by Jesse Elms

Created on: September 28, 2008   Last Updated: October 08, 2008

In early August 2007, about a year ago, " far and away the strongest global economy I've seen in my business time," was the yawningly expressed opinion of President Bush to then-a-year-old Treasury Secretary Paulson who allegedly shared that leisurely pleasurable view. Given that, the full scale of upcoming US housing crisis, followed by the demise of Lehman Brothers(LEHMQ.PK), short-sale of Merrill Lynch(MER) to Bank of America(BAC), and bankruptcy of Washington Mutual(WM.N) looked nearly practical jokes. But $700 billions price tag couldn't be, not to us with a pang of nostalgia for good old days.

Mr. Greenspan, former Chairman of Federal Reserve, who'd kindly asserted us of what healthy foundation of the US economy he had been managing in the years of his tenure; sure enough he forgot to tell us how he's a genius capable of managing himself(?) out of the way. But I can't be sure though if Mr. Greenspan's pleased with the way Treasury Secretary was swing the axe round under waning lame-duck boss to make what'd been considered his lifetime achievement look nearly a fraud.

"I am quite disappointed," said one of former Reagan administration treasury officials, "he(Paulson) certainly isn't a believer in free markets." And followed an accusation resonating the public sentiment. "This is welfare for the rich," said another, one of investors. What did Mr. Paulson think he's doing, poising himself like a communist emerging from a financial storm? Regardless what rosy opinions Paulson had had in the past on the hobbled economy, and what anti-capitalism measure subsequently he's trying to pull, that's not a point. What looks bad is bad already; and it's a fact.

In July, when House and Senate had eagerly let pass the American Housing Rescue and Foreclosure Prevention Act of 2008, signed afterwards by President Bush, in attempt of helping homeowners avoid foreclosure and Fannie Mae(FNM) and Freddie Mac(FRE) better function, who had ever thought then that we needed another remedy with a monstrous price tag? Why's anybody there so convinced then that all that needs was just tactical maneuvers such as increasing loan limits, and helping states in purchasing foreclosed properties, and so on. And it's only a month ago that Paulson had to draft another plan for a takeover of two giant mortgage firmsin a most sweeping action, which now became Paulson's signature. And it's not enough, says he now, and they, and we as well. What does he know anyway? Is there any of us who knows the whys and wherefores?

It looks still summer. And even months ago, it was, when Paulson and Mr. Bush and their supportive congregation blessed the bills one after another, to boost the stranded mortgage industry. Then bingo! Didn't see it coming, sorry folks. Economy looks bad, come to think of it. Well, on second thought, to the contrary it could be, after all; stocks are still hovering over 11,000, and with jobs and houses somewhere out therewe all hopeit might. I have my fingers crossed.

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