Who's a worse economist: Jerry Yang or Secretary Paulson?

As the economy heads south, there are plenty of boneheaded CEOs and clueless government officials to blame. Looking at the overall economy in general, and the tech economy specifically, Chief Yahoo Jerry Yang and Treasury Secretary Henry Paulson stand out for how destructive their actions have been. Which one of the two do you think has made more boneheaded decisions?

Of course, you really can't accurately compare the two. Paulson's actions affect the entire economy, while Yang's directly affect only one company and its investors. Still, it's worthwhile trying to figure out who made worse decisions.

Months ago, Jerry Yang turned down Microsoft's offer of $31 a share for his company. Yang turned his head the other way. A mere $31? He was convinced he would be able to beef up the company so it was worth far more than that. It didn't quite work: As I write this, Yahoo's share price hovers at just above $9 a share.

It's tough to know what convinced him he'd turn around the company, other than sheer blindness to reality. Yahoo had no chance of catching Google in the search market, and was falling further and further behind with each passing month. He had no plan for catching up, other than possibly a deal with Google --- a possible deal that government regulators may well squash.

It's true that since Microsoft made its offer, the entire stock market has tanked, but even at the time of the offer, the economy was in rough shape and going nowhere. Yang should have known that $31 was the best he would get. As it is, he's now gone, and Yahoo shareholders are left holding the bag. Microsoft won't buy the company, Ballmer has said, and may only be interested in part of it.

Now how about Treasury Secretary Henry Paulson? Instead of using the $700 billion from Congress to help homeowners, buy up toxic mortgages, or ensure that banks start lending again, he's handed over billions to banks with no strings attached. In Great Britain, by way of contrast, the bailout requires that if banks get the money, they have to start lending.

So what are the banks doing with the billions in taxpayer dollars? Some banks have simply squirreled the money away. Others will be using it to buy their competitors. Paulson now says he won't use any money to buy troubled mortgage assets or help homeowners.

Both conservative Republicans and liberal Democrats are furious with Paulson, and justifiably so. Conservative Jeb Hensarling (R-Tex.) says Paulson's move "felt like a bait and switch." Liberal Gary Ackerman (D-N.Y.) said to him at a hearing, "You came to us with a plan, then suddenly one day we woke up and found that $700 billion would be used for a different purpose. You appear to be flying a $700 billion plan by the seat of your pants."

I'm torn over whether Paulson or Yang has made the worse decisions. With Yang leaving as Yahoo CEO, his title reverts to Chief Yahoo, which is certainly fitting. I think Paulson should share the title.

Of the two, who do you think is worse?

Preston Gralla is a contributing editor for Computerworld, and the author of more than 35 books.