U.S. Needs a Bankruptcy-Smart Treasury Secretary: Street Whispers
NEW YORK ( TheStreet) --Amid the discussion about who will replace Tim Geithner as President Obama's Treasury Secretary, one of the qualities that hasn't been discussed but could prove essential is experience with bankruptcy.
Is the U.S. really headed for bankruptcy? It seems far-fetched, but the country has seen its costs exceed its revenues by more than $1 trillion annually for four straight years, and Democrats and Republicans in Congress appear so deeply divided about whether and where to raise taxes and when and where to cut expenditures, it is unclear how the issue can be resolved.
"I think this is a very dangerous situation largely because there is a general presumption that somehow we can resolve this issue without physical pain or spiritual pain or any sort of economic pain whatsoever," former Federal Reserve Chairman Alan Greenspan told Bloomberg Television Wednesday. "We have to recognize that no matter how we resolve it there are negative consequences."
Sounds like a job for a bankruptcy expert, according to Jay Westbrook, a University of Texas law school professor who happens to be one himself."A bankruptcy expert who had the requisite other experience could be very well equipped," to tackle the U.S. deficit negotiations with Congress, Westbrook says. That's because bankruptcy negotiators know how to "put enough water in each bucket to keep the water flowing," as Westbrook puts it. "They are good at responding to a situation where we have a lack of sufficient resources to do everything we want to do." Westbrook himself would like to see "crusty Midwestern banker" as Treasury Secretary. "Or the head of a large and successful regional bank, like Frost Bank in Texas," he says. Such a person understands finance and high finance, without carrying the taint of Wall Street, Westbrook reasons, adding "he could keep a bankruptcy expert in the office next door." What does Westbrook think needs to be done? While he isn't sure the series of devastating cuts agreed to by both parties and known as the "fiscal cliff" is the solution, he does believe some similar type of mechanism may be needed in order to "lash us to the mast," since both major parties don't seem to be able to reach an agreement by any other means.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV