Thursday, 25 September 2008

A strange choice as saviour

The world financial crisis is the creation of merchant/investment bankers with their greed and avarice. Henry Paulson until a couple of years ago was the boss of the biggest such bank on Wall Street. Is it any wonder that there is scepticism about the plan he has devised as Secretary of the US Treasury to end the turmoil?
Presumably when he joined the Cabinet of George W. Bush Mr Paulson was aware of the troubles that were brewing because of the sub-prime loans. And if was unaware of the dangers then surely that ignorance alone would rule him incapable of carrying out his job.
Yet there was barely a whimper from the former king of Wall Street as things got worse and worse and conditions in the United States deteriorated to the point where the whole world is threatened with bring thrown into recession. When he finally chose to act it was in the half hearted and ineffective fashion of aiding and abetting the takeover of Bear Sterns and then using taxpayers' money to prop up AGI insurance.
That was all to no avail and the failure of these attempts at intervention just made the crisis worse. So what did the Treasury Secretary come up with? Another large dollop of taxpayer money only to find that $700 billion impressed neither the politicians who have to authorise its expenditure nor the markets it was designed to placate.