The M3 and Paulson's bait'n'switch

Along with all the other major news outlets, ABC is reporting:

Global markets have been rattled by US Treasury Secretary Henry Paulson's decision to change the terms of the $US700 billion bailout package.

He says using the remainder of the package to buy troubled mortgage assets as originally planned isn't the most effective use of the money at the moment and instead it will be funnelled towards boosting the availability of funds for credit cards, and student and car loans.

Bazooka Hank pulls a bait'n'switch. But what's new? I'm sure this bailout wasn't the first time money grew on trees in the past couple of years. After all, the Federal Reserve stopped reporting the M3 on November 10, 2005.

But what's the M3 you ask? It is the broadest measure of money commonly used and is used by economists to estimate the entire supply of money within an economy. (Wikipedia)

Now think about it... no one even knows how much money exists? And you think they're not playing games? IMHO, this is just further evidence that America's central planners central bankers have to be held accountable. Unfortunately, President Bush, President-elect Obama, Speaker Pelosi, Senate Banking Chair Dodd and most other members of Congress have no idea what's happening.

It's the classic case of politicians being led around by the nose.

I hope President-elect Obama can deliver change, but I don't expect it to happen on monetary policy. And without changing our monetary policy, I don't expect any real change.

Tim White