Hank Paulson Needs A Sales Lesson

Hank Paulson needs to go to a Dale Carnegie Sales course. Half of you probably never heard of that but he needs to go to some sort of sales seminar to learn how to sell a program and not try to ram it down people's throats. It clearly wasn't enough to say this isn't a bailout of Wall Street. It is a bailout of Wall Street. It also is a bailout of Main Street, but of problems caused in large part by Wall Street. The American voter cannot be railroaded. Constituent mail was running overwhelmingly against the program. A deft, sensitive touch was needed and "The Hammer" Paulson, for all his brilliance, didn't pull it off.

The Administration needs to realize it can't risk another defeat. They need to line up the few votes needed in advance. To get a few Republican votes they need to pull out all the lobbying stops they can. Outfits like the Chamber of Commerce have to get on the phone. The Treasury may not like it but it seems more than a few Democrats voted against the bill because it contained no bankruptcy relief for homeowners. Better craft a compromise that can pull a few votes over. If recrafting the bill doesn't work in advance of a vote, go to plan B.

Plan B is to shelve the bill till after the election and do some or all of the following:

1) Suspend mark to market accounting (if you can. ) I don't know how that would work, but it's a man made accounting regulation that has played havoc with our financial system This was not a law handed down with the burning tablets. Change it and relieve the pressure of trying to mark assets to a market that isn't there.

2) The Fed should cut interest rates immediately.

3) Fannie and Freddie, with Treasury backing, should accelerate buying mortgages.

4) John Ryding of RDQ Economics thinks that a Treasury backed asset lending facility should be considered.

5) The Federal Reserve and /or the Treasury should consider a plan to recapitalize banks by buying mortgage related paper in exchange for equity in the banks like Sweden did during its crisis. They have kind of done this with AIG.

6) The FDIC should raise the guaranteed amount for bank deposits. If it is any way legal, the government should buy/guarantee commercial paper to get the system breathing again. Confidence needs to be restored.

I don't know what is doable and I don't know what is even legal. But I know that in crisis there is opportunity. The stock market lost $1.4 trillion in value on Monday. That could have been two rescue plans of $700 billion each! The Administration can't stay bound within its original proposal. I like to say politics is the art of the possible. This is a flawed proposal to deal with a chaotic mess. There is no way it will be anywhere near ideal. But some plan is better than no plan.

Comments

[georgemia]

Every other time that the Bush administration has had a bucket of fecal matter to market, they've at least wrapped it up with shiny names: "No Child Left Behind," "The Patriot Act," and "Operation: Enduring Freedom."

What happened to the publicity machine in the White House? They had no marketing at all, and the press was allowed to give its' own misleading appellation non controlée. The plan died because it became known as the "Bailout for Wall Street and Southampto­n."

It's just one more measure of how Bush's operation is collapsing.

[schatsie]

Paulson was following the party line...

Remember NO OVERSIGHT, sounds like no subpoenas, no investigation of the WAR PROFITEERI­NG..

Remember you gave us 8 billion that we 'lost' in Iraq..

Remember, no body armor for the troups, no bailout for the borrowers, heck no jobs, no nothing.

Remember, cutting CEO compensation would be PUNITIVE..­.

This was not a GOOD FAITH bill, it was a slap in the face to every thinking American.

Read Bartlett and Steele, Al Franken, Jim Hightower, Kevin Phillips and VOTE!

[BassMonk]

I wonder if GWB has learned the lesson of 'The Boy Who Cried Wolf' in the last few years.

[katok]

Yes. A striking shortcoming in communication skills. But lets not forget, he also had a horrible product.
Even the best salesman can't sell freezers to Eskimos (soon maybe). It needs to be positioned as an investment. Then it needs to considered against all other options. Compared in terms of risk and payoff. It needs to be conducted in consideration of our current and future challenges. I believe propping up failed and criminal organizations is a bad way to start, and therefore a deal breaker.

[davedave]

"The stock market lost $1.4 trillion in value on Monday."

let's be straight. you didn't lose a penny if you didn't sell...the truth sells better than hmmm, horsefeathers.

d

[schatsie]

Yes and don't forget the Market BOUNCED BACK UP today, about a trillion dollars I guess...

[LeRoyHolt]

Being a good salesperson sometimes is not enough....­...... "sometimes good salesmanship can't overcome pure stupidity"­....... or pettiness or job fear..... even if your country(economy) needs your vote

[LeftRight]

1) I don't know for sure about this one, not being in the market....

2) The second worst thing that we could do, after the $700 Billion bailout!

3) This one could work, ESPECIALLY if they were to then refinance the loans into something that people could AFFORD!!!

4) If this is tied into a buyout of mortgages by Freddie/Fannie, then this could be useful. If instead it was simply a backdoor bailout, then no!

5) Again, I don't know for sure....

6) Most people are confident in the banks in general. In fact, it is ONLY the banks which have become INVESTMENT banks that are the problem. Just as an example, look at my bank, US Bank. 99.9% of their loans throughout the bubble were prime loans. They did go based on the inflated values of homes, but they were still ensuring that people could PAY the loans back!!!

The fact of the matter is that the govt needs to either do nothing and let this blow over in a decade or two, or it needs to bail out the PEOPLE, which will have the effect of ALSO bailing out the banking/financial sector!!!