Bedeviled by many in the US for his handling of the financial crisis, Treasury Secretary Hank Paulson whose demeanor makes him look like an elk surrounded by a horde of famished hyenas, proved to be foxier than any old-hand politician in Washington.
His appearances before Congress, scanty and far between as they may be, have become a real circus, with all the usual buffooning, laughs, shouts and hubbubs. Yet Hank Paulson should be credited for a steadfastness seldom seen within the beltway. There are at least five reasons for which Hank Paulson deserves our admiration:
1. From the start, he devised a strategy and he stood by it. He seems to have deliberately boxed Congress in an untenable position by giving himself a maneuvering margin ranging from stunt to dare. He began with a shocking, outrageous stunt, by asking for 700 Billion dollars and unbridled powers to disburse the money as he sees fit. It was a “shock and awe” strategy that worked well with an unpopular Congress about to face an irate constituency back home. Paulson didn’t get a blank check from Congress, but he nonetheless ended up with a check cut to the “Bearer.”
2. While Paulson’s visibly dithering testimonies never exceeded the limits of the speech hindrance from which he suffers, he seems to have used that same impediment to his advantage. Oddly enough, Paulson’s stuttering tic was all too befitting, given the momentousness of the crisis he was in charge of tackling.
3. Paulson further unmasked the legislators' ignorance of the extent of a financial crisis that was brewing under their watch for a number of years. Many of our elected officials still admit today they have no clue where the money went or where it’s going—another credit to Paulson’s rightly planned policy to not divulge the names of the money recipients to fend off the risks of any bank runs. Paulson is mindful of a-la-Chuck-Schumer leaks that can come out of the Capitol with no regrad to the consequences.
4. Paulson dropped the TARP provisions of the rescue package without bothering to ask for Congress’s approval—a dare that came to light after half of the money was already handed out. Again, Paulson’s from-stunt-to-dare strategy worked to his advantage and re-enforced his undeclared conviction that Congress is irrelevant when it comes to tackling a matter as earth-shattering as the current financial crisis.
5. Even under pressure, Paulson never wavered from his early position that the auto industry should not expect to be bailed out like Wall Street. Paulson knows the “Bridge” money Detroit is begging for is a bridge to nowhere. This position is based on the fact that what could work for Wall Street may not work for the Big Three. The thrust behind Paulson’s rescue plan has more to do with voodoo economics than with throwing money at the problem. He and the Fed Chief Ben Bernanke have implied it repeatedly in their interventions before Congress. Their main aim was to pronounce the allocation of big money for the rescue effort, but with the hope that they won’t need to use all of it. Paulson and Bernanke’s hopes were pegged on restoring consumers’ confidence and healing investors’ psychological ills by appearing to be busy doing something about the crisis. Like most savvy economists, they are both aware that there just isn’t enough money in the government coffers to cure all the ongoing tribulations of the financial sector.
Paulson might have fared much better by asking Congress to hold prayer sessions, instead of the endless hearings that seem to have no bearing on the current financial and economic turbulence, both at home and abroad.
His appearances before Congress, scanty and far between as they may be, have become a real circus, with all the usual buffooning, laughs, shouts and hubbubs. Yet Hank Paulson should be credited for a steadfastness seldom seen within the beltway. There are at least five reasons for which Hank Paulson deserves our admiration:
1. From the start, he devised a strategy and he stood by it. He seems to have deliberately boxed Congress in an untenable position by giving himself a maneuvering margin ranging from stunt to dare. He began with a shocking, outrageous stunt, by asking for 700 Billion dollars and unbridled powers to disburse the money as he sees fit. It was a “shock and awe” strategy that worked well with an unpopular Congress about to face an irate constituency back home. Paulson didn’t get a blank check from Congress, but he nonetheless ended up with a check cut to the “Bearer.”
2. While Paulson’s visibly dithering testimonies never exceeded the limits of the speech hindrance from which he suffers, he seems to have used that same impediment to his advantage. Oddly enough, Paulson’s stuttering tic was all too befitting, given the momentousness of the crisis he was in charge of tackling.
3. Paulson further unmasked the legislators' ignorance of the extent of a financial crisis that was brewing under their watch for a number of years. Many of our elected officials still admit today they have no clue where the money went or where it’s going—another credit to Paulson’s rightly planned policy to not divulge the names of the money recipients to fend off the risks of any bank runs. Paulson is mindful of a-la-Chuck-Schumer leaks that can come out of the Capitol with no regrad to the consequences.
4. Paulson dropped the TARP provisions of the rescue package without bothering to ask for Congress’s approval—a dare that came to light after half of the money was already handed out. Again, Paulson’s from-stunt-to-dare strategy worked to his advantage and re-enforced his undeclared conviction that Congress is irrelevant when it comes to tackling a matter as earth-shattering as the current financial crisis.
5. Even under pressure, Paulson never wavered from his early position that the auto industry should not expect to be bailed out like Wall Street. Paulson knows the “Bridge” money Detroit is begging for is a bridge to nowhere. This position is based on the fact that what could work for Wall Street may not work for the Big Three. The thrust behind Paulson’s rescue plan has more to do with voodoo economics than with throwing money at the problem. He and the Fed Chief Ben Bernanke have implied it repeatedly in their interventions before Congress. Their main aim was to pronounce the allocation of big money for the rescue effort, but with the hope that they won’t need to use all of it. Paulson and Bernanke’s hopes were pegged on restoring consumers’ confidence and healing investors’ psychological ills by appearing to be busy doing something about the crisis. Like most savvy economists, they are both aware that there just isn’t enough money in the government coffers to cure all the ongoing tribulations of the financial sector.
Paulson might have fared much better by asking Congress to hold prayer sessions, instead of the endless hearings that seem to have no bearing on the current financial and economic turbulence, both at home and abroad.
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