Pinkerton: Bush Administration Not Serious Until the Right Heads Roll

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Jim Pinkerton on the Bush administration’s lack of seriousness about the convulsing economic crisis:

If the Bush administration really believed that the Paulson proposal was absolutely vital, it would be accompanied by:

a) the President’s prime time speech to the nation;
b) the resignations of top administration officials who have been overseeing the situation heretofore; or
c) a tax increase, specifically, a “Tobin Tax” on speculation, perhaps balanced with a reduction in the tax rate on long-term capital gains.

But if the administration can’t rouse itself to even do a), then it’s obviously not that serious a situation.
The situation of Paulson himself is particularly egregious. Having been in charge at Treasury for more than two years and issued innumerable “sunny skies” forecasts, he now wants a $700 billion blank check to oversee the bailout of his once and future colleagues.
His swift exit from the scene ought to be a rock-bottom minimum requirement.

— Steve Clemons

Comments

19 comments on “Pinkerton: Bush Administration Not Serious Until the Right Heads Roll

  1. arthurdecco says:

    WigWag said: “I don’t love Paulson and I do think he shares in the responsibility for this mess, but firing him now would lead to disaster. The markets would completely collapse here and around the world.”
    Duh…No!
    Fire him immediately!
    Hiring someone internationally and widely recognized as a COMPETENT and HONEST money manager to take over Paulson’s responsibilities would alleviate this financial crisis in a heartbeat.
    Isn’t investing in the market mostly about emotional trust?
    The world – the Whole World – is sick and tired of the psychotic roller coaster ride they’ve been forced to ride since Bush and his traitorous co-conspirators systematically stole the 2000 elections. The whole world is tired of Amerikan kapitalism, kronyism, korruption and kriminality. (Except for those who have benefited, of course – they’re not tired in the least.)
    The whole world is hungering for a respite from the worship of Greed and aggressive, Murderous madness and a return to reasonable, personal Responsibility. The whole world would applaud the incarceration of those, like Paulson, who were, (and continue to be), responsible for the meltdown in American wealth management supremacy and those who are responsible for the murder of a million people so that they and their friends could turn a Profit.
    The fear, the loathing, the immorality displayed by most of those that lead Amerika, and therefore lead you, cannot be overemphasized. Those empty suits with perfect hair who can, and do, casually destroy your family’s futures for their own self-aggrandizement should be guillotined, at the very least guillotined. I’d personally bring back drawing and quartering for all of them. Every single one of them is a traitor and a venal criminal deserving of no clemency.
    The tragedy is that this administration could no more appoint a qualified and honest person to take Paulson’s place than they could walk in points on the moon at midnight in an egg-white tutu.
    But who are WE to worry about that kind of stuff anyway?
    …Ahhh shit…why worry? Let’s take another Prozac…and turn on the TV…
    …Or go yell like a fool at some other identical, but mirror-imaged, ideologically opposite victim of the same crimes on the internet.
    That should make a difference.
    …We’re pathetic. Especially those of us who are drug free. What excuse have we for our blubbering ineffectiveness in the face of so much disgusting criminality?!?

    Reply

  2. Turmoil 2008 says:

    The Treasury Secretary works for the President. It was Bush’s decision not to fund the war and it has been Bush’s decision to ignore the mortgage meltdown. This is not the time for Paulson to go. He is trying to stop the bleeding.

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  3. JohnH says:

    “Do the Democrats have any leaders who are capable of credibly explaining this to the American public in a way that average people can understand?”
    Also, do the Democrats have any leaders who are not too corrupted by Wall Street to enact a plan that doesn’t primarily benefit the criminals?
    It’s time for the Democratic Leadership Council and the blue dogs to shut up, stand up to their underwriters, and do right by the American people. Fat chance!

