According to this report, Alan Blinder and Newt Gingrich have also called for Paulson's resignation.
Frank James asks (also excerpting from my post yesterday):
As the fingerpointing continues following the House's failure to pass the $700 billion bailout, a lot of blame is going to Treasury Secretary Henry Paulson Jr. for first trying to run roughshod over Congress and the sensibilities of taxpayers until he realized that approach was doomed to failure.
Paulson is being singled out for crafting an initial proposal that was so offensive to many Americans and members of Congress in how it sought vast new and unreviewable powers for the Treasury Secretary.
With the controversial three-page proposal he dropped on Congress last week, he wound up creating a wave of outrage so huge it couldn't be overcome by the time yesterday's vote occured.
The very same hard-charging qualities that led him to be such major success and riches on Wall Street as investment bank Goldman Sachs' chairman and chief executive, it's thought, caused him to be insensitive to how consensus is formed in Washington and how major legislation must be marketed to the American people.
Interviewed on CNBC this morning, Steve Forbes, chairman and CEO of Forbes Inc., said "Paulson, with House Republicans, has been about as effective as an angry drill sergeant talking to raw recruits."
There've been the inevitable calls for Paulson to resign. Last week Alan Blinder, a Princeton University economist who served as Federal Reserve vice chair in the 1990s called for his resignation. That was followed on Sunday by a similar call from former House Speaker Newt Gingrich.
All this raises the following question. Does Paulson have enough political capital remaining to renegotiate a revision of the already revised bailout? Many financial market commentators are saying the markets still believe there'll be a bailout package and are trading on that belief.
But Paulson may not have the sway to pull if off.
A friend of mine (who follows politics loosely) put it this way yesterday afternoon, "Looks like they stopped Paulson's bailout for his Wall Street buddies." I think that perception around Paulson is pretty widespread at this point and that it is time for someone else to take over, or at least to take over as the point man for the bailout. This is the point that I was alluding to yesterday. As for not "marketing" this to the American people, no offense but has an investment banker ever asked anyone for permission to do anything that they wanted to do? And is it really accurate to say that it was a failure of "marketing," as opposed to just a lack of confidence that this particular piece of legislation is necessary?
How about as a new Treasury Secretary someone like Peter Fitzgerald, former Senator from Illinois, founder and Chairman of Chain Bridge Bank a new community bank, and a member of a multi-generation banking family?
If a true "Main Street" (I hate that term, btw) banker like Peter Fitzgerald studied the bailout and said that he thinks that the blunderbuss bailout is the way to go for the good of the country, then I think that'd show me a lot.
It would also be nice for them to re-boot the entire process, perhaps starting with the House Republican proposals as a new baseline and move from there. Perhaps we will end up at the same point (Paulson says that they considered and rejected more modest approaches), but at least then we'd know that this was the last resort.
As of now, there has been no independent testimony, no vetting of alternative options, and they've kept all the relevant information close to the vest and said "trust me." Many smart economists have opposed it. Many smart economists have supported it--but only because they do trust Bush-Paulson's representation of a doomsday scenario. This is crazy to make such big policy decisions based on credibility rather than fact.