There are two remaining stand alone Wall Street investment firms - Morgan Stanley and Goldman Sachs. Henry Paulson, before he became Secretary of Treasury, was Chairman and CEO of Goldman Sachs with a long career in that organization. It is a gift to the country that this man is now leading us through the current financial climate.
"I hate the fact that we have to do it but it is better than the alternative." "This is not a spending program." "There are no guarantees." Those are quotes from Secretary Paulson from a Sunday show this morning. Paulson stresses the fact that we need new regulations and policies but that takes time. He submitted a regulatory blueprint some time ago but it hasn't been acted upon. There is no time now to consult egghead after egghead. Action has to be taken, in the most responsible way.
While partisans in the media, like Tom Brokaw on Meet the Press, will try to point fingers since that is what they do best, and some politicians try to blame President Bush for yet something else, this is not the time for that. To think one president, even Bush, is responsible for this is only coming from the unserious about the welfare of our country. This crisis has been a long time coming. Neither political party has a firm, complete answer. That is why a bi-partisan approach is the strongest.
If President Bush had appointed the cabinet of his second term in his first term, his Presidency would have been much smoother. The first MBA President, he knew he needed Henry Paulson to lead the economic horizon as the economy slowed. Bush has had a strong performance on leading the country to economic recovery after the devastation of 9/11. The stock market was performing at historical highs, unemployment at historic lows, interest rates very low. All good. But the regulations and reforms needed in the financial markets were lacking. In 2002, President Bush and Republicans in Congress tried to push for reform , especially with Fannie Mae and Freddie Mac, but were stopped by Democrats. This has continued every year since. Though loathe to regulate a free market, some strong reforms are needed and Democrats must work with the ideas of Republicans now.
Stabilize the situation first, then reform. Henry Paulson has an MBA from Harvard and he is running into some demands by all the lawyers on Capitol Hill who think they know better than he on what else needs to be included in the legislation Paulson and the administration will ask to be passed before the recess after next week's end in Congress.
Michael Bloomberg, a billionaire to whom both parties look for sound financial advice, said, "Hank's the right guy" for the job now. While partisan hacks like Chuck Schumer want to punish greedy executives within this legislation, Paulson said that will come but first we cannot allow financial executives to turn away from support. Schumer insists another stimulus bill must be included. Senator Jon Kyl, on the panel with Schumer, said a stimulus package shouldn't be included right now. The time for political agendas is later.
Both senators said the chance of the legislation passing through Congress before the recess is more than 50/50.
I watched Brokaw interview Paulson and Bloomberg this morning. He lamely prompted Bloomberg to state the U.S. will be in an official recession soon. Bloomberg, a grown up, didn't take the bait. Bloomberg stresses more accountability and transparency is needed, as do both presidential candidates.
There is not much difference in what both presidential candidates hope will be solutions to the current financial atmosphere. Bloomberg said we have to have realistic regulations in the free market - note to Republicans, and free markets have to have capitalism and low taxes for growth - note to Democrats. John McCain called for reforms and transparency 2 years ago and he was ignored by the Bush administration and by his fellow senators - including Barack Obama. That is to McCain's credit. I know it is popular for Obama to mock McCain for being out of touch and not smart on economics but there is absolutely no evidence or history to point to that Obama is any smarter. McCain has a long history on the Senate Commerce and Technology Committee - the largest committee in the Senate and the one responsible for oversight on all commercial transactions. Obama would do well to ratchet down his arrogant ridicule of McCain. He looks small and unserious when he does that. Obama should humbly remember he couldn't define a capitol gains tax during a past debate.
This crisis needs the smart MBA's and the successful business leaders, not trial lawyers in the Senate, to guide us through. It's time for bloated egos to step aside and let the experts show what needs to be done. I think the politicians would be wise to temper their speeches and remarks in the manner of Michael Bloomberg. Bloomberg has been a declared Democrat, Republican and now a registered Independent. He has kept a cool head and offers even-handed suggestions to both parties. I hope someone is listening.
If all goes well with this bail-out, Henry Paulson will go down in the history books as one of the great Secretaries of Treasury. Let's let him do his job.