All Posts Tagged With: "Henry Paulson"

The Latest Treasury Bailout and the Law of Unintended Consequences

I have to admit, my thoughts regarding the latest financial debacles waver from one extreme to the other.  My initial instinct is that the markets need to be stabilized, and anything that provides a floor for a stock market in apparent free fall is a good thing.

My next thought is that $700 billion is a huge chunk of change, and ultimately, the taxpayer, that is, you and me, is on the hook.  The current US budget is running a significant deficit, Congress and the current Administration have not proven themselves worthy of handling such a large sum of money.  On the other hand, the Treasury is acquiring these assets at a fire sale price, so as a taxpayer, we may be able to recoup …


Thoughts on the Federal Reserve

20 years ago I looked at a map of the regional Federal Reserve Banks and I thought:  Why do we have banks in Richmond, Philadelphia and New York?  Cleveland and Chicago?  St. Louis and Kansas City?  Why does the San Francisco bank handle everything west of Denver?  Why do we need 12 banks?  At the time, I thought that consolidation would make sense, that having banks in cities where the population was migrating to would make sense…places like Phoenix, Los Angeles, Houston, Dallas, Denver.  This way there wouldn’t be banks essentially sitting on top of each other.

Maybe Treasury Secretary Paulson’s idea isn’t so bad, although I confess I don’t know the details.  What I do know is that he has more experience running a …


Republicans Try To Make Things Right – Not So Much

What a day. I’m sorry, but politically, not one that I’m proud of:

1) Alphonso Jackson resigns as HUD secretary (effective April 18). Few doubt there is something to allegations of favoritism. See my previous posting on the temptations of power.

2) Henry Paulson presents a plan to overhaul the Fed that is not well received. Criticisms run all over the map. My criticism remains simple: the Government cannot save everyone from their mistakes. This looks like the beginning of the end of free markets to me. I need to review the content before I make any more detailed assessments, however, you should watch your wallet and your Constitution. It’s perhaps positive that Paulson recognizes that this kind of change cannot happen quickly, but the …


New Fed Powers Plan Needs Careful Thought

Let Friday, early news about a plan to broadly expand the power of the Federal Reserve was released.  Evidently the plan will be formally announced in a speech by Treasury Secretary Paulson.

I’m a bit out of breath.

McGehee was the first I saw to make mention that something like this was seriously in the works.  He expressed some concern which I share.

Seeing some more details of the plan (in the Des Moines Register Saturday morning) gave me reason to sit back and think.  The plan calls for 3 regulators, essentially eliminates any distinction between banks and thrifts, and would make the Fed the “primary regulator of market stability”, overseeing all segments of the financial services industry.

And the Democrats love it.  That should …


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