Matthew Rothschild: Henry Paulson’s False Confession

[marmar]

from The Progressive:



Henry Paulson’s False Confession
By Matthew Rothschild, March 31, 2008


Finally, a Bush Administration official has made a confession.

Henry Paulson, the Treasury Secretary, said: “Government has a responsibility to make sure our financial system is regulated effectively. And in this area, we can do a better job.”

The astonishing thing about this statement is that the Bush Administration, for seven long years, has been gutting one regulation after another.

Now it’s a little late to get religion.

But it’s unclear how much of a conversion experience Bush has gone through, or even Paulson, for that matter.

Paulson is proposing an expansion of the Fed’s authority to oversee the financial industry, and that’s good, as far as it goes.

Problem is, it doesn’t go very far.

Paulson isn’t recommending a return to Glass-Steagall, the New Deal law, repealed by Bill Clinton and Robert Rubin, by the way, that established a wall between commercial banks and other financial institutions.

Nor is Paulson demanding that any institution holding mortgages or mortgage securities should have a sizable capital reserve in place.

Nor is Paulson offering anything new to the three million Americans who face foreclosure.

He did not recommend that the Federal Housing Authority offer to buy up some sub-prime mortgages from lenders at reduced prices so that people could stay in their homes, as Barney Frank has recommended. .....(more)

The complete piece is at: http://www.progressive.org/mag_wx033108