Skip navigation

“The biggest help we can give the American people is to stabilize our financial system right now and to prevent the system from clogging up, because if it does clog up, this is going to have an adverse effect on people’s abilities to get jobs, on their budgets, on their retirement savings, on lending for small businesses,” Paulson said on ABC’s “This Week with George Stephanopoulos.”

The head of the Treasury made the rounds on the morning talk shows to sell the Bush administration’s plan to the American public, but he stated on “Fox News Sunday”: “I hate the fact that we have to do it.”

[To get a handle on what is really going on, go to http://www.michael-hudson.com/ It’s a long piece, but informative, from a financial expert but not, evidently, a bought one.]

Paulson: ‘We need this to be clean and quick’

Words which would apply to any bank robbery or swindle, the cleaner and quicker, the better.  And this, to be sure is a major league heist, the biggest swindle in a country of big swindles.  Reading between the not-so-vague lines of the proposal of the Bush administration, as others have swiftly noted, is basically a governmental-no-Congressional-or-Judicial-oversight commandeering of most the US economy.  Welcome to the USSofA, where Commissar Paulson and Comrade Bush, or is it der Fuhrer and his minions, decide what sells to whom for how much under what terms.   The terms, as proposed, do not include taking the captains of capitalism’s golden parachutes, bonuses, perks, tax-exemptions, etc. away from them.  Ohhh that would hurt so bad.  Nope, it means dipping deep into JQ’s pocket for the next umpteen years and pickpocketing in broad daylight, of course, all for your own good.  Nanny Guv (remember that former Bogey-girl?) knows best, so following the shriveling coinage of the land, “In God We Trust” cuz trusting the Bush clan to do anything but fuck you badly is an error which all but a hard-core 30% of the hyper-rich and the hyper-dumb have already learned.

However, since we deal with cinema here, we all know the plot-line of almost any bank robbery scenario is the well-laid plan that invariably follows the Robert Burns axiom: if it’s possible to fuckitup, it’ll get fugged up.  So on Friday, to delirious reviews (+370 from the critics at the DOW), the show opened with its first scene.  The weekend BO was mixed, with some non MSM critics carping about certain aspects, raising some caveats about certain plot line potentials, and some far-out left (and right) critics pointing out that this amounted to little more than fascism. Oh well, in a free country people get to think whatever weird thoughts they want (as long as they keep their fkn mouths shut down at the “free speech zone.”)  Said one Senator of considerable rightist tendency, “As of now the free market in America is dead.”

As if there’d ever been such a thing, but now the wraps are off and everyone is informed that the function of America is to keep Wall Street paved with gold, and tough shit if you can’t cover the mortgage (see in that word is a sneaky little French one which means “death”), or the rent, go fkn eat cake.   Not that you weren’t long ago informed of this:

The business of America is business. Calvin Coolidge

(or go see the quotes from Tocqueville to be found at the end of my item at http://www.jonjost.wordpress.com)

Out in the market is a book titled Shock Doctrine: The Rise of Disaster Capitalism which would seem to cover this current little bit of the massive shell-game which is Bushism.

Whatever, if Monday brings a boost or a crash in the “market” it really probably doesn’t matter much since if there is no crash, it is simply staving off the inevitable.  They can print money as fast as they can, but it won’t paper over the real problem, only temporarily hide it while the worst perpetrators run off with as much as they can, and tamp down public anger.  More Prozac!  More Ludes !  More American Idol !  More baseball (play-offs & Series coming up) ! More football !

Oh yeah, and there’s going to be an election I recall.  dail…Paulson.  Not a good sign.

3 Comments

  1. “Obama apparently talks daily to Paulson. Not a good sign.”

    That doesn’t bother me as much as the rumor from the Straight Talk Express that should he prevail in November, McCain intends to give Phil Gramm Paulson’s job. Gods help us all.

  2. A friend from the great state of Virginia writes,

    “Ya know, I read an outstanding summery of the bail-out in the Financial Times last week when I was in London. People there are so outraged that it will certainly cost the Labor Party dearly. They are in the same position as the Democrats here — they had everything on their side, but still insisted on fucking things up by accepting the current economic folly. The only difference with their situation is that our tax dollars will bail-out the scammers holding bad American paper.

