Paulson needs to restore confidence
The controversy heats up and keeps the bailout in the headlines. The Congressional view of Henry Paulson, which had been fairly benign in the past, is changing to one of suspicion and contempt. Paulson’s friends on Wall Street are not the role models that most people would want to be associated with.
I was in the business for 26 years, so I understand that there are some very smart people leading financial service firms. The business has always provided enormous paydays to its senior executive suite, and that rankles a lot of people. Paulson can’t get that smell off of himself.
Bernanke and Paulson appear before Congress
To counter this growing suspicion, Paulson and Bernanke appeared before the House Financial Services Committee to provide an update and explanation of the change in course of the bailout. They were met by a number of skeptical committee members voicing the same questions as members of the public. From a purely political perspective, this is all very interesting because there sat both Republicans and Democrats, all on the same page with the same concerns about the plan.
According to an AP story, Paulson explained his change in course by stating; “There is no playbook for responding to turmoil we have never faced. We adjusted our strategy to reflect the facts of a severe market crisis.”
Concerns of members of both parties sounded surprisingly similar. From Republican Spencer Bachus of Alabama; “We all understand that when conditions on the ground change, policymakers must be agile enough to adjust to those changed circumstances, but changing too quickly, without adequately explaining why you’ve changed or what you’re going to do next, risks sending mixed signals to a marketplace that is in dire need of certainty and a sense of direction.”
Democrat Paul Kanjorski of Pennsylvania let the Fed Chairman and Treasury Secretary know that they had made a; “180 degree change in policy, and… do we have a plan? Where are we going?”
Bernanke, who has garnered respect and support from both sides of the aisle in the past stated; “Going forward, the ability of Treasury to use the bailout program for capital injections and to take other steps to stabilize the financial system, including any actions needed to prevent the disorderly failure of a major financial institution, will be critical for restoring confidence and promoting the return of credit markets to more normal functioning.”
According to AP, the current focus of the bailout is to roll out a ‘capital injection program to pour $250 billion into banks in return for partial ownership stakes in them.’ The first $350 billion that Congress approved will be spent before the inauguration on Jan. 20, and the remaining amount will be in the hands of President-elect Obama.
November 19th, 2008 at 11:44 am
What this American wants to know is:
“Where is the list of Banks that have received bail-out funds?”
November 20th, 2008 at 4:00 pm
How did General Motors fly under the radar when they had hundreds of their employees vacationing last weekend at a resort in the Poconos. I work at the resort and can tell you that it’s absolutely true!
Also, the resort (Woodloch Pines) is not a cheap resort to stay at. The bottom line was why where they even spending money like that when they are asking for bailout help.
December 4th, 2008 at 7:21 pm
Wondering why Freddy, Fannie and the CEOs of the US Auto industry don’t ask the CEOs of the petroleum companies for a loan, versus the US government and its citizens. Lord knows the gas companies have the capital reserves following the benchmark year in gas prices we just experienced.