I don't think there are many "patriots" that are qualified to fix this problem and are willing to give up their ability to profit. Wait, didn't John McCain honor a fellow prisoner of war at the GOP Convention? Let's get him to do the job. Country First. War Prisoners FTW.
But do you expect a ceo of successful company to run a fire departmnet? I wouldn't think so. There are experts in every field and no one knows them all. We still need financial sector experts to help clean up the mess.
Really, let's get over the bail out and also we need to start calling it a bank hand out. I don't think the bailout will be relevant come Jan. 1 It will be about survival.
What's the concern? They're going to make so much money fixing the economy, they'll be incentivized to break it again?
Are you saying this 35 year old would be your first choice? Are you saying this is the best guy in the country to do this? My choice would not include this plan, but since that's where we are... If you're picking someone from Wall Street, how about a guy with a little more gravitas and someone not from Goldman Sachs and someone not tied to this administration? There's also a pool of academics that understand the issue (as much as it can be understood). Also, how about the guy that was originally assigned to rebuild Iraq before the Bush Administration replaced him for not being Republican enough? If he can rebuild countries, he probably has the organizational skills and judgment to make this happen as best it can. And really, arguing that the issue is so complex that only a finance guy can work on it is tantamount to saying that only people who pollute should be in charge of EPA or only old people should administer Social Security.
I don't know but I do know that most people in derivatives & complex assets like this do in fact tend to be younger rather than older because these assets didn't exist that long ago. It's not the type of thing you could pick a Bob Rubin to do. OK - which bank are we picking the guy from. Lehman? Bear? Merrill? I bet you'd find no shortage of takers from those ones. Are there any candidates you have in mind? There really aren't that many academics who are equipped to double as asset managers - or else they'd be doing it. Most theoretical economists are completely out of touch with this (I get a kick out of Gary Becker's essays on "Stanley Morgan" and "Bears Stern") and are incredibly ill-equipped to deal with this. At best you'd have to go to business school professors, most of whom have connections to various Wall st. firms - even then I'd probably rather have a professional asset manager, considering that the job is basically overseeing an asset management program. I agree - hey why not Sarah Palin? She has common sense, is a tough hockey mom, and is a regular person! She'll bring maverick style reform to the issue!
That is incredibly illogical. Hybrid cars didn't exist a few years ago, therefore only people 25 years and younger are capable of driving them? Your statement supports my argument more than discredits it... if these things are new and they completely screwed the pooch, why yes, I would want someone who has some perspective trying to make sense of it. Weak response Sam. I'm talking competence in managing large organizations and making decisions under stress and you immediately throw out the Palin quip. You are much, much better than that.
1. He may be 35, but he's also a VP at Goldman Sachs. Doesn't sound like a slouch. 2. He's an interim choice. He may have ties to the Administration, be too young for your liking, and be involved with companies that stand to profit, but you get an interim guy because you need someone fast. Obviously, someone like him is easier to find quickly. He may well be replaced by someone more to your liking. 3. Academics can't fill this role. You don't need only to understand the securities, but also how to run an organization. The people in academia who have that skillset got it by previously working for companies like Goldman Sachs.
I figure that since we're going to gamble 700b of gov't money on valuing complex derivative instruments - it would be helpful to have somebody from that milieu. Anyway who are your choices - I'd be interested to hear them. Have you read any of the articles such as the one that you started this thread with? The TARP office is going to hire about 24 people - People management is not the issue here. The issue is valuation of complex financial instruments.
I tend to agree with Sam on this one. However, the appearance of fairness is important and I'm not sure you want it to be an all Goldman Sach's thing. Apparently billions in fees are to be made by private companies managing these assets and I think that is where you have to be careful who you give that money to. I would say Goldman Sach's should be ruled out due to appearances of impropriety. As far as the value of the instruments goes if at this time the whole market can't price these things, how is this guy from Goldman Sach's going to price them? I would suggest an advisory board of experts to supervise Paulson and this guy. Difficult question.
They could get the one of the senior management guys from Lehman Brothers or Merril Lynch, but is it wise to really grab guys from whose skills and expertise created this mess. Guys who didn't see this this coming. While Goldman Sachs saw this coming, last year, and made $4 billion off of derivative investments on a mortgage bust. Citi and Merrill Lynch lost billions buying mortgage backed securities.
