|ERDMAN'S WORLD: Snow job
Commentary: Bush's second Treasury chief also a dud
By Paul Erdman, CBS.MarketWatch.com
HEALDSBURG, Calif. (CBS.MW) -- I don't know how George W. goes about
picking his secretaries of the Treasury, but I do know that he has come
up with two duds in a row. The new one, John Snow, is even worse the
first one, whose name I have already forgotten.
Here we have the secretary of the Treasury of the United States who is
going to have to borrow a half-trillion dollars a year to cover this
nation's deficit, plus a whole lot more to refinance the enormous debt
that's outstanding, telling us he will be "frustrated and concerned if
long-term interest rates do not rise."
Did anybody tell him that if he gets his wish, the additional interest
cost on new government borrowings could be staggering?
Did anybody tell him that mortgage rates would soon rise to a level
sufficient to undermine the strength of housing sector, which has been
the strongest pillar holding up the economy during the past couple of
Did anybody tell him that the refinancing of mortgages that has been a
much-needed source of liquidity for millions of American households
would cease altogether?
Did anybody tell him that vehicle sales would go the way of housing
sales if the cost of financing a car goes from zero back up to 10
Did anybody tell him that the cost of corporate borrowing could rise to
the point where the much-needed revival in capital spending for new
plant and equipment could be kept on hold indefinitely? ...
This nation's reputation has already suffered enough as a result of the
growing fiasco of our occupation of Iraq.
The Financial Times got it right in an editorial earlier this week: "The
world economy is volatile enough without a loose cannon at the U.S.
Economist and author Paul Erdman is a CBS.MarketWatch.com columnist.