Wednesday, November 12, 2008

Paulson Deserves The Electric Chair

How obvious is Paulson's scam getting? Even mainstream media is figuring it out.

Here's ABC's Dan Arnall on whether there has been, as he puts it, a "Great TARP Bait & Switch:

No Troubled Asset Purchases? Then what are they doing with that $700 billion blank check? They are buying bank stock, not troubled assets. We probably shouldn't call it the TARP anymore. Instead, they are focused on a capital purchase plan (CPP) which is the widely reported $250 billion plan to use taxpayer money to purchase a stake in banks. "By October 26th we had $115 billion out the door to eight large institutions," said Paulson. "In Washington that is a land-speed record from announcing a program to getting funds out the door. We now have approved dozens of additional applications, and investments are being made in approved institutions." When we'll get a list of those dozens of additional applicants which will be getting a piece of the $125 billion in remaining taxpayer case remains to be seen. The original CPP participants were told about the program at a closed-door meeting at Treasury and no minutes have been released on what was said during the meeting.

So, is this the biggest bait and switch in American history? There will certainly be critics who say that Paulson and the Bush Administration were disingenuous when they were selling Congress and the American public on the program back in September. And they’d probably be right. Paulson said today, he knew when the bill was signed the purchase of trouble assets wasn’t the right solution to the problem.

Of course, if you read EPJ, you would also have known about this back in September. On September 25, BEFORE THE BILL WAS APPROVED BY CONGRESS, I titled a post THE BIG LIE: The Supposed Paulson 'Bailout' Plan

At the time Paulson was talking about paying for mortgages at deep discount prices. That wasn't going to help out banks in trouble and in my post I discussed this, and I clearly smelt the rat as I wrote:
This $700 billion may end up in many places, but it doesn't appear it is going to bail out many troubled banks. This could be news to many Americans, since it also appeared to be news to Fed Chairman Ben Bernanke, who is something of Paulson's lapdog. Bernanke tends to follow Paulson's lead and doesn't generally get out of order, but he even barked as he was figuring out what Paulson was up to... As best that can be determined, since Paulson likes to keep everything vague, it appears the $700 billion will act as a feeding trough for all sorts of insiders and wannabes.

I really don't know what is going on with Congress and most other observers. Most really have no clue. Most don't know the Fed tightened money supply all summer, to worsen the crisis, most don't know the Fed has changed the rules so that the Fed Funds rate is not as relevant, and they missed a $700 BILLION inside bank job as it was going on, since most don't know what causes a business cycle or how to deal with it.

Part of the blame has to go to the authors of basic economic texts, for this lack of basic understanding. Some of the blame can be put at the feet of teachers for ineffectual teaching, but a bright student should be able to pick up a Paul Samuelson text or a Greg Mankiw text and get the economic basics, but that is not the case. Congress, the media, the world is filled with nothing but economic idiots. If I was Mankiw, I would not be proud of the fact my texts are the best selling texts, when college students graduate clueless about economics.

But, I digress. Even the Mankiw educated students are beginning to understand the scam Paulson has pulled off. Even if it took Paulson, himself, to admit today, that even he didn't believe in his plan as it was being passed by Congress.

Did he tell Congress this at the time? NO.

Did he go to Congress and say, "I made a mistake in my calculations, and we are going to have to do it differently"? NO

Instead he took the money and passed it out to his crony buddies. Goldman Sachs got $10 billion (after being a bank holding company for all of a week!). The Robert Rubin wing of Goldman (Citigroup) got $25 billion. And it should be noted that before Paulson went to Congress for money, he crushed both Bear Stearns and Lehman Brothers. There was no bailout money for them. The crushing of Bear and Lehman wasn't a bad thing for Goldman. Goldman's chief earlier this week bragged at a conference that Goldman has picked up 100 new clients because of the crushing of Bear and Lehman.

This $700 billion is the greatest heist of all time. If Dennis Kozlowski can get 25 years for bogus "crimes". And, Jeffrey Skilling can get 24 years for his edgy pranks, then Henry M. Paulson Jr. deserves the electric chair, for taking the "bailout" money and bringing the economy to its knees.


  1. Damn you're smooth. Holy cow you have been way ahead of everybody on this.

    I am anxious now for my life to unfold, to see if this was a fluke or if you are this prescient all the time. (I.e. I just started reading you a few months ago.)

  2. I have been following this site for about a year. There is nothing like it. There's more original, on the mark stuff here, than anywhere else.