Three Reasons Why We Don’t Trust Paulson

By overwhelming numbers American people do not like the bailout strategy being championed by Secretary of Treasury Henry Paulson. This is partly because we do not understand much about the convoluted chaos on Wall Street and partly because we do not understand much about the proposed legislation.

But there is another reason we dislike what the authorities in New York and Washington have proposed: we do not trust Henry Paulson and his cohort of economic advisors.

This dirty river of distrust upon which Paulson hopes to float his bailout boat arises from three contaminated streams. The first stream runs out of the camp where Paulson and his people have spent their entire lives. Prior to becoming Secretary of the Treasury, Paulson was a 34-year employee of one of the largest, strongest financial firms on Wall Street—Goldman Sacks. It has been widely reported that he was paid $600,000,000 for his five years of work as CEP of the company.

In other words, Paulson profited handsomely from an economic game deeply tilted toward Wall Street executives and tilted away from Main Street workers. When the Main Street workers by the millions began loosing homes and jobs, Paulson and his pals hardly blinked an eye; but when Paulson and his pals began loosing credit and profit, they described their situation as the brink of worldwide chaos. This focus on the troubles of Wall Street rather than the tribulations of Main Street sent a strong signal of self-interest to the working public. We doubt that people who profit so much for a system can be counted on to reform the system.

The second source of toxic water runs uphill from the other end of the Axis of Incompetence, from the political sinkhole known as Washington DC. Paulson was hand-picked by the President of the United States to articulate the economic policy of the present administration. Paulson thus inherits the profound disgust that 70% of the American people have toward the White House.

Before Paulson speaks even one word, his message is suspect—simply because it emanates from a place and a philosophy that has had nothing but failure: war, justice, disaster relief, international affairs. Why should the ordinary American think the White House and those spokespeople it recruits—such as Henry Paulson—should fair any better when it comes to economic policy? We are not dumb.

Third, Paulson and his people in New York and Washington have already offered us water unfit for human drink. They proposed a solution that was so badly conceived and so badly received that it has damaged, perhaps beyond repair, their credibility to craft an economic relief plan.

In other words, Paulson dumped enough of his own economic sludge into the pipe line he proposed for the rest of us that it has been both undrinkable and also un-cleanable. Politicians are hard at work even as I write these words hand pumping the filters that they say will eliminate the waste and leave only the water. We don’t think it will work.

So there: three contaminated streams: personal history of economic collusion on Wall Street, political history of widespread failure along the Axis of Incompetence, and legislative history of lost opportunity to do the job right the first time. We have reason to distrust Paulson and his economic pals.

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6 comments so far

  1. John on

    When we talk about the financial industry and the beginning of the downfall, we must go back to 1998. This is when the Clinton administration and congress, passed a sweeping bill that deregulated our financial system. We can not place all of the blame on the Bush administration and Paulson. The deregulation of the financial industry setup the environment that we are now living with. Check out this site: http://www.wsws.org/articles/1999/nov1999/bank-n01.shtml

  2. Greg Magruder on

    I have equal distrust and disgust of Congress. Both the administration and Congress were asleep at the wheel when all of this was going on. The agencies that had oversight of Wall Street and the banking industry did not have the courage and perhaps the competence to reign in the specualators. When credit card companies can charge 30% interest, home equity loans are encouraged so the average homeowner is mortgaged to the hilt, and the government encourages unsecured mortgage loans, it only reveals the utter disregard those who know better have for the average American citizen. It is time to clean house and seriously consider something other than a two party system of government that is actually two sides of the same coin. We need fresh ideas and new leaders. For an alternative approach to the current crisis see http://www.daveramsey.com/media/pdf/the_common_sense_fix.pdf

  3. Rick on

    I totally agree with Dave Ramsey’s fix it plan, and I don’t mind the rich getting richer, as long as I don’t get poorer.

    I don’t understand why our elected officials can’t come up with a similar plan that benefits everyone, not just the Wall Street crowd.

  4. Camille Haggard on

    I am in agreement as to the distaste for Paulson and Wall St. However, in 2005 when the Bush admin came before the Barney Frank com. concerning stopping the growth and out of control practices of FM and FM the democrat controlled com. refused to look at the new regulations and Barney actually said, “The Bush Admin is more concerned with financial security than housing.” He didn’t care that people couldn’t pay the mortgages they were assuming. Now he has the gall to claim no responsibility for this fiasco. There’s plenty of blame to go around.

  5. spiritualway on

    I don’t know whether to laugh like hell or just “pile on” with my slant to all of the above (including the post)!!!

    After adding another $100 billion+ in earmarks (thats for us), that bill went right through both houses of Congress and was signed by the President in record time!!!!

    ENJOY!!!!!

  6. Rob McPherson on

    Unfortunately, it’s worse than you think. We have a government that’s of the Congress, by the Congress, and for the Congress. Our two party system has become two wings of the same bird of prey. We are the prey.

    “Individuals working for Wall Street finance, insurance and real estate companies and the companies’ political action committees have contributed more than $47 million to the campaigns of Senator Obama (three of top five sources) and Senator McCain (top five sources), both of whom voted for the bailout.

    More to the point, Wall Street has contributed more than $1.1 billion dollars to congressional candidates since 2002. Nine of the top ten House recipients of Wall Street largesse, who each received an average of $1.5 million, are on the financial oversight and taxation committees.

    Even more telling, the bipartisan Congressional “leaders” most responsible for pushing the bailout through Congress, Senators Dodd and Gregg and Representatives Frank and Blunt have taken almost $20 million from Wall Street sources during the last 20 years. Dodd recently received $6 million in contributions during his presidential primary campaign, and Frank has collected $720,000 this year.”

    http://globalresearch.ca/index.php?context=va&aid=10433


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