Paulson Warns Against Regulation Overkill

Treasury Secretary Sees "Long-Term Harm" To Economy If U.S., World Adopt Severe Regulation

(CBS/AP)  Treasury Secretary Henry Paulson called the financial crisis now plaguing the world economy a "once or twice" in a 100 years event, even as he warned Thursday against imposing too-strict regulations to prevent a repeat calamity.

Paulson's remarks follow pledges by world leaders attending last week's emergency economic summit to begin an overhaul of the world's financial regulatory system.

With the next summit slated for the spring, the work on fleshing out details for the Herculean task will fall to the incoming administration of President-elect Barack Obama and his new Treasury secretary.

Paulson, whose boss President George W. Bush leaves office on Jan. 20, acknowledged that the financial crisis was caused by many factors including "government inaction and mistaken actions, outdated U.S. and global financial regulatory systems, and by the excessive risk-taking of financial institutions."

Still, he cautioned against the U.S. and other countries developing a too-onerous regulatory response.

"If we do not correctly diagnose the causes, and instead act in haste to implement more rather than better regulations, we can do long-term harm," Paulson said in a speech in Simi Valley, Calif.

Paulson's remarks followed more grim economic news, as new claims filed for unemployment insurance zoomed last week to 542,000, the highest since the summer of 1992, when the nation was recovering from a recession, the Labor Department reported.

Congressional leaders also indicated Thursday that they would put off any vote on an auto industry bailout until next month in the face of steady resistance from the Bush administration, despite the fact that a bipartisan group of several lawmakers announced a compromise proposal on a rescue package for Detroit's Big Three automakers.

Earlier this week, lawmakers blasted Paulson for his handling of a $700 billion financial bailout package to help ease the crisis and restore stability and confidence to unhinged markets.

Paulson on Thursday again defended his management, including his decision last week to officially abandon the original rescue strategy: buying rotten mortgages and other bad debts from banks to free up their balance sheets and get them to lend more freely.

"By proactively addressing the problems we saw coming and being pragmatic enough to change strategy in the face of changed facts and despite the inevitable criticism - we prevented a far worse financial crisis," Paulson insisted.

Focusing the bailout program on infusing billions into banks - and possibly other types of companies - to pump up their capital and bolster lending to customers was deemed a faster and more effective approach to stabilizing the financial system than the original centerpiece of the plan, he said.

"There was no playbook for responding to a once or twice in a hundred year event," Paulson argued, saying he needed to shift strategy to respond to worsening financial and economic conditions.

Paulson again said he believed the Bush administration has taken the necessary steps to prevent a financial market collapse, but he cautioned that it will take time for markets and lending conditions to return to normal.

[peter776-2009]

Paulson should resign from his government post immediately. He clearly belongs in the private sector where he can play with the private money of private citizens who are stupid enough to let him do so. Paulson should never have been allowed to come into such close proximity to taxpayer treasure. He is just another loudmouthed, opinionated, inept and, at the end of day, rather stupid man in the Bush administration. Congress needs to watch and control this man very carefully so that the amount of damage he does before January 21 can be contained.

[lvdragonlady-2009]

I think Paulson has been pocketing some of the 700B or giving it to friends. Hey Paulson, who have you given the money too and for what use???
Regulations can be worded to make sure the there is enough leeway to move but to NOT have enough inplace is what has brought this economy to it''s knees. I would prefer more to not enough.
No one can be trusted handling that much money that has got to be oversight.......what was congress thinking??

[trillion1]

Getting this incompenent crook out will be a big boost to our economy in and of itself.

[dakkotadawg]

Scare scare scare, that''s all these guys can push. I guess if it did not work they would stop doing it. I would love for the press to go after these guys with hard questions instead of just publishing everything they say. So much has been proven to be BS anyway.

