Blank Check for Paulson? by George Soros

[Lydia Leftcoast]

NEW YORK — U.S. Treasury Secretary Hank Paulson's $700 billion rescue package ran into difficulty on Capitol Hill over the weekend. Rightly so: It is ill-conceived. Congress would be abdicating its responsibility if it gave the Treasury secretary a blank check.

Early versions of the bill submitted to Congress even had language that would have exempted the secretary's decisions from review by any court or administrative agency — the ultimate fulfillment of the Bush administration's dream of a unitary executive.

Paulson's record does not inspire the confidence necessary to give him discretion over $700 billion. His actions two weeks ago brought on the crisis that makes rescue necessary. On Monday, Sept. 15, he allowed Lehman Brothers to fail and refused to make government funds available to save AIG. By Tuesday he had to reverse himself and provide an $85 billion loan to AIG on punitive terms.

The demise of Lehman disrupted the commercial paper market. A large money market fund "broke the buck," and investment banks that relied on the commercial paper market had difficulty financing their operations. By Thursday, Sept. 18, a run on money market funds was in full swing and we came as close to a meltdown as at any time since the 1930s. Paulson reversed again and proposed a systemic rescue.

http://search.japantimes.co.jp/cgi-bin/eo20080929a1.html

[OwnedByFerrets]

1. TY Mr Soros...nt

[Lydia Leftcoast]

2. Interesting that this seems to be only in the Japan Times

They quite often carry op-eds that don't appear elsewhere--for no discernible reason.

[barbtries]

6. maybe it's because

msm in the US won't carry it? i've noticed for several years that they seem only to carry water for the bushies. that's why i love DU - i'm exposed to so much more that i would never learn whether by watching tv or reading the nation's biggest papers.

[struggle4progress]

3. kick

:kick:

[RainDog]

4. exactly

now, where are the DUers who want to call out Soros for wanting to punish Wall Street? why aren't they saying he's not an adult?

[barbtries]

5. i'll just keep on beating this drum

paulson should be gone by now. no absolute power. conflict of interest. i don't trust him as far as i can throw him. so yesterday he lost, he failed, but look? the motherfucker will not go away. no bailout involving henry paulson!

[chill_wind]

7. He wrote to Slate:

"Dear Friends and Colleagues:

I thought you might be interested in my opinion piece which appears in the September 25th edition of the Financial Times."

http://fray.slate.com/discuss/forums/thread/1880420.aspx

All we've been hearing about in the MSM is re: Pro-Paulson Warren Buffet, who went on CNBC (also Fox I think) early last week trying to give the first drafts a big push after his GS buy.

[NuttyFluffers]

8. Soros is a wise man when it comes to money. perhaps i should listen to him...

but the voice of the media and the doomsday mob! it is like a siren song, i cannot resist. i have fear in my heart, so i must obey the call... oh, who could speak with logic on this now? is there not a billionaire who could give us sensible advice? anyone? anywhere? i am so afraid that i forgot what happened 5 minutes ago...

:evilgrin:

[Hannah Bell]

12. he's also a player with an agenda, not a shining knight. listen with multiple grains of salt.

[Lydia Leftcoast]

13. Certainly no angel, but why is his opinion not being given equal weight

with that of Warren Buffett (also no angel)?

[kristopher]

9. Good read

"...Paulson's proposal to purchase distressed mortgage-related securities poses a classic problem of asymmetric information. The securities are hard to value but the sellers know more about them than the buyer: In any auction process the Treasury would end up with the dregs. The proposal is also rife with latent conflict-of-interest issues. Unless the Treasury overpays for the securities, the scheme would not bring relief. But if the scheme is used to bail out insolvent banks, what will the taxpayers get in return?

Democratic presidential candidate Barack Obama outlined four conditions that ought to be imposed: an upside for the taxpayers as well as a downside; a bipartisan board to oversee the process; help for homeowners as well as the holders of the mortgages; and some limits on the compensation of those who benefit from taxpayers' money.

These are the right principles. They could be applied more effectively by capitalizing the institutions that are burdened by distressed securities directly rather than by relieving them of the distressed securities...."

[crickets]

10. Good find. K&R -nt

[FourScore]

11. kick