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Jun. 8 2009 - 11:34 am | 627 views | 8 recommendations | 40 comments

‘It’s time to enshrine Hank Paulson as national hero’ WTF?

Henry Paulson, Secretary of the Treasury of th...

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By Evan Newmark

Hank Paulson is a national hero.

I said it last October and I’m sticking by it. And now, there’s actual evidence to back me up. The TARP bailout worked. The Wall Street crisis is over.

via Mean Street: It’s Time to Enshrine Hank Paulson as National Hero – Deal Journal – WSJ.

So here’s the letter I wrote to the Wall Street Journal after reading Evan Newmark’s paean to Hank Paulson last week:

Dear WSJ,

Just out of curiosity — did Evan Newmark ever work for Goldman, Sachs? And if the answer to the question is yes, don’t you think that might have been a good fact to disclose before he fellated Hank Paulson in his “Mean Street” column?

Sincerely,
Matt Taibbi

I didn’t get an answer, which I guess is not surprising. But in the interim I found out that Newmark did, indeed, work for Goldman. I find it funny that a business journalist has to disclose if he’s invested in this or that stock, or short this or that security, before a newspaper will allow him to have an opinion about anything even distantly related to that company — but you don’t need to disclose anything if all you’re doing is kissing your former boss’s ass.

Can you imagine what a craven, bumlicking ass-goblin you’d have to be to get a job working for the Wall Street Journal, not mention up front that you used to be a Goldman, Sachs managing director, and then write a lengthy article calling your former boss a “national hero” — in the middle of a sweeping financial crisis, one in which half the world is in a panic and the unemployment rate just hit a 25-year high? Behavior like this, you usually don’t see it outside prison trusties who spend their evenings shining the guards’ boots. I can’t even think of a political press secretary who would sink that low. Hank Paulson, a hero? Are you fucking kidding us?

Exactly what part of Paulson’s record is heroic, Evan? The part where he called up SEC director William Donaldson in 2004 and quietly arranged to get the state to drop capital requirements for the country’s top five investment banks? You remember that business, right, Evan? Your hero Paulson met with Donaldson and got the rules changed so that Goldman and four other banks no longer had to abide by the old restrictions that forced banks to actually have a dollar or two on hand for every ten or so they lent out. After that, it was party time! Bear Stearns in just a few years had a debt-to-equity ration of 33-1! Lehman’s went to 32-1. By an amazing coincidence, both of these companies exploded just a few years after that meeting, and all of the rest of us, Evan, ended up footing the bill, thanks to a state-sponsored rescue of Bear and a much larger massive bailout of Wall Street in general, necessitated in large part by the damage caused by the chaos surrounding Lehman’s collapse.

Meanwhile your own Goldman, Sachs ended up with a 22:1 debt-to-equity ratio a few years following that meeting, a number that would have been much higher if one didn’t count the hedges Goldman bought through a company called AIG. Thanks in large part to Paulson’s leadership in his last years as head of Goldman, the company was so massively over-leveraged that it would have gone under if AIG — which owed Goldman billions when it went into its death spiral last September — had been allowed to collapse. But thanks to Hank Paulson, who heroically stepped in and gave AIG $80 billion the same weekend he allowed one of Goldman’s last key competitors, Lehman, to collapse, Goldman didn’t have to go without that money; $13 billion of the AIG bailout went straight to Goldman. So I guess we have Paulson to thank for the fact that he used about $13 billion of our taxpayer money to essentially bail out his own fuckups. I mean, that’s heroism if I’ve ever seen it. Audie Murphy has nothing on that. Sit your asses back down, Harriet Tubman, Thomas More, Gandhi and Jesus Christ. Hank Paulson is in the house!

Or maybe it was Paulson’s foresight in heading off the crisis before it happened that inspired you? Maybe it was the way Paulson pronounced the subprime fallout “contained” in 2007 and called the economy the “strongest in decades?” Or maybe it was the way he remained calm last July, saying that it was a “very manageable situation” and “our regulators are on top of it?” Remember how he said all that shit, Evan, just about six weeks before the world exploded? Remember that Henry Paulson was actually in charge of regulating the financial environment during the last years of the crisis and did nothing as his buddies on Wall Street built one gigantic mountain of leverage after another, gashing underwriting standards across the board, saddling the country with a generation of toxic assets that all of the rest of us will be paying for in taxes (instead of, for instance, a health care program, which we can now no longer afford) for the next fifty fucking years? Do you remember that part?

Or was it his non-intervention last summer when gas prices hit $4.50 a gallon thanks again to his old buddies at Goldman and Morgan Stanley, who juiced the commodities market with so much speculative cash that oil prices soared despite the fact that supply was up and demand was down all year? Do you remember that part? How about the way food prices soared thanks to the same commodities speculators? According to the World Food Program at the UN, about 100 million people joined the ranks of the hungry last year during the commodities spike.

