Tuesday, June 9, 2009

Paulson Speaks

The man who started one sector of madness, former Treasury Secretary Henry Paulson, has issued a statement hailing the fact that his crony buddies at Goldman Sachs and JP Morgan are able to pay back TARP money:

Today’s announcement confirms that the TARP programs, in conjunction with the FDIC guarantee and the Fed’s liquidity programs, worked to stabilize our financial system. The recovery of our financial system is underway, but the road ahead is not short. Taxpayer investment in financial institutions is anathema to me – only the dire circumstances last fall forced us to take such an unprecedented step. I appreciate the participation of all the institutions that,by accepting TARP capital, helped to stabilize the financial system and prevent a much worse economic collapse.

Repayment of TARP capital investments is only the beginning of unwinding the broad array of temporary programs in place to support the financial system. The recovery of our capital markets must remain a top priority, as some sectors are still not performing as normal. I look forward to the day when our system and our economy are sufficiently strong that we can end the FDIC debt guarantee, close the Fed’s liquidity programs, and resolve the permanent status of Fannie Mae and Freddie Mac. When the temporary support programs are ended and the federal regulatory architecture is modernized we will have met our responsibilities to the American people of restoring a sustainable financial system through which capital can flow seamlessly to support a vibrant and prosperous US economy.
Paulson made no mention of the fact that his chosen few were provided huge infusions of money, while the likes of Bear Stearns and Lehman Brothers were left to die on the vine.

Note that Paulson appears up to speed on Obama's plan whereby the "federal regulatory architecture is modernized".

Modernization, of course, means putting roadblocks in front of any firms attempting to usurp the power positions of J.P. Morgan and Goldman Sachs.

BTW, the only reason this TARP money is being paid back is that the J.P. Morgan cronies and Goldman Sachs cronies couldn't figure out a way around the public demand that their salaries be controlled. Once it was clear that the political headwinds were too strong to buck, and TARP money recipients would have to deal with salary oversight, JPM and Goldman camped out at the Treasury to give the money back. Afterall, what good is money that is going to limit what you can put in your own pocket?

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