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Published on Thursday, October 9, 2008 by CommonDreams.org
Should Henry 'The Fox' Paulson Guard the Henhouse?
by Medea Benjamin

On Tuesday, October 7, a group of CODEPINK pranksters pranced in front of the New York Stock Exchange. One, wearing an oversized papier mach� 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." Passersby, reading the sign "Henry �The Fox' Paulson' in the People's Henhouse," heartily agreed.

Congress thought otherwise, entrusting Paulson -- the former CEO of Goldman Sachs -- with $700 billion of the people's money. On October 3, Speaker Nancy Pelosi, smiling ear to ear, congratulated Congress for passing a bill that gave Secretary Paulson unprecedented control over our nation's economic future. An hour later, President Bush and Secretary Paulson appeared on the steps of the Treasury Department signing the bill.

"This bailout bill does not deal with the absurdity of the fox guarding the henhouse," Senator Bernie Sanders decried on the Senate floor. But during the post-bailout hearings held by the House Oversight Committee, Congressman Dennis Kucinich was the lone voice raising questions about Paulson's performance and his obvious conflict of interest.

Kucinich asked the witnesses from AIG and Lehman Brothers why one company -- AIG -- was bailed out by the Treasury Secretary while Lehman Brothers was allowed to go under. AIG owed Goldman Sachs $20 billion, so their bailout meant that Paulson's buddies at Goldman Sachs would get repaid in full. Goldman Sachs also gained a competitive advantage from the bankruptcy of its rival Lehman Brothers. One would think that this maneuver alone, which happened BEFORE the $700 billion taxpayer bailout, would have immediately raised hackles in Congress and disqualified Paulson as economic czar.

To see the absurdity of Paulson in charge of the crisis, Congress need only have looked at Paulson's past. On the very day that Congress passed the bailout, The New York Times published a shocking story about how the SEC was lobbied in 2004 by the nation's five largest investment banks to change a regulation that limited the amount of debt they could take on. The exemption unshackled billions of dollars held in reserve as a cushion against losses on their investments, and led to the unraveling of the financial sector. Among the five banks leading the charge to change the rule was Goldman Sachs, which was headed by Henry Paulson. Translation: Paulson was one of the architects of the crisis!

Not surprising

[mises]

You don't know the half of it. Paulson then picked, after Bill Gross offered to do it for free, a 35 year old nobody from Goldman's to save the American financial sector. The guy is an m&a banker in SF focusing on mid sized tech firms. And he is who they picked for the 700bil.

The corruption is so naked, so obvious that it is almost humorous.

[Gopher]

Commondreams calls itself, in complimentary fashion, unsurprisingly, "the progressive community." But it seems more like "the anti" community. Because I find it impossible to believe that "progressives" in any sense of the word would seek out and publish negative and hostile, muckraking, and even conspiracy-theory-like news information to attack in the hopes of discrediting and thus undermining the government's intervening in the economy and moving to strengthen banking regulation in a time of crisis.

Inveterate oppositionists who know nothing else, absolutely nothing else, in life, except the impulse to tear down and destroy.

How will such people behave under an Obama Administration? Especially once they realize that he cannot and/or will not do all that they have assigned to him in their dreams and idealism?

[mises]

Yeah, that's what I meant to say.

[Gopher]

"Excellent contribution?" Right up there with alleging that H. Paulson cynically and masterfully engineered this entire affair as a coup, I imagine.

[mises]

Yes, I suppose. He was one of the primary actors in creating the current crises, but managed to shield his firm from the shit-storm by getting out in time (without warning non-Goldman's actors why) and is now in charge of cleaning it up and to do so scares the shit out of the people and congress and then appoints a 35 year old nobody to head it.

Maybe not a financial coup, but pretty funny regardless.

[Gopher]

Then I suggest you get the liberals together and go burn him. And yes, the brilliant, progressive people often sound like this.

[mises]

Really?

[Gopher]

Yes, really. And I could ask the same.

Dennis Kucinich as the lone voice of sanity and good-faith in government? Really? That guy is BLT No-Brainer in a suit.

[mises]

This is a very serious crises, Gopher. Very, very serious. The global economic and financial system is under severe stress. Paulson's actions with this 35 year old nobody, and his absolutely irresponsible words to get his 700b gift, I believe (and I'm hardly alone) demonstrate that he is not acting in good faith for the country but is behaving in a self-interested manner.

[Gopher]

I believe it is a serious crisis. That is why I support H. Paulson's and other serious people's -- including H. Reid, N. Pelosi -- handling it.

So far on this messageboard, Mises, we have heard from R. Paul, D. Kucinich/Commondreams.org, and H. Chavez, playing the annoying, smirking jester. I know you take R. Paul seriously, but we disagree there. As far as the rest, this does not strike me as a serious discussion on this serious problem at all.

[mises]

Ron Paul offers an accurate criticism of the foundation of the financial industry, which the current crises suggests is in whole or part correct. I like the guy because I am basically a pacifist or anti-war type. Paulson has been wrong at every turn in government, but was a goddamned oracle while at GS. This is worrying. He was able to see this coming while directing an ibank but not while directing the Treasury.

Again, this 35 year old nobody M&A IT adviser speaks to how either 1) unserious Hank is or 2) corrupt he is or 3) disinterested he is. Take your pick.

[jadarite]

The money problem is not confined to the US or Paulson. It's easy to point fingers and feel a sense of security in selecting a culprit, but we are experiencing financial difficulties worldwide.

[Gopher]

Yes, but for some, especially in "the rest of the world," read: "among the good people, the people who are not Americans," every global problem can be traced backed to an American capitalist and puppet-master, sitting in the darkness of his metropolitan, Manhattan lair, arrogantly sprawled across his hand-crafted, button-tufted, leather executive chair, masterfully pulling everyone's strings and laughing the laugh of the wicked...

[mises]

Nobody is saying that Gopher. Well, I'm not anyways.