No blank check

The Reality-Based Community: Abracadabra

At the Banking Committee hearing today, Chuck Schumer–not generally known as someone who is tough on Wall Street–asked Hank Paulson a reasonable question: why do you need $700 billion right now? You said you were going to use about $50 billion a month; so why don’t we give you $150 billion now and then come back in 3 months?

And Paulson simply refused to answer the question.

First, he said that it’s about market confidence.

This from a guy whose contribution to market confidence has been to go on record saying that we shouldn’t tell executives how much money they can draw just because we’re going to be paying their salaries, because it might stop them from accepting bailout money. In other words, that his former colleagues put their personal compensation above the interests of their shareholders. In other other words, that they’re crooks.

This is why I am coming to think that the whole thing is an enormous bluff (and quite possibly a deliberate scam). If Paulson were really worried about a credit crunch sinking the economy right now I don’t think he would be playing this kind of brinksmanship. He’d be getting whatever funding he could, as soon as he could, and getting to work doing the actual bailout.

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