John Snow is a dud....................By Paul Erdman,
CBS.MarketWatch.com
Last Update: 6:36 PM ET Oct. 22, 2003
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 is outstanding, telling us the 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 years?
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 percent plus?
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?
Snow is just as fuzzyheaded where the dollar is concerned.
He is a strong dollar advocate, yet in favor of forcing China and Japan to allow their currencies to float way up against the dollar. One simply does not square with the other.
This is a guy who should be fired right away, before he does even greater harm to the standing of the United States as the financial powerhouse that the world looks to for economic leadership.
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. Treasury."
Economist and author Paul Erdman is a CBS.MarketWatch.com columnist.