Alas, the market is currently flopping around like a fish on a hot dock, once again raising some serious questions for Paulson and his bailout. After all, the LIBOR rates have fallen but still not significantly, meaning that intrabank lending is still clogged up, meaning the gears won't turn and the money won't flow. Now maybe it takes a while, but then why is the market falling? And if Paulson Bailout II is such a success, what does that say about Paulson Bailout I? And should Treasury have allowed Lehman Brothers Holdings Inc. to go, knowing what we know now (which I realize is unfair, but such is life)?
The truth is, Paulson is trying very hard and at least he's proved to be flexible and energetic in an administration that's currently mummified. But every move he's made of late has been proceeded by someone in Europe, from the Irish to Gordon Brown's U.K., although Pearlstein seems convinced he's out in front.
As for Dimon, well, he's done a great job at J.P. Morgan. Maybe in different times he should get the Treasury job. But if Obama offers up Dimon, he's pursuing the same tone-deaf politics as Paulson -- and you can say many things about Obama, but tone deaf is not one of them. Here's the problem: Wall Street, for good or for bad, has been effectively demonized. (After all, Dimon is just one of Pearlstein 's "maharajahs of finance" who so far have not volunteered to work for $1.)
We're about to enter a period, no matter who wins, where Wall Street will be blamed for every layoff and every bankruptcy and every foreclosure. Much of the blogosphere, right and left, is already deeply suspicious and angry at both the bailout plan and the nationalization program, which, by the way, includes J.P. Morgan. And Paulson's task as Secretary of Rescue has been complicated by the prevailing notion that he was saving his pals, despite Weidner's belief that "critics would have a hard time accusing him of partisan politics in the job." Well, they already do. And they'd hammer Dimon as well.
The trouble here is that many of the names Weidner and others float for the job are also complicit in the mess. Robert Rubin works at Citigroup Inc., and with Larry Summers got mixed up in Alan Greenspan's stifling of the CFTC's Brooksley Born over derivatives regulation. Could Tim Geithner at the New York Fed get the job? Sure, though he's been deeply involved in the rescues and bailouts as well. Laura Tyson? She lacks the Wall Street stigma, but she doesn't seem to excite anyone either.
Of course, maybe everyone is looking in the wrong places. For most of the New Deal, Roosevelt's treasury secretary was Henry Morgenthau Jr., a resolutely balanced budget, non-Keynesian type of treasury chief who had worked for FDR when he was governor -- as head of the New York State Agricultural Advisory Committee and to the state Conservation Commission. Now that's credentials. - Robert Teitelman
Robert Teitelman is editor in chief of The Deal.
Comments
This guy is brilliant. Create your own relevance and neither guy that wins can replace you. Cheers...A-hole!