Amnesty for Wall Street and Questioning Paulson's Motives

The government has made some stunning admissions over the last couple of days. First, the Bush administration admitted that they brought the world to the brink of global economic collapse. They said they desperately needed the help of Congress to authorize a $700 billion bailout. Otherwise their governance would lead to a complete financial disaster. Is anyone going to be held accountable for that?

Before they get any of the money, I would like George Bush to come out and say, "I'm sorry. Our governing philosophy was wrong and it led to this debacle." That might seem petty to some in light of the weighty issues at hand. But actually it isn't; it's very important. If we want to avoid this type of colossal blunder again, we need to know why it happened. If Bush (the government) is going to get the money, I need to know that he (they) understands what he (they) did wrong.

Secondly, the response to this situation has been as horrible as the Hurricane Katrina response. It's just that it's about finance, so not as many people easily understand it. Think about it. Bear Stearns melted down months ago. They saw this hurricane coming from a mile away -- and now they introduce a panicked, three-page bill to give the Treasury Secretary almost complete power over $700 billion.

They didn't have time craft better legislation than that? Of course, they did. Either they wanted this kind of unchecked authority and pretended there was a sudden panic or there was a slow-motion Hurricane Katrina like response as they dawdled along with no plan until it got to be too late. I honestly think it's the latter. I'm now convinced they're not bright or competent enough to be that devious.

Let me re-emphasize that point. The $700 billion bailout is wrapped up in a three page bill! That is astounding. That means there are almost no checks on it and is incredibly vague. Any chance that some finance companies take advantage of that vagueness to unload all of their bad loans and contracts on us? Any chance that vagueness leads to lobbyists getting all that they want out of this while the American taxpayer gets screwed?

But we are told we must not question this bailout, because terrible danger lurks above us. It is imminent, we must act now. In fact, Bush said, "The risk of not acting would be far higher." I feel like I remember that from somewhere? Oh yeah, it sounds a lot like Iraq.

Who in their right mind would believe the Bush administration with no qualifications? Who takes their word for it? They tell us that they have secret evidence of an imminent global economic collapse. Really? You'll excuse me if I'd like to see that evidence.

It's not that I don't appreciate the seriousness of the situation. I understand that many financial companies were in a lot of trouble and I understand how that can affect the whole economy. But remember they told us earlier that if one of these giant financial companies went bankrupt, it would be the end of the world. Then Lehman went under and the world didn't end.

The stock market went down but it didn't come anywhere close to collapsing. Remember Nasdaq lost 75% of its value in the beginning of this decade, and we still survived. What I am not convinced about is that there is evidence of a worldwide financial collapse. And until about a week ago, apparently the Bush administration was not convinced of that, either. Until someone said the magic word - Goldman. The minute Goldman Sachs was put on the board of possible companies who might go down next, panic set in.

Now, let me do something that is forbidden in polite Washington circles - question the motives of Henry Paulson. For those of you who don't know, Hank Paulson was the CEO of Goldman Sachs before he became the Treasury Secretary.

Notice that this catch-all financial bailout was put together the minute Goldman Sachs was put on the list of companies that are in trouble. I don't know if Paulson has all of his money out of Goldman. Is he really all liquid? None of it is tied up in some way with the company he used to lead? I'm asking because this could be highly relevant. Any reporter worth their salt should be asking this question, though none have as far as I can see.

Even if Paulson is completely out of Goldman financially, how many friends does he have working there? How much is he personally invested in the success of his old company? How much did that motivate him to create a giant bailout plan right before the mess got to Goldman, and not a day earlier? If Goldman was in the position Lehman was, would he really have let it go under?

Finally, it must be pointed out that this is a giant amnesty program for Wall Street. We wash away all of their mistakes. So, the next time the Republicans come after illegal immigrants, the lowest in the worker totem pole, we should remember what they did for the highest in the worker totem pole. The richest and most privileged people in America are about to get a general amnesty for all of their wrongdoings. Will the poorest and least privileged?

Unfortunately, we all know the answer to that question. So, don't ever let them scapegoat the poorest workers in America again after they just gave amnesty to the richest.

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Comments

[carl99e]

I have to agree with the fellow below that Hank Paulson did answer questions like a contestant in a beauty pageant. Lots of fluff but little in the way of information or substance.

[carl99e]

I heard a lot of good questions from both sides of the aisle and some excellent suggestions. Unfortunately I did not hear many answers. Actually few questions were addressed with proper answers.
I would rate Hank and Ben with one C+, a lot of D- , and mostly F's. Head of the SEC did the best of the lot. Ben seemed out of his element when it came to Wall Street and he said as much.
What we never heard was: What was/is the model that was used to arrive at $700 billion. Sen Chuck Schumer made the best suggestion that this new entity start with, say 150 Billion and then after review go from there. Hank, didn't go for it. And here I thought beggars can't be choosers.
Folks I am a day trader and there is a lot of money around. Paul Krugman got it right: Cash for Trash!!

[BP1]

Thank you, Cenk! I've read dozens of articles about the current fiscal crisis, and this is one of the best. It concisely cuts through the clutter and spin, and that's very much needed right now.

