Hank Paulson: Worst Failure in the History of World Finance

Yes, you have seen the above title before in this blog. It has now been proven accurate, as if it had not been before.

Hank Paulson is Secretary of the Treasury (the worst one we have ever had). He led Goldman Sachs to the brink of ruin (although nobody knew it at the time Paulson left as CEO of Goldman Sachs to become Secretary of The Treasury--Paulson being the mina person with reason to know it, illustrating how clueless he is). As Secretary of the Treasury, he has led the country to the brink of ruin--giving it a huge push toward that ruin with Paulson's panic in September/October.

Remember that three week farce in Congress as Congress debated the Wall Street bailout bill? Remember those really stupid assertions at the time, by Paulson and others, about how urgent it was that the government purchase all of these "toxic" assets that were poisoning the system, and how there was no time to try to figure out any other solutions? Remember those idiotic discussions at the time about whether the taxpayers would make money (lol) on the distressed assets to be purchased by the Feds (Paulson, in his new position as dictator over the economy)?

Paulson today: "Just kidding." I could never make this up. Paulson said today that none (zilch, nada) of the bailout money will go to purchase "toxic" assets, despite the three week "debate" on that plan, and only that plan. That was the whole plan. It was selling that plan, now discarded, that prompted Paulson to panic a nation, thereby guaranteeing an economic meltdown and recession.

Never has this blog been proven more right in what I said so clearly. so quickly, and so conclusively--in contrast to the stupidity in both Congress and the media, including the financial media. Who was more "expert"? Was it Paulson and the financial "experts" on CNBC, or was it this blog (Congress, of course, is known to be so stupid that there was never a contest there)? Consult the record, where this blog told you (beyond the obvious argument that this was socialism and central planning, which Paulson has made even more clear with an entirely new plan):

1. A cumbersome, expensive government purchase of "toxic" assets (failing mortgages and the like) would not create one single new loan--would not directly ease the credit crunch at all.

2. Congressional attempts to "protect the taxpayer" made this whole idea of purchasing "distressed" assets untenable. If the Treasury had to attempt to arrange purchases at "market prices", that could not possibly help banks and financial institutions. There entire problem is that "market prices" have fallen apart for these assets, and they have had to "mark down" (under post-Enron accounting regulations) the assets to a ridiculously samll "market value". An "auction" to set the smallest price for the government to pay would not only guarantee that the government would get the very worst assets, but it would guarantee highlighting just how little the "market price" of these assets (especially the "worst" ones) really is. That could only hurt the financial system, and not help it. If you add in Congressional "oversight", and ideas lie that of Mark Cuban to post every transaction on the internet (sanely not in the final bill, but the attitude was there toward putting too much pressure and scrutiny to force the government to pay as little as possible), you got an idea that was unworkable. I said so, at the time, in contrast to the "experts". Paulson today said I was right, and that Paulson and the rest were wrong. Okay, Paulson did not actually say that very last part, but that is what he admitted by totally abandoning the original "plan" as unworkable, and not providing enough benefit soon enough.

3. Despite the debate, what Paulson wanted, and what he got, was a central planning "blank check", and the entire Congressional "debate" was a typical farce meaning absolutely nothing. What does "oversight" mean when the plan that was "dbated" was a totally different plan than what Paulson is now implementing?

It is absurd. Pauslon asked for "confidence", after destroying a nation's confidence, and now has shown he never deserved any "confidence". He never had any real idea what to do. He just wanted Congress to give him 700 billion dollars to play with--at the cost of destroying the economy by precipitating a panic--which is exactly what Congress did (while pretending otherwise.

Now, after the election, Paulson admits it was all a farce. Did you ever doubt that Paulson is really a Democrat?

I told you, correctly, that the main reason for panic here (Paulson's panic--which may have destroyed, in the end, with these precedents, the greatest country the world has ever known), as this blog told you, was really created by Paulson's need to save Goldman Sachs. To a degree, Paulson succeeded in that (the only thing in which he succeeded), although Goldman Sachs is down some 50% since the bailout bill, and may yet be in some trouble (albeit with the Feds virtually guaranteeing the firm will not be allowed to fail). This was an incredible conflict of interest on the part of Paulson--devising a panic to save the firm where he was once CEO. Even if not a legal conflict of interest, this has to be one of the worst cases of letting the wrong man (a man who was a major part of creating the problem in the first place as CEO of Goldman Sachs) make the decisions--a man who should have been immediately fired instead of given virtually unlimited power.

Read my numerous entries in the blog archives. I dare you to find even a single sentence that has been proven wrong. In contrast, there are many assertions of this blog that have been proven entirely right, and that Paulson has just admitted are entirely right. This blog told you that the bailout "plan" was unworkable, and it was.

Should I be Secretary of the Treasuy? Well, I could not possibly be worse than Paulson. Modesty forbids me from commenting further.

Modesty does not prevent me from saying that CNBC should replace all of their "experts" with me. There is no doubt that would be a vast improvement. CNBC has, somewhat gently, broached the idea that Paulson has hardly added to "confidence" by admitting his original "plan" had no merit--a plan endorsed by almost all of the "experts" on CNBC. CNBC has hardly touched the dorollary question: Why should anybody have any confidence in, or watch, CNBC "experts", who so underestimated the problems with the original "plan", as modified by Congress?