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Post Claims Paulson Misled Bush on Bailout
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.
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Someone needs to begin a criminal investigation of Paulson. The more this goes on, the more one gets the impression that Paulson is a flim flam artist who is helping his corporate buddies, including perhaps Warren Buffet, embezzle $1-2 trillion out of the U.S. treasury.
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.
A question. Not rhetorical. In light of the destabilized foreign markets, is it at all plausible to speculate that this was a desired effect of our leadership standing idly by(while simultaneously profiting from all their "failed" policy decisions) as our economy tanked? I'm not the type of conspiracy theorist who believes that the "man" has it all figured out, given the number of variables and factors that are potentially uncontrollable. But when you control the means to orchestrate a bail-out should things start to go south, I let the thought enter my brain that the impending economic disaster may have been exploited to further undermine the very foundations of our republic, practice a "scorched earth" policy which will severely hobble the next administration, and bring our foreign competitors down a peg or two: gambling that our relatively stable, and obviously easily-manipulated, population would allow the "government" to restore
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.
It turned out Plan B to the $700B bailout was a $150B surge.
No one was mislead. They planned it that way.
So what's new? Bush has been led around by the nose for eight years. He believes everything Republicans tell him. It's time to get him out and let the Dems see if they can make sense of this mess. We should never have bailed out Wall Street. Even if I have to wait to retire, it was just wrong, wrong, wrong.
I still blame Bush. Paulson may not have given Georgie all the information. But Incurious George should have been on the ball enough to ask at least a few other people.
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.
"If the Post accurately described the meeting between Paulson and Bush (there is no source given for this account)..."
Why doesn't the WP name sources?
Dean Baker is always insightful,straightforward and on the money. I remember when he ran for congress as a graduate student in '88 and almost won...too bad there aren't more like him in Congress now.
DEMS ADDED $150M TO THE RESCUE PLAN AND THEN
SAY THEY 'HAD TO DO IT FOR THE SAKE OF THE REPUBLICAN VOTE'!!!
WHAT BLATENT DISHONESTY!!
The entire BAILOUT is nonsense. Let us see that great invisible hand wipe out the dastardly bastards.
The pork roll was an existing bipartisan bill that would have passed anyway. It had plenty of bacon for both parties. Republicans don't vote for pork. They attach their pork to bills that will pass easily and then vote Nay. That's how Ron Paul can say he doesn't vote for pork yet still be re-elected every two years. They need the pork, but they let the Democrats vote it into law.
NONSENSE!!! The whole IDEA was to keep Bush, Cheney, Bush's COUSIN, and all their friends from losing anything. Fuld ALONE took home $480 MILLION since 2000. That's $60 MILLION a year. I'll Bet Bush's COUSIN got more than that. He thinks that's WONDERFUL because "That's what the MARKET allows", thanks to their thievery of course.
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.
Actually.... They have a system of deception, round robin style. First Bush told Paulson that the "fundamentals of the economy are strong" and Paulson took it from there.
It's not like misleading President Bush is difficult or anything.
Paulson: "I need to discuss something important with you - many banks can't give anyone credit because they still have these toxic assets on their books and..."
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."
Close enough, Nicole.
BINGO....that is exactly how the conversation went.....you painted a very good picture...funny too....I would laugh a little harder but too busy crying over my retirement fund. Guess I won't be retiring anytime soon! Maybe Cindy and Mac can donate a 6pack to me to drown my sorrow!
There is something sinister, reckless, irresponsible and tragically incompetent about this Bailout.
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?
And Paulson just chose someone from GS to be in charge of the bailout although it's clearly a conflict-of-interest and nobody in congress seems to care. Instead they want to talk to the CEO of LB about his bank so they pretend they're doing something.
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.
"Secretary Paulson badly misled President Bush on the most important economic decision of his presidency."
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?
This story seems to be contrived at the WP to give GW Bush some political cover. Secondly, misleading GW Bush is not an overt act.
Yes, it smells like the latest propaganda to cover all their little behinds.
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?
Looks like "Plan B" could've been much more palatable then the $700B "morning after pill" that we were forced to swallow.
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