Sunday, April 13, 2008

Ben Shops His Plan


The Treasury secretary and Fed chairman were out in tandem yesterday defending their “Doritos”-style economic stimulus plan: “Spend all you want. We’ll make more…”
“The U.S. economy,” warned Secretary Paulson speaking before the Council of Institutional Investors in Washington, “has turned down sharply. Risks continue to be to the downside.”
But have no fear, he assured his Wall Street constituents: Those $600 rebate checks coming next month from the IRS will make everything just swell again. "We believe that given how they are targeted, that they will make a real difference in the economy.”
The Dynamic Duo: “Spend all you want. We’ll make more…”
— The “financial distress that we are seeing now is among the most severe episodes of the postwar era,” Ben Bernanke acknowledged for his part yesterday. But he stopped short of suggesting the present-day U.S. economy is like the run-up to the Great Depression.
Drawing on his academic studies during his pre-Fed days at Princeton, he told the World Affairs Council that back in the ’30s, the Fed allowed banks to fail, prices to fall and the money supply to contract.
"We now know the lessons from that,” says the helicopter man. “We are certainly going to make sure that the financial system remains in good functioning order." The part about “regardless what happens to the dollar” was merely implied.
— “Maybe at the end of the third quarter,” Goldman Sachs CEO Lloyd Blankfein said, offering encouragement to his shareholders yesterday, “or the beginning of the fourth.''
The credit crisis is nearing the end he believes, but he makes “no promises” as to how much longer it will last. Lloyd’s football analogy went thud when he said the fourth quarter typically lasts longest. Aren’t they all about 15 minutes each?
Maybe, subliminally, he’s expecting overtime.

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