This is interesting, and scary.
Forget Washington, forget Goldman: Our hero has global ambitions
Henry Paulson: Harvard M.B.A., 1970. Then a staffer at the Pentagon and with Nixon. Joins Goldman in 1974. CEO in 1999. Paid $38 million in 2005. Federal ethics laws let him sell $484 million in Goldman stock tax-free when he left. Net worth, about $700 million.
While baffled Republicans wondered why Hank pushed the panic button, his panic set off a scene rivaling "Jaws." Washington is run by 42,000 lobbyists. They smelled blood in this $700,000,000,000 ocean. Add my bank! Foreign banks! Hedge funds! Money markets! S&Ls! Auto loans! Bankruptcy relief! Sharks on a feeding frenzy.
I saw that: car companies wanted more, after getting $25 billion in loan guarantees just days earlier.
Yes, he saw this crisis coming years ago. Bloomberg Markets reports that back in August 2006 Paulson spoke to the White House staff at Camp David: "Paulson held up over-the-counter derivatives as an example of financial innovation that could, under certain circumstances, blow up in Wall Street's face and affect the whole economy." Yet he withheld this information from America, didn't tell us till his recent panicky flip-flop.
Isn't that some breach of fiduciary duty?
Paulson owes a lot to Goldman; 24 years almost made him a billionaire. An analyst told Bloomberg News that Goldman and Morgan Stanley may be the two "biggest beneficiaries" of the Bailout Bonanza: They've already "written down the value of their holdings." So they have much junk to dump on taxpayers, thanks to Paulson their, "inside man." And he wanted no oversight. With several former Goldman staffers working with him at Treasury now, you wonder: Did they give their old buddies early hints of the bailout?
This is difficult to believe, but, not implausible.
Main Street may be overlooked, but not old friends like Warren Buffett. Earlier as Goldman's CEO derivatives made Paulson one of the chief architects of today's "Economic Pearl Harbor," as Warren Buffett calls it (a strange comment since back in 2002 Buffett warned derivatives were "weapons of mass destruction").
Buffett is the object of a cult of personality.
Here's another sneaky script subplot from The Huffington Post: First Goldman pays Paulson megabucks, then "lends" him to Bush, a virtual Trojan Horse. Now Paulson's preparing the way for his grand march back into private life by throwing billions of taxpayer dollars to his old buddies. So Goldman gets billions, and taxpayers get a pile of illiquid junk. Scam? Yes, and a classic case of moral hazard: Freed of risky liabilities, Wall Street dances off into the sunset, laughing at the stupidity of the American taxpayer. If Paulson did return to Goldman, his future bonuses would likely more than double his net worth. In short, his 30 months in government will undoubtedly make him a billionaire while costing taxpayers a trillion in new debt as a result of his inaction and incompetence.
Where will Paulson wind up after January, 2009? McCain said just a few weeks ago that he'd think about keeping him on. I don't think he's saying that now.
Some things never, never change, no matter who's president. America is run by 42,000 lobbyists, not our 537 elected officials. And Wall Street's the biggest political campaign donor. For example, USA Today reports that since 1989 Christopher Dodd, chairman of the Senate Banking, received $43 million. Barney Frank, chairman of the House Financial Services Committee, got $7.8 million. No wonder they voted for Paulson's Bonanza.
$43 million in campaign contributions in 20 years? That is a lot of money. But the figures that really catch my eye: 537 elected officials versus 42,000 lobbyists, some of whom are just-departed public officials. 78 lobbyists per official.
No, he's not going to stay. He's already the de facto president, an uncrowned king, the messiah of global finance. He raised hundreds of billions to "save" America and the world from collapse. So forget Goldman. What then? He's a former president the Nature Conservancy, a $5 billion global environmental charity. Bloomberg reports he's already working on a "$10 billion international fund under the auspices of the World Bank that would help emerging-market countries avoid investments in heavily polluting infrastructure." He's even lined up "$6 billion in informal commitments [and] Congress is considering the administration's request to kick in $2 billion." Get it? Not only is he bailing out his old buddies. Not only is he preparing for his return to private wealth. But he's also finagling more taxpayer money for his pet cause. All while being paid to work for U.S. taxpayers. Next, a new Paulson Global Bank Holding Corp.? An IPO? You bet, in 2009. But not retail, probably a private placement with $25 billion minimums.
Wow! It seems over the top, but, not to be discounted. Just who is this guy, anyway?