Hillary Clinton Craps on my Dreams of a Glorious Trump v Sanders Debate
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I believe that Secretary of the Treasury Hank Paulson and Federal Reserve Board Chairman Ben Bernanke have endangered the United States’, and possibly the world’s, financial system by presenting an unreasonable bailout plan that may be unable to muster bipartisan support. I am appalled that they do not appear to have consulted with Nouriel Roubini to develop a plan that would have addressed all of the financial problems and would have been much more politically sellable to the American taxpayer who is being asked to fund an amount that will leave the country with no further financial resources.
Roubini’s plan addresses all problems of illiquidity and insolvency not just for Wall Street but for homeowners. The one detail that Roubini does not mention but that Bernanke should be well familiar with, because Bernanke has written and spoken about mortgages and the Great Depression , is that mortgages threatened with default must be restructured for a longer length, here perhaps 40 to 50 years.Mortgage relief, which Roubini believes is essential, could have been presented as the government lending a “helping hand, not a handout.” This would not have left the vacuum into which the Democrats have rushed in with their provisions to funnel vast amounts to their political allies.
I am astounded and furious that Paulson and Bernanke could be so tone deaf to believe they and President Bush could believably sell such a plan to the American people. It was critical that an expert who had predicted the current problems, who is outside of the current Administration, be presented as a credible source of a solution. Failure to make a convincing presentation has created an explosive situation where factions of Congress could kill any plan, a situation that within a week could result in unimaginable financial chaos. The Paulson plan for a blank check presented on three pages was dead on arrival, and now we see the consequence of leaving the work of crafting a politically acceptable compromise to Congress.
Roubini presents solutions to illiquid assets, to the foreclosure problem, and to the need to recapitalize banks. His solutions present not just relief for those affected but provisions for the government and ultimately the taxpayer to recoup much of the investment. Roubini’s solutions can be presented as being part of a historical understanding of what is required to clean up a debt crisis. Regardless of what one believes about the overall success of New Deal programs, I believe it was vital to present to the American public solutions that have been tried and have been regarded as having had positive results, instead of asking the people to support a wild experiment in giving the Secretary of the Treasury permission to spend 700 billion USD however he feels, without any outside oversight.
Paulson’s presenting to Congress a coherent and comprehensive plan such as Nouriel Roubini’s was the best hope to avoid the danger this nation faces this weekend. We may all pay the price for unconscionably poor performance of duty.