Tug-of-War Over How to Spend TARP Funds

J.D. Foster, who was Bush's associated budget director, said he does not believe the contrasting priorities of the Bush and Obama teams are going to be a serious problem, but said "uncertainty is a problem generally" for financial markets.

"There is a great deal of uncertainty as to what President Obama and his team will do and they need to lay that out," Foster said. "At some point, the market will be helped with much more information from President Obama as to what he's going to do."

Foster, who is a fellow at the Heritage Institute, said that Obama may not yet know what he's going to do when he takes office because "he may not know what the state of the economy will be at the end of January."

At the moment, the financial markets are more worried about Paulson's next move, Foster said.

"The markets are more concerned about the next vagary from Secretary Paulson rather than a new administration that will take place six weeks hence," he said.

Foster complained that Paulson's shifting tactics have injected uncertainty into the nation's fiscal recovery plan.

Consistency into the next administration would help, he said.

"You have to let the financial markets heal. It's hard to heal when the doctor keeps changing the medicine every day," Foster said. "Sometimes you have to give them the antibiotics and let it work for a few days."

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