The Next Wave of Effort: Ben and Hank at Work
A few years ago, I told a friend that, with the various Treasury chiefs Bush had picked to date, the world would be in serious trouble if anything went even remotely sideways.
Luckily for all of us, he finally broke the mold of this seriously-inferior run with his selection of his (fourth, fifth?) Treasury Secretary, Henry Paulson.
At the same time, the much-compromised Greenspan, who started day one with Bush by reversing himself in front of an incredulous Congress by espousing more deficits, was laying a truly pernicious trap for his successor, exhausting house equities in a nation that doesn’t save, and getting out just as a huge inflationary spiral hit the US and the world.
Again, his replacement, who seemed to be a deer in the headlights (frozen at 5.25) for over a year, has suddenly come to life, and seems to be up to the job.
In other words, we seem to have two of the best possible people in charge, just when we need them to start reacting to the most mismanaged economy in history. (By that, I mean starting with the most amazing economic expansion in history, as Bush entered, and turning it into a generations-deep disaster).
Rumors have had it that Paulson has been prevented from doing what he wanted, when he wanted, and I think it’s true: Bush is still in the way, using economic voodoo principles and forcing Paulson to play along.
But we are fortunate to have Paulson along, talking the FMs into increasing liquidity, adding another $360B through extended lending powers, with Ben adding an additional $200B in facilities, and using the discount window for direct support in the JPM / BS takeover for the first time since the Great Depression.
I warned our members what would happen to the economy if Bush were elected, and unfortunately that, and much worse, has come to pass. But we are extremely fortunate that, after all the damage was done, two clean-up experts have been brought in who, charged with saving the world, just might be up to the task.
Now tell me exactly WHY we had to go through this experience?