From Friday’s Special Report.
On the Obama administration’s handling of the economic crisis:
He has inherited a mess, but the markets are scared to death because the major issue right now is the banks, and he hasn’t lifted a finger on the banking issue.
You get even Paul Krugman, the liberal columnist for “The New York Times,” who loved the budget, saying the administration is dithering and scaring the people because that is the essence of our crisis. Obama speaks about education and healthcare and energy and all that is fine, but our problem now is a sick banking system.
And the fact is that in the past the markets would react to economic news and to some of the political decisions in Washington, as, for example, the decisions of the Fed.
But in the last year, the markets are exquisitely sensitive to what’s happening in Washington because all the money is gone from New York and all the money is here. All the great decisions in finance are no longer in New York which is broke. The decisions are being made here.
And the non-decisions, the fact that the administration has not had a plan–it promised a plan on banks and produced nothing–is what is scaring the markets and making them tank….
People have this image of dozens of economists, young MBAs wandering around the Treasury, working on the problems all night long and divided plans. Geithner is essentially alone.
I have an image of him wandering the halls Treasury at night like Nixon in the final days speaking with the portraits of the old treasury secretaries. That is not an image that will inspire confidence in the market.
On Hillary Clinton’s diplomatic tour:
I see a field of carrots with nary a stick. I think her trip in which she goes to China and says human rights is not going to be an issue, in which she leaves the Poles and Czechs hanging out on a limb over missile defense, in which in Jerusalem she has the slight slap over the Israelis over demolitions in Jerusalem.
The big winners, Syria, Iran, and Russia–change you can believe in.