Paulson cannot be allowed a blank cheque

Financial Times ^ | 9/25/08 | George Soros

[Obadiah]

Hank Paulson’s $700bn rescue package has run into difficulty on Capitol Hill. Rightly so: it was ill-conceived. Congress would be abdicating its responsibility if it gave the Treasury secretary a blank cheque. The bill submitted to Congress even had language in it that would exempt 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.

Mr Paulson’s record does not inspire the confidence necessary to give him discretion over $700bn. His actions last week brought on the crisis that makes rescue necessary. On Monday 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 $85bn 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 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. Mr Paulson reversed again and proposed a systemic rescue.

Mr Paulson had got a blank cheque from Congress once before. That was to deal with Fannie Mae and Freddie Mac. His solution landed the housing market in the worst of all worlds: their managements knew that if the blank cheques were filled out they would lose their jobs, so they retrenched and made mortgages more expensive and less available. Within a few weeks the market forced Mr Paulson’s hand and he had to take them over.

[Obadiah]

Is it not amazing how all the Democrat talking points, such as, "cannot be allowed a blank cheque" are incorporated into Soro's column? Coincidence? Or is are the Democrats getting their talking points from Soros?

[Mercat]

That settles it. If Soros is against it, then I’m for it.

[Perdogg]

George Soros = Obama

[frankjr]

Soros is just angry that he went in big on Lehman just before the Govt let them go under.

[Travis McGee]

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

---Ludwig Von Mises

Paulson and Bernanke are choosing option #2.

[Ouderkirk]

Soros is just angry that he went in big on Lehman just before the Govt let them go under.

Ding, Ding, Ding !!!! We have a winner.

Soros is angry that Bush let him lose a large sum of his ill gotten lucre in Lehman Bros. Good for Bush. We should revoke Soros citizenship and deport him anyway.

[M203M4]

Sour grapes. Soros wants his cut - the bailout is perfectly aligned with his collectivist, Keynesian-Marxist philosophy.

[nathanbedford]

Here we have the virus blaming the doctor for treating the wrong symptoms.

[Lou L]

Soros is angry that Bush let him lose a large sum of his ill gotten lucre in Lehman Bros. Good for Bush. We should revoke Soros citizenship and deport him anyway.

Wow...this is interesting. Is there truth behind people like Soros losing big time in this situation? There's almost sweet justice in that.

Could George Bush be the "Francisco d'Anconia" that led investors like Soros to lose billions by investing in the financial equivalent of a Mexican copper mine?