Former Bush Treasury Secretary O'Neill: Bailout is "crazy"

Paul O'Neill, who served as President Bush's first treasury secretary, today called the bailout bill headed for Senate passage "crazy," with "unbelievably bad" consequences.

From Bloomberg News:

Former U.S. Treasury Secretary Paul O'Neill said the $700 billion bank-rescue proposal under negotiation in Washington is "crazy,'' with potentially "awful'' consequences for the world's largest economy.           

"Doesn't this seem like lunacy to you?'' said O'Neill, who was President Bush's first Treasury chief, from 2001 to 2002, in a telephone interview today. "The consequences of it are unbelievably bad in terms of public intrusion into the private sector.''

... "Is anybody thinking there?'' asked O'Neill, who also served as deputy budget director in the Ford administration. "It's too late, it's not going to make any difference and it's aggravating as hell when there's a better idea and you can't even get it in play,'' he said, recognizing little success so far in pitching his own proposal.

Back story: O'Neill (pictured above) was the first Bush insider to publicly question the president's judgment and decision-making ability. After he was fired, it was O'Neill who said, memorably, that Bush in a cabinet meeting was "like a blind man in a roomful of deaf people."

--Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles

Comments

[Maggie Knowles]

Bernie Sanders wants to add an amendment that says Wall St. operatives pay the $700B.

Please call all reps and demand the Bernie Sanders amendment!!!!

[Maggie Knowles]

From Bernie Sanders website:
~~~~~~~~~~~~~~~~~~~
Before flying back to Washington from Vermont, Sen. Bernie Sanders told Vermont Public Radio, "I think the federal government needs to act and needs to act decisively. I think this particular bailout is not going to do what needs to done and the burden of this bailout is going to fall on people who should not have to pay for it.

So my first concern is if we do need a bailout, who should pay for it? ...To my mind what we should see is a surtax on incomes of people who make $500,000 a year or couples that make $1 million a year. A five-year surtax can pay for this bailout and 99.7 percent of the American people would not be put their money at risk."
~~~~~~~~~~~~~~~~~~~goto http://www.sanders.senate.gov for the rest...

[puckhead]

Maggie,

Let’s be realistic. I’m all for negotiating a hard enough package as possible to limit the gains of bank management. But what incentive does the bank executives have to participate in a plan where they are on the hook for $700B???????? I’d rather let my company get taken over and get a nice golden parachute or just let it fail outright and walk away w/o any personal liability

[Peter]

The bailout *is* crazy. I have no idea why after eight years of bad policy and poor decisions, congress suddenly believes that Bush got it right this time. And in his final days of his presidency?

Why after being so critical of the administration, would any of these delgates just jump when they say jump?

Isn't this the same kind of scare tactics that were used to prevent the "unthinkable" that got us into the Iraq war? And now if this fails are they going to blame Bush for tricking them?

I have been a Republican for a long time and *I* can't trust what they say. Why do they? Why aren't they looking at alternatives?

Come on people!!!

[Maggie Knowles]

I see nothing unrealistic about the people who caused this economic collapse paying for the $700B they're asking for. Paulson got a We just need the political will to push back and make it happen. I hope we can.

We are talking about millions of lives that are now or about to be affected by... well, I don't have the words to express it.

There are other options. If the system collapses, it's not because we didn't make a decision today. This has been 30 years in the making.

[Maggie Knowles]

On the senate floor today, Senator Maria Cantwell says this bill is a giveaway of the keys to the Treasury to the private sector.

[JO]

This "revised" bailout bill is not that "revised" at all. It is still the same fraud and aimed at wasting 700B to buy toxic debt that will likely save GS/MS and C. Please keep up the pressure on the House who appaer to be ready for a vote on Friday. Thi sbill cannot pass. It is sad that the foundation of the global economy needs a "bailout" to stay afloat, but the bill has to change. There are several high profile economists and other accomplished analysts who have provided more sensible and DEMOCRATIC proposals to assist the ECONOMY and TAXPAYERS. Keep up the fight against this fraud.
JO