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  4. WigWag says:

    I just hope that the Democrats are smart enough to use this crisis as an example of everything wrong with Republicans in general and Reaganism in particular. In 1981 Reagan was elected on the mantra of deregulation (which Jimmy Carter had actually stared a few years earlier with his deregulation of the airline industry).
    Reagan’s goal (and the goal shared by millions of young and misguided Republicans who were inspired by his message) was the deligitimization of the New Deal. Since the Reagan Revolution republicans have been doing everything they can to return to pre-New Deal policies.
    They’ve deregulated the economy on a massive scale. They’ve destroyed organized labor. They’ve virtually eliminated enforcement of anti trust regulations. They’ve allowed massive mergers which concentrated economic power in the hands of the few. They’ve defanged the SEC. They’ve eliminated banking regulations. They’ve allowed Medicare recipients to choose private HMOs which actually cost more than regular Medicare and thus add to the insolvency of the system. They’ve attempted to invest social security funds in the stock market (can you imagine the havoc if that had happened). They’ve continued to reduce capital gains taxes so that people who earn a living by the sweat of their brow pay higher taxes on their wages than pencil pushers pay on their coupons. They’ve made the federal tax code far less progressive. They’ve gutted the bankruptcy laws.
    In some of this they were aided by Democrats. In some cases Democrats resisted the best they could like the little boy with his finger in the hole in the dike.
    What we are seeing now is merely a replay of the type of financial and economic crisis that was replayed over and over again in the American economy from the time of the industrial revolution until the advent of the New Deal.
    The President who single handedly solved this problem, mostly by the force of his own will and tremendous popularity, was Franklin Roosevelt. In doing so, he saved capitalism.
    This crisis presents the Democrats with a golden opportunity to deligitimize Reaganism in the same way that Republicans deligitimized the New Deal. If the Democrats are smart the political benefits of doing that could last them a generation.
    One mistake the Democrats should stop making right now is repeating Republican assertions that this crisis occurred because the regulatory system did not keep pace with new financial realities. This is not true. The regulatory system was up to the task until the Republicans destroyed it. We don’t need a new system; we need to go back to the old system. With minor modifications, the old system will solve the current problem and prevent new ones just like it did for 50 years.
    It’s also a mistake to point to excessive greed on the part of Wall Street types that is worse than ever. Greed is not worse than ever. It is the same as it ever was. Greed drives capitalism. It always has and it always will. Roosevelt put into place mechanisms to channel that greed and ameliorate (and if necessary punish) its excesses. It’s not the greed that’s new; it’s the destruction of reasonable regulations that’s new.
    The question is, do the Democrats have any leaders who are capable of credibly explaining this to the American public in a way that average people can understand. The window of opportunity to get started will be short. Once the immediate crisis has passed (as it surely will) the opportunity will be gone unless the dialog with the public has already started.
    This is a golden opportunity for Democrats. That is assuming that they don’t blow it as they usually do.

    Reply

  5. BetteB says:

    You wrote:
    “If the Bush administration really believed that the Paulson proposal was absolutely vital, it would be accompanied by:
    a) the President’s prime time speech to the nation…”
    Hmmmm. Welll according to bloomberg.com, he’ll be be giving a national address tonight at 9 pm.

    Reply

  6. WigWag says:

    What a gimmick from the McCain Campaign. This from the NY Times
    McCain Seeks to Delay First Debate
    By ELISABETH BUMILLER
    Published: September 24, 2008
    Senator John McCain said Wednesday that he would temporarily suspend his presidential campaign on Thursday to return to Washington to deal with the financial crisis and the $700 billion bailout package now before Congress.
    Mr. McCain said he told Senator Barack Obama that he was asking the Commission on Presidential Debates to postpone the debate scheduled for Friday night.
    “I am calling on the president to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself,” he said. “It is time for both parties to come together to solve this problem.”

    Reply

  7. questions says:

    Well, condition a is being met. 12-14 minutes of Bush’s precious time to explain to us what is happening. Hmmm. Will he finally admit to having made a mistake? Stay tuned!

