Wall Street investors are getting very nervous about the economy and that makes the rest us pretty jumpy as well. Today the stock market tumbled off a cliff with a drop of 445 points, closing at 7,552. Apparently a host of bad economic news, including the failure of congress to come up with a solution to the Big Three automakers’ copped plea for a $25 billion bailout, sent stocks into a dive.
Meanwhile this morning, Treasury Secretary Henry Paulson spoke to a gathering at the Ronald Reagan Presidential Library in the Southland city of Simi Valley. Paulson talked about the faltering financial system. Paulson warned, “In all that lies ahead we must never forget that our financial system is built on the hard work of our citizens; it is built on the savings of our citizens – and perhaps most importantly, our financial system depends on the trust and confidence of our citizens.”
Later, when asked about the crippled housing market, Paulson said the best thing “… by far is to keep lending going.” I disagree. The most important thing to do, and to do quickly, is to slow the foreclosures by modifying home loans so struggling homeowners can stay in their homes.
I think Paulson is just spinning his wheels and going nowhere with his plans to revive the economy. Paulson has shelled out billions of that $700 billion bailout deal, approved by congress last month, to high-ended players in the financial system and so far, he has little or no results to show for it.