    And of course we will all pay through inflation, value decline of our currency (I never thought I’d see the day when I exchanged $300 USD for 144 pounds sterling. But I just did that in the UK — where a Big Mac, fries and a coke cost me US$14!) and ultimately, as one minister of Parliament pointed out, with the loss of our Social Security system most likely through privatization — though it might not be called that. In all likelihood it will be called “saving the Social Security system.” Beyond that, there is the up-front acknowledgement in the UK that the fiasco will cost 600,000 jobs in England, a nation of 60 million. Can you imagine what that translates to in our nation of 300 million? Yet nobody is speaking of that aspect at all.

    In fact, since I’ve been back in the States I have yet to meet anyone who really grasps the full implications of the bail-out. I’ve talked about it to several regular working folks in Virginia, and all of them seem to feel it does not reach into their individual worlds. If they are not in foreclosure, then it’s not real to them, and bedamned any kind of sympathy for those who are in foreclosure.

    Most people here tend to believe it is mainly Mexicans, white trash, and other what they feel to be weaker, lesser specimens of Americans being foreclosed upon. After outlining the whole swindle to one fellow, he said: “Why do you hate America so much?” I’m not kidding. People are still using that old line.

    Even intelligent, educated Democrats seem to believe Obama can fix it all, despite the fact he will inherit a plundered and flat busted national treasury, and doubtlessly some obstinate Republican elements, plus bought and paid for Democrats in Congress. If he gets in. We don’t have to guess what McCain will do. He’s said it aloud. More of the same.

    I never make predictions, but now I’m willing to guess that it’s going to take a genuinely brutal collapse, one in which our citizens cannot get even the most basic necessities of life before the spell of American exceptionalism is broken. And even when that happens I have no doubt the citizenry will be provided with some appropriate scapegoat abroad, most likely a Muslim or Russian one. Hell, they are already ginning up the case against several suspects.

    I find it amazing that after the highest rolling scam artists are given a walk for their theft, our government is now letting the collapsing industries consolidate and actually own thousands of banks at the local level. I suspect that having raped the public for fees and having exhausted all the other mortgage racket scams, they now want to get closer to the pockets of the people and “get first count of the dough,” as the carnies used to say. He who gets first count always makes money in the carnie world.

    Another local citizen I talked to said: “Well, it’s all more complicated than we can understand. You have to leave it to the experts.” As if “the experts” somehow are not human beings prone to greed or other human folly. That people can watch such a disaster happen before their very eyes and somehow not relate it to their own lives as Americans boggles the imagination. It goes beyond apathy and into the realm of learned helplessness. Complete helplessness in the face of the corporate state. Complete reliance upon unseen “people in high places” who somehow know what is best for the rest of us, and belief these people will act first in our interests instead of their own.

    I fear for this country’s fate. I really do.

    In art and labor,

    J.

    *Jost, you’ve been saying pretty much the same damn things. It’s nutso out here, and Homer and Jimmy Jack still don’t get it. They’re still obeying their masters like Limbaugh, Hannity and Malzberg. This douchebag Steve Malzberg here in NY is a radio fiend, and the other day he’s still screaming- and I do mean screaming- about Rev. Wright, and how black power is but one slight remove from full-on Maoism. I did some reading on Limbaugh’s website and he’s calling for a fullscale round up of all the Democrats who caused this economic crisis. That’s right, Democrats. And even though they are certainly complicit in the con of exceptionalism, I mean, please…

    And all those low-information ignoramuses are nodding along to this sagacity even as they’re bent over a table, drawers yanked down to their ankles, with a stiff one savaging their assholes. And no one asked “please”, said “thank you” or bothered to reach around and give these dumb fuckers a rub-off. But they do love America.

    Obama made that crack about guns and religion, and the density of noise that provoked from these cousin-lovin’ morons was staggering. Man, I tell you, we have, against all sense and warning, gone ahead and stepped through the looking glass into some surreal zone, haven’t we?