    Reply

  8. Mike Claussen says:

    Thanks to Sue for highlighting a very informative site on the inside of journalism and their responsibilities in this “crisis”.

    Reply

  9. easy e says:

    Today’s frightening interview with Warren Buffett:
    http://www.msnbc.msn.com/id/21134540/vp/26867473#26867473
    And Mainstream Media has yet to inform Mainstreet America about $62 Trillion Ticking Time Bomb:
    http://www.contrarianprofits.com/articles/beware-the-62-trillion-cds-time-bomb/5574
    It’s time for national uprising and revolution. Round ’em all up, try…convict…imprison.

    Reply

  10. JohnH says:

    A Tobin Tax would be a wonderful solution. The tax would amount to a miniscule fraction of a percent on every financial transaction. It would affect mostly those who engage in frequent financial trading — speculators, hedgers, etc. In other words, it would be a tax on exactly the kind of behavior that has caused the problem. While not banning such transactions outright, like the ban on short selling, it would raise the casino’s (US government) share of the take ever so slightly and maybe give speculators pause before they every bet they place. If managed well, it could shift the balance of financial activity from speculation to underwriting real, productive activity.
    The other advantage of the Tobin Tax is that the sums raised are potentially enormous–perhaps even big enough to cover the $700 billion. (A miniscule tax on huge trading volumes adds up quickly.)
    And, best of all, it levys the tax them that brought the problem, exempting the rest of us.

    Reply

  11. Robespiere says:

    Heads Rolling, sea of blood …… now you are talking my lingus franca.
    Guillotines anyone?
    Not yet?
    In due time, in due time.

    Reply

  12. Linda says:

    Everybody should look at the link in Sue’s post above as it is written by David Cay Johnston, one of the best, if not the best, journalists around on complex financial matters. If people have missed his writing in NYT lately, he took a buyout and retired last spring.
    He is writing an open letter to all journalists on the Poynter website for journalists that is the site also of Romenesko where everybody goes to know the latest happening in journalism.

    Reply

  13. easy e says:

    $700 billion is only tip of the iceberg. A lot more needs to happen than heads rolling.
    THE $62 TRILLION TIME BOMB
    The US subprime and credit crisis has cost the world over $7.7 trillion, according to a report released in February by Bank of America.
    The worst could yet be to come. Shah Gilani in Money Morning says the $62 trillion market for credit default swaps (CDS) is a ticking bomb.
    The derivative instruments – which offer insurance against default – are neither transparent nor regulated. But they are all at risk. And they are already causing huge writedowns in the banking sector…
    more here…http://www.contrarianprofits.com/articles/beware-the-62-trillion-cds-time-bomb/5574

    Reply

  14. Linda says:

    Perhaps more interesting was a typical Bush faux pas in the few remarks he did make last week where he said that if there was any criminal activity, then those involved should be “persecuted.”
    News is just breaking that the FBI is investigating no less than 26 financial services companies, and it is likely that some “persecutions” will emerge.
    I think the whole Bush team should stay and suffer doing their jobs for the next four months.
    Congress will put adequate controls on the bailout within the next week because people on Main Street are demanding them.

    Reply

  15. PissedOffAmerican says:

    If heads were to roll for this mess, Washington would be a sea of blood, and the halls of government would be empty caverns.
    It is truly amazing watching these pieces of shit query Paulson as if they had nothing to do with creating this calamity, that it comes as a suprise to them that America has been looted from within.
    This bail-out ain’t gonna cut it, folks. There is too much partisan posturing going on, and too many cronies and co-conspirators to protect. The very gaqrbage that created this mess is being tasked to “oversee” the “remedy”. This is not a solution, its a tactic designed to conceal the criomes. Its a tactic to avoid accountability. Its a tactic through which a band of theives intend to keep their stolen booty.
    We’re fucked. Thats the bottom line. These pieces of shit that looted the system aren’t hurting. They’ve got theirs. We’re on our own.