Or maybe it was the way the Treasury Department refused to tell the Congress really anything at all about how it chose whom to give TARP money to; how when the Congressional Oversight Panel asked Paulson what criteria he was using to decide who gets bailout money and who doesn’t, he sent Congress back a copy of a TARP application form. Maybe it was that. Or maybe it was the way Paulson got a $200 million tax deferral thanks to an obscure rule that allows executives who join the government to defer taxes on their holdings. That means that not only did Paulson use billions of our money to bail out his own mistakes, he managed to use a loophole to get out of paying his fair share of that same bailout.

Even if it weren’t about five years too early to make any kind of judgment at all about whether or not TARP helped, the notion that Henry Paulson is a hero is complete and utter madness because TARP would never have been necessary if someone, anyone who wasn’t a greed-addled incompetent like Paulson had actually been regulating the economy in the last years of the Bush adminstration. If anyone besides Paulson had been running Goldman Sachs earlier in this decade — if a person with a serious brain injury had been in his place, for instance, or a horse, or a head of lettuce — we’d all be better off today, because there wouldn’t be so many toxic Goldman-underwritten mortgage-backed CDOs on the market. We, all of us, are paying the freight for assholes like Paulson, and like you, for that matter. And while we’re getting over it, slowly, you’re really not helping when you open your mouth and pat yourself on the back for all the good deeds you’ve done. Spare, us, okay? Just give it up.


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  1. collapse expand

    wow. good stuff. How many letters do you think the WSJ editors get that refer to fellatio?

  2. collapse expand

    Yes, the juxtaposition of fellatio and Henry Paulson, the human penis, is apt. Kudos. Slightly off topic, regarding the Progressive Insurance chick: A close, perhaps obsessive, reading of the stimulus package, and more specifically, the Kent Conrad sponsored farm-subsidy addenda, reveals a potential loophole within an obscure codicil, one that SEEMS to permit the construction of some sort of internment camp near Minot where she, and her kind (Paulson too?) could be confined for a “not to be unspecified” period of time, for *their own* safety. I’m not sure how realistic this is nor how it pertains to any so-called “farm subsidy” (perhaps, Conrad’s staff would be able to elaborate), but it’s in the bill and it’s something to consider. The mental health of the nation, or at least that of those who watch too much TBS, TNT and USA, may depend on it.

  3. collapse expand

    heroism is assessed on the basis of motivation and in proportion to the stakes involved (conflits of interest rule out any presumed altruism in this case and symbolic threats (such as the loss of reputation) do not qualify as life-threatening enough to qualify as heroic courage)

  4. collapse expand

    Nice post Matt. Hank Paulson was a disaster capitalist extraordinaire.

  5. collapse expand

    I have heard this line of criticism before, pointing out the huge conflicts of interest in government fiscal policy-makers, but still haven’t heard a criticism of the system that makes this possible.

    There was no way in hell someone like Summers would be hired by a Republican administration, so they all have to work on Wall Street, or at least they say they do. Is there an alternative? I don’t know, but there sure should be. This would be like judges alternating between working for the Mob and being judges, depending on who was in office. Unacceptable.

    Any substantive critique of the fiscal decision making process is met with what seems to be some kind of inside joke. “It’s too complicated for anything but this.” So, only the people who have a stake in it can understand it, but everyone else needs to just shut up? Sounds like an information oligarchy.
    Iskid2astop

    • collapse expand

      “I have heard this line of criticism before, pointing out the huge conflicts of interest in government fiscal policy-makers, but still haven’t heard a criticism of the system that makes this possible.”

      Voila! And therein lies one of the great ironies. The so-called policy-makers and government aparatchiks are the very criminals responsible for the problems that they’re now foisting off on everyone else to pay for. Hmmm? It’s a revolving door and YOU, dear citizen/slave, are getting spun in the middle.

      In response to another comment. See in context »
    • collapse expand

      iskid2astop wrote:

      “I have heard this line of criticism before, pointing out the huge conflicts of interest in government fiscal policy-makers, but still haven’t heard a criticism of the system that makes this possible.”

      Really? There’s plenty of criticism of the system, but much of it is artfully suppressed. Look a little harder, and I’m confident you will find some.

      In response to another comment. See in context »
  6. collapse expand
    Wes
    Wes

    I was expecting some piece of satire, or a fake interview for some laughs. I can’t believe this douche actually sent this to an editor and it was printed. What planet do these people live on?

  7. collapse expand

    I swear this shit makes my eyes bleed.
    It is so important but so M.C. Escher that I’m left dizzy and wheezing.
    Thanks for clearing some of the fog.

  8. collapse expand

    As a head of cold, refreshing iceberg lettuce, I’m offended to mentioned in the same breath as these syphilitic toadies.

  9. collapse expand

    Couldn’t agree more with your assessment of Paulson. But then I don’t know of any heroes really regarding our current economic and moral crisis.

    As for journalistic integrity, I agree with your assessment that news people should announce who they worked for or are married to, when those people are directly responsible for the current debacle.

    It makes my ears and eyes hurt whenever I hear or see Andrea (Mrs. Allen Greenspan) Mitchell do news stories on the state of the economy and/or unemployment. I keep screaming every time I see her on television…”Come on Andrea, fess up, tell the whole nation you are Mrs. Allen Greenspan”. Then do your news stories with a straight face as you look the American people in the eyes knowing you were part of the MSM that gave all these guys a pass in the media during the course of the past, oh, say…25 years or so.

