According to the Washington Post, after the initial defeat of the bailout package in the House last Monday, Treasury Secretary Henry Paulson went to see President Bush in the White House. The Post reports that President Bush asked Paulson about "Plan B." According to the Washington Post, Paulson told Bush "there is no Plan B."
Of course this was not true. Paulson could have easily designed a bailout plan that was centered on the direct infusion of capital in the banking system, as was suggested by George Soros in a Financial Times column later in the week. Virtually every economist who has written on the bailout argued that a direct infusion of capital is a far more effective approach to dealing with the financial crisis than the approach outlined by Paulson.
Clearly Paulson had not invested a great deal of time in crafting the initial proposal he submitted to Congress since it was just three pages and few of the details of the plan had yet been decided. This means that Paulson easily could have switched gears and developed a plan along the lines advocated by economists.
This alternative approach almost certainly would have passed by an overwhelming majority in both houses of Congress since it could easily be structured in a way that ensured that the banks were not being rewarded for their incompetence at the taxpayers' expense. This was a major factor behind the public's outrage over the bailout.
If the Post accurately described the meeting between Paulson and Bush (there is no source given for this account), then Secretary Paulson badly misled President Bush on the most important economic decision of his presidency.
It would be a good idea to pull the passports of Bush, Cheney, Paulson, et al so that they can't flee to that patch of Paraguayan former air force base that G.H.W Bush purchased a few years ago. The whole lot of them should be reporting to work in 2009 in orange jumpsuits at the Leavenworth Involuntary Hospitality Resort as part of a chain gang.
some semblance of economic stability and fiscal responsibility. Meanwhile, this campaign of economic terror would grease the wheels for the Neo-con agenda. Am I too cynical/crazy?Not enough space here to flesh this out more, but I'm sure others will fill in the blanks and infuse other perspectives.
Incompetent Businessman,... Incompetent Chief Executive of our Country,... maybe we should just tell him to get his ass to Crawford for the duration and stick to cutting brush at the Ranch. He seems to do that OK,... and even if he screwed up - at least he would only hurt himself doing that.
Why doesn't the WP name sources?
SAY THEY 'HAD TO DO IT FOR THE SAKE OF THE REPUBLICAN VOTE'!!!
WHAT BLATENT DISHONESTY!!
Misled BUSH? Bush has run his whole presidency with one goal. TO MAKE MONEY FOR HIMSELF AND HIS BUDDIES, with HIMSELF getting the biggest SHARE. If Bush is looking a little "peaked" these days, it's because he didn't make as much as Cheney and some others LIKE Fuld.
Bush: "I had a credit card once but I only used it to buy Jack Daniels...that reminds me...do they really keep all that money in the banks...how do they fit it all inside the building..."
Paulson: "I really need you to focus on this - we have to decide how to find a solution that they banks will start lending to each other again..."
Bush: "We can just print more money and give to the banks."
Paulson: "Forget it - I'll do this on my own."
1) According to WH Spokesman Tony Fratto the Administration had been working on this Bailout Plan for months, but produced just 3 pages of an absurd request for a blank check for $700B.
2) And about that $700B figure -- 'It's not based on any particular data point,' a Treasury spokeswoman told Forbes.com Tuesday. 'We just wanted to choose a really large number.'
So there you have it, a breakdown of the largest bailout in U.S. history featuring former Goldman Sachs CEO Paulson. Is there anyone in the world who can defend this Administration?
I think Paulson is obviously corrupt and a just a really bad person but he is also leaving soon and someone new will replace him. That is the part I don't understand. He can give GS a few billion before he leaves but he can't be sure the next person will be willing to do that.
Badly enough to have committed a criminal act? Does that mean that eventually they can throw his ass in jail?
Speaking of jail, Ken Lay of Enron supposedly died before he reported to prison. Did anybody ever see the body?
All we DO know about this, is that they are taking $850 Billion right off the top before the REALLY BIG changes come tumbling down on our heads, and there is nothing we can do...we're already out of gas.
They wouldn't be trying to incite some civilian unrest so they can try out that new Population Control Division of the US Army "OVER HERE' on our soil, would they?
Well time marches on, so we know soon, no doubt.
Canada, are you ready for a refugee population?
Mexico, is it really cheaper to live there?