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It's Time for Paulson to Cut the Crap and Do His Job
Oct 10, 2008
Just about every economist who supports bailing out the banks thinks
that taking an equity stake through a direct infusion of capital is the
way to go. While Secretary Paulson had pushed for his buying bad assets
approach, he is now playing Hamlet and flirting with the idea of going
the equity route.
This is not the time for high school drama. Doesn't Paulson remember
his comments from the last two weeks when he told us that the economy
would collapse if Congress didn't act immediately? Those statements
were not true, and obviously Paulson didn't believe them, since it has
now been a week since he got his bill and we still don't have even the
outlines of his plans for buying bad assets.
We could harp on the bad faith shown by the administration in using
unwarranted fear to force Congress into hurriedly passing the bailout
bill. We could also harp on the horrible media coverage on this issue,
with the media acting almost as an appendage to the Bush administration
in its efforts to increase public support for the bill.
But the immediate issue is to get the Treasury to actually do
something to help the economy. That means using its $700 billion in the
most effective way possible by directly injecting capital into the
banking system. What will it take to get Paulson to move?
Â
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Dean Baker
Dean Baker is the co-founder and the senior economist of the Center for Economic and Policy Research (CEPR). He is the author of several books, including "Getting Back to Full Employment: A Better bargain for Working People," "The End of Loser Liberalism: Making Markets Progressive," "The United States Since 1980," "Social Security: The Phony Crisis" (with Mark Weisbrot), and "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer." He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.
Just about every economist who supports bailing out the banks thinks
that taking an equity stake through a direct infusion of capital is the
way to go. While Secretary Paulson had pushed for his buying bad assets
approach, he is now playing Hamlet and flirting with the idea of going
the equity route.
This is not the time for high school drama. Doesn't Paulson remember
his comments from the last two weeks when he told us that the economy
would collapse if Congress didn't act immediately? Those statements
were not true, and obviously Paulson didn't believe them, since it has
now been a week since he got his bill and we still don't have even the
outlines of his plans for buying bad assets.
We could harp on the bad faith shown by the administration in using
unwarranted fear to force Congress into hurriedly passing the bailout
bill. We could also harp on the horrible media coverage on this issue,
with the media acting almost as an appendage to the Bush administration
in its efforts to increase public support for the bill.
But the immediate issue is to get the Treasury to actually do
something to help the economy. That means using its $700 billion in the
most effective way possible by directly injecting capital into the
banking system. What will it take to get Paulson to move?
Â
Dean Baker
Dean Baker is the co-founder and the senior economist of the Center for Economic and Policy Research (CEPR). He is the author of several books, including "Getting Back to Full Employment: A Better bargain for Working People," "The End of Loser Liberalism: Making Markets Progressive," "The United States Since 1980," "Social Security: The Phony Crisis" (with Mark Weisbrot), and "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer." He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.
Just about every economist who supports bailing out the banks thinks
that taking an equity stake through a direct infusion of capital is the
way to go. While Secretary Paulson had pushed for his buying bad assets
approach, he is now playing Hamlet and flirting with the idea of going
the equity route.
This is not the time for high school drama. Doesn't Paulson remember
his comments from the last two weeks when he told us that the economy
would collapse if Congress didn't act immediately? Those statements
were not true, and obviously Paulson didn't believe them, since it has
now been a week since he got his bill and we still don't have even the
outlines of his plans for buying bad assets.
We could harp on the bad faith shown by the administration in using
unwarranted fear to force Congress into hurriedly passing the bailout
bill. We could also harp on the horrible media coverage on this issue,
with the media acting almost as an appendage to the Bush administration
in its efforts to increase public support for the bill.
But the immediate issue is to get the Treasury to actually do
something to help the economy. That means using its $700 billion in the
most effective way possible by directly injecting capital into the
banking system. What will it take to get Paulson to move?
Â
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