The Eclectic One

…Because labels are a poor substitute for thinking

Paulson got on his knees and begged

Posted by Bill Nance on September 26, 2008

At yesterday’s White House meeting on the proposed wall Street bailout, Treasury Secretary Henry Paulson got on his knees and begged Speaker of the House Nancy Pelosi to go along with the plan.

From the LA Times:

In a dramatic moment described by a Democratic aide, Paulson took several Democrats aside as participants were leaving and asked House Speaker Nancy Pelosi (D-San Francisco) in particular “not to blow this up.”

Pelosi retorted angrily that it was House Republicans who were putting the brakes on the plan, according to the aide, who asked not to be named because he was not authorized to discuss the meeting. As the aide described it, Paulson then dropped to one knee and repeated his appeal.

The only problem was that he was apparently begging the wrong person.

Even as the White House meeting was underway, a group of conservative House Republicans began pushing a drastically different approach. Their idea, they said, was to get Wall Street firms to pony up funds for an insurance program to bail out their less-solvent siblings by creating a kind of insurance program for investment banks like the one for commercial banks.

In addition, the present liquidity crisis could be resolved, according to the proposal, by further deregulation, temporary tax breaks and relaxation of other rules to encourage investors to put more money into the financial system instead of using government funds.

So this was apparently the terribly important thing which made John McCain cancel the debate: true to his history, John “deregulate everything in sight” McCain came back to Washington to press for even more deregulation and to grandstand behind the safe cover of the Republicans in the House.

Note to Hank Paulson: Next time get on your knees to John McCain; maybe you’ll get a result. Pelosi wasn’t the holdout.

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