I nominate the following statement to be the one most likely to come back to bite Paulson's ass:As policymakers face the difficult challenges ahead, they will begin with two considerable advantages: a significantly more stable banking system, one where the failure of a major bank is no longer a pressing concern; and the resources, authority and potential programs available to deal with the future capital and liquidity needs of credit providers."The failure of a bank is no longer a pressing concern"??? So what will he say once Citigroup goes belly up? Oh, that won't be a "failure", because the government will either dump a bunch of money into them, or help them become acquired.
And surprise, surprise, the taxpayers are now dumping billions into Citigroup in a futile attempt to keep them going. I love being right and everything, I just wish I were wrong about this.
Given what we know about Paulson, it should come as no surprise that he will probably try to tap the next installment of the TARP program, after saying he would leave it to Obama.
Paulson may ask Congress for the remaining $350 billion from the Troubled Asset Relief Program as he puts together plans to boost consumer credit. Treasury and Federal Reserve officials are working on an effort to buttress the market for securities backed by auto, student and credit-card loans, Paulson said last week. He’s also assembling an office to address mortgage foreclosures.
Six days ago, Paulson told Congress “it was only prudent to reserve our TARP capacity, maintaining not only our flexibility, but that of the next administration.” Since then, the collapse in Citigroup Inc. shares threatened a renewed bout of financial turmoil, and forced the Treasury to mount a rescue of the bank late yesterday.
The only question now is what will they all say when the next installment of $350 billion dollars isn't enough? Still no help in sight for struggling poor or middle-class citizens, but we've rushed the banksters hundreds of billions of dollars. Isn't capitalism great?