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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Mon Oct 06, 2008 10:30 am Post subject: Secretary Paulson badly misled President Bush |
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Primary link from boom2bust.com but cited from the Washington Post, in case we want to play the source game.
http://www.boom2bust.com/2008/10/06/did-secretary-paulson-mislead-president-bush-on-the-bailout/
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Along with Fed Chairman Ben Bernanke, U.S. Treasury Secretary Henry Paulson has quickly become a household name in recent days. As one of President Bush�s top economic advisers, Paulson has helped spearhead the movement to rescue Wall Street and the financial system on behalf of Main Street and the U.S. economy.
His efforts to date have resulted in the $700 billion bailout legislation that was signed into law by President Bush over the weekend. The bailout authorizes the Treasury Department to buy bad mortgages and other troubled securities associated with them from banks and other financial institutions. It is hoped that these purchases will allow credit to flow more freely throughout the financial system.
Earlier today, Dean Baker, an economist and co-director of the Washington, D.C.- based Center for Economic and Policy Research, questioned whether or not Secretary Paulson presented all the available options to the White House. He wrote in the Huffington Post:
According to the Washington Post, after the initial defeat of the bailout package in the House last Monday, Treasury Secretary Henry Paulson went to see President Bush in the White House. The Post reports that President Bush asked Paulson about �Plan B.� According to the Washington Post, Paulson told Bush �there is no Plan B.�
Of course this was not true. Paulson could have easily designed a bailout plan that was centered on the direct infusion of capital in the banking system, as was suggested by George Soros in a Financial Time column later in the week. Virtually every economist who has written on the bailout argued that a direct infusion of capital is a far more effective approach to dealing with the financial crisis than the approach outlined by Paulson.
Clearly Paulson had not invested a great deal of time in crafting the initial proposal he submitted to Congress since it was just three pages and few of the details of the plan had yet been decided. This means that Paulson easily could have switched gears and developed a plan along the lines advocated by economists.
Baker, who has been warning of an economic crisis for years now, added:
If the Post accurately described the meeting between Paulson and Bush (there is no source given for this account), then Secretary Paulson badly misled President Bush on the most important economic decision of his presidency.
Do you think it�s possible Hank Paulson may have had an ulterior motive when he allegedly told President Bush there was no other option available? |
Paulson scared the shit out of the public and government to bailout his former employer. Will there be any consequences applied to him? |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Mon Oct 06, 2008 1:45 pm Post subject: |
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Do you think it�s possible Hank Paulson may have had an ulterior motive when he allegedly told President Bush there was no other option available?
Paulson scared the shit out of the public and government to bailout his former employer. Will there be any consequences applied to him? |
The final sentence in the article destroys the credibility of the article, in my opinion. Tippy toeing into conspiracy theory territory damages any claim, in my eyes.
'Mislead' is a nice word for 'lie'. Is there evidence, not just disagreement with the decision, that Paulson was not acting to save the entire economy as he saw it? Paulson was not sitting in a room alone when he drew up the plan. He talked to a lot of people. The fact that he chose one approach over another does not mean he had evil intent. He may have made a mistake, but mistakes are not criminal. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Oct 06, 2008 2:03 pm Post subject: |
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Dean Barker has no credibility issues. Trying to throw the "conspiracy" pejorative is weak dude. You got swindled by being made afraid. I told you so.
Baker said:
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| If the Post accurately described the meeting between Paulson and Bush (there is no source given for this account), then Secretary Paulson badly misled President Bush on the most important economic decision of his presidency. |
Baker is a "liberal", like you. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Oct 07, 2008 10:44 am Post subject: |
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Guess who Paulson put in charge to manage that 700 billion?
http://ap.google.com/article/ALeqM5iuaB6oiGq2NrDrkG9vR7HLqoysugD93L537G0
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WASHINGTON (AP) � The administration has selected a former Goldman Sachs executive to be the interim head of its $700 billion rescue effort for financial institutions.
Neel Kashkari, the Treasury's assistant secretary for international affairs, was selected Monday to be the interim head of Treasury's new Office of Financial Stability.
The designation was made by Treasury Secretary Henry Paulson, who was the head of Goldman Sachs before he joined the Bush administration in 2006. Kashkari, 35, will head the office created by the emergency legislation enacted Friday to fund the largest government bailout in history.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) � An official says the administration has decided to pick a key Treasury Department official to be the interim head of its $700 billion rescue effort for financial institutions.
The official said Monday that Neel Kashkari, Treasury's assistant secretary for international affairs, will soon be announced as the interim head of Treasury's new Office of Financial Stability. The official asked not to be identified by name because the selection has not been announced publicly.
