Friday, September 19, 2008

Whatever happened to "We're all in this by ourselves?"

Henry Paulsen the New Dealer? Gosh, if Lehman Brothers could have hung on for one more week! Maybe it'll get a do-over.

In the Strib today, Paulsen says some things that strike Spot as correct, but which must come as a bitter pill for the likes of Davey Strom and Craig Westover at the box of puffed cereal known as the Minnesota Free Market Institute, and Perfesser Banaian at Harvard on the River:

WASHINGTON - The Bush administration sketched out a multi-faceted effort on Friday to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt that has unhinged Wall Street.

President Bush, flanked by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, acknowledged that the program will put a "significant amount of taxpayers' money on the line."

The administration is asking Congress to give it sweeping new powers to execute the plan. Paulson said it "needs to be big enough to make a real difference and get to the heart of the problem."

But as Bush says in the video of a press conference that Mr. Sponge put up earlier today, the Administration has got the taxpayers' backs:

Speaking to reporters at the Treasury Department, Paulson said that the new troubled-asset relief program that he wants Congress to enact must be large enough to have the necessary impact while protecting taxpayers as much as possible.

"I am convinced that this bold approach will cost American families far less than the alternative — a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson said in a prepared statement.

Spot's a little less sanguine about the hit the dollar may take as a result of all of this. And unspoken is the regulatory environment - or lack of one - that permitted this crisis to happen.

When we've poked through the rubble, Spot believes we'll find Phil Gramm.

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