Friday, July 30, 2010

Hank Paulson's big joke:

From his WaPo op-ed: (emp add)
A significant root cause of the [financial] crisis was the combined weight of government policies promoting homeownership; these are apparent in the housing GSEs, the Federal Housing Administration (FHA), the Federal Home Loan Banks, the federal tax deduction for mortgage interest and various state programs. Homeownership was overstimulated to the point that it was unsustainable and dangerous to the broader economy. (...)

Fannie Mae and Freddie Mac should not be allowed to revert to their old form, crowding out private competition and putting taxpayers on the hook for failure while shareholders benefit from success.
But that's exactly what Paulson did by funneling money through AIG to Goldman Sachs - of which he was CEO.

Barry Ritholtz has a sharp take-down of Paulson's essay. It's not pretty, but worth reading.

Of interest, the op-ed's comment section is overwhelmingly hostile towards Paulson, although there is always be the occasional Hannity-listener who cheers him on. That said, I haven't seen such a negative reaction in the Post's comments section for a long time. Looks as if Paulson failed to make his case.


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