Hank Paulson Fleeced the American Taxpayers in Order to Save Them

Hank Paulson is deeply empathetic about the American people's plight; absorbing intergenerational levels of debt to cover the costs of unbridled greed and recklessness on the part of Wall Street. Thus, while being raked over the coals at a congressional hearing for his role in the near destruction of the global financial system last fall, and the $700 billion TARP Wall Street bailout package he was able to pull through a terrified Congress as the price of avoiding financial Armageddon, the former Treasury Secretary had this to say about the plight of the American people: "The tragedy is they didn't create the problem. But they would be the ones that would pay the greatest penalty if there was a collapse."

Paulson's statement, while superficially sympathetic to the injustice of the collective innocent paying for the sins of the few, is in substance the manifestation of a disdain for the broad masses that borders on contempt. In effect, he is reiterating a posture that has been consistently maintained by the "masters of the universe" since the onset of the global financial and economic crisis; privatize the profits (especially after radical deregulation) but socialize all losses.

Since last fall, trillions of dollars have been added to the U.S. national debt through TARP, fiscal stimulus packages made necessary by the financial collapse, and other forms of direct and indirect government and Federal Reserve aid to the financial sector. All in the name, we are told, of the American people who, it is claimed, would be subjected to even greater debt and future taxation if Wall Street is not bailed out. The old concept of "moral hazard," still in force when Paulson allowed Lehman Brothers, a competitor of his former stomping ground Goldman Sachs to die, was swiftly ejected when AIG faced bankruptcy.

Now Goldman Sachs is declaring a record quarterly profit, and arrogantly boasting of the billions of dollars of bonus payments that will be dished out to its employees. What the firm that Paulson used to lead as Chairman won't divulge is how much of its profit was due to $13 billion it received in payment from the U.S. taxpayer, using AIG as a pass-through for the payment. Neither will this Wall Street entity make public the impact of tens of billions of dollars in low-interest, taxpayer subsidized loans it now has access to, once Hank Paulson and Fed Chairman Ben Bernanke changed the rules, and allowed investment banks such as Goldman Sachs to magically transform themselves into bank holding companies.

If Hank Paulson symbolizes the incestuous relationship between Wall Street and government, his attitude reflects how insignificant the general public has become in the minds of those calling the shots and making the critical policy decisions in the wake of the worst economic crisis to afflict the American people since the Great Depression. But when those who caused the disaster are spared the ravages of the unwashed masses who are now being corralled into ever-growing unemployment lines, and instead are basking in the illumination of near record bonus payments, their callousness can at least be understood.

The question that Hank Paulson and his ilk may ultimately be compelled to answer is why should the American people be eternally grateful for their "noblesse oblige" when it becomes crystal clear to them that they have been dispossessed of much of their future as the price for bailing out Wall Street and its architects of our current economic and financial doom.

Follow Sheldon Filger on Twitter: www.twitter.com/EconomicCrisis

Comments

[ejhickey]

Larry Kudlow praised Hank Paulson on hi 7/16/2009 show and gave Paulson some type of award for his alleged saing the US economy. Quote form Kudlow: "Paulson deserves a congressional medal of economic and financial honor, not this ridiculous witch-hunt­ing-and-fi­shing expedition­."

Kudlows latest gimmick is to appear at the end of his show at a podium that imitates the Presidents and has some type of Seal on it . then he goes into a rant and on this day made the above quote and present ed the award to Paulson (in absentia) This is all done on the CNBC set with only Kudlow present. It looks strange and hokey.

Point is - Kudlow thinks Paulson is a hero and that he and Bush saved the economy and the financial system.

[csmith14]

One of the reasons for Goldman's current success is the demise of Lehman Brothers. Henry Paulson decided to let this firm go, no bailout for them! This removed a major competitor of Goldman and allows them to significantly increase market share.

This decision was made by the former Chairman of Goldman. Kind of an obvious conflict of interest.

Attorney General Holder should investigate this decision. Does Paulson profit from Goldman's increased profits in any way? Does he still have stock, business links to Goldman executives, etc? When an action does not pass the smell test it is worhth looking at.

[blaising]

Trading OP's money is a sin. God will be their judge.

Pray for them...

[MakeAWish]

As with Bush, Obama's house has ex Goldman Sacs employees in high positions of power, who continue to carry their torch. Goldman Sacs owns this country.

[steppenwolfsayshi]

Kill the zombie banks!
They are eating your money and killing the healthy banks!

[Mogamboguru]

Hank Paulson, Ben Bernanke, Larry Summers and Timothy Geithner - the "Economic .H.i.t-Men­" of Wall Street, have fully achieved their terminal goal - they:

a. Have saved Wall Street's .l.o.o.t.i­.n.g. scheme from collapsing while sticking the American tax-paper with the bill;

b. have saved their masters while, at the same time, destroying their competition;

c. have avoided an effective scrutiny and oversight over their deals by the Congress;

d. have STRENGTHENED the position of the Federal Reserve in this context;

e. have enriched their masters during the deepest of al crisis possible and,

f. while doing all this, have even achieved to make the people of the USA THANK them for being looted!

If THAT ain't REAL achievements - than what are...?

[rf-hawaii]

Paulson is far worse than Madoff, but will likely never see the jail cell he deserves.

[justobserve]

He is one of them. He is their mole in the government!

[StephenJK]

And there are many more serving under this president. All pulling strings and trapdoors.