Paulson’s regulatory strategy in full

Heck of a job, Hank

Treasury secretary Henry Paulson’s ambitious plan to overhaul the US regulatory structure appears to draw more than a page or two from previous Bush administration misadventures.

1. The False Premise

Iraq: Claim Saddam Hussein has weapons of mass destruction, and helped al-Qaeda stage the 9/11 attacks.
Paulson: Claim securities industry regulation is the principal cause of an alleged decline in US competitiveness in global financial markets.

2. The Invasion

Iraq:  Win military victory. Announce “Mission Accomplished.”
Paulson: Set up Committee on Capital Market Regulation to deliver preconceived recommendations. Announce “Mission accomplished.”

3. Katrina Intervenes

Bush:  Pretend to give a rat’s ass as almost 2000 people die, and more than 1 million people are forced from their homes. “Heck of a job, Brownie.”
Paulson: Pretend to give a rat’s ass as credit chaos forces hundreds of thousands from their homes. “Subprime mortgage problem is contained.”

4. Exit strategy

Iraq: Kick can down the road, paying lip service to the loss of American and Iraqi lives, while winking at military-industrial complex corruption. Bequeath problem to next administration. Retire to farm in Crawford, Tex.
Paulson: Kick can down the road, paying lip service to the little people, while encouraging investment banks to lie about portfolio marks. Bequeath problem to next administration. Retire to farm in Illinois (with occasional trips to New York as a recently appointed director of the recently enhanced JP Morgan Chase).

Blueprint for a Modernized Financial Regulatory Structure
US Treasury Mar. 31 2008

Comments

[Megatron]

Perfect comparison - how is taking on $700bn of likely toxic debt not 'kicking the can down the road' in the same way applying a short term military solution to temporarily reduce troop death rates in Iraq for politically expedient purposes.

If we're all going to have to pay for the banks short-sighted idiocy in the long run anyway then why should people bother paying them back in the short run?

Moral hazard begat moral hazard.

[gpc31]

I truly enjoy your blog. But with all due respect, this is a grossly stupid comparison. If I want this kind of facile word association, I read Maureen Dowd. It doesn't even work as satire.