[dakkotadawg]

Other than public humiliiation, can anyone remember when anything associated with "Grilled By Congress" acomplished anything? It''s like theater. I''m sure Paulson is getting humiliated all the way to his overseas bank account and I''m sure a few senators too. Itegrity and personal responsiblity get kicked to the curb when your dealing with the kind of fortune these guys are dealing with. Nice Job Bushies, thanks for the *** sandwich, oh I forgot, it''s an Obama recession............right....

[noloyalisti]

Right wing wacko extremist provatization freak. Get a rope.

[docadams3]

dakkotadawg:

I''d get grilled for half their salary!

[ddaryl1]

I am sorry for the greed of those people who have screwed you and me.

I hope people can put their political views aside and band together to help and prtoect each other. Now is not the time for hatred and self preservation. Now is the time to be human again, and share with your fellow human beings.

Greed has destroyed America, and now the entire developed world will suffer.

Take care of each other, otherwise it is going to be even uglier.

Paulson calls this a "once or twice in a hundred year" phenomenon? How long did he take him to figure out this happened twice in the last 200 years? Obviously the brightest bulb in Dubya''s lamp. And he worries about too much regulation? Too much? Where is "too much" regulation on the $700 billion, the $540 billion for money marketeers, the %150 billion for the insurance moguls, we don''t even know where all the money is going from the $10 billion a month poured into Iraq. We gave $2.5 billion to the oil companies as incentives when their war profiteering inflated their profits four hundred percent; where is the "too much regulation" there, my man? What is this guy smoking?

[antoniof123]

Why does anyone listen to this idiot moron Paulson he needs to be gone with the rest of them.

Come on America you can hold out for another 2 months I hope.

[mikezembill]

Palson why don''t you just shut the fvck up you stupid peice of dogshi!.

[torva-2009]

There is only one thing wrong with Paulson''s statement.

It wasn''t over regulation that killed off Enron, Worldcom, Lehmann Brothers, and Wall Street.

It simply was greed and a lack of good judgement and common sense...

The market has proven that it can not and will not police itself, has no sense of "enlightened self-interest" nor do the over extended consumers who borrowed more than they could/can afford...

In the end, regulation is all we have to protect ourselves from ourselves.

[soose95]

Bush is waiting to exit the White House and Obama is waiting to move, everyone who should know what to do is treading water. In the meantime, those of us who are retired are watching our 401K''s crash and burn. Honestly, we don''t have another 65 days to wait, we''ll be on the streets.

[lemonskink]

I predicted 6000 for the stock market by January. Boy, was I off. Lucky if it can make it above 6k this month alone. Way to go Bush and Bushies.

[dnamj]

Paulson: Whatever you do, don''t throw me in that briar patch!

[missingamerica]

Greed has destroyed America, and now the entire developed world will suffer.

Posted by ddaryl1 at 04:20 PM : Nov 20, 2008

...and the under-developed world will suffer more.

[david1737]

Let''s get "old west" on Paulson, Gramm, Dodd, Frank, and the entire Bush Admin. Anyone got some rope?

[david1737]

Opps, I forgot Bernanke, and especially Greenspan, go ahead and toss Bill in the there too.

[david1737]

Don''t forget that the root of this economic meltdown is Phil Gramm''s CFMA (the Commodities Futures Modernization Act) which literally PROHIBITED regulation of Credit Default Swaps!

Sneaky Gramm and his friends covertly placed the CMFA into an omnibus spending bill in the final days of the Clinton Admin, causing Enron, and the Subprime debacle.

Global financial meltdown rests at the door of Phil Gramm and other key players who will most likely never be held accountable. In fact most have already enjoyed tens of millions, if not hundreds of millions of dollars as a result.

[susanhelit]

And here we see the problem with having people of the same ideology that caused the bailout running it. They don''t really believe they did anything wrong. Maybe we should get Greenspan back - he, at the least, recognized that he was wrong, that businesses when unregulated will indeed self-destruct in the search for short term gains at the cost of long term destruction.

[david1737]

I hear that Paulson has lost one strand of hair for every ten billion dollars which he''s stolen. LOL

[steamed2]

Paulson warns over-regulation could do more harm? IS THIS MAN CRAZY? Normally I''m not into conspiracies, but every move Sec. Paulson has made brings me inescapably to this conclusion. As the CEO & Chief Financial Officer of Goldman Sachs, he personally took a hand in dismantling most of the major laws restraining the questionable activities that has brought the financial system to it''s knees. He''s not trying to minimize damage to taxpayers, he''s trying to prevent the collapse of specific companies like his own Goldman Sachs, A.I.G and Citigroup, who''s failure could bring out 52 trillion dollars in CDS''s (not to mention other derivatives)that should have been illegal in the first place. He''s changed his mind where to put the money? Is everyone in Congress galactically stupid? (Oh, yeah, I guess we already know the answer.) He''s feeding bull*#&t to morons! For some interesting info, check out http://www.peak.org/~LW584

[david1737]

Hmmmmm.

Baby-boomers retiring.

Social Security needs reforming.

Medicare gets retooled.

401ks, pensions and other retirement obligations suddenly undermined by global econ. crisis. (due to deregulation of the commercial and investment banks)

Banks offer "reverse mortgage" option to seniors.

Follow the money people.

[david1737]

Oppps, forgot to mention the deregulation of "Big Pharma," and the ever rising cost of health care.

[chrisbieber]

Herr Paulson was speaking at another rhetorical! freemarketer Ronald Reagan''s library....their Brer Rabbit "Dont give us too onerous of regulations" fooled/continues to fool the conditioned and utterly oblivious Americans...who think weUS HAS a "free market" and that the "Federal" Reserve is a branch of the government..

and Rome burns....and the NONGovernment "Federal" Reserve prints more worthless fiat notes....and the clamoring for MORE controls and regimentation continues...in a BIPARTISAN emotional chorus......

[heavylexus]

I don''t see how we can let these people leave office without cleaning up this mess. this administration has been the worse in our nations history. how can their children, spouses, family, and friends ever say that they new these people with pride. what a shame what a shame

[inventagod2]

Worst
Administration
in
HISTORY!

[mikezembill]

PROGRESSIVE TAX ON THE SUPER RICH AT ABOUT 90%. START WITH THE CEO''S FIRST MILLION AT 50% ANYTHING OVER THAT ITS AT 90% AND COME BACK TO THE FIRST MILLION AND TAKE 90% OF THAT

[mikezembill]

Paulson has lost his mind they need to remove him from his job now and hurry.

[mikezembill]

Can anyone get this man the hell out of washington the man is nuts

[mikezembill]

If the rice burners are piling up and bush and palsun find this out they will sell the shipping ports to China.

[jsilver2th]

The punch line is though that there will be nothing left to regulate so there-

I''d say watch for a fire sale on all U.S. assets.

Sell your positions now and buy your stocks back for wooden nickles soon if you have any.

Bush still has a few days and they are not going to let them go to waste- what a perfect gift for the incoming administration full scale depression and panic.

[jsilver2th]

Don''t think for a minute it''s an accident either- Gotcha!

[treknutz]

Does this sound familiar????? Bush is the ventriloquist and Paulson is the DUMMY!!!!

Trying to get his few last scare tactics in before we do to him what we did to Stevens.

[treknutz]

Did anyone ask if Paulson has any off shore accounts in his wife''s, kids, mistress, boyfirend''s name? He has to be hiding it somewhere! I think he''s not telling all here.

[tx2democrats]

can you believe this s(h)it!!!! it was the lack of regulations that were dissolved by Phil Graham that caused this freaking mess. Paulson is just cronie from Wall St doing Cheney''s work, Bush is an idiot and could never have designed such a heist, they''ve made billions upon billions off the stock market. Cheney runs all oil and stocks, Paulson is an idiot who couldn''t do s(h)it with Sache''s other than rape the 401K plans of all thier interest, thanks ..you f(u)ck(s)h(it)

[tx2democrats]

I feel better...sometimes its best just to let it out.....oh wait, I think there is still alot more pinned up..............hold on.

[tx2democrats]

Has there been any intelligence in the Bush Administration.....wasn''t the intelligence missing when they told us that we had to attack Iraq.

[jerr11]

Paulson is just another fox guarding the henhouse.

That''s the neocons for you!

Looting the US taxpayers while pretending to look out for us.

Ask the fox-in-chief how much he and his cronies have benefited from 8 years of looting.

Thanks Bush! Heckuva job!

Mission Accomplished!

[patrik1974]

Paulson should of warned against regulation underkill. Not the most trustworthy guy, only the insane would listen to him now.

[standlee5]

While obama plays with his blackberry... the markets crash around us. No hope of any confidence from someone who hates American capitalism and business. When a socialist becomes president it''s hard to get business to invest in the future.

[standlee5]

Paulson''s done a fine job considering the immensity of the situation. He''s done a helluva lot more than obbama sitting around playing with this blackberry and trying to decide on whether to get a shelter dog to appease his followers or a pedigree dog.

[standlee5]

Boy those markets they''re showing tremendous confidence in our new kindergarten president elect.

[treknutz]

Boy those markets they''''re showing tremendous confidence in our new kindergarten president elect.


--------------------------------------------------------------------------------

Posted by standlee5

Hey Moron,

The markets are reacting to the last, and I do mean last round of stupid policy changes brought to you by your good friends at the BUSH admistration....They are not reacting to anyone but those who are still pulling the strings.....remember stupid, one president at a time and last I looked the dynamic dum-dums are still in control.

Let me take a page from the late Tim Russert, the problem is:

PAULSON, PAULSON, PAULSON!

[punkinpie1]

I don''t see anything wrong with regulating business. They don''t need to be given free run on running amok.
Everybody seems to forgot Enron. Remember how they were trying to take advantage of the state California. I remember investors, employees and other individuals lost their incomes and retirement accts. I think it is great that CEOs,CFOs and Chairmen of the boards are getting investigated on their operational practices. I question their motives anytime when there is bonuses and common people like
myself get layoff and get nothing to show for their years of devoted work. We as common workers are told to get unemployment for our bonuses. I ask is this fair?

[punkinpie1]

I ask standlee5 what the heck could Obama do right now he hasn''t been sworn in yet? He can make suggestions. The Bush administration did absolutely nothing til it was too late. They chose their priorities it was as follows: The Iraq war, Tax breaks for the top 10% of this country. The Bush''s lack of response to Hurricane Katrina and Rita just showed their ineptness to the country''s needs. They turned their back on their citizens the ones especially who voted them in. But yet they are more than willing to send them off to war and put them in Harm''s Way. Wake up we are in a global depression. Get your head out of the sand.

[armydog2]

Regulation overkill is this guy kidding or what.Oversight was promised when they shoved this thing thru Congress for a vote. Get F@cked paulson regulate or forget it.

[punkinpie1]

The sooner we get rid of this nightmare administration the better. You will see the majority
of the populus will agree with what I''ve stated. Whats
sad is everybody on this blog seems to forget that the Bush family were in the middle of Savings and Loan debackle. They benefited from the S&L bailout. They owned Dallas S&L and Sunshine S&L in Florida. I say good ritence to all the Bushs. It couldn''t come fast enough for me. All they''ve done is swindle, got
us in the middle of 2 wars and wreaked this economy. Goodbye G.W. go back home to Crawfordsville where you should be right now.

[punkinpie1]

I know I sound bitter. I have good reason to feel this way. On Nov 18th of 2008 I got layed off like many others out there. We need these regulations to protect people like myself from idiots like these CEOs who have gotten away with this nonesense.

[whitemale08]

What the hell are you talking about?

You talk like we''re in ''post-crisis'' and now it''s time to create a new government dept. of "Lessons Learned".

Don''t make me laugh, get your stupid a** off the stage.

You''re a stuttering babbling idiot.