Political Bull Bullshitter of the Week - Treasury Secretary Henry Paulson.


	Seed Newsvine

It seems like we're beating a dead horse to keep assigning our bullshitter label to those directing the U.S. economy but they are so damn deserving. This week it is Henry Paulson, making claims that the U.S. banking system and the economy have strong fundamentals. What makes this utter bullshit is that he does not actually identify any of these "strong fundamentals." Last week Fed Chairman Bernanke backtracked on his statement that earned him the award a few weeks ago. Bernanke had made the same claim as Paulson about a month ago but in front of Congress did not make the same claim. Paulson must have figured that someone has to keep saying everything is fine.

In reality, the fundamentals are not strong. Simply offering to support the federal mortgage guarantors Fannie Mae and Freddie Mac does not mean they are in good shape. It just means the government will try to spread out the losses by increasing the federal deficit to cover any major troubles that might come up. The number of homes falling into foreclosure is continuing to rise and until this flattens out no fundamentals can be considered strong. Foreclosures affect both the financial sector and housing sector. Bad debt for the former and a glut of homes needing to be sold for the latter function to depress both of these sectors without even considering the trickle down impact of all these unpaid loans. Until the number of foreclosures stop increasing the economy cannot be considered to have strong fundamentals. Anyone that says otherwise is an outright bullshitter and we haven't even delved into energy, trade, inflation, and the other components that are weighing heavily on the economy. The problem with the Bush Administration is that they can talk a good game but can't seem to actually do anything right.

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