Sunday, November 02, 2008

The Worst Government Money Can Buy....

Whatever the outcome on Tuesday, let's hope it's at least marginally better than what we're continuing to suffer under Bush. We've seen the harm caused by Bush's many incompetent appointees, and now we're being, in essence, robbed by one of his few competent appointees.
The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.

These are dynamite facts that demand immediate action to halt the bailout deal and correct its giveaway terms. Stop payment on the Treasury checks before the bankers can cash them. Open an immediate Congressional investigation into how Paulson and his staff determined such a sweetheart deal for leading players in the financial sector and for their own former employer. Paulson's bailout staff is heavily populated with Goldman Sachs veterans and individuals from other Wall Street firms. Yet we do not know whether these financiers have fully divested their own Wall Street holdings. Were they perhaps enriching themselves as they engineered this generous distribution of public wealth to embattled private banks and their shareholders?
Meanwhile, bailout money is being used to fund astronomical "bonuses" for the employees who ran their companies into the ground. In the U.K. they saw that possibility coming, and thus forbade it as part of their bailout package. Here Paulson saw it coming as well, and made sure that the recipients of taxpayer $billions had a green light to shovel taxpayer money into their pockets.

I can only hope the next President tells companies like Goldman Sachs, "We appreciate that you needed to fritter away the bailout money we gave you in order to pay bonuses to the people who bankrupted you. And don't worry - we're still here for you. Yes, if you need an additional penny of taxpayer money to stay afloat, we'll help you be taken over by a competent institution in the manner of Merrill Lynch, or help you enter the bankruptcy process in the manner of Lehman Brothers. Feel free to ask, any time."

1 comment:

  1. Then there's Detroit, left with no bailout. Sort of.

    They'll get loans to create fuel efficient vehicles, accept them as reimbursement of past expenses, then use the money for whatever they want, be it a GM-Chrysler merger, or big bonuses for Ford executives.

    I hope I'm kidding about the Ford bonuses, but you can't say there isn't a precedent....