Paulson is forecasting economic meltdown unless granted another trillion dollars to deploy as he sees fit. What choice do we have?
Here’s the part of it all that galls. The thing that has Main Street spitting bile as Washington bails out Wall Street.There is no justice to it all.A relatively small number of men (and to be fair, possibly even a few women, although this is still a somewhat restricted club) made some really bad choices.They borrowed several trillion dollars, and invested them in risky financial devices that most them did not understand, based on a forecast that could not possibly come true.When these incredibly unwise positions began to unwind, they publicly denied the peril they put their depositors, stockholders and bondholders, and indeed the entire country in.
These actions and subsequent denials may or may not meet the legal description of dereliction of duty, fraud and theft. That is an issue for a few underpaid public prosecutors, thousands of brilliant defense attorneys, and several illiterate juries to decide.
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It sure as heck meets any commonsense description of highway robbery. But rather than serve time for this bit of astonishing piracy, this small group of white-collar rogues was paid several billion dollars.
The names have become famous now. Even my school-age daughters name them at the dinner table.
Goldman, Morgan Stanley, Merrill, Lehman Brothers and Bear Stearns may not have been the only players in this rigged game.
But they are certainly five of the largest and will suffice to provide a sense of scale as to just how well paid the brigands who have brought us to the brink of ruin were.
Between 2003 and 2007, the top honchos of these five were paid a collective $3.1 billion. In 2007 alone, the 185,687 employees of these firms took home $66 billion, more than half of which was bonus pay.
And now, one of those five CEOs, Goldman’s own Henry Paulson, has gone before the U.S. president and Congress and asked for another trillion dollars to deploy as he sees fit. There is to be no limit on his powers. No supervision or review of his actions by any committee or court.
And if we do not pay him this ransom immediately, he has threatened the shutdown of the U.S. economy and, quite possibly, the global economy as well. One might be tempted to add extortion to the list, if it weren’t so damned likely that he’s right.
If we don’t pay them off, we are probably ruined for decades to come. If we do pay them off, we will most likely be ruined for years to come. Either way, you and I will pay the penalty for their egregious folly.
And either way, there will be no lessons learned here. From the point of this small group of men, this has been an incredibly successful exercise. And it will just get better from here, once those trillion dollars start finding their way into various Wall Street pockets.
Justice says I am angry.
You bet I am angry.
Sincerely yours,
Adam
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