A Bushco Survivor Returns

I didn’t want to let too much time go by without acknowled- ging the interview Deborah Solomon conducted with former Treasury Secretary Paul O’Neill in last Sunday’s New York Times Magazine.

O’Neill weighed in as follows…

Do you think it was appropriate for the Federal Reserve to lend a helping hand to Bear Stearns and save a private investment company from its own bad decisions? I would say they didn’t save Bear Stearns. They saved the financial system from a panic collapse. I reject the notion that they helped Bear Stearns. Bear Stearns was destroyed.

No it wasn’t. It was purchased by JPMorgan, which will keep it alive. They’re going to keep the book alive. But the institution of Bear Stearns has been destroyed. They’ve gone from $158 to $2 of equity. It’s wallpaper. It’s not even good wallpaper. It’s butcher paper.

It’s so hard to understand how the subprime mortgage crisis has triggered a financial crisis of global proportions. If you have 10 bottles of water, and one bottle had poison in it, and you didn’t know which one, you probably wouldn’t drink out of any of the 10 bottles; that’s basically what we’ve got there.

Instead of helping Bear Stearns, why doesn’t the Fed help out homeowners? It’s too late now. Going back a year ago, if the Fed and the Treasury had set out to help the institutions provide clarity and differentiate between good loans and bad loans, we wouldn’t have gotten to this freeze condition.

I'm don't agree with that - just remember, though, that O’Neill was fired by Bushco because he opposed their tax cuts. And speaking of that…

Do you feel bitter about your service for the Bush administration? No. I’m thankful I got fired when I did, so that I didn’t have to be associated with what they subsequently did.

And as for the election…

How do you feel about John McCain, who claims to be a straight talker? I don’t want a straight talker. I want a leader. And a straight talker is one dimension of a leader.

McCain recently confessed in public that his grasp of economics is limited. Yeah. That’s a great place to start from, isn’t it?

Tee hee (no word on what he thinks of the Dems, though, to be fair).

Have you seen Dick Cheney since he fired you? I have been to a few events where the vice president was there, but we both did our best to ignore each other. You know, I was a pallbearer, and he was a pallbearer, too.

You mean at President Ford’s funeral? Yes.

And you didn’t say hello? Nope. It was a good time to be alone together.

God, it would have been so neat to have O’Neill around lobbing spitballs as these clowns; might have actually kept them from making some of their catastrophic decisions (I know O’Neill is a conservative through and through, but he built a successful company, Alcoa by name, which is more than I can say for anyone else in our ruling cabal).

And finally…

How did you first get involved in government? I went to Washington in 1961 because I believed what Kennedy said. If you want to make a difference, come here. It sounds corny, but it’s true.

It still is (corny perhaps, but no less the truth then as now).