What if the Public Knew This?
On Saturday, Sept. 27, Gretchen Morgenson of the New York Times reported a remarkable story that may further shake public confidence in the bailout and the man in charge, Secretary of the Treasury, Henry M. Paulson. The Secretary held a top level meeting at the New York Federal Reserve Bank with "the nation's most powerful regulators and bankers." There was only one Wall Street executive in the room, Lloyd C. Blankfein, CEO of Goldman Sachs, the investment banking firm Paulson ran as chief executive before joining the Bush administration.
Discussed at the meeting was the fact that AIG owed Goldman Sachs $20 billion and was about to default. Following the meeting AIG was bailed out to the tune of $85 billion dollars. Paulson's former firm, Goldman Sachs, clearly benefited as a result of the AIG bailout.
How would citizens react to that, were it presented as part of the bailout debate?
They would probably be furious and demand that there be careful consideration and deliberation of this bill. They might even determine that it was blackmail with the people who caused the problem threatening a world financial meltdown if they don't get their way. Then they would connect the dots between the bailout and the head dispenser of funds, Secretary of the Treasury Henry Paulson, former CEO of Goldman Sachs. This firm received huge financial benefits from Secretary Paulson before this bill was even conceived.
The will of the people is just "collateral damage" if members of Congress determine that details like democracy and honesty are less important than the instructions of their leadership and the Wall Street firms that created this problem in the first place.
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Contact for your member of the House or Representatives.
House Committee on Financial Services Web Site (for original House bill and updates on legislation)
Original House Bailout Bill Archived
"A Cascade of Ruin" The Money Party (part 6)
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