Henry Paulson

Is Sen. Amy Klobuchar having bailout remorse? In a letter to Treasury Secretary Henry M. Paulson, Jr., on Thursday, Klobuchar called Paulson’s efforts a “failure” with a “massive transparency gap” and criticized Wall Street for not doing more to alleviate the credit crunch.
“I strongly believe that those financial institutions receiving federal aid through the TARP [...]

In this week’s edition of the Schultz Report audiocast, David Schultz examines the looming vote recount in the Minnesota US Senate face-off between Sen. Norm Coleman and Al Franken.

Is the situation here another Florida 2000 cage match, as so many pundits are claiming? In most respects, Schultz thinks the answer is no. But when it comes to the stakes and the political gamesmanship, that’s another matter.

The Los Angeles Times has obtained a letter from California Gov. Arnold Schwarzenegger to Treasury Secretary Henry Paulson warning that his state may need an emergency $7 billion bridge loan to maintain cash flow as it awaits sales and income tax receipts at the end of this year and in early 2009. The trouble? Seized-up [...]

Poring over news accounts of the deal struck last night by congressional leaders, the only thing that seems clear is that the widely touted protections against taxpayers getting stuck with the ultimate tab are scant and vague. The pitch on behalf of the deal still emphasizes the potential resale of all the bad paper after the market recovers, but as you’ll see in the analysis pieces highlighted below, it’s unlikely that the sorts of assets the Treasury Department will be buying are ever going to be worth anything. The terms of this deal punt the question of recovering bailout funds from the financial sector five years down the road: “[I]f the Treasury program to purchase and resell troubled mortgage-backed securities has lost money after five years, the president must submit a plan to Congress to recover those losses from the financial industry. Presumably that plan would involve new fees or taxes, perhaps on securities transactions” (NYT).

Likewise, the broad call to provide help to foreclosure-stricken homeowners as part of the package has fallen by the wayside. In place of programs or provisions to rework the terms of onerous mortgages, “[the bailout legislation] calls on the Treasury, as an owner of mortgage securities, to ‘encourage the servicers of the underlying mortgages’ to minimize foreclosures” (WSJ). As guarantees go, that’s roughly the equivalent of promising to pray for a good outcome.

The assessments of last night’s doomed economic pow-wow have not been kind to John McCain. Setting the table is The New York Times with a damning (and dryly amusing) description of McCain’s performance at the economic summit that was called at his behest. An aide to House Minority Leader John Boehner all but acknowledges that [...]

Darryl Dahlheimer, a project manager at Lutheran Social Service financial counseling in Minneapolis, points to the main reason we got into this mess: “We’ve been fetishizing free markets for the last 15 years to the detriment of the consumer and families and stable communities.”

Now consumers are experiencing anger and starting to fight back in the face of a $700 billion Wall Street bailout.

The media keeps getting Rep. Michele Bachmann’s home state wrong. Last week it was New Mexico and today it’s Florida — this time courtesy of Human Events, which reports that Treasury Secretary Henry Paulson couldn’t assure Bachmann that his bailout plan would avert (in her words) “economic Armageddon.”

Purely as a question of self-interest, John McCain’s exit-the-stage gambit makes sense. With cries of impending doom filling the air, he had nothing to gain by sticking around to discuss a subject he ill understands, all the while being pelted with quotations of the Hoover-like things he’s already said and done during his long tenure as a cheerleader of financial deregulation. On Monday of last week, McCain proclaimed the economy “fundamentally strong” even as Wall Street’s latest and gaudiest blowup was unfolding. Since then he’s faced erosion in the polls day after day.

For a guy who can turn out a three-page demand for $700 billion (make that a trillion) on a dime, Treasury Secretary Henry Paulson has shown he hasn’t forgotten about pennies. And neither has his U.S. Mint, which this week announced four new designs from the life of Lincoln for the one cent coin’s flipside, which next year will join new series of coins honoring U.S. Presidents and their wives — all meant to delight Americans in their daily transactions.

Every hour of every day brings reams of fresh news reports and commentaries on the Wall Street crisis and the competing bailout proposals wending their way through Congress, but that doesn’t mean you can learn anything from most of them. Here’s a guide to the best, most comprehensible commentaries on the present mess.