I just have to say that my belief structure is being unwound as quickly as our capital is being drained...
Tracking the Bailout
EMMA COLEMAN JORDAN: The belief system was one in which he believed that by fixing the problem at the top, by giving the money with trust to his peer institutions on Wall Street, the money would trickle down in the form of lending to consumers and businesses. And the economy would be restored. And so that way of thinking dominated his decision making, slowed things down.There is so much in this interview, I do not know where to start and where to stop.
The facts that were clearly on display were simply ignored. And I'm giving Secretary Paulson credit for being a very smart man. I believe that the delays were caused by pre-commitments to an economic belief system that has been turned on its head by this crisis.
BILL MOYERS: The ideology is that trickle-down economics will work and that the market will eventually correct the excesses? Is that what you think that ideology is? That's the bubble they live in on Wall Street, right?
EMMA COLEMAN JORDAN: It's that confluence of belief, the Federal Reserve, the Department of the Treasury, and the White House, all believing that the markets would correct. So that in the year between August of 2007 and September of 2008, we had a natural experiment. And the natural experiment was the markets did not correct. They crashed and burned. And as a result, the government had to come in to rescue with the taxpayers' dollars.
BILL MOYERS: What about this cover story on this current issue of "The Atlantic"? "After the Crash: China to the U.S., 'Shape Up or Else.'" What's going on there?
EMMA COLEMAN JORDAN: What's going on is a change in the power relations, and we're seeing that the countries who have savings like China are now asserting themselves to tell us to reform our debt dependent ways, both in the public sector and the private sector. They have been financing this. China is the largest purchaser of U.S. Treasuries and other securities, government-related and securities.
BILL MOYERS: They're saying live within your means, right?
EMMA COLEMAN JORDAN: Live within your means. Your credit line has been reduced.