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Commentary: The Emperor Has No Clothes
Bud Conrad, Chief Economist of Casey Research, (www.caseyresearch.com) examines how Hank Paulson has failed to foresee the economic crisis as only a bank crisis.
In the excerpt from the just-released issue of The Casey Report, Casey Research’s flagship publication, Mr. Conrad says Secretary Paulson is wielding “financial nuclear weapons.”
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Op-ed - Bud Conrad
And who is in charge of managing these huge swaths of the U.S. economy? Everybody
seems to believe that Paulson is the right person to manage this situation.
I disagree.
Consider his track record of insisting, again and again over the last year, that there was no problem. He is on record claiming that the subprimemess was “contained” at only $100 billion. And it is hard to overlook the multiple failed ideas he has floated, including the super SIV (four big investment banks to wrap SIV assets in tissue paper and sell them off yet again),or suggesting that two investment banks should come up with $75 billion to bridge the AIG situation, etc.
That he has been so slow in admitting the scope of the problem, even when it was apparent to any reasonably attentive observer, means he is either incompetent or disingenuous. I think he’s both. If he had admitted the seriousness of the situation sooner, a more well-thought-out plan might have been developed. While the scale of dislocations that have built up in the economy over the decades make the odds high that any plan will fail…short of moving away from the populist quick fixes and allowing the free market to do its painful job, a more realistic assessment, earlier, could have offered a fighting chance at a more balanced solution.
Handing Paulson the equivalent of financial nuclear weapons is completely unjustified. Even worse, he is aiming the weapons at only one small sector, the banks, and not solving the underlying big problems.
“Handing Paulson the equivalent of financial nuclear weapons is completely unjustified.”
Please contact me for more info or to arrange an interview with Mr. Conrad.
To schedule an interview, please contact Kevin McVicker with Shirley & Banister Public Affairs at (703) 739-5920 or kmcvicker@sbpublicaffairs.com