    I gotta go now. I’m gonna chew up a mouthful of ‘shrooms and try to pretend this whole thing is but a very weird dream…

  3. My friend Errol sent me this illuminating item on just who is talking right now in Congress, peddling his “save our world” plan to use 700 billion (that’s the figure now, so figure on doubling or quadrupling in short order) of non-existent US funds (tax money) to rescue Wall Street. This guy is a major-league hustler and now he’s hustling you:

    Who is Henry Paulson?
    By Tom Eley
    23 September 2008

    Back to screen version | Send this link by email | Email the author

    The plan to rescue the US financial industry arrogates virtually unlimited money and power over the financial affairs of the state to the office of Treasury Secretary Henry Paulson. Paulson is a figure with a long history of intimate connections to the political and financial elite.

    In 1970, fresh from the Masters program of the Harvard Business School, Paulson entered the Nixon administration, working first as staff assistant to the assistant secretary of defense. In 1972-73, Paulson worked as office assistant to John Erlichman, assistant to the president for domestic affairs. Erlichman was one of the key figures involved in organizing President Richard Nixon’s notorious “plumbers” unit that carried out illegal covert operations against the president’s political opponents, including espionage, blackmail, and revenge. Ehlichman resigned in 1973, and in 1975 he was convicted of obstruction of justice, perjury, and conspiracy, and was imprisoned for 18 months.

    Utilizing his connections, Paulson went to work for Goldman Sachs in 1974. In a 2007 feature, the British newspaper the Guardian wrote, “Not only was he well connected enough to get the job [in the Nixon White House], but well connected enough to resign in the thick of the Watergate scandal without ever getting caught up in the fallout. He went straight to Goldman back home in Illinois.”

    Paulson rose through the ranks of Goldman Sachs, becoming a partner in 1982, co-head of investment banking in 1990, chief operating officer in 1994. In 1998 he forced out his co-chairman Jon Corzine “in what amounted to a coup,” according to New York Times economics correspondent Floyd Norris, and took over the post of CEO.

    Goldman Sachs is perhaps the single best-connected Wall Street firm. Its executives routinely go in and out of top government posts. Corzine went on to become US senator from New Jersey and is now the state’s governor. Corzine’s predecessor, Stephen Friedman, served in the Bush administration as assistant to the president for economic policy and as chairman of the National Economic Council (NEC). Friedman’s predecessor as Goldman Sachs CEO, Robert Rubin, served as chairman of the NEC and later treasury secretary under Bill Clinton.

    Agence France Press, in a 2006 article on Paulson’s appointment, “Has Goldman Sachs Taken Over the Bush Administration?” noted that, in addition to Paulson, “[t]he president’s chief of staff, Josh Bolten, and the chairman of the Commodity Futures Trading Commission, Jeffery Reuben, are Goldman alumni.”

    “But the flow goes both ways,” the article continued, “Goldman recently hired Robert Zoellick, who stepped down as the US deputy secretary of state, and Faryar Shirzad, who worked as one of Bush’s national security advisors.”

    Prior to being selected as treasury secretary, Paulson was a major individual campaign contributor to Republican candidates, giving over $336,000 of his own money between 1998 and 2006.

    Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March, Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

    In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.

    These bailouts have been designed to prevent a chain reaction collapse of the world economy, but more importantly they aimed to insulate and even reward the wealthy shareholders, like Paulson, primarily responsible for the financial collapse.

    Paulson bears a considerable amount of personal responsibility for the crisis.

    Paulson, according to a celebratory 2006 BusinessWeek article entitled “Mr. Risk Goes to Washington,” was “one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits.” Under Paulson’s watch, that meant “taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities.”

    According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”

    Paulson then handsomely benefited from the speculative boom. This wealth was based on financial manipulation and did nothing to create real value in the economy. On the contrary, the extraordinary enrichment of individuals like Paulson was the corollary to the dismantling of the real economy, the bankrupting of the government, and the impoverishment of masses the world over.

    Paulson was compensated to the tune of $30 million in 2004 and took home $37 million in 2005. In his career at Goldman Sachs he built up a personal net worth of over $700 million, according to estimates.

    After Paulson’s ascension to the treasury, his colleagues at Goldman Sachs carried on the bonanza. At the end of 2006, Paulson’s successor Lloyd Blankfein was handed over a $53.4 million year-end bonus, while 11 other Goldman Sachs executives raked in $150 million in year-end bonuses combined. That year, the top investment firms Goldman Sacks, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns handed out $36 billion in bonuses. At the end of 2007, the executives of the same firms, excepting Merrill, were handed another $30 billion.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: