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Amidst Hank Paulson's rapid transformation from Treasury Secretary to Economic Emperor, Dean Baker wonders if any reporters will stop and examine the record of the man who would demand $700 billion to spend as he sees fit:
In March of 2007, after the first shock waves of the housing meltdown had already hit, the Associated Press reported Mr. Paulson's view that the credit difficulties linked to the housing slump would be limited.In August of last year, after the second round of financial shock waves disrupted markets worldwide, Paulson commented, "We have the strongest global economy I’ve seen in my business lifetime."Just last March he warmly endorsed a reduction in the capital requirements for Fannie Mae and Freddie Mac, saying "additional capital [invested in mortgages by Fannie and Freddie] will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market."At every point along the way, Secretary Paulson has failed to see the extent of the crisis resulting from the collapse of the housing bubble. This raises serious questions about his judgment. Reporters should be discussing Paulson's track record in the context of this bailout proposal.True enough. It's hard to argue that Hank Paulson has established enough credibility to demand a no-questions-asked transfer of $700 billion into his personal emergency crisis management account. Moreover, it's a bit weird to have a Wall Street guy demanding total control over a Wall Street bailout which comes in response to a Wall Street crisis but is funded with taxpayer money. Even the slightest level of intellectual humility would suggest the need for other, more prescient, less conflicted, perspectives, and time to shape the plan in response to their advice. Obviously, this administration is not exactly the introspective type. But there's no reason Congress can't insist on some due diligence. That, after all, is the point of the institution.
