Wednesday, November 12, 2008

The Paulson Disaster

Hank "The Hammer" Paulson isn't looking so good these days. After months of deciding how exactly to spend $700 billion dollars we've given him, Paulson is changing directions again. In what amounts to a severe leadership deficit within Treasury, Paulson is now focusing the $700 billion blank check on consumers by providing better access to student loans and vehicle financing. That's a great idea Hank--we can save GM and the consumer all at one. An even better suggestion is having the federal government mail out giftcards to WalMart in time for the holidays.

Facetiousness aside, Treasury has shown a keen inability to craft an effective and coherent stimulus package. By initially coming forward with a half-baked plan to buy trouble assets, then scraping that idea in favor of providing financial intermediaries with capital via preferred shares stakes, and now pulling out the consumer idea, we are left with little faith in the direction of the bailout and it's potential for success. All this shouldn't be surprising, because by having Paulson at the helm we are asking the very man responsible for creating the subprime debacle to use his lack of judgment and poor foresight to fix the problem he created. Paulson was in a leadership position at Goldman, arguably the center of the financial universe, during the years in which the risky behavior and hasty decisions were executed, getting the world into this mess.