Despite telling the world about the free market and hands off approach to business, which of course is a completely false argument by the GOP, Treasury Secretary Paulson has jumped into the middle of the Wall Street meltdown. According to Paulson, he simply was facilitating discussions that were already under way, though many financial experts are scratching their heads and wondering why. This super-fund is estimated to be between $80-$100 billion and financed through the Wall Street players that have been scorched in recent months due to their business model of selling securities related to the now imploding high risk mortgages.
Wall Street is patting itself on the back despite the fact that the plan has yet to be formalized. A few questions remain such as whether Treasury is propping this up with US taxpayer money as well as the equally important question of whether this will only help delay the inevitable. If Wall Street wants to spend their own money and keep taxpayers out of this ridiculous show, fine. Spend away and let them explain to shareholders and clients why they are sinking billions into propping up otherwise worthless junk.
Others see the department's role as setting a risky precedent. "This is a bailout," said Dean Baker, co-director of the liberal Center for Economic and Policy Research. "Treasury has insisted it made no financial commitment, but I would like a statement from [Treasury Secretary Henry] Paulson that if the banks lose a ton of money on this that the government won't come to the rescue."This show only proves again that the Bush administration is full of free market hypocrites who love to intervene when it is beneficial to their special interests. This move by Paulson at Treasury is highly unusual since the Fed tends to be the organization that would typically be involved in such matters. Putting the issue of ownership aside, if Wall Street is going to dig a hole for themselves, let them get out on their own since they are so fond of the free market.
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