They Just Can’t Get It Right
The markets will tank again on Monday because they just didn’t get it done, as Krugman notes in Falling Short:
…The IMF ministers have endorsed the G7 plan — but there isn’t any plan, just a vague statement of principles.
I’m willing to bet that Paulson is the problem, as he doesn’t seem to understand the real problem. People are looking for guarantees that their money will be safe, and the “leaders” don’t seem to understand that the “market” has no credibility. Every delay means there will be less to save.
It is too late for words, people want actions with results they can see.
2 comments
Yes, my opinion of Paulson goes down day by day. Paulson has two problems — a) he’s a lame duck and is thus reluctant to do anything drastic because if he starts something, he won’t be able to finish it before the next guy takes over and then if what he started fails, he gets all the blame (and believe me, someone who’s been where Paulson has been has an ego the size of the effin’ Goodyear blimp and does NOT want to go down as “the guy who did X that crashed the economy”), and b) he’s just ideologically incapable of doing the right thing without being pushed, shoved, nudged, and whacked over the head with an iron skillet, because all his ideology says “the market” and that is not going to work here.
The only good news is that in three weeks, someone new gets elected. The bad news is that this someone else doesn’t actually take office for another 2 1/2 months after that :-(.
Of course “the market” will take care of the problem – by wiping out everyone who got involved in the bubble in any way. That people don’t remember that the “invisible hand” often acts as a fist, doesn’t mean that the market doesn’t have a solution.
Yes, everyone is running around trying to avoid the blame, but there is too much blame going around, and too many people responsible. At this point someone needs to lead.
At this point Gordon Brown seems to have some credibility, and seems to making the right moves from a standpoint of confidence.
Regime change in the middle of this mess is not making things easier for the US or Canada, and the Japanese, French, and Italian governments are not long in office. The timing is definitely a problem, but the markets are looking for someone to take charge.
There is plenty of money out there, they just need to get it circling again or it was all wasted.