Paulson's
Mother
of
All
Boondoggles
September 26, 2008
By Alyce Lomax
Is Treasury Secretary Hank Paulson letting the cat out of the bag about 
who he's most worried about right now? He doesn't like the idea of "punitive" elements in the $700 billion bailout package he's championing. Apparently, Paulson fears that such elements, like limits on executive pay, could mean the companies in question might decide not to participate.
Say WHAT?
Congressional Democrats are trying to insert some limits on executive compensation, among other things, into the massive bailout package, and I have to say I agree with them wholeheartedly. Heck, if a company's feeding at the government trough at taxpayers' expense and risk, then, gee, I guess maybe the company might owe those taxpayers something -- like, perhaps, jettisoning CEOs without giving them huge golden parachutes, or maybe even holding them accountable for the millions they made while they took on far too much risk and helped build this toxic and dangerous situation. Call me stark-raving crazy.
And what the heck is this implication that some institutions might choose not to participate in the plan because they'd be so miffed at the "punitive" elements? If things are as dire as they've been portrayed, I think maybe, just maybe, the government could call their bluff, right? Plus, Paulson's apparent aversion to "punitive" action doesn't do much for people who might feel a wee bit uncomfortable knowing that he used to run Goldman Sachs (NYSE: GS) and obviously has plenty of buddies in the industry.
As for "punitive," let's talk about punishing elements. Bring that topic up with the common American who didn't buy a McMansion with some "exotic" mortgage, or who didn't go into debt to purchase too many other toys they didn't need, and now faces the prospect of a triple whammy: rising taxes to pay for this disaster, nonexistent returns from savings, and runaway inflation as the Fed keeps printing money.
Maybe Paulson and his friends figure that Americans are reeling from the onslaught of relentless, historical, and often bizarre news that's been compacted into the past few weeks: Fannie Mae (NYSE: FNM) and Freddie Mac being seized, AIG (NYSE: AIG) nationalized, Lehman going bankrupt, Merrill Lynch (NYSE: MER) being acquired by Bank of America (NYSE: BAC), Washington Mutual (NYSE: WM) seized and sold, Morgan Stanley (NYSE: MS) and Goldman Sachs suddenly becoming bank holding companies. Did I miss anything? Probably. It's all so mind-blowing.
Is this newest "shock and awe" campaign expected to confuse and scare Americans so badly that they won't be outraged?
Trust me, I know -- it is tempting to blank out the way our entire financial system has been altered in a dizzyingly swift period of time, but if you haven't blanked out; if you're not outraged yet, I have a hunch you will be once the dust settles.
Please feel free to let loose in the comment boxes below -- or, if you'd like to defend Paulson's sympathetic, kid-gloves approach to these poor, suffering financial company heads, then feel free to share that too.