    Reply

  16. erichwwk says:

    4)Firing Paulson? This suggestion is so dumb it’s hard to believe anyone takes it seriously.
    Sorry, as one of the long line Goldman Sachs CEO’s, while he’s extremely bright, this former Ehrlichman aide’s 3 page proposal is outrageous beyond belief. I take the suggestion to fire Paulson seriously (but of course it won’t happen, Democrats are also at Wall Streets beck, and DC is full of crooks), as well as the suggestion to let the US economy collapse. Yes, we will suffer as the Russians did, but what will arise from the ashes will be better- It certainly was after the crash of 1929. Let’s NOT forget that economies ALWAYS do better under a Democratic (less transfer of wealth from workers to non-workers) than under a Republican administration.
    Yes, I generally think a lot of Buffet, but his purchase of GS stock is LESS than 1/3 of what GS paid in bonuses to their 29,000 employees (read $600,000 a piece)in 008 alone. Read what he had to say about derivatives in 2002.
    http://tinyurl.com/3npad7
    The fight is about MORE than saving the financial markets and making it easy to coordinate economic activity. Yes, there will be a severe depression. But what is the alternative? More 3 trillion dollar wars, until the US dollar tanks, and the Russians/Chinese control world resources? That the top 0.1% continue to shift wealth from the rest of us to them? Social security gets privatized (read disappears), health care costs continue to make America non-competitive?
    The GDP gains of the Bush administration are mostly fictional, paper products. The losses are real, and cannot be avoided. The issue is merely:
    WHO will bear these losses? Those that deluded themselves and others that real wealth had been created (requiring merely a tax increase at the top, ie returning stolen wealth), or those from whom wealth is constantly stolen?
    Those of us that saw this coming are prepared:
    “bring it on”.
    While decency can’t compete with money/credit for coordinating economic activity, money w/o decency is nothing; decency w/o money is more than adequate.
    However, yesterday’s Senate hearing on “Federal Intervention in Financial Markets” gives some hope. The hearings video has been archived on C-span. http://www.c-span.org/
    Not a bad start.

    Reply

  17. WigWag says:

    Presumably Mr. Pinkerton’s remarks are not supposed to be taken seriously. Most of his suggestions are ridiculous on their face.
    1)There was no prime time speech because President Bush is despised by the American public. It’s reached a point that he is so unpopular that he is President in name only. Putting him front and center would have made the crisis worse not better.
    2) What resignations does Pinkerton want? I agree that Chris Cox should resign. Even McCain suggested that Cox be fired. But who else? Should Bernake resign? Should the chairman of the President’s Council of Economic Advisors resign? Calling for resignations is easy. Figuring out who to fire, that won’t make the situation worse in the short run, is hard.
    3)A Tobin tax on speculation and a reduction on long term capital gains taxes? Come on. The rule here should be the same as in medicine; “first do no harm.” Making precipitous decisions about tax policy that are not well thought out could easily make things worse not better. Take the complete elimination on short sales in financial stocks. What do you think is going to happen when the temporary ban is lifted. You don’t need to be a genius to figure out that with all the shorts coming back at once, those stocks are going to plunge (and take the Dow and the S&P with them).
    4)Firing Paulson? This suggestion is so dumb it’s hard to believe anyone takes it seriously. Even Warren Buffet (a Democrat) thinks Paulson needs to stay. Buffet even thinks he should continue as Treasury Secretary for a year or so in the next Administration regardless of who wins. I don’t love Paulson and I do think he shares in the responsibility for this mess, but firing him now would lead to disaster. The markets would completely collapse here and around the world. Americans could easily show up at their cash machines to take out a few bucks and find the cash machines aren’t dispensing money. Firing Paulson could easily lead to bank runs like we haven’t seen since the 1930s.
    James Pinketon’s exist from the scene is what is needed to advance intelligent debate.

    Reply

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