Henry Paulson... Live and Die By The Bull!

Treasury Secretary Henry Paulson and his team are starting to look like short-order cooks stuck in a perpetual lunch-hour rush. The worse the economic crisis gets, the more confidence- and liquidity-boosting measures they cook up, from the Bear Stearns deal last spring to the AIG bailout last month.

Now the markets have devoured last week’s passage of the titanic $700 billion bailout package without a trace. By the end of Tuesday, the Dow had dropped 1,400 points in five days, the biggest point loss ever. As increasingly gloomy job numbers pile on top of the continuing problems in the credit market, it seems the U.S. government may be running out of economic hash to sling.

But not yet. The indefatigable Paulson, along with Federal Reserve Chairman Ben Bernanke, this week unveiled a slew of new initiatives to try and restore confidence in the markets. On Tuesday, Bernanke unveiled a plan to try and gig the frozen market for commercial paper, offering to loan companies unlimited amounts of money three months at a time, sometimes with little or no collateral, a move unseen since the Great Depression. And at the Treasury, Paulson appointed a 35-year-old former Goldman Sachs banker as temporary head of the agency charged with using the $700 billion to lift bad loans out of the financial system. The banker, Neel Kashkari, immediately took bids from companies interested in running a market to price the bad loans. On Wednesday morning, in a surprising move, the Fed announced a half-point interest rate cut in unprecedented coordination with central banks in Asia and Europe.

Other Junk You Might Like!

• October 9, 2008 -- Our favorite Government Screwups… Henry Paulson and Ben Bernake (1)
• October 1, 2008 -- Secretary Of The Treasury Henry Paulson Goes To The Dark Side! (0)
• September 16, 2008 -- Government To Bail Out Companies With Taxpayer Dollars… BEND OVER HERE IT COMES AGAIN!!! (2)
• March 21, 2009 -- Obama’s Wall Street Bailout Failure…Time To Bailout (0)
• March 20, 2009 -- Obama Tells Leno He Was ‘Stunned’ by AIG Bonuses (5)

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