October 16, 2008

What After November 4?

Treasury Secretary Paulson is stumbling - he has his thumb in the dike when he should be bringing in the bulldozers.

  • He took too long to demand bank equity, and when he did, he made the mistake of taking only nonvoting shares. He is handing out methadone without rehab.
  • He has not drawn a line around banks that should fail. It would be cheaper and better to shoot a few small losers than to reward a few big winners.
  • He's not doing anything to address the homes. Instead of pushing the FDIC further out on a limb, he should be putting out the fire by setting down some rules for overextended borrowers.

Paulson should be on his way out. The real question for me, now, is transition.

Between November 4 and January 20, the financial hurricane continues while we have a new President-elect and an outgoing Treasury Secretary.

Will the new President assert his authority? Can he? Who will be in charge?

Posted by David at October 16, 2008 04:51 PM
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