Hopefully there is a lot in a name and generally more than meets the eye! Who said that? Actually as far as I know it was I who penned those words. Why do we care? Because there is much concern in the financial and governmental circles about a name and what it actually means. I'll get to that in a moment.
If you decide to take a trip overseas to see some of the historical monuments we have all heard of, you wouldn't be happy if the pyramids turned out to be a square structure. Nor would you be pleased to see the Parthenon if it turned out to be a round building. The white cliffs of Dover might be closer to gray, perhaps, but if they were pink you would have a lot of questions. Hopefully you get the point. Now back to the current little problem: TARP. That of course stands for the Toxic Asset Repurchase Plan of which Congress approved....only it didn't happen.
Hank Paulson, the Secretary of the Treasury, obviously isn't a purist. He certainly doesn't make a big deal out of names and while we're at it we might say he doesn't seem to mind the Congress, the American Public and probably half the free world wondering what the heck was he thinking? No one, to my knowledge, told him to call his plan TARP, or even do what TARP suggests will be done. But if he wasn't going to do the repurchase of the toxic assets why would he call the program the Toxic Asset Repurchase Plan? Why not name the program BUB: Buying Urban Banks or SPAM: Securing Plans to Accumulate Money. Probably the most likely acceptable program is simply PC: Paulson's Choice! Did we really need another Congressional hearing to try to figure out what happened between "yes, we are going along with your plan and why did you changed your mind?"
Paulson had better study the theory of holes in a hurry. It starts with once you recognize you are burying yourself it is time to stop digging. As kids we saw many young girls take a flower and pull the pedals off one at a time saying he likes me, he likes me not and hoping to end on a positive note.
Just when I thought I was through with the adult version of this pedal pull, up pops Hank with his "I didn't think it would work and besides I have a better plan." Have we as a nation not suffered enough?
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.