Posted by A Stoner on Saturday, October 11, 2008 10:55:34 AM
Henry Paulson, Ben Bernanke and Chris Cox have all pushed an economy on the brink of a moderate recession into a world headed towards a depression. JONATHAN MACEY has the how over at the Wall Stree Journal The Government Is Contributing to the Panic . I will go into the possible reasons here.
Who are these people?
Henry Paulson is the Secretary of the Treasuryof the United States of America. The Secretary of the Treasury is the principal economic advisor to the President and plays a critical role in policy-making by bringing an economic and government financial policy perspective to issues facing the government. The Secretary is responsible for formulating and recommending domestic and international financial, economic, and tax policy, participating in the formulation of broad fiscal policies that have general significance for the economy, and managing the public debt. The Secretary oversees the activities of the Department in carrying out its major law enforcement responsibilities; in serving as the financial agent for the United States Government; and in manufacturing coins and currency. So he has a few things to do.
Ben Bernanke is The Chairman of the Board of Governors of the Federal Reserve System. It is his job to ensure that we have low inflation and for some reason the added responsiblity of keeping unemployment low, two things that many times are mutually exclusive. Fighting inflation sometimes means to keep money tight and slowing the economy down which can cause higher unemployment. Fighting higher unemployment requires speeding the economy up, which adds pressure to the sources of inflation. So he has his work cut out for him, but Alan Greenspan did a remarkable job for many years keeping it all balanced, so it is not an impossible task.
Charles Christopher Cox has served as Chairman of the U.S. Securities and Exchange Commission (SEC) since August 3, 2005. The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Basically the only thing this person has to do is enforce the law and ensure the proper functioning of the financial markets.
Can they handle their job titles or was Bush stupid to appoint these people? Looking at the background of each of these people shows a competent person, someone who should be capable of accomplishing the job title they have been appointed to. Henry Paulson ran Goldmans Sachs, he must have done a bang up job there, as he left with hundreds of millions of dollars in bonus’. Ben Bernanke was already a member of the Board of Governors of the Federal Reserve System and worked with Alan Greenspan, he certainly had the experience to do his job. Chris Cox was a member of the House of Representatives for 16 years, giving him ample experience in understanding American Law and the importance of ensuring that it is upheld.
So we have three people in very powerful positions, each one should be competant, so why are they failing so badly?
Ben Bernanke changed the direction of the Fed, not only does he want the mutually exclusive job of ensuring low inflation and high employment, but adds a third “promoting financial stability,” and with it a fourth, regulating “nonbank financial institutions” such as Goldman Sachs, Merrill Lynch, Morgan Stanley, and Lehman Brothers. Taking on too much responsibility and in the process he removes the responsibility for the people who should be responsible. Unfortunately, we cannot blame him as much as, I at least, would like, because it was a lax money supply to keep the economy out of recession that helped fuel the housing bubble.
Chris Cox has obviously not been doing his job very well, as pretty much everyone has been doing things they likely should not have been doing. I mean seriously, he has been in his job since 2005, how many NINJA loan comercials have you seen running on TV ads? No Income, No Job, No Assets. If Chris Cox was doing his job starting in 2005, then 50% of the bad mortgages that happened in the last 7 years would not have occured. It is these loans that are destroying our financial system, and if Chris Cox had done his job in 2005, then 3 years later when the house prices fell and the 3 year ARMs came due, there would be far fewer people defaulting on their mortgages.
That brings us to Henry Paulson, what has he been doing? Well, it is his job to give advice to the President on how to keep the economy as a whole working like a well oiled machine. What did he do? He went out on the world stage and screamed that the end of the world was upon us, and that he needed unfettered access to all the money in the world to prevent it. He said banks were on the verge of failure, that insurance companies were effectively insolvent, that liquidity in the markets was about the freeze solid, and that this freezing would push ever more companies into failure. Basically he told everyone with money invested in the markets that they would lose their money soon, unless they pulled that money out, and pulled it out now. He then said there were bombs planted in every institution around the world and they would start going off, destroying any money left in those institutions. Is it a suprise then that banks stopped lending money to other banks, who might be about to go bankrupt? That banks who needed money from other banks to lend money to companies that rely on credit to remain in business stopped supporting those business’? Paulson basically set up the dominoes and gave the one at the front a push when he let Lehman Brothers fail.
Paulson destroyed this nation’s financial system’s good name. He had this plan in the works for 18 months. Why did he have to set the fall for now? Why indeed? Look at where we are today. The nation is in the grips of the most hotly contested Presidential Election in many decades. We are at war in two nations against an enemy that spans over 60 countries. Our nation’s economy was already teetering at the edge of recession. All that and Paulson decided to scream bomb in a packed theater. What is the reason for that? Every single thing that the $700,000,000,000.00 Paulson plan can do was already available to be used, just under another department. So why push the world into economic epeleptic seisure in order to just move it over to a new department? The only reasons I can think of are; He wants power and picked just the right moment to force congress to conceed to his demands, or he is trying to effect a political coup by destroying the economy in order to get Obama elected president.
If he wants power, then he should have done this months ago, because his tenure is up in just a few short months. Unless he only needs the power for a short time in order to accomplish his goals. Almost everything he has done has been to support Goldman Sachs. Allowing Lehman Brothers to fail got rid of a competitor to Goldman Sachs and did great damage to the economy. Not allowing AIG to fail also favored Goldman Sachs who had a $20,000,000,000.00 stake to lose if AIG failed, and Goldman Sachs was the only company that had an employee in the meetings that decided the fate of AIG. Goldman Sachs is up to it’s eyeballs in sub-prime mortgage backed securities and that is the exact same thing that Paulson wants to buy at inflated prices from the market, likely including much from Goldman Sachs. So, was this multi trillion dollar inplossion of the world markets set into motion for the selfish needs of Goldman Sachs? Sounds plausible to me.
If he wants to get Obama elected, then was this a good strategy? When the economy is the single largest issue on the minds of voters, democrats gain votes. Lets look at this one in detail. The timing is pitch perfect, just 6 weeks from election day. The plan he chose was something out of a socialist wish list, getting the government heavily invested in the private market, almost to 100% of mortgages. then there was the way he treated John McCain. “BOB SCHIEFFER: I am told, Maggie, that the way McCain got involved in this in the first place, the Treasury Secretary was briefing Republicans in the House yesterday, the Republican conference, asked how many were ready to support the bailout plan. Only four of them held up their hands. Paulson then called, according to my sources, Senator Lindsey Graham, who is very close to John McCain, and told him: you’ve got to get the people in the McCain campaign, you’ve got to convince John McCain to give these Republicans some political cover. If you don’t do that, this whole bailout plan is going to fail. So that’s how, McCain, apparently, became involved. ” Then when McCain suspended his campaign, the Democrats came out and claimed, just before McCain landed that a deal had been already brokered, even though it had not. Did Paulson, who has not shown any shyness for camera’s up ’til now support McCain by informing the public that he had asked McCain to come help get a deal brokered? His shameful actions made McCain look like an opportunist instead of the “Country First” man that he is and was when he suspended his campaign. To me, this looks like Paulson set up John McCain.
I cannot think of any other reasons that Paulson acted the way he has over the last few weeks other than he is helping Goldman Sachs or is helping Barack Obama. While Chris Cox is only guilty of negligence, and Ben Bernanke incompetence, I think that Henry Paulson is guilty of treason.