The Political Bear

I thought Secretary Paulson was a good guy. However, recently he has been making some interesting statements about the need for federal control of markets. These statements are the false misleading statements of a desperate man. Secretary Paulson, wrongly, believes that part of this economic slowdown is his fault, and now he is making sure that he doesn’t take the blame.

Treasury Secretary Henry Paulson said Thursday that the government must move quickly to give the Federal Reserve more powers to regulate the financial system, contending that this year’s financial market turmoil had highlighted the need for action.

Paulson said that the central bank’s powers should be expanded in the wake of the near collapse earlier this year of Bear Stearns, the giant Wall Street investment firm.

He said there was a need to consider quickly how to give the Fed the power it needs to obtain information from investment banks and the responsibility to intervene to protect the overall financial system. His comments were provided by the Treasury Department as excerpts from a speech he was to give later in the day.

Businesses made bad choices, more regulation is not going to stop that. The only thing that more regulation might stop is an exact repeat of the exact same problem, but regulators aren’t smart enough to foresee every harebrained idea that might have a negative impact on the overall economy. That is the job of investors.

Policy wise, no further regulation of the markets should be enacted, and the lax regulations that lead to the current situation were championed by democrats to expand the ability to buy a house to more minority home buyers. That was a great change, and an interesting point at which the parties kind of change sides…….I would have voted for the regulation changes. While foreclosures are currently at historic levels, home ownership is at historical highs because of these changes, and the ownership increases are much higher than the foreclosure increases.

This entry was posted on Friday, June 20th, 2008 at 8:21 am and is filed under analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.