The Bush Administration seems bound and determined to prove its incompetence right to the very end of its term. Every commentator says that President-Elect Obama has huge problems on his plate, and the Bush Team in its waning days is just adding to the shipload. Take Treasury Secretary Henry Paulson(soon please, rather than later).
Here is some commentary :
CreditWritedown – If you are wondering why the stock market has been declining, you only need to flip your TV to C-SPAN and see Hank Paulson explaining why he has abandoned his original plan to save America from depression. Basically, Paulson has done a complete 180 and now refuses to invest a dime of the TARP (Troubled Asset Relief Program) in buying the troubled assets for which the program was named. The result: those assets have cratered, pulling down many shares with them.
Ecommerce Journal – But could the situation be far worse? George Soros has another point of view: “The U.S. authorities bought into market fundamentalist ideology. They thought that the markets would ultimately correct themselves. U.S. Treasury Secretary Henry Paulson epitomized this. Since they did not understand the nature of the problem – that the market would not correct itself – they did not see the need for government intervention,”
TPM Cafe – The other reason that borrowing is down is that homeowners realize that they have to start saving. Tens of millions of homeowners are approaching retirement with no pension, no savings and no equity in their home. Is it any surprise that these people would suddenly place a priority on saving? Paulson’s plan will not revive consumer spending and provide any noticeable boost to the economy. It is simply another way to give money to the financial industry, as Treasury will presumably overpay to acquire tens of billions of dollars of securities backed by consumer debt. It’s a good deal for the financial sector, but it’s a ripoff for the rest of us.