Nov 21st, 2008 at 2:12 pm
Paulson on the Job
The Wonk Room notes Hank Paulson’s disturbing habit of proclaiming that everything is fine just before some new piece of terrible news hits. Just last week he said “the banking system has been stabilized.” Now Citigroup is on the verge of collapse.
And yet for some reason some keep feeling that Paulson is worthy of things like gushing Washington Post writeups. It’s frightening to consider the implications of the fact that the Secretary of Treasury doesn’t seem to know what he’s doing. But just because it’s frightening doesn’t mean we need to be in denial about it.
45 Responses to “Paulson on the Job”
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November 21st, 2008 at 2:14 pm
Of course he knows what he’s doing- he’s taken very good care of his Goldman buddies.
November 21st, 2008 at 2:26 pm
But just because it’s frightening doesn’t mean we need to be in denial about it.
But we do need to be in denial about it — otherwise we might panic…and then things will really start falling apart.
November 21st, 2008 at 2:26 pm
Paulson is tall, bald, and officious-looking.
That’s a strong argument for Paul Volcker for Treasury. Or maybe Kareem.
November 21st, 2008 at 2:27 pm
i must say, i’ve been astonished: goldman is supposed to be a smart bunch, and this guy was the managing partner. that’s why i keep saying to myself there must be more to this, although possibly the “more” is that goldman isn’t such a smart bunch after all.
November 21st, 2008 at 2:35 pm
And yet for some reason some keep feeling that Paulson is worthy of things like gushing Washington Post writeups.
C’mon, Matthew! If the Washington Post didn’t write gushing articles about rich Republicans years after everyone has realized that they are in fact, idiots, who would? We have to consider the delicate Washington ecosystem here. If stupid rich guys were wiped out, hordes of lowlifes from places like Missouri or Illinois or other foreign nations would move in and might do things that would hurt the feelings of people in Virginia, and then there would be all this whining by all those insecure guys, and we’d have to go to war with some midget country to make things better. Or even worse, they might cancel their subscriptions. They’re very sensitive and stuff, you know.
Are you trying to ruin the economy or something? You should pick on disgusting subhuman cannibal union workers like everybody else.
max
['Real estate prices would fall! Dogs and cats would live together in sin! Blood would run in the streets and the world would finally end!']
November 21st, 2008 at 2:35 pm
It’s frightening to consider the implications of the fact that the Secretary of Treasury doesn’t seem to know what he’s doing.
And your evidence for this is that he said the banking system is sound? What would you have him do: say Citigroup is on the verge of collapse? Think about the merits of that approach for a minute.
November 21st, 2008 at 2:45 pm
And your evidence for this is that he said the banking system is sound? What would you have him do: say Citigroup is on the verge of collapse? Think about the merits of that approach for a minute.
He could make reassuring noises without making rosy assesments that are almost immiediately contradicted by events in the world. I think the technical term for your response is “false dillema.”
November 21st, 2008 at 2:52 pm
Rosy assessments? He said the banking system was stabilized. That sounds more like a reassuring noise to me. He didn’t say Citigroup stock was a screaming buy.
Besides, it’s up to Citigroup to make sure Citigroup doesn’t go bankrupt. To the extent Paulson has tried to help the banks, he’s been crucified for doing so.
November 21st, 2008 at 3:01 pm
It’s more than the fact that Paulson constantly undercuts his own credibility by making bold pronouncements that are proven inoperative shortly after leaving his mouth.
It’s also that all his plans have been wrong. Anyone else remember how we were going to buy up assets, and mean ol’ Barney Frank insisted the legislation give us the right to buy equity?
And it’s also that he’s not telling anybody what he’s up to. There’s a lot of ways to do this bailout wrong. His first public plan was a way to do it wrong, and it was only after a lot of pressure that he did something more effective. What is he doing that’s wrong that we don’t know about? Because he’s telling very, very, very little.
Not to mention, uh, all this happened on his watch.
November 21st, 2008 at 3:08 pm
What can one logically expect–as a member of the all time reverse midas touch team aka the George W. Bush administration or the Humpty Dumpty brigade, Paulson is a man of his era–inexplicably inept.
November 21st, 2008 at 3:09 pm
Not to mention, uh, all this happened on his watch.
Yes, a more competent treasury secretary would have prevented the collapse of the biggest asset bubble in history.
November 21st, 2008 at 3:15 pm
To paraphrase Atrios, Washington’s full of people who find big GOP daddies in nice suits reassuring.
Why should the local vestige of journalism disagree with those values?
November 21st, 2008 at 3:16 pm
“Oh, pay no mind to that cow, she’s the best behaved girl in the barn.”
Catherine O’Leary
October 8, 1871
November 21st, 2008 at 3:17 pm
As was pointed out on Bespoke yesterday – here are some of Paulson’s greatest hits:
Marketwatch 3/13/07: Paulson also said the fallout in subprime mortgages is “going to be painful to some lenders, but it is largely contained.”
