In the WaPo today, Harold Meyerson puts Paulson right where he belongs: As an enemy of the people. The article: Wall Street's Man in Washington Gets it right:
He is less Washington's man on Wall Street than he is Wall Street's man in Washington.
The problem with Washington is that it has been in Wall Street's pocket for a very long time. They are calling the bail out scam "Socialism". Well folks the same people who want you to believe that socialism is a dirty word are the ones who got you here. If you still think that the profit motive should ever be in front over people's needs I see no hope for you. Let's look below for Harold's take on this situation.
Meyerson starts out by reminding us that
This past winter, when American banks were already scrambling for capital, foreign investors came to their rescue. Last November, the Abu Dhabi Investment Authority put $7.5 billion into Citigroup. One month later, Merrill Lynch sold $4.4 billion worth of new stock to Temasek Holdings of Singapore, and Morgan Stanley sold a $5 billion stake to China Investment Corp. In January, Merrill Lynch issued $6.6 billion of preferred stock to Korea Investment Corp. and the Kuwait Investment Authority, among others.
Why did they do that? Well, of course it was all benevolence wasn't it? Not quite. They wanted something.
But these were not charitable outlays. The citizens of Abu Dhabi, Singapore, China, Korea and Kuwait got something in return for their treasuries' aid packages to American finance. They got stock. They got an equity interest in those banks.
So these were clever moves right? They really made out didn't they?
These may not, just now, seem like the shrewdest investments ever made. Still, all those East Asian and petro-state citizens will probably reap some long-term profits if their treasuries hang on to those shares in Bank of America-Merrill, or Citigroup, or Morgan Stanley and Whomever It Merges With.
Which, sadly, is more than can be said for American citizens in the deal that Treasury Secretary Hank Paulson brought down from his Mount Sinai penthouse over the weekend. In Paulson's plan, the American public pours at least $700 billion of its money into purchasing the bad loans on Wall Street's books and gets -- well, it gets the thanks of a grateful Wall Street. It does not get any equity in return. To receive a return for their investment, Americans would have to become Chinese or Kuwaiti or Abu Dhabian; they would have to move to some country that accords a little more respect to the public's claim over its money.
But here we are a "democracy" and we control what our government does. In fact we fight bloody wars to impose this wonderful democracy on others. We pay dearly to make them swallow this bitter pill. The whole world is just flocking to be like us because we are so free. Don't you remember that the reason we were attacked on 9/11/01 was because they hate our way of life and are so jealous of it?
So where are we really? Is the totality of the farce ever going to soak in? We have been had. I maintain that one big piece of our having been had was the acceptance of the profit motive as a basis for our economy. Never, never, never should profit come first before the well being of the people. Never! Was it always this way?
During past financial crises, Americans did get something in return for the assistance their government proffered to Wall Street. As my American Prospect colleague Robert Kuttner has noted, when the Depression-era Reconstruction Finance Corp. (a bipartisan creation -- Herbert Hoover started it and Franklin Roosevelt continued it) poured $35 billion into American banks and corporations, it often became a preferred shareholder in those concerns and appointed members to those companies' boards to oversee their operations. Other quids offset the quos of the Resolution Trust Corp., which handled the savings and loan meltdown in the 1980s.
But we allowed them to equate that move with "socialism" and thereby destroy any benefit that might have lingered on.
The idea that we can not look to socialism for models and ideas is wrapped up in what is going on now. We have gone so very far down the path of accepting the anti socialism frame that we have allowed its antithesis to bring us to where we are now. How in the name of reason can anyone explain why we are in a position to fight against the Paulson ploy? Why should he not be laughed out of the country? It is because what we see as normal is so skewed towards the right that we have lost all perspective. Here's Meyerson's conclusion. Read it and weep.
On one Sunday talk show, Paulson dismissed the idea of reining in top executives' pay. "If we design [the bailout] so it's punitive and so institutions aren't going to participate," he said, "this won't work the way we need it to work."
That depends on your definition of "we," does it not? In recent years, Wall Street salaries and bonuses have soared as investment banks peddled ever more profitable schemes that enabled Americans to take on debt -- an activity of no discernable social utility and, in fact, of some peril, but one that attracted a disproportionate share of our smartest college graduates, who clearly understood where the big money was. Reducing Wall Street's outsized incomes is not only a moral necessity, now that it's the public that will be putting up the funds but a national opportunity to redirect our best and brightest into actual productive enterprise.
There's no indication that Hank Paulson understands that. He is less Washington's man on Wall Street than he is Wall Street's man in Washington. And having endorsed the Street's version of socialism -- the American public picks up the tab for the financial sector's mistakes, no questions asked -- Paulson and the administration and the Republicans remain opposed to the more democratically socialist, or democratically capitalist, proposition that the public should get something for its investment. China, Singapore and the oil emirates cut a deal for their people. Why won't Hank Paulson cut one for his?
The answer is tied to each American's willingness to let these thieves rule rather than shed their phobia of any idea that can help them be free of this tyranny. All they have to do is call a good idea "socialism" and it is easily replaced by another step in enslaving us further. Will we ever wake up? Today Barack Obama told us that they have succeeded in limiting what he will be able to do after he is elected. There goes some of our well deserved change! I still worked hard keying in data from the phone banks tonight and into the wee hours. That's why I am writing this at 4:00 AM. I sure wish I could find a way to wake people up. We deserve better! Let's start by getting him elected.