Fire in the Hole(s)!!
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- September
- 21
As of now, Henry Paulson is getting rave reviews for his bold and decisive leadership. But you have to stop and ask how the “financial crisis” would have been handled if the Treasury Secretary wasn’t an ex-Goldman Sachs man. Perish the thought, but a person who doesn’t live and breath in the dense, self-adulating oxygen of Wall Street might not have been so quick to further indebt an already war-ravaged treasury over a ludicrously gargantuan Wall Street bailout. Why couldn’t strict regulations on shorting financial shares have been put in place six months ago, when we knew something was was wrong, before the implosion? Why couldn’t mortgage brokers, mortgage securities (and the Rip Van Winkles who rated them) have been reined in before all the credit dried up? And obviously the other burning question is: Why am I not the Treasury Secretary?
This entry was posted
on Sunday, September 21st, 2008 at 6:47 am by Matt Davies.
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(I’m reminded of “Silence of the Lambs” when Clarice Starling shouts down “THE OTHER OFFICERS WILL BE HERE ANY MINUTE NOW!” to Catherine in the well.)
Why am I not the Tresury Secretary?
Spelling issues? You know more about black ink than red?
Matt,
I loved the cartoon in part because it cut quickly to an otherwise long & winding chase.
I have 2 questions of my own:
1) I hear Bernanke & Paulson are talking to Congress about managing the crisis. Remeber CONGRESS? We actually elected them.
2) If the Prez & the Cabinet dig any more holes, think they’ll @ least strike oil while they’re down there?
DebS – That’s a funny observation!
Richard – Thanks for pointing that out. I am usually a pretty good spellar.
Come on…the only way to make any sense of the gargantuan bailout numbers is to put them up against government spending. (Only 2 years’ military budget!!!) Only politicians can deal in these abstracts…and Paulson would have got there quicker if he’d have been a proper politico. Oh, except he would have been delayed at lunch with the lobbyists, so maybe not. And we still remember who lunch is for right?
(ps Matt…who cares about the shorts…they’ve still got to buy ‘em back….look at the UK where they’re investigating undue profiteering from a last-week bank merger– by buyers!)
Also..(never to let the parenthesis get the last word) “Why couldn’t strict regulations on shorting financial shares have been put in place six months ago,”...why couldn’t have strict regulations on–simple term this–overborrowing have been put in place 6 months/years ago. Isn’t it a little too easy to blame the last suckers standing when the music stops/the punch bowl gets shattered by somebody collapsing in it? What about the federal government getting some of the blame for encouraging household leverage by offering 100 % tax relief on mortgage debt?
Purity…That’s the point. The Gov. just banned shorting when it’s now suckers standing round the flaming, smashed apart punch bowl. Why didn’t a treas. sec. who is sophisticated in the ways of wall street see it coming?
The 100% mortgage interest deduction is probably the biggest sacred cow in US politics.
Pols are willing to just let AMT step in and do the dirty work!
But Matt…you joining in and placing a few convenient bankers under the pendulum (or in the pit per your cartoon) only perpetuates the convenient “Wall St. fat cats” mythology that is gaining currency by the day. Government is actually the perpetuator of the booms-that-bust. By joining in with the shrill cries against the short sellers you’re effectively propagandising on their behalf. And when the government takes back in taxes what they subsidised in the first place, these scapegoats increase their value. The US has operated a “social capitalist” (ie state subsidised) policy in the property market for 80 years. That’s almost the entire life of popular housing ownership; and that is the system that has failed. Largely because of the system risk that government credit ‘guarantees’ initiated, capitalism has been brought down in its current form by socialism.
All of which has bugger all to do with Paulson…and everything to do with politicians who have been too busy looking after their own interests to make the tougher decisions that were necessary…for 80 years.
‘the convenient “Wall St. fat cats” mythology that is gaining currency by the day.’
You are kidding right? You must work on Wall Street! And of course no short seller EVER propagated rumors to push a stock price down before the end of the trading day, huh?
Truthfully, I think we can all agree that there is no single cause. The tax code is one. Also, the lack of oversight of mortgage writing and mortgage securities ratings, unsophisticated homeowners, opportunistic investors, Alan Greenspan etc, etc. all contributed to the mess.
I think this may be the most active head-to-head debate I’ve ever seen Matt get involved in on this blog…
Oh sh*t. Just realised I am now standing in the middle of a freeway. RUN AWAY, RUN AWAY!
D-Man…I think you may be right. Apart from the fact that “Purity” is a knowledgeable poster, more importantly he is also a thoughtful & reasonable poster (just like you! -Take a bow D!)
I am nonetheless unswayed by any argument that seeks to remove blame from Wall Street brokers and bankers. They knew that what they were doing was crap, but people do crappy things when they smell a chance at big money. And Wall Street is all about smelling chances at big money. And meanwhile all we are left smelling, is crap.
Or she….thanks for the compliments.
I don’t work on Wall St. and am just passing observation that while the crap stench emanates most powerfully from that direction, let us not forget that conjoined with the “New Greedy” are the politicians who framed the mortgage interest tax relief because it gained them votes, and federal Governor Greenspan who gambled the most and gained stature while others lost their heads, and–now–houses.
“Or she….”
Apologies, Purity.
The same can then be said about all tax deductions though right? Business, charitable etc. It all boils down to Government (read: us) subsidies for all.
Agree on Alan G. He opened the flood gates.