Taking the Economists' Pulse
Secretary of the Treasury Hank Paulson could have been the secretary of ennui as he slouched in the witness chair before the Senate banking committee yesterday.
"Are we headed toward or in danger of being in a recession?" asked Sen. Bob Menendez (D-N.J.).
"I don't have a crystal ball," the secretary announced.
"Aren't you underestimating, not paying enough attention to, the severity of the problem in the credit markets?" inquired Sen. Chuck Schumer (D-N.Y.).
"It's one thing to identify a problem," Paulson returned. "It's another to know exactly what to do about it."
Sen. Bob Casey (D-Pa.) asked about home foreclosures and the "subprime crisis."
Replied Paulson: "I didn't create this problem."
No, but if Paulson and his fellow Bush economic advisers get any more laid back about the state of the American economy, they'll have to make their next appearance before Congress in a horizontal position.
That touch of "froth in the housing market," as then-Federal Reserve Chairman Alan Greenspan put it in 2005, has left his successor and former colleagues with a huge economic mess. Though economic officials have to avoid hysteria so they don't cause panic, Paulson and Fed Chairman Ben Bernanke, who joined Paulson at the witness table yesterday, went so far the other way that they seemed bored.
The senators were highly caffeinated -- Chris Dodd, Jack Reed, Evan Bayh and Richard Shelby all had venti Starbucks cups in front of them, and Chuck Hagel had a grande size -- but they proved unable to excite the witnesses.
One senator accused Paulson of having a tendency to "gloss over" problems, while another found a "sense of urgency" lacking. A third protested the "lapses that allow these situations to develop."
"When there is a storm brewing on the horizon, we count on those at the top, and certainly that's all of you, to sound the alarm, and to many of us, I think what we got was a snooze button," Menendez said. While saying he had no desire "to talk down the economy," the senator went on to ask how they would "stem the hemorrhaging."