US Treasury Secretary Henry Paulson believes the US housing market will remain in a slump through the rest of the year, but does not intend to stay on to help the next president cope with the crisis.
In an interview with NBC News airing on Sunday from Beijing, Paulson said he did not plan to inject public money into two troubled US mortgage giants, and laid out the case for new regulation to keep capital markets under control.
Whether the next president is Senator John McCain or Senator Barack Obama, “I will do everything I can to make for a smooth transition, to work closely with my successor in Treasury,” he said.
There has been media speculation that the McCain or even Obama could ask Paulson to stay on to help unwind the housing crisis buffeting US consumers and Wall Street.
“But I’m focused on getting everything done I can get done between now and January 19th,” the former Goldman Sachs boss said, referring to the last full day of US President George W. Bush’s administration.
“I’m going to do everything I can to step up to any problems that are going to face the country, but again, I look forward to doing other things, you know, next year,” he said.
In the interview, which was taped Saturday, Paulson reaffirmed that “I believe it is going to take us well beyond the end of the year to work through all of the housing problems.” Until the housing market starts to recover, “we’re going to continue to have turmoil in our capital markets.”
But he stressed that in the global rankings of major economies, “the long-term economic fundamentals of the United States compare very favorably.”
Paulson defended a government lifeline thrown to the mortgage finance giants Freddie Mac and Fannie Mae, which together account for about 70 percent of all US home loans. Plunging share values and shocking losses have raised new questions about the two firms’ solvency, but Paulson said he had no plans to tap his new authority to buy equity in the companies to boost their capital.
“Well, we have no plans to insert money in either of those institutions,” he told NBC.
“I think it was very important that we get these temporary backup facilities, because Fannie and Freddie are important to our capital markets broadly,” he said.
He disagreed with Democratic leaders, including Obama, who want a second stimulus plan to boost the US economy, following a US$168 billion package stuffed with tax rebates that was enacted in February.
He said that following US economic growth of 1.9 percent in the second quarter, which was better than the first quarter’s 0.9 percent pace, “my view would be let’s see how this program works in the third quarter.”
Paulson, agreeing with Bush that Wall Street had got “drunk” and was now suffering a hangover, said new regulation was needed to cope with the daunting complexity of modern banking’s investment practices.
“We have a regulatory system that is very outdated. It was put in place many years ago,” he said, calling for a legal revamp “across the board.”
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
The government is considering polices to increase rental subsidies for people living in social housing who get married and have children, Premier Cho Jung-tai (卓榮泰) said yesterday. During an interview with the Plain Law Movement (法律白話文) podcast, Cho said that housing prices cannot be brought down overnight without affecting banks and mortgages. Therefore, the government is focusing on providing more aid for young people by taking 3 to 5 percent of urban renewal projects and zone expropriations and using that land for social housing, he said. Single people living in social housing who get married and become parents could obtain 50 percent more
DEMOGRAPHICS: Robotics is the most promising answer to looming labor woes, the long-term care system and national contingency response, an official said Taiwan is to launch a five-year plan to boost the robotics industry in a bid to address labor shortages stemming from a declining and aging population, the Executive Yuan said yesterday. The government approved the initiative, dubbed the Smart Robotics Industry Promotion Plan, via executive order, senior officials told a post-Cabinet meeting news conference in Taipei. Taiwan’s population decline would strain the economy and the nation’s ability to care for vulnerable and elderly people, said Peter Hong (洪樂文), who heads the National Science and Technology Council’s (NSTC) Department of Engineering and Technologies. Projections show that the proportion of Taiwanese 65 or older would
RSS