Schumer also floated the notion of giving the Treasury a portion of the $700 billion now and revisiting the success of the program in January. But Paulson was not as supportive.
"I think that would be a grave mistake," the secretary said. "This is about market confidence, and we need to have the tools to do it right."
These are good noises from Schumer. Hank Paulson as usual is using dishonest authoritarian GOP Daddy tricks - the market will be mad if you don't give me everything I want. Oh yeah? Well what if the market loses confidence in Hank Paulson? I know I have a hell of a lot more confidence in a democratically elected Congress in January than some Wall Street greedy hack.
This is a giant scam. Gary Marcus, a psychologist at NYU, has noted that the $700B number and the sense of urgency are 'anchors' designed to exploit a weakness in the human mind that fixates on the first number uttered during a negotiation. For instance, he says, a shopkeeper might put up a sign that says 'limit 12 items' just to lead shoppers to think they might need several. It's a powerful tool, and also helps explain why this administration operates via crises. They are good moments to anchor a culture around arbitrary numbers, but you don't need a crisis to do it - Bush pushed his $1.6 trillion dollar tax cut in 2001, and Tom Daschle 'compromised' around an amount a little over a trillion.
On the other hand, this is why we have a political system. These kinds of experimental notions in behavioral economics are still relatively new, and while we do know that humans tend to use all sorts of shortcuts to manage information inputs and that this leaves us vulnerable to trickery, there's a lot we don't know about how social systems can push back against deceivers.
What Schumer is doing here is pushing back against the anchored number and the sense of urgency. That's good. Someone needs to tell these used car salesmen to go fuck themselves. It's ironic that it's the man funded by Wall Street who is doing it.
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