Henry Paulson is part of an administration that has shown repeatedly it can't be trusted. He is also a former chairman of Goldman Sachs - which is switching from an investment bank to a commercial bank.
Henry Paulson wants to get a large sum of money so he can be flexible while dealing with assets of all types. Each of the asset types might require a different type of solution. Paulson hasn't worked through what the solutions for each asset would be, but he wants to make sure he has immediate access to money and the freedom to do anything.
I feel he hasn't earned my trust. I think his administration is untrustworthy, and I think he's part of the culture that created the problem in the investment banks.
When I watch him in the Senate Banking Committee meeting, I get the feeling he's doing what he thinks is right. And he's frustrated that people want to pin him down. I don't think he's necessarily far off from what could be true - but he hasn't convinced me yet.
Schumer brought up a good point...why do they need all the 700 billion right now, this week? He's not going to spend it in the next couple months. Why not give him 150 billion and wait until maybe January or February to review where we're at and decide if more money is needed.
The point of this effort is to bring confidence back to the markets and grease the wheels of the economy.
As far as greasing the wheels, you don't need but a little bit of money to grease the wheels and then the market will generate grease of its own.
And confidence? The fact that we're still here today means somebody has confidence in something. At the very least they should have confidence that people don't want to lose money and its not in anyone's interest for the financial market to fail. Isn't that enough? If the government and the financial markets would just sit tight for awhile and recognize the cycle of the housing market - the price of houses will go up again at some point - they would get their money back.
I wonder if the big problem isn't the 'bad' mortgages itself, but rather what those 'bad' mortgages do to the institution's financial statements - which is what shareholders use to decide if they want to buy a share of the company. Maybe they're not trying to save the United States economy, they're trying to save their own stock prices from their own mismanagement.
Hmmm...maybe that is so fundamental and elementary I look stupid for saying it. Of course the financial statements are important.
But, is the importance because it reflects on the economy of the United States, or because it reflects on the company's share price and profitability? I think the financial institutions and the people who have a vested interest in maintaining our financial system would like us to believe the economy of the United States is at risk. In reality, though, maybe its just the company that's at risk. And in a free market, a company that has failed should be allowed to fail. I'm not sure I believe that, because I realize innocent people suffer when a company fails.
The bottom line is that I don't trust the economic advisors, administration, et al who to look out for my best interest. Its happened too many times that people have said they're going to do this to 'help' the American people and then years later we find out they were gaming the system.
Who's confidence are we concerned about regaining? It doesn't seem to be my confidence they care about.
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