Hank Paulson

Can we start with Henry Paulson?!?

In this interview with Larry Kudlow yesterday, Dick Cheney said about TARP:

KUDLOW: But did you anticipate the degree of government control over the banks? No question throwing a safety net from Federal Reserve liquidity was appropriate. I don’t think any economist left or right disagrees with that. On the other hand, what we’ve seen now is that this Congress has moved in to declare, for example, compensation and pay limits, repurchase agreements, dividend policies, merger and acquisition policies. You yourself know these things because you were a CEO of a big company once upon a time. Did you anticipate how Congress would move in to take control of the banks when you made these initial loans?CHENEY: No, I don’t believe we did. I don’t recall any debate within the administration. There may have been some over at Treasury or someplace that focused on the extent of which government would try to control these institutions once they provided financing for them. You know, I’ve got experiences going back to the wage price controls in the Nixon administration where, in effect, we had what I think was a terrible mistake, in that case a Republican administration, where moved in and tried to control the wages, prices and profits of every enterprise in America. It was a huge mistake. We finally got out of it, but it took a long time to do it, and it does a lot of damage.

If you liked that, just wait, it gets better:

CHENEY: Well, some of us at the time wanted GM to go bankrupt, go to Chapter 11.KUDLOW: Were you in that camp?CHENEY: I was.

Essentially, Cheney is saying that he was against bailout nation and Bush overruled him.  I'm not surprised.  Cheney has always been a much more genuine small-govt. guy than Bush ever was.

That said, maybe Quinn Hillyer was right: Cheney, not Bush, should have been President!!!

I was discussing the recent financial crisis with a friend tonight.  He said: "The Problem with the GOP is that they deregulated until the banks became too big to fail." BULLSHIT!!! Had our political leaders had a pair of brass balls last year, they would have realized letting the banks fail would benefit America.  We could have re-built a solid banking system instead of the politicized BS we have now.

Unfortunately, the Republican President and Treasury Secretary didn't have the courage of their alleged free market convictions.  Thus, we're stuck with a politicized banking system for the next decade.

And some people are trying to say the GOP has moved too far to the right...ha!

Given his pathos; it seems safe to start the Timothy Geithner Death Watch.

Moving forward, after the disastrous duo of Henry Paulson and Timothy Geithner, this country desperately needs a top notch Secretary of it's Treasury.  On that note, I would nominate former General Electric (GE) Chief Executive Officer (CEO) Jack Welch.

Why is Jack Welch the Strongest Potential Candidate for Treasury Secretary?

1) His Record Inspires Confidence -- Jack Welch is, along with Andrew Carnegie, one of the best Corporate Executives in American History.  During his tenure as CEO, GE became the most valuble company in the world.  While the skillset of a wildly successful CEO doesn't translate perfectly to a Treasury Secretary, Jack Welch, on his laziest day, sure as heck knows a lot more about the Global Economy than Timothy Geithner on his most perfect day.

Furthermore, Jack Welch knows how to make other people want to follow when he leads.

2) GE's Business Stretches Across Many Business Sectors -- From Financial Services, to Manufacturing, to Defense, to the Media Jack Welch's business experience stretches across many different sectors of the American Economy.  While Jack Welch understands financial markets better than almost anyone, he's not just a Wall Street guy.  Jack Welch understands, and can explain, the relationship between financial markets and the so-called "real" economy.

3) The Obama Administration DESPERATELY Needs Business Leaders -- Right Now, the Obama Administration has exactly ZERO business leaders serving it.  That needs to change if they want any credibility.  Who fits the credibility bill better than Jack Welch?

The biggest question, of course, is why Jack Welch would accept such a thankless task?  I can't come up with a good reason.  Maybe an appeal to patriotism?

I hope this helps.

That is all.

Cahnman out.

Dear Senators Dodd and Schumer and Congressman Frank,

First things first, let me congratulate you for reaching a level of hypocritical grandstanding I thought impossible even for the United States' Congress.

Congressman Frank, you blocked oversight at Fannie and Freddie while you were dating a high ranking Fannie official.

Senator Dodd, you took a bribe from Angelo Mozillo to filibuster George W. Bush's attempts to reign in criminal excesses at Fannie and Freddie.

Senator Schumer, the 100% tax rate you propose on Wall Street bonuses violates the ex post facto clause in the United States Constitution.  Not that you care when you're up for re-election this cycle....

Furthermore, all three of you were crucial players in the decision to bailout Wall Street.  While you may personally disagree with some of the decisions those firms have made, the fact remains you had an oppotunity to let said firms fail six months ago.  Instead of letting Wall Street fail; you failed.

Once you decided to bail these firms out, you implicitly accepted responsibility for any unpopular business decisions said firms made.

Against that backdrop, I find your grandstanding over the compensation paid by the American International Group (AIG) utterly nauseating.  Said compensation, while perhaps unwise from a narrowly defined business perspective, is standard practice in the financial services industry.  Gentlemen, if you didn't want AIG engaging in standard business practices; THEN YOU SHOULDN'T HAVE BAILED THEM OUT IN THE FIRST PLACE!!!

Don't get me wrong: AIG screwed up and THEY SHOULD FAIL as a result (the fact that their screw up is a direct result of Elliot Spitzer's bullying is a topic for another day).  That said, Gentlemen, you are standing in the way of AIG's creative destruction.  Until you are willing to let AIG fail, your whines about executive compensation ring hollow.

Sincerely,

Adam Cahn

Austin, TX