Paulson says more is needed

Treasury Secretary Henry Paulson spoke this week. Jason Kilborn's post on Ray of Light for Those Feeling Grouchy does a good job of calling Paulson on the rhetoric about lending. That said, the government is clearly worried that targeted action has been taken without results. Credit markets are still tight, enough that the Federal Reserve issued a joint statement with the FDIC, Comptroller of Currency and Office of Thrift Supervision reminding banks of their important position in the economy as lenders recently in their Interagency Statement on Meeting the Needs of Creditworthy Borrowers. This seems a simple principle, but as Jason Kilborn remarked here lately, What's the Holdup?

Paulson's talk was quite lengthy, but he did deliver the message that the problems of the auto manufacturers are not within the scope of the TARP (Troubled Asset Relief Program). This leaves a pretty big issue on the table, which must be addressed. If auto is not in the scope of TARP, then separate intervention is inevitable and necessary. That does not mean, though, that it will actually happen. It seems politically difficult, at least under the Bush Administration as many Republicans oppose aid for the automakers.

In case you missed Paulson's talk, here it is:

— JSM