Paulson is only the latest of the foxes guarding the henhouse. Harvey Pitt was Bush's initial SEC chairman. What did he do that was noteworthy? He pushed for the exact same accounting deregulations that Arthur Andersen and Enron used with their illegal financing and creative accounting when Pitt was a lobbyist. When the ensuing investigation began Pitt begged for our understanding and feigned his sorrow at unfortunately being forced to recuse himself from the investigation. Paulson's initial, but unoriginal move in this economic crisis was asking for deregulation from the selfsame SEC from his cohort in crimes.
The article "Should Henry 'The Fox' Paulson Guard the Henhouse?" predicted that we would scammed as it states "On Tuesday, October 7, a group of CODEPINK pranksters pranced in front of the New York Stock Exchange. One, wearing an oversized papier maché head of Treasury Secretary Henry Paulson, grabbed at the purses of the "chickens." "Give me your money; give me your money," he cried. "You might need a new house, but my buddies and I need new yachts."
Treasury Secretary Henry Paulson started as being the CEO of investment bank Goldman Sacks. Back in 2000 he testified in front of the Security and Exchange Commission lobbying for the SEC to enact a "change to self-regulation" for Wall Street. He also urged them to change the "net capital rule" which governed the amount of leverage investment banks could use. The net capital rule was indeed changed in 2004, and is now blamed for the investment banks' collapse.
The banking community--as other businesses do, acts in unison, and when Goldman Sacks in 2001 started to lend money to mortgage lenders the other banks followed his lead-which naturally led to a housing boom of subprime loans.
In a September 11, 2003 BUZZFLASH INTERVIEW at click here, Paul Krugman stated "There is no economic policy. That's really important to say. The general modus operandi of the Bushies is that they don't make policies to deal with problems. They use problems to justify things they wanted to do anyway. So there is no policy to deal with the lack of jobs....Now if you ask what do the people who keep pushing for one tax cut after another want to accomplish, the answer is they are basically aiming to create a fiscal crisis which will provide the environment in which they can basically eliminate the welfare state."
"Fiscal crisis...eliminate the welfare state"--that's about right and others have been predicting that big bro 43 would ruin our economy almost from the very beginning of this lazy lout's term as Reagan attempted to do. The plan is to start wars and pump money into the military away from the social welfare network. No GOP goon was ever radical enough to considered starting a war without raising taxes. Who would be that foolish, besides raising taxes during wartime makes it a nationwide problem not just the military's. And big bro 43 even changed that. It is our reservists who are bearing the brunt of the war along with the hugely inappropriate privatization of the military.
So, we knew that there would be an economic crisis, but what did the Secretary of the Treasury--the man who point into motion all of the problems we are now facing, do? He did nothing when the subprime mortgages starts tanking in 2007 or when more mortgages default throughout spring of 2008.
Then September, 2008, Paulson announces that the U.S. economy will collapse unless the Congress passes his $710 bailout to buy the bad mortgages so banks will begin lending again. Back on September 23rd Paulson said "We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. That's the role of Congress, that's something we're going to work on together. So if any of you felt that I didn't believe that we needed oversight: I believe we need oversight. We need oversight."
Imagine the hubris of that lie. He planned on lying to Congress and the US and he knew his plan would only give his cronies more of the US taxpayers money without addressing the economic crises because he knew these leaders of the banking company. He was one. He knew they'd hoard the money and acquire other banks. That is what he would do. Besides-don't you think he ran the idea by his cronies before, during and after the bailout?
Simply deal with external reality not a "three-page legislative outline" with no accountability for the benefactors. Look at Paulson's bailout in comparison to that of the British government's. Paulson's bailout throws away money to banks while only recommending they give loans while the British government mandated lending as a requirement for getting the capital. With this idiotic arrangement what would Paulson and his chums predict would happen? Investors for good reasons wouldn't trust the financial system and wouldn't invest. The stock market would continue to fall. People would continue to lose jobs and homes by the hundreds of thousands. Banks are encouraged to be active on the acquisition side or opportunistic side for some banks who are still struggling which might result in smaller banks becoming ancient history. We have legislation against the formation of monopolies, but we are encouraging banking monopolies. It does not matter that the policy seems doomed to failure as long as the core feature of any GOP policy can be realized-that of the top 1%, the oligarchy, the blue-blooded chums, the "expletive deleted" skim their cream off the top. (Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
Banks are given money and have no accountability. I thought that accounting was standard at banks, but in big bro 43's world only the rules he wants to adhere apply.
On September 23rd Sen. Tom Carper (D-DE) asked the panelists whether they would support the creation of a new Inspector General post to oversee the program. All of them -- the director of the Federal Housing Finance Agency, the chairman of the federal reserve, the chairman of the Securities and Exchange Commission, and Paulson -- supported the move, though Paulson said he didn't think they could "design it here today."
So for six weeks Paulson did what he wanted. Big bro 43 knows about the economy-remember he was the CEO-in-chief? He knows where the off shore bank accounts are and Paulson must have slid some W's way. 6 weeks later the White House finally named a special inspector general to oversee the Treasury Department's $700 bailout, nominating a New York federal prosecutor named Neil Barofsky. The move comes a day after the Washington Post complained in a Page 1 story that six weeks into the bailout, no action on oversight had been taken.
Where did this happen before? In the Iraqi reconstruction huge amounts of money were thrown away as the article "Outrageous! The $9 Billion Heist -- While our troops are dying, crooks are getting rich on the war." at click here showed how the W administration lied to us and then stole from us. It gives an example that is analogous as the article states "If you have $82 million to spend on contracts to help rebuild war-shattered Iraq, you might not want to put it in the hands of a convicted felon. But that's just what the U.S. military did in 2003.
When Robert Stein was hired to serve as a key administrator in Iraq for the U.S.-led Coalition Provisional Authority, apparently no one noticed he'd had a 1996 conviction for credit card fraud. And so Stein was assigned to dole out lucrative government contracts as part of the reconstruction meant to help bring democracy to Iraq and let U.S. troops come home quickly.
