Paulson Lied Stocks got Fried?
2008-11-16
Posted by: badanov
I recently found this Karl Denninger and his website about the financial mess going on. I like his style and how he writes,but I think he is a little too politically liberal for me.
And as some of you may know, I was against the bailout on the ground that it was throwing good money after bad. You can't expect rich folks to throw good money into a private investment which has shelled out, why should Congress buy into this non-sense?
Now, it emerges that Secretary of the Treasury Henry Paulson may have lied about his intentions for the money and many on the internet are furious they were lied to.
Pardon me, however, for pointing out that Paulson wanted $700 billion on his say so with as few as strings as possible attached to the bill, and aside for some additional unneeded ( is there any other kind? ) pork barrel spending and a restriction on executive pay, Congress cut Paulson his blank check.
Why now, after shoveling $700 billion towards a program a basic econ major knew wouldn't work, and any honest person knew was essentially a blank check, is Congress angry they were lied to now?
It was a blank check. If a distant relative asks me for a blank check and I hand it to her telling her not to buy any drugs and she spends it on booze, what right do I have to be angry, if she promised not to spend it on marijuana and does anyway?
The fella in the video is haranguing everyone to be up in arms about something, all of which Congress could have stopped by saying no to Paulson in the first place. And all by applying a little economic common sense, we all could have avoided this comedy.
Markets work. They may not work they way we want them to work but they work, and markets, being the true amorphous blob, are too large for a teeny tiny federal government to weigh in effectively Yet, here we are two months after handing over an incredible sum of money from the finite federal treasury, and people are mad because they were lied to.
Paulson asked for and got a blank check. When Congress took recess everyone seemed smugly satisfied they had taken care of business, apparently despite many, many warnings to the contrary, not realizing they has just burned $700on on a program that will not work.
And Congress still doesn't apparently get it.
And I can't sit here and tell folks that markets really do work because the overarching theme in finance these days is that if markets are crashing, then they aren't working.
And I know that that is a bigger lie than anything Paulson ever told to Congress and it is a lie that Congress pushes to this day.
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