In a stunning turnabout, the Bush administration Wednesday abandoned the original centerpiece of its $700 billion effort to rescue the financial system and said it will not use the money to purchase troubled bank assets.
“Our assessment at this time is that this (the purchase of toxic assets) is not the most effective way to use funds,” Treasury Secretary Henry Paulson told a news conference.
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The Bush administration has realized that it can purchase whole countries instead - "places where we can run experiments to test various economic models and bailout options before we commit to any one plan," Paulson explained.
"As it turns out," Treasury Secretary Paulson said, "$700 billion is a LOT of money. Once we realized how much we could do with it, buying bad assets didn't seem that appealing." (Reporters commented later that Paulson seemed to drag out the term bad assets is ways that he might have hoped would make an old white man in a suit sound like a bad ass.)
George Bush, who is looking for retirement property, was said to have protested any move that would prop up home prices before he moved out in January. Aids say that Bush was shocked to realize that although the resale value of the White House was still high, he would not actually get to sell it when he moved out. "If we aren't selling the place," he said to Laura, "tell me again what the deal was with showing the place to that young black couple with the two pretty little girls?" They deny, though, that this is the only reason Bush has decided to embrace a policy that would let home prices fall further.
Paulson explained that there is something magical about having $700 billion to spend at any time. "You should see the way people look at me, hang on my every word, hoping that I might throw a little of it their way. Even when I was the CEO at Goldman Sachs, it was never this good," he said. "I don't want to rush this process of deciding where to spend the money."
The Bush administration said that it has no plans to revive credit markets or the economy and might not have one until sometime after the holidays - "perhaps late January," Dick Cheney said with a chuckle.