Reuters 4/20/07: “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.”
Bloomberg 5/22/07: Paulson, also speaking to CNBC, said the housing slump was “largely contained” and that market’s correction was mostly “behind us.”
Bloomberg 6/20/07: Subprime fallout “will not affect the economy overall.”
Forbes 7/27/07: Appearing on CNBC with other members of the Bush administration’s economic team, he again said mortgage industry problems would be ‘largely contained.’
Boston.com 8/1/07: Paulson added that he did not see anything that caused him to reconsider his view that the economic damage from the housing correction was “largely contained.”
And yet, Paulson has the cojones to try and rewrite history, saying at the Ronald Reagan (natch!) Library yesterday
“By pro-actively addressing the problems we saw coming…”
as if…
he then of course added the obligatory, “As I assess our current situation, I believe we have taken the necessary steps to prevent a financial collapse.”
Do we really want a treasury secretary who says soothing things and rewrites history while the world is going to hell in a handbasket?
November 21st, 2008 at 3:29 pm
Do we really want a treasury secretary who says soothing things and rewrites history while the world is going to hell in a handbasket?
Well it would be good for him to come up with plans to help fix the problem, but it’s the hell-in-a-handbasket that’s the problem, not the soothing things or the rewriting of history.
November 21st, 2008 at 3:36 pm
So I guess you enjoy having leaders lying to you Brian rather than telling the truth. Sounds like a very Republican trait, if you ask me.
November 21st, 2008 at 3:38 pm
I’m not at all Republican, but yes I think it’s natural for the US Treasury Secretary in November 2008 to sound like the Iraqi Information Minister in March 2003.
November 21st, 2008 at 4:18 pm
To the extent there is a scandal here, its that a Goldman Sachs managing partner turns out to be so incompetent. Also remember that Rubin bears alot of responsibility for this mess.
The unstated rationale behind the masters of the universe making so much more than the rest of us was that they were simply better than the rest of us, taller, smarter, and more energetic. They certainly are taller.
November 21st, 2008 at 4:25 pm
Maybe Paulsen can just tell me who’s going to win the Giants-Cardinals game this weekend, so I can make the appropriate financial investment.
November 21st, 2008 at 4:32 pm
You should take the Cardinals. Moody’s rates them AAA.
November 21st, 2008 at 4:34 pm
I see the right-wing apologists are out in force. Why do they hate America so?
November 21st, 2008 at 4:40 pm
You should take the Cardinals. Moody’s rates them AAA.
I’m actually looking for a counterparty to hedge that bet. Unfortunately there’s not so many investment banks as there used to be.
November 21st, 2008 at 4:51 pm
The problem is that he’s either oblivious to all the problems in the financial sector (I don’t think so), or he’s willing to burn through more of what little credibility he has every time he opens his mouth. I think there’s a fair number of bank CEOs that can tell you what happens when the best indicator that there’ll be a liquidity injection on Friday is that the CEO said that they have adequate capital on Monday.
November 21st, 2008 at 6:44 pm
Paulson’s real failing is that he has had quite some time to prepare and he wasn’t ready. once the crisis hit, his decision-making has been slow. he misread the risks associated with the lehman failure. his initial rollout of TARP was based on a wrong-headed theory and was politically ham-handed, and it took congress, prompted by a quick consensus among professional economists, to put it right.
in the scheme of things, his comments on banking in general as they related to citigroup in particular are pretty thing gruel: i, too, after all, think that the risk we saw a couple of months ago of the financial system completely binding up (as illustrated by the jumps in LIBOR and the TED spread) are probably considerably mitigated by now, but that doesn’t mean that citigroup will survive, but as an application of the general problem, i have no difficulty with admitting them into evidence.
November 21st, 2008 at 7:12 pm
Matt: “It’s frightening to consider the implications of the fact that the Secretary of Treasury doesn’t seem to know what he’s doing. But just because it’s frightening doesn’t mean we need to be in denial about it.”
Yet when I say the same thing about Obama’s foreign policy – especially since he’s never done ANYTHING concerning foreign policy or the military in his career – I get insulted by morons here and Matt gushes over Obama’s foreign policy creds just because Obama claims to have been against the Iraq war and (allegedly) want to “draw down” – somewhat – US troops in Iraq.
Meanwhile, he’s ginning up a war with Iran based on the same bullshit Bush used to gin up the Iraq war, and he’s planning on expanding the wars in Afghanistan and Pakistan against the opposition of every military and regional expert in the world.
December 12th, 2008 at 9:29 pm
SPRINGFIELD, Mo. (AP) – Departing state Treasurer Sarah Steelman will teach a political science class at Missouri State University next year. Steelman will be the school’s first “executive in residence” – a newly
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