth will. We just win, and the doom mongering shorts just lose.
Deal with it already, and grow up.
The facts show that a significant part of this problem was caused by democrats. FNM/FRE lobbying was heavily skewed toward Democrat members of congress who repeatedly thwarted efforts to reign in the GSEs. Democrat efforts to promote "affordable" housing by promoting 10%, 5% or no money down loans was nothing short of irresponsible. Alan Greenspan (appointed repeatedly by both parties) encouraged home buyers to take out adjustable mortgages after lowering rates too far for too long -- practically guaranteeing that resets would be at much higher rates.... and most recently, the three stooges (Bernanke, Paulson and Cox) have taken a really bad situation and turned it into a disaster.
Your attempts to blame this on one party simply do not hold up. It makes no difference who is in the White House or who the next Treasury Secretary is.
America has lived FAR beyond its means for decades. We are addicted to debt. Like all addicts, we are now trying to blame the drug dealer, society, OPEC, bankers, short sellers, and a whole telephone book full of boogie men.
And now you are trying to pin our spendthrift ways on one guy in the Whitehouse who has been there for only 7 years out of the 40 or so that we have been spending way beyond our means. Roughly half the country strongly dislikes Bush, and another quarter (roughly) doesnt approve of his performance -- so how can you argue that we are following his "leadership" into indebtedness?
We refuse to acknowledge that the real demon is us. We are addicted to debt. We are addicted to spending money we don't have.
Replacing the idiot in the White House or the three stooges will not change the idiots in the voting booth. We need to grow up and take responsibility.
But we only get to PICK TWO.
Paulson is an idiot. McCain is clueless. Obama is an empty suit. Why on earth would ANYONE want to give a politician this kind of power?
FDR, with his meddling and bungling about, exacerbated and extended GD1 and demonstrated clearly why the market must be allowed to clean itself. What the market needs is capital, which comes from savings and NOT from consumption. Do we want to reignite savings, or consumption?
We have an economy that has forgotten how to make things. We have a bloated public workforce. We have a people who don't know how to save. We have a corrupt political system that clearly is beholden to Wall Street and foreign investors alike, but not to the people it "represents".
I say, let 'em crash.
All I've heard from them from the start is gleeful demagoguery about keeping "working families" (i.e. people who bought out of their means) in "their" homes.... forever. On top of bailing out the financial system, which the Dems will have to do too, unless they want every company and consumer in much of the world abruptly paying all their bills in cash each month.
Won't that be wonderful: A massive wealth redistribution scheme subsidizing the improvident at both top and bottom, while those of us in the middle who didn't jump into deep water get to keep renting while we subsidize these jerks!
I suppose the Takings Clause of the Constitution forbids us from retrogressively seizing all the bonuses and beach houses of the Wall Street frat boys who stampeded us into this mess, right? At least that might appease the mob. Pour encourager des autres, and all that.
We've witnessed the greatest transfer of power and wealth from the private sector to the public sector under the guise of preserving capitalism. It's happening community by community where "poor" teachers and municpal and county workers get 30-and-out plans with full pension and medical. How many private sector workers, even managers, have amassed $1MM in their 401k to generate $60k in annual income (at 6%)? State and federal workers have equally cushy deals. Meanwhile, those of us dumb enough to think riches lied in the private sector will be forced to work until death because the public sector has absconded our Social Security and inflated away our 401k assets.