Henry Paulson, Banker to the BFEE - Democratic Underground

Octafish

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Sun Jan-17-10 05:23 PM
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Henry Paulson, Banker to the BFEE

Want to know where the bailout trillions went? Ask Henry Paulson, banker and accountant to the Bush Family Evil Empire.
The guy cut his teeth in the Nixon White House, working for John Ehrlichman, domestic advisor and Master Plumber.
You may remember Nixon is the president who said, "I am not a crook."

So today, he's the architect of the Wall Street Bailout. Here's what his gig means in dollars and sense of power:

Who is Henry Paulson?

By Tom Eley
23 September 2008
WSWS.org

EXCERPT…

Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March, Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.

SNIP…

Paulson bears a considerable amount of personal responsibility for the crisis.

Paulson, according to a celebratory 2006 BusinessWeek article entitled “Mr. Risk Goes to Washington,” was “one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits.” Under Paulson’s watch, that meant “taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities.”

According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”

CONTINUED...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=1547206&mesg_id=1547206

Wow. That was a warning from before Congress signed off on Bush’s 2008 bailout.

Gee. What a nice friend to have – a miracle worker. Instead of water into wine, though, he turned millionaires into billionaires.