Uh-oh. Robert Rubin was co-head of Goldman Sachs, then Secretary of the Treasury, and is now chairman of Citigroup Inc.'s executive committee (though, of course, Citi hasn't been doing all that well itself. Yet I think Rubin arrived there after the damage had been done).
He's quoted: "There is a strong need for urgent action. I would be very, very seriously considering the possibility of using public funds in one form or another.''
Seems pretty clear the government is going to have to step in and clean up the mess business created. Typical: business demands to be left alone, but cries for help when it steps in doo-doo it made.
"The Fed has done a very good job,'' he said. "The Treasury, working with the Fed, did the right thing conceptually in rescuing Bear Stearns.''
Note his use of the word conceptually. That seems qualified praise.
Rubin shied away from saying that the U.S. has already entered into a recession. He saw, though, a 1-in-3 chance that the economy could be in for a deep, prolonged contraction.
Ouch. Prolonged? That's bad.
"As a policy maker, those risks are high enough so that you would be highly proactive in seeking ways to reduce the risk,'' he said.
Government proactive? Yeah, right. Greenspan still insists that the free market will take care of things. W is saying there may be some challenges ahead. And Paulson looks out of place, as if he's serving a sentence for the crime of accepting the Treasury Secretaryship.
Yikes.
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