The 35-year-old Kashkari is a former Goldman Sachs Inc. banker, the investment giant once headed by Treasury Secretary Henry Paulson. The new office was created by the emergency legislation enacted Friday to fund the largest government bailout in history. |
35 years old, Goldman's banker. Yup. Par for the course.
Was this a financial rescue or coup?
http://gawker.com/5060145/neel-kashkari-americas-new-head-of-money
http://www.nypost.com/seven/10072008/news/nationalnews/mr__rescue_is_kash__kari_132501.htm
I'm sure the world feels relived that such an accomplished man is now going to oversee the bailout and reconstruction on the American financial economy. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Tue Oct 07, 2008 6:48 pm Post subject: |
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| I would rather they choose Warren Buffett to do this. He is an economic conservative and social liberal. What's going on over here? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Tue Oct 07, 2008 7:16 pm Post subject: |
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I believe Bill Gross offered to do it for free. And he has infinite more experience than some 5 years out of an MBA banker. But he doesn't work for Goldman's. Buffett would be excellent too and he has experience in turning shit into gold with Salomons.
But they picked a 35 year old banker. What does this tell us? When you pass up one of the most talented and experienced professionals on earth, who offered to work for free, for a 35 year old banker. |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Tue Oct 07, 2008 10:35 pm Post subject: Re: Secretary Paulson badly misled President Bush |
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| mises wrote: |
Paulson scared the shit out of the public and government to bailout his former employer. Will there be any consequences applied to him? |
As I understand it Goldmann Sacs made a packet out of this whole affair in shorting subprimes. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Oct 08, 2008 12:49 am Post subject: Re: Secretary Paulson badly misled President Bush |
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| OneWayTraffic wrote: |
| mises wrote: |
Paulson scared the shit out of the public and government to bailout his former employer. Will there be any consequences applied to him? |
As I understand it Goldmann Sacs made a packet out of this whole affair in shorting subprimes. |
Yes. They were both the first to sell (package) them and the first to short them. Given the bailout, it all worked out ok. |
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KOREAN_MAN
Joined: 01 Oct 2006
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| Posted: Wed Oct 08, 2008 2:39 am Post subject: |
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| Ya-ta Boy wrote: |
| 'Mislead' is a nice word for 'lie'. |
Good one. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Oct 08, 2008 3:57 pm Post subject: |
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The guy has spent his post mba career working the M&A market for mid-cap IT firms in the SF area. Yes. He is perfectly qualified for the job.
If I wanted a guy to rebuild and restructure the American banking system, I'd pick him. I'd pick him over every academic expert on the subject from MIT, Harvard, Yale, Stanford etc. I'd pick him over Bill Gross (who offered to work for free) and Warren Buffett. Yes. Him. I'd pick him if I wanted an easily influential minion who would jump at the career move and not make much noise about being told to do nefarious things. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Feb 02, 2009 11:41 am Post subject: |
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| So, Paulson got down on one knee and begged Pelosi for the money. He got TARP, and the bankers went shopping. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Mon Feb 02, 2009 6:36 pm Post subject: |
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Ya-Ta,
Mises' view seems to be common among people who have cause to know what they are talking about. We had a private placement bridge investor (basically a one-man run hedge fund providing start-ups with pre-seed money) excoriate TARP in our Problems in Corporations class. The more I think about it the more I think Obama is failing to bring about change I can believe in. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Mon Feb 02, 2009 7:40 pm Post subject: |
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| The word I'm hung up on is 'mislead'. When the price tag is $700 billion, that would be a criminal action. I'd like to see some proof. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Feb 02, 2009 8:14 pm Post subject: |
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I don't know how someone would prove this. It is subjective, right? Did he, or did he not think the financial world would end without TARP.
I'm still befuckled at that 35 year old 'banker' they hired for TARP. Unless he is some kinda super-finance-sponge, he was a patsy. There is no way he could in 5 short post-mba years learn enough about the American economic and financial system to help stabilize and rebuild it. Bill Gross offered to do it for free. FREE. Bill Gross is to government debt as Wayne Gretzky is to hockey. Jesus. They call him "The Bond King". He offered to do it for free!!
Americans have been robbed. I know that sounds 'alarmist' (maybe even allegation driven discourse) but I believe it to be true. And it is continuing to this day. And all Obama says it "show restraint" to the bankers. "Show restraint" in giving out in bonuses the emergency money given to you from the government to "Stabilize the economy".
Show restraint in robbing us. He meant. |
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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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| Posted: Mon Feb 02, 2009 8:36 pm Post subject: |
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| wow. I find it hard to believe that Bush would have just rolled over on that one. He went to war over make believe; why not put up a fight if it goes against his economic principles? |
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