I personally have a very low opinion of politicians, but once in a while I get surprised by candidness, which is usually not a quality most of them possess.
Bloomberg featured a story called “Senator Bunning Says Paulson Acts Like Socialist, Should Resign.” Let’s listen in:
Senator Jim Bunning said Treasury Secretary Henry Paulson, by rescuing Fannie Mae and Freddie Mac, is acting like China’s finance minister and both Paulson and Federal Reserve Chairman Ben S. Bernanke should step down.
“I sincerely believe that Henry Paulson and Ben Bernanke should resign,” said Bunning, a Republican from Kentucky on the Senate Banking Committee. “They have taken the free market out of the free market.”
Paulson and the federal regulator for Fannie and Freddie placed the two largest U.S. mortgage-finance companies in a government-operated conservatorship on Sept. 7, ousting their chief executives and eliminating their dividends. Treasury also may purchase up to $200 billion of stock in the firms to keep them solvent.
“We no longer have a free market in the United States, we have a government controlled free market,” Bunning said in an interview. Paulson, a former chief executive officer of Goldman Sachs Group Inc., “is acting like the minister of finance in China.”
Bunning, 76, criticized Paulson’s successful effort in July to obtain congressional authority to pump unlimited amounts of money into Fannie and Freddie to keep them afloat.
“When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turned out it was socialism here in the United States,” he told Paulson at a July 15 Senate Banking Committee hearing.
Following Paulson’s Sept. 7 announcement of the takeover of Fannie and Freddie, Bunning said he now feels like a citizen of China.
“No company fails in communist China, because they’re all partly owned by the government,” said the former pitcher for the Philadelphia Phillies.
Bunning accused Paulson of deception when he told Congress in July that the Treasury’s plan would instill such confidence among investors that it would never have to be used.
Paulson “saw and knew what was happening, and didn’t tell the truth to the banking committee,” Bunning said yesterday.
Treasury spokeswoman Michele Davis didn’t respond to requests for comment.
Bunning, a critic of former Fed Chairman Alan Greenspan, faults Bernanke for lax supervision of the mortgage market.
The Fed chief waited too long to require lenders to change how they write mortgages, Bunning said. “I mean he just did it two months ago. Come on.”
When asked if he expects more multibillion dollar rescues by Treasury, Bunning said, “You bet I do.”
Good for Senator Bunning; he appears to be the only politician with the balls to step up and call a spade a spade. While most hide behind the stupidity of political correctness, at least one man said out loud what may be on the mind of many. Iacocca couldn’t have said it any better.
Comments 2
Short memory Ulli, It was Lee who got a bailout from Chrysler. As to not letting institutinos fail yur raft shud be totally aimed at the wall streeters that cut up the big bonuses. Where was Bunning the last 10 years while his repub party dismantled regs & made it legal to game the financial mkt.
Bill Moyers Journal just interviewed a republican from the Nixon admin who wrote Bad Money. He succinctly outlined the inside power shift to favor finance over the last 30 years at the expense of mfc-ing and the sense of entitlement for financial bailouts. Perhaps a read of that wud put the matter in a different perspective. Yur investmetn advice is the tops, the best…
You are correct with the Chrysler bailout. To my knowledge, this was the only bailout that worked because it was paid back in full.
Ulli…