The Record
Ali Frick rounds up the record of Bush administration financial mismanagement in the inimitable Think Progress style. Remember when $5.1 billion in expenses for Iraq reconstruction were charged with no documentation? Or the “widespread” waste and mismanagement on the millions of dollars spent on Katrina recovery? And this is to say nothing of the recent blockbuster scandal at the Interior Department.
For the sake of argument, it does seem to be the case that Hank Paulson and the Treasury Team aren’t as inept as the worst of the worst of the Bush administration. But at the same time, they’re asking for much more money. Figure only half as much theft and squandering as you get from a typical Bush initiative, but then inflate the total amount of money under discussion to $700 million and, well, there’s a problem. The FT’s “Lex” column has observed “Nor is the package necessarily a disaster for the taxpayer or the U.S. dollar. If the Treasury buys assets well, and confidence is restored, there is [a] chance that Mr. Paulson could win fund manager of the year.” Perhaps true, but “if the Treausury buys assets well” is a huge “if” and Paulson is asking for the authority to disburse the money with no oversight.
What’s more, though I suppose it’s indelicate to raise this point, Paulson’s going to be out of a job in a few months and presumably looking for employment in the very same financial industry he’s now in charge of bailing out. The potential conflict of interest is mind-boggling.
24 Responses to “The Record”
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September 21st, 2008 at 3:43 pm
Typo check: It’s not $700 million. It’s $700 billion.
September 21st, 2008 at 3:44 pm
The term “willful negligence” doesn’t even begin to describe the notion of granting a Bush Jr. administration hack (who by the way came from Wall St and will be headed back there to play with his massive investments) free reign to spend at least $700 billion however he wants without rules, restriction, or court challenge.
September 21st, 2008 at 3:57 pm
I am writing on the $700 billion dollar bail out Sec. Paulson wants Congress to Quickly pass, again without any regulation or oversight! “How did we get here? All of a sudden we are facing Armageddon in our financial systems, one day they tell us our economy is fundamentally sound and the next day we’re here. King Paulson is asking for the power to make decisions that would be unchecked by Congress, the ability to buy whatever he wants. He is now saying foreign banks should be able to use this program. American tax money we don’t have. If this really affects global financial systems, why isn’t the rest of the world putting up their balance sheets? Why does American continue trying to do everything by it self? Here we go again, what does this sound like? This sounds like 2001 and 2002 all over again, a time when the Congress gave the President broad powers to fight the war on terrorism, powers that they couldn’t get back. WE SHOULD BE VERY CAREFUL!
One of the reasons our government has been free of major problems is the checks and balances designed to ensure major crises are well thought out. Look at the major events of the 20th century, in World War I, President Wilson realized our nation couldn’t avoid the war but he made sure that he got the American people behind him, convinced them they should sacrifice for the greater good. In World War II we had the same thing, however, after 9/11 the president told the people they shouldn’t change their way of life, he told them they should go shopping. Trillions of dollars have been sent to Iraq and now Americans cannot afford the gas for their cars and the mortgage on their homes. Under this administration, we continue to find our nation in crises, we continue reacting instead of acting, and now they are asking for more unchecked powers, WE MUST BE VERY VERY CAREFUL.”
Due to no regulation and short certificate buying, no one knows what loan belongs to who and they may never know. How can that be? It sounds fishy and criminal, and now corporations who are suffering a metl down want to save their own hides on the backs of the American people. We cannot allow this to happen to us again and again — corporations first, people never. This time it must be people first!
We cannot allow ourselves to be pushed into this decesion based on fear and scare tactics. We must carefully and thoughtfully try to find our way out that will benefit the people this time and not just the corporations, who are only trying to save their wealth, their stocks, their homes, cars, and their Country Club First, way of life.
Trickle down economics cannot work because it is against the laws of nature. In nature we start/build from the bottom up, etc. a plant, a tree, a child. And when we build homes or cars we start from the bottom and expand up or outwards and that is how we should model our business dealings. We cannot work against nature’s wisdom and intelligence by hoping things will trickle down. It is just not sensible. We have an intelligent design through nature and we should use her model not man’s greed. It is very hard for me to trust the people who got us into this mess to somehow now be able to get us out of this mess. That too does not make sense! We must contact our Congressman and Senators and tell them NOT SO FAST!
September 21st, 2008 at 4:04 pm
The idea of handing $700 billion (for starters) to Paulson and letting him go on a shopping spree with no recourse for citizens, no judicial remedy, etc., is just stupefying.
I just sent my 2cd e-mail to the Democrats opposing this nonsense. It’s now or never, folks.
Link: http://www.democrats.org/contact.html
September 21st, 2008 at 4:16 pm
Matt,
You’re a plugged in, right thinking sort of guy who sees this bill as the disaster it is. You’re whole point in coming to Think Progress was to become more of an activist.
Well, you have a strong platform, and a moderately large audience. How do we activate? Something tells me, given a time frame of less than a week, we’ll need something more than “call your representative”, and pretty soon.
Lead us, oh wise one, lead us!
September 21st, 2008 at 4:36 pm
Matt, how about setting up a link page to make it easy for people to e-mail the democrats, congressman, senators, etc.?
September 21st, 2008 at 4:37 pm
The time has come. We must take this discussion to bush. He must be told that America does not have his back on this $700 billion bail out of a problem he let happen. bush has got to get out of American household budgets. Seriously, he is not welcome to the kitchen table where I pay my bills. Enough.
And where is cheney???
September 21st, 2008 at 4:41 pm
On the plus side, this will be an incredibly boon for the lobbying industry. Can you imagine the skirmishing to influence the Treasury to buy assets in a manner favorable to particular financial firms’ interests?
Lobbying fees might stimulate the economy out of Depression all by themselves!
September 21st, 2008 at 4:52 pm
But that’s in fact the heart of the problem. The only credible purpose of the Paulson “plan” (or as Obama calls it, a “concept” that’s not even a plan) — as Krugman has pointed out today — is to pay a high price for the assets in order to effect a backdoor recapitalization of part of the system.
By definition, the Treasury isn’t going to want to “buy assets well.” If Paulson pays a low price that would be good, in the long run, for the taxpayer, the FIs and the system as a whole remain over-leveraged, the dodgy institutions will be pushed into sale/liquidation, the rest will be busy trying to raise new capital. No new lending, no credit crunch easing, more downward spiriling of asset values, and ongoing financial crises. Either the $700 billion is a (non-transparent) giveaway, or it’s just the next in a series of increasingly expensive steps to try to keep the finger in the dike.
September 21st, 2008 at 4:53 pm
Kafka –
for House members
https://forms.house.gov/wyr/welcome.shtml
for the Senate
http://www.senate.gov/general/contact_information/senators_cfm.cfm
September 21st, 2008 at 5:13 pm
Okay, totally off topic, but why are Bush and Paulson wearing *matching ties* in this photo?!?!
September 21st, 2008 at 5:46 pm
Another aspect is the fact that this “crisis” has been brewing for weeks? months? years? So a “plan” with few specifics (other than the $700,000,000,000 price tag) and no liability or review is thrown together in TWO DAYS and needs to be approved in 6 days or the world will end? Why should we trust Hank much less Bush? Apparently, they were blind to the problems but now they have the answers and we should just trust them? Ridiculous. The Packers took more time to “plan” for tonites football game.
September 21st, 2008 at 5:56 pm
bryan, that’s why Bush has that peevish look on his face.
September 21st, 2008 at 7:11 pm
When referring to the sum associated with this proposed bail out, I find it useful to write the full number out: $700,000,000,000. Sure, you have to type eleven zeroes, but it’s better than making the mistake of saying million instead of billion. Plus it helps drive the point home. That is an insane amount of money.
September 21st, 2008 at 7:19 pm
Who says Paulson is going to be out of a job in January? Obama seems like he’s all about assuaging fears. Keeping Paulson on-board would be a good move symbolically (and who knows, maybe even a good idea)?
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