A message to POTUS Bush and e-POTUS Obama: Fire Paulson first, then fix the economy from autos to banks.
Paulson has a glaring conflict of interest and has no place dealing with the financial crisis. He is essntially funneling non-binding money to his old cronies on Wall Street. Goldman Sachs ran out of money yesterday. Today, reports are that Paulson is considering asking Congress for more money to bail them and other financial institutions out.
Where did Paulson work before becoming Secretary of Treasury?? That's right: GOLDMAN SAChS.
Here is what GAO says in its report on the financial bailout, issued Tuesday: Treasury hasn't developed a mechanism to ensure that firms receiving federal funds are complying with its intent. Issues not addressed include ensuring the $250 billion dumped into the banking industry is "achieving its intended goals." Funny, I said that a couple weeks ago on CNN. It's not THAT HARD to figure out.
Do you think Paulson wanted an enforcement mechanism in the bill? Not if the banks wanted liquidity more than they wanted to lend. Let's look at it this way: a run on money could put any bank or financial firm out of business TODAY. So what are they doing with the first $250b? Hoarding it. Not lending it, not stimulating the economy. Loans for cars, houses, school? Nope. Not gonna do it 'til you make me.
Could Paulson even get more money for the banks now? Maybe not. Congress is REALLY worried about Detroit. Americans are REALLY worried about Detroit. Cars are a big deal in this country. Auto manufacturing provides a lot of jobs.
I know its hard for Paulson to watch his former friends and colleagues carry boxes out of fancy New York skyscrapers. But its harder for Americans to watch middle class and working class people slip into unemployment across the country, in jobs that are a lot easier to pay for, with much lower salaries.
Paulson, do yourself a favor. Ask for money for the regular folks first, then ask for more money for the banks, who also do need it. But remember, the banks don't need it so they can pay CEOs all that money. They need it so they can lend it to the regular folks. THAT's economic stimulus.