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.