"We the people" were screwed a long time ago by the wealthy oligarchs who control our country, and this is merely a continuation of the abuse. After they've had their cake (our cake, actually), they want to eat it, too, and not gain weight. The people who got us into this mess and who are making our children and grandchildren suffer for their selfishness want to avoid accountability and consequences. More than that, they want to avoid them so that they can do it ALL OVER AGAIN!

I've watched "businesspeople" like these for enough years to know that as one well starts to dry up, they're already looking ahead to their next score. Whatever enriches their balance sheets, regardless of who loses or gets hurt in the process. It's sick, especially considering that raising all boats would result in a considerably better world for everyone in the end.

Keep up the great writing! We need your words now, more than ever.

[jmpurser]

Very good point that this "emergency" that we have to rush to deal with became inevitable months ago. Either we're handing $700 Billion (minimum) to people who couldn't read the writing on the wall or we're giving that money to con men and hoping for the best.

[schatsie]

We are giving money to the GAMBLERS if we do this bailout....

We need jobs, we need universal healthcare, we need safe neighborhoods, we need decent housing, we need good education to catch up with the other developed countries, we need good roads and mass transportation..

These people gave the money away without even doing credit checks,,, How about paying some money to me for a false bad debt....

[schatsie]

I am listening to Paulson testify and he sounds just like Palin..

Palin says God wants us to Drill, to build a pipeline, to build the road to nowhere, to support the AIP.

Paulson, says 'Trust me' ' in my belief' etc...Nothing factual at all, just give him a blank check and everything will be just fine until he needs another blank check..

And I am still getting Credit Card Solicitations... The foreclosure mess is something else, and we need to be bailing out the taxpayers with targetted and limited offsets for interest and property taxes....instead of the Titans of Wall Street who gave them the money... If I was in Atlantic City and Donald Trump gave me 100,000 dollars without any security, I would take it and run because he is taking the risk of not getting the money back. These banks toook the GAMBLE and LOST, get over it!

[OutragedMom]

Cenk,
If this corporate handout is passed in any form whatsoever, I am calling for a tax strike.

[juliette23]

How can the American public guard the henhouse better? It does seem the fix is in. Try to call your representative lately? Busy or no answer.

[Liberoservative]

No Bailout....

They abhor socialism so much that they won't give us Healthcare and Education rights..

well, no Corporation Rights...... If you are going t bailout anybody then bailout the hard working people of our Nation.................

No Bailout

[TommyMcCarthy]

Be sure and register and vote Republican......from the guys who broght you WORLD ECONOMIC COLLAPSE

Four more years???? not good enough............ THOUSAND-YEAR REICH!!!!

Paulson UBER-ALLES!

tm

[demfriend]

After the great give away of all power and control that this administration ahs asked for int he past there should be red flags the size of DC waving there. To give one man the power and control over our countries economy without any oversight or questions as to why this must happen quickly smells like the worst sewer overfill ever. There is a hidden motive and this is feeling much like there is a terrorist attack happening and the administration is the terrorists doing it. We have had all of the red flags waving along with yellow flags and road blocks and bridges falling for a couple of years while we have been manipulated and falsely assured by the administration and Congress. If this was manipulated in order to show McCain's strengths in the economy and to have him look presidential then we are even more worse off. That our country has been turned againest by the very people we have had to trust to take care of it, us and the Constitution is shameful and tat we must endure more time with this administration in charge of anything should be a warning to not to let anyone associated with it be in charge.

[BMBTHC]

Maybe Colin Powell will come out and show us some pictures of a bunker where the bad loans are kept. Then he'll whip out a vile of ground up money and scare us with it, saying that the dollar is about to be vaporized. Then he'll mumble something about golden shoots from some far off place and we'll know he means business. Be very scared.

[obamanation31]

I am so worried about this. I think the democrat should try to get in return. I am so sick of Bush scaring us into submission.

[DMHendrix]

This post was much better than the rant from the other day. I've been on the phone all afternoon with Senators Obama, Dodd, Biden, Boxer, S. Brown, Clinton, Feingold, Kerry, Leahy, McCaskill, Martinez & Nelsons offices actually speaking to staffers. It should give a little comfort that I have been told that the phone calls and emails coming in from Americans all over this country opposing this unrestricted bail-out has kept them so busy they can hardly leave the phones.

I don't know why but it makes me feel better to know that Americans are engaged in this and not willing to just take another "panick stricken" Bush at his word. He has cried wolf one too many times and now people are finally wising up.

I totally agree with Cenk when he questions the motives of Paulson. He creeped me out on the Sunday shows with his vague B/S. I am really encouraged today to see a lot of democrats and some "fiscally" conservative republicans speaking out against this proposal.

It tickles me a little to watch John McCain trying to dig his way out of this hole with a tiny plastic shovel at the same time he is being critical of Obama. Obama this morning in Wisconsin seemed to be measured and steady in his response and let it be known that he would only support the efforts that helped Middle America, restored oversight, and reinstated stricter regulations.

[HermanBubbert]

This is simply "disaster capitalism". Naomi Klein has explained it all. We are so fscked.

[Dogger]

Why help Wall Street and not desperate homeowners?

Does Bush and his cronies have subprime mortgages? Hell no. Do they have investments? Of course.

[ihavenobias]

Very well said Cenk.