A look back at Sheila Bair and the speedy TARP decision.
The U.S. created TARP last year to remove souring assets such as subprime mortgages weighing down balance sheets and leading banks to stop lending, among steps Bair said were needed to contain the crisis. Former Treasury Secretary Henry Paulson was forced to drop the strategy and use the $700 billion fund to inject capital into banks when the plan prompted lenders to hoard cash and failed to halt a slide in the stock market.
"We would have tried to dissuade Treasury from making these capital investments," Bair said. "In retrospect, that was probably not a good thing. At the time it sounded like the right thing to do."
TARP capital gave the U.S. stakes in the institutions, raising questions about additional steps if the firms needed further help, and put the government in the role of containing compensation at the firms getting taxpayer aid, Bair said.
Given the urgency at the time, no one should be held accountable "for not thinking all this through," Bair said. "I think it was not a good idea."
This was a time when nobody did any thinking. Unlike now. The congress can't seem to do anything but think.... of ways not to help the citizens of this country. They are paralyzed with thinking now. They can't act for thinking. Thinking is their chief strategy. Now making a decision and acting on it... for the good of the people, well it's not like the sky is falling when it comes to reorganizing how this country deals with healthcare. The burden our tax dollars could lift in working toward something meaningful like affordable healthcare.
Let's hear from Henry Paulson 12/19/2008
NEW YORK (MarketWatch) -- With only weeks to go before he leaves office, Treasury Secretary Henry Paulson says he has no regrets about his handling of the financial crisis that helped push the nation into recession.
"We've had to move very quickly, but I've worked very hard not to make any mistakes," the former Goldman Sachs executive of his efforts to stem an outright collapse of the country's financial system.
I think we should get through the problem before we determine the causes and what we should do about it. These excesses had been building up for a long time, and there is a lack of understanding about the limited authority and how outdated the regulatory structures are," he said
And I said to Mr. Paulson's assertion here in that same diary:
Mistakes how and about what? If you don’t know the cause, (and ask a doctor), how do you help a thing to heal? So I venture to say the cause is known. The cure though, may require more infusions.
Americans must be in some paralyzed shock mode now, because idiots, double dealers, and conflictions of interest, like Paulson should not be allowed to have jobs like Secretary of Treasury of the United States of America.
But today you hear what Sheila Bair(FDIC) says up top. Let's hear from her around the time of Paulson's idea of an aggregator bank from a diary of mine titled I Am Amazed at the Level of Absolute Stupidity:
circa Jan 2009.
Jan. 16 (Bloomberg) -- The heads of the U.S. Treasury and Federal Deposit Insurance Corp. gave further momentum to the idea of a new government-backed bank to remove toxic assets from lenders’ balance sheets.
"A lot of work has been done on an aggregator bank" and other ways of using the $700 billion financial-rescue fund "to let it go further when it comes to dealing with illiquid assets," Treasury Secretary Henry Paulson told reporters today in Washington. FDIC Chairman Sheila Bair praised the idea in an interview on CNBC, saying it might have "some merit."
In her eyes Paulson was the man. She didn't have a clue on her own. But my response to her that she never heard because I, a normal citizen, do not have access to her, was:
FDIC Chairman Sheila Bair praised the idea in an interview on CNBC, saying it might have "some merit."
I had to re iterate that comment from Bair, because apparently these people don't comprehend the enormous amount a billion dollars is. They don't even comprehend that if you come up with a solution it usually should work. It shouldn't be an experiment. It shouldn't just 'might have some merit'.
Look, in any event, isn't this cooking the books?
Government sponsored and approved of course.This is clearly something she should have known better than to entertain, given her status and all. But she, like all the rest in Washington, still couldn't think.But look, people are thinking again now and today this is where her head is at:
"If any individual institution gets into trouble again and a conventional bankruptcy process would pose collateral damage to us, the rest of us, it should be put into a special resolution process just as we do with banks now," Bair said. "It should be broken up and sold off."
So, the sky fell anyway, and this is what she had to say, today.
"I just see all the problems it’s created now, the horrible public outcry," Bair said on PBS’s "The NewsHour with Jim Lehrer" yesterday. "It’s had a terrible, terrible impact on public attitudes toward the financial systems, toward the regulatory community."
But from the first comment above she says
Given the urgency at the time, no one should be held accountable "for not thinking all this through,"
In my estimation this is not a statement of truth with any good supporting fact. Someone other than the American tax payer should be held accountable for these rash actions.