"Do as I say, not as I do" is the clear message of hypocrisy spewed forth by former US Treasury Secretary Henry Paulson this week. Having presided over the largest redistriubution of taxpayer funds to bailout the banking system, while exclaiming fire and brimstone should they not be saved, he now has some advice for an over-levered, over-capacity, systemically-stymied China – "let failing companies fail."
Some other Paulson comments:
"As Americans, we shouldn't like bailouts. Where I come from, if someone takes a risk and they're going to make the profit from that risk, they shouldn't have the taxpayer pay for the losses."
"If the financial system collapses, it's really, really hard to put it back together again."
"What I've said repeatedly is, 'I think the auto industry is a very important industry.'"
But for China – screw them all…
"They can show right now they're very serious about dealing with inefficient state-owned enterprises as they take capacity out of the steel industry, coal industry and others by letting some failing companies fail," Paulson told CNBC's Squawk Box on the sidelines of an Institute of International Finance event organized in conjunction with the G20 meeting in Shanghai.
Of course this is exactly what China 'should' do – just as America 'should' have faced up to its own malinvestment boom, dealt with the bust, and moved on to renewed growth. But that would have meant the elites lost… and that can never happen.
Just remember, risking US taxpayer money to fill a bottomless pit of bank balance sheets was "for your own good."
via Zero Hedge http://ift.tt/1OBTsNA Tyler Durden