Representative Harman, pity poor Hank Paulson. He's completely over his head and doesn't know which way is up. Remember, Paulson got rich off the very financial mysticism that is in the process of transforming itself from Prince Charming back to into a wart covered toad.
Of course stabilizing the mortgages is the way to address the problem of collapsing leveraged mortgage securities, but Paulson and Co are straitjacketed by their economic ideology. They see helping mortgage holders as some sort of socialist handout, where in actually it would be an act of capitalistic self preservation. Paulson, and Bernanke are trapped in the contracting box of Milton Friedman's failing economic model and they can't imagine a way out ... they're doomed.
But we aren't ... all it requires is a reevaluation of the current economic reality. If you look at the trillions upon trillions of leveraged CDS and derivatives as what it truly is ... fraudulent wealth ... we can use all manner of unique approaches to solve the problem. In the case of the collapsing CDS contracts due to counter party failures, how about this? Create Virtual counter party banks to replace the collapsing ones. In essence, pretend the banks didn't fail and use virtual banks as a stalling mechanism to buy time to reasonably unravel the contaminated contracts over a prolonged period of time at lesser impact to the greater economy. Remember, this is fraudulent wealth so why pretend we have to address its deflation?
The businessmen failed, lets
About Henry Paulson
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