Wow. Did I miss something? Weren't Paulson and Fed Chairman Ben Bernanke just saying that a bailout is the only thing that will save the economy from a catastrophic meltdown? Now, apparently, some financial companies have determined that a full-scale collapse of the U.S. economy is preferable to leaving a job without sufficient bonuses and separation packages. Rather than tell the heads of these companies to stick it in their ears, however, Secretary Paulson is suggesting that America's taxpayers need to cave in to their demands. This seems so amazingly shortsighted, so incredibly illogical that I began to wonder if there might not be another reason that the Secretary of the Treasury is demanding what seems to be tantamount to financial blackmail.
Howard Rodman suggested a bizarre scenario: he theorizes that Secretary Paulson left his job as CEO of Goldman Sachs in anticipation of this crisis. Hank then went to work for the Treasury in order to orchestrate a major rescue of Wall Street. Having coerced the Federal Government into buying billions of dollars of worthless securities with minimal oversight and provisions, he would subsequently return to Goldman Sachs where, presumably, he would be heavily rewarded for his good work in betraying the public trust.
Of course, this scenario is ridiculous and far-fetched. First off, the current evidence suggests that Wall Street is incapable of predicting that the sun will come up tomorrow, much less foreseeing a major meltdown two years in advance of its occurrence. Beyond that, I'm sure that there is no way that the Secretary of the Treasury could possibly be so utterly treacherous, so completely perfidious. Still, I decided to check out the oath of office that is taken by the Secretary of the Treasury, just to see if Hank has any wiggle room:
I, Henry Paulson, do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.
Basically, as long as Paulson doesn't endanger the Constitution, he seems to be in the clear. On the other hand, some people are already claiming that Paulson's bailout will do just that (and they aren't all wingnuts like Lyndon LaRouche). Senator Christopher Dodd, for example, argued that the bailout puts the Constitution at risk. By exempting the Secretary, a member of the Executive branch of government, from Judicial and Congressional review, the bailout would, essentially, make him more powerful than the President and would cede him power that usually resides in Congress. According to some scholars, this directly contravenes Article I of the Constitution.
Presumably, Secretary Paulson is unaware that he may have recently attempted treason, but I'm still blown away by the scope of the powers that he requested. What, I wondered, could possibly inspire him to pursue this sort of Julius Caesar-style power grab? And then I read this piece on Bloomberg, which points out that the majority of the bailout funds would go to investment banks that have written down the value of their holdings, a category that, of course, includes Goldman Sachs. Goldman Sachs, in case you forgot, is the company that paid then-CEO Paulson somewhere in the neighborhood of $700 million in salary, stock, and bonuses.
Simon Cameron, a famed financier and politician, once defined an honest politician as "One who, when he is bought, will stay bought." By this standard, Secretary Paulson may be among the most honest men in Washington.
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Reader Comments (Page 1 of 1)
9-24-2008 @ 3:29PM
Laisseraller said...
Great Article! a talk show host claims an
Economist Wesberry, has a solution to Paulson's $700 billion bail out plan!
http://got700billion.blogspot.com/
http://www.cafepress.com/092308
9-24-2008 @ 3:53PM
gunther said...
We can trust our government to continually do what they are told to do by their benefactors, the Federal Reserve and the multinational corps. Our only problem is that there is no one to standup for us "useless eaters". Maybe it's time to stand up for ourselves. Just say no. That won't help much. It looks like the final scenes of the "The Decline and Fall of the American Empire" are being played out right before our eyes. We have been enslaved to the service of the corporate borg.
9-24-2008 @ 4:22PM
Ray said...
I guess it would seem far fetched if the facts were not so clearly in favor of such a thing. AIG could have scraped up the assets to not need top be bailed out, it has a trilluion dollars of assets , just not liquidity. so a bridge loan or some other thing was totally possible, but not really in the fear and financial panic program, which will force scared Americans to allow this so they will not have economic collapse... or so they believe.....
9-24-2008 @ 4:40PM
Henry Postigo said...
I truly believe as an American citizen and soldier that this bailout plan has other interest in mind. Bailout ok! Top executives getting still the top cream of the pie? NO. I cannot believe this SOBs are still trying to protect themselves after all the damage they have done. Don't come to us with " It was not our fault but our predecessors' " That doesn't matter. When I was in Fort Sam Houston, I arrived to my barracks and the first thing they told me was that I was in Phase One again like a solider out of Basic. I asked why, simply because soldiers of previous classes have abused their privileges. So now I was paying for it because of them. Fair enough.
The bailout should be for the people, not the companies because after all. IT'S OUR MONEY!!!
9-24-2008 @ 5:54PM
joseph said...
Not so far featched! Way would Henry leave a job making all that $ to work for the Goverment. Ya right he stants to make more off all us dumasses. We will all pay for it, and like sheep just go along with it. We the People need to take OUR Country back.
9-24-2008 @ 6:24PM
Frank said...
NO bailout, who the hell is paulson? He's just another car saleman. Let the market re-group itself. The housing is a small part of this financial situation. The side deals from wall street are a major part of this situation. I just found out that the government bailed out the carmakers...Are you kidding. This is bullshit! Let the chips fall...
9-24-2008 @ 7:20PM
Ken Narlow said...
Instead of bailout they should be talking jail time. Then watch the dog's run to the woods.
9-24-2008 @ 7:28PM
Wayne said...
The real estate "bubble" was in fact a transfer of wealth from the many to the few and this is the final act in that drama. The drama-queen is in the Oval office and has been moving wealth to the few for the past eight years. I think it is time to say - No more!
9-26-2008 @ 8:51PM
Arba said...
WOW I am so excited to see so many American citizens speaking up for "We the People"! I have often wondered why American's are so patient with government taking better care of themselves and their friends then "We the People" whom they are suppose to be protecting.
Government always protects big business. "We the People" always get to make sure our government officials have more and we haveless!
Whom was watching out for "We the people" while these thugs were padding their pocket over the past 8 years?Okay last 2 years, How about the last 6 months?OH they were looking the other way, I got it! Government has been focused on helping Wall Street! WE have to help Wall Street! OVer and OVer again... Well ,What about helping "We the People' just once..JUST ONCE!..
I would love some affordable medical insurance for myself and family, vehicles that actually save us money, protect our environment and stop making oil companies wealthy for a small start. I bet that money could support medical insurance for ALL of We the People!
Remember Enron! Same old song!
I wish We the People the best of luck! Thank you for listening, these past 8 years have been very painful.