Billionaire developer Donald Trump says that the banks are a total disaster and warns that the United States could relive 1929 and the resulting economic collapse of the Depression if something isn’t done soon to restore normal lending.
But, Trump told Fox News, he believes President-elect Barack Obama will do “no worse than Bush” in handling the aftermath of the credit crisis.
The $700 billion bailout should be helping the banking system to recover, but there’s really no playbook for this kind of crisis, so the result is chaos, Trump says.
“It's a very scary time. And people are doing things that they've never done before. They're experimenting. It's all one big experiment that nobody knows how the experiment is going to end,” Trump says.
The banks have the money now, Trump complains, but they are not loaning it out.
“No matter how strong you are, you can't borrow 10 cents,” Trump says. “And, I will tell you, this could lead to something very, very bad for the country and for the world.”
“It's a very serious problem, the likes of which we have not seen since 1929.”
As for Obama, Trump is hopeful, despite the nearly 500-point drop in stocks the day after Obama’s win on Tuesday.
“Hopefully, he's going to do a great job. But the way I look at it, he cannot do worse than Bush.”
Obama’s transition team is already at work, and pundits expect key posts to be named quickly in order to give investors a sense that the transition will go smoothly.
One top post will be Treasury Secretary. Current Secretary Henry Paulson warned months ago he would not stay on, despite the gravity of the bank crisis.
"This is one of the first times that I can remember that the Secretary of the Treasury is going to be almost as important as the Secretary of State," David Gergen, who served in the Reagan and Clinton administrations, told CNN.
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