Paulson's Plan Revealed

"Perhaps the biggest looming fight is over Democratic efforts to require the program's participants to curb what they pay their executives. ... Many are unnerved by Treasury's request for a blank check with few conditions. The proposal has also stirred a populist backlash, with many members of Congress saying the bill needs to be better geared to Main Street than Wall Street. ... Paulson is resisting efforts to limit the pay of executives whose firms participate in the program and plans to fight 'hard,' according to a person familiar with the matter. He fears that provision would render the program moot, since many firms might choose not to participate", my emphasis, WSJ, 22 September 2008.

"Why should American taxpayers give US Treasury Secretary 'Hank' Paulson [HP] a blank check to bail out the shareholders of busted banks? ... If America is to adopt socialism, why not have socialism for the poor, rather than for the rich? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who warn $5 million a year? ... Part of the problem is that Wall Street, like the ethnic godfather in the old joke, has made America an offer it can't understand. ... Contrary to what the Bush administration says, it is not the case that banks' troubled mortgage assets cannot be sold in the private market. ... Why is Lehman bankrupt, and Goldman Sachs still in business? ... Where, oh where, is America's Vladimir Putin, who will drive the oligarchs who have stolen the country's treasure and debased its currency", Spengler at http://www.atimes.com/, 22 September 2008.

"While it is dizzying to predict how this plan will be implemented, it is fairly simple to forsee the macroeconomic consequences. The U.S. dollar will be shattered beyond repair. ... The global mass exodus from the U.S. dollar and Treasury debt is about to begin: do not get caught in the stampede", Peter Schiff at http://www.europac.net/, 19 September 2008.

"To bankers and politicians who insist that the world will come to an end if the US Congress does not approve the proposed $700 billion bailout package, I wish to say, 'It is not the end of the world. It is just the end of you.' Sadly, it won't be. America's financier caste will live to fleece another day. ... The trouble is that the banking system is insolvent; that is, it lacks sufficient capital to hold its existing portfolio if assets, let alone to make new loans. ... Why anyone believes that the Treasury plan will prevent widespread economic misery is unclear. ... Nonetheless, the bailout package will pass in some form. America's intellectual class, right, left and indifferent, is too dependent on the begging-bowl proferred to the financier class to conceive of its existence after the prospective demise of its patrons", my emphasis, Spengler at http://www.atimes.com/, 1 October 2008.

Why does HP care what Wall Street executives earn, unless that is what his program is about: maintaining executive compensation. Suppose a firm fails to participate to continue to pay its executives fortunes? Where are our corporate governance people? Where is such a firm's Board? Would such an executive be sued for breach of fiduciary duty if his firm could have gained from the program? Will HP disclose which firms were so concerned about their exceutives' pay they opted to save the taxpayers money and taken their chances in the market?

Yes, where is our Czar Putin or dare I say it our master, "So he made a whip of cords, and drove all from the temple area, both sheep and cattle; he scattered the coins of the money changers and overturned their tables", John 2:15 (NIV). One duty of the American President is "tribune of the people", my 29 August 2008 post. We haven't had a president discharge that function in decades. Wall Street money changers out of Washington!

Right on Peter Schiff!

Spengler strikes again. Nothing a supposed expert says about the Paulson plan should be accepted no matter what pedigree he has.