Abracadabra

This is really extraordinary.

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?

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.