  10. collapse expand

    With both Geithner and Paulson being Dartmouth alumni you’ve got to wonder if that place shouldn’t be forced to become a public liberal arts college handing out University Studies degrees to older students returning to college after being laid off in this little “downturn”.

  11. collapse expand

    Matt, you need to write a book on this shit.

  12. collapse expand

    Thoughtfully provocative blog. The jury will be out for some time in its consideration of the relative merits of participants in the lead-up, and response, to the intensifying economic problems that finally erupted into the public consciousness in the second half of 2008. You emphasize one approach to key issues, stimulating the debate. Mind you, I thought it stood on its own merits (without the apparently gratuitous sexual inferences – which could have been significantly reduced by a single tribute to rusty trumboning).

  13. collapse expand

    F–K YEAH! Nicely done, Matt. Paulson, a hero? Shyaw! Who in the eff was this effing “evan” guy trying to kid? I mean, you have to be a total ass-douche to even go there. And please don’t get me started on bullshit “soft” propaganda the WSJ’s thinks is cleverly disguised as opinion. I’d rather stare at dog shit before eying a word out from that place.

    If ever there was an asshole on earth deserved of the kind of endless suffering only hell can dish out, that’s Murdoch.

    Greed-led treasonous bastards, all of ‘em.

  14. collapse expand

    excellent column.

    the To Big To Fail Doctrine has corrupted the financial services industry. there is no penalty for imprudence. imprudence is rewarded. greedy executives like Paulson can play the all long shots and if they win, they get rich. if they lose, no problem. they still get rich compliments of the taxpayers.

    but what can we do? both of our political parties are on their knees to the money changers. our votes wont change that. and it seems the entire world has the same problem.

    • collapse expand

      Key money-men, read…Goldman Sachs etc., are placed everywhere in government where it counts. So where is the surprise? They write or bend the rules, and spend your money while doing it, so as to grease their palms and the pols who allow it. Meaning everyone is guilty. The only way for anything to change is for firing squads.

      In response to another comment. See in context »
  15. collapse expand

    Hank: “I’d like to thank you Evan for standing up for me and setting the record straight.”

    Evan: “I’m honored sir. History, no doubt will judge you in a much better light when the true story can be told”

    Hank: “So true Evan…..Hey, look over there! It’s a Pale-Headed Brush Finch!”

    Evan: “I’m sorry sir I don’t see it.”

    Hank: “It’s right over there son….just bend over a little more…that’s it…oooh, that’s it!”

    Evan: “Wait..I think I SEEEEEEEEEEEEEEEEEEEEE!!!”

  16. collapse expand

    Thank you !! Please don’t forget honorable mentions for ‘Hammering Hank’s’ Partners in the biggest financial crime in history: ‘Easy Money’ Alan Greenspan; ‘Fast Willie’ Bill Clinton; Ben Bernake; Bush41; Bush43; Timothy Geithner; Gordon Brown; Evelyn de Rothschild; Michael Camdessus; Jaime Caruana. Why aren’t they being prosecuted ? Someone planned this monumental scam that has been more than 30 years in the making – and these men implemented it. Waterboard them all until they divulge everything they know, and everyone involved. THEN they, and those they divulge, ALL deserve to be drawn-and-quartered and their ‘pieces’ displayed as a warning to the next scum who would try to do perpetuate the same kind of scam. Being ‘politically correct’ doesn’t enter into it !.

  17. collapse expand

    Can we get out the pitchforks now Matt? Can we? Please? Pretty please? With sugar on top?
    Mine is sharp and I dipped it in my son’s diaper to give it some extra bite.

  18. collapse expand
    deleted account

    One contention: the WSJ has brought some good minds onto the field. Asra Nomani and Thomas Frank for example. Still, overall it has become an increasingly crappy paper.

  19. collapse expand

    Today’s announcement of TARP playback rings quite hollow when you consider that none of these banks could exist without their FDIC debt.

  20. collapse expand

    So much for no man being a hero his valet…

    Never in my entire life have I ever seen such Singapore-class cock-gobbling in all my life. Bush is a hero, Cheney is a hero, Tom DeLay is a hero, Duke Cunningham is a hero, David Vitter is a hero, Paul Bremer was a hero, Joe McCarthy was a hero, now Hank Paulson is a hero. I guess to the republican party, all you require to be a hero is an “R” after your name and an impressive resume for moral turpitude.

  21. collapse expand

    Gas prices are still out of whack because someone (captive consumers) have to take it in the bum for those sky high oil contract delieveries floating on the oceans.

    The vampires have figured out a way to circumvent the fundemental eonomic laws of supply and demand:

    http://proudtoliveinamerica.com/forms/main/default.aspx?l=en-us&p=editorials14

    “If our governments can’t unilaterally drive a regulatory stake through the financial industries heart by preventing them from flying from one country to another in order to continue their bloodletting carnage” then we need to do it ourselves.

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