At the Banking Committee hearing today, Chuck Schumer–not generally known as someone who is tough on Wall Street–asked Hank Paulson a reasonable question: why do you need $700 billion right now? You said you were going to use about $50 billion a month; so why don’t we give you $150 billion now and then come back in 3 months?
And Paulson simply refused to answer the question.
First, he said that it’s about market confidence. Maybe true, Schumer responded, but isn’t the market confidence about how well the money is working?
Then, Paulson insisted that they need more if there is a sudden emergency and Congress is out of session. But if there is really an emergency, Schumer asked, then you’ll call us back anyway. Why, exactly, do you need $700 billion?
And then Paulson just said basically: Senator, we’ve told you what we think we need, and that’s all there is to say.
You see? It’s magic. It’s secret. You don’t need to know. Paulson is just going with his gut, because he “knows” what needs to be done. And he’s not going to tell you.
Haven’t we heard that somewhere before?