Paulson, Bernanke, Try Hustling Congress

Here we go again.

As the Bush administration did with the Patriot Act and Iraq War resolution, Henry Paulson and Ben Bernanke spent today trying to hustle Congress into new territory using the familiar administration tactic of hysteria. Fortunately, this time it looks as if more than a few members have read the fine print before committing us to a whole new level of disaster.

The meltdown is a prime example of what happens when the nation's leaders on both ends of Pennsylvania Avenue, on Wall Street and Main Street, hold government service in contempt. And who believe, amazingly, that "the market" is an alternate life form requiring no supervision or oversight.

Paulson spent a good part of the day telling Senator Dodd’s banking committee not to fret, not to worry, not to upset “marketplace forces.” Just show him the money today and tomorrow he’ll talk with Congress about nettlesome issues such as oversight, executive compensation, public ownership of bailed out institutions and so on. Watching Paulson reminds me of Wimpy, a 1930s-era cartoon character who kept telling waiters, “I’ll gladly pay you tomorrow for a hamburger today.” Except Wimpy never came back to pay.

According to the New York Times, Democratic Senator Sherrod Brown of Ohio asked the former professor-turned-Fed chief, “Do you think Wall Street owes the American people an apology?”

Bernanke quibbled over word choice, ruminating that “Wall Street is an abstraction. There were many people who made mistakes, many regulators who made mistakes.” In other words, everyone was responsible so no one is responsible. That’s how the old Supreme Soviet did things