Should Henry Paulson be fired as Treasury Secretary? ?

Question

Considering the events of the past 9 months, it appears that Henry Paulson is totally out of his league. America needs a competent economist to bring comfort to the financial markets, not an Ivy League-trained politician.

Some Background:

There is increasing evidence that Paulson was influential with two U.S. Securities and Exchange Commission Chairmen, William H. Donaldson and Christopher Cox, in receiving restraint in the Commission's exercise of oversight requirements.

In 2004, at the request of the major Wall Street investment houses, including Goldman Sachs, then headed by Paulson, the Commission agreed unanimously to release the major investment houses from the net capital rule, the requirement that their brokerages hold reserve capital that limited their leverage and risk exposure. The complaint that was put forth by the investment banks was of increasingly onerous regulatory requirements -- in this case, not U.S. regulator oversight, but European Union regulation of the foreign operations of US investment groups. In the immediate lead-up to the decision, EU regulators also acceded to US pressure, and agreed not to scrutinize foreign firms' reserve holdings if the SEC agreed to do so instead. The 1999 Gramm-Leach-Bliley Act, however, put the parent holding company of each of the big American brokerages beyond SEC oversight. In order for the agreement to go ahead, the investment banks lobbied for a decision that would allow "voluntary" inspection of their parent and subsidiary holdings by the SEC.

During this repeal of the net capital rule, SEC Chairman Donaldson agreed to the establishment of a risk management office that would monitor signs of future problems. This office was eventually dismantled by Chairman Cox, after discussions with Paulson. According to the New York Times, "While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the [new] Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency."

In late September 2008, Chairman Cox and the other Commissioners agreed to end the 2004 program of voluntary regulation.

Answer 1

Best Answer - Chosen by Voters

Well, he's leaving with Bush anyways.

Interesting that the number 1 choice of Obama and McCain for Paulson's replacement was Warren Buffet, if he's interested.

I wasn't thrilled with McCain's alternate - Meg Whitman, formerly CEO of ebay.

She's very unpopular with the ebay sellers and her judgement is suspect.

Good thing McCains going to lose anyways.

Answer 2

I'm inclined to think Paulson is capable, because Bush pretty much only works with Republicans, and Paulson is a Democrat. He was recommended for the position by others; for Bush to go beyond party lines to select someone.... that says a lot.

Answer 3

I have no opinion there. I do feel that all of the politicians that took money from Fanny and Freddie should have to give every dime back, plus some intrest. Obama, John Kerry, and McCain, and all of the rest. This is a good example why people spend millions trying to get a job in the Congress and Senate that only pay about $169,300 per year. ...

The hand in The Cookie jar and the free perks are worth hundreds of millions.

Answer 4

OMGOSH actually hes not a bad person. I'm not kidding, I even asked questions about him before he even got exposure on t.v. My dad is a hedge fund manager and owns a firm in Manhattan and hes been close friends with Henry Paulson. Infact, we went sailing in Connecticut with Paulson one time and hes been to our house like alot of times. Seriously, hes a really nice man, I don't understand why everyone is so mad when they don't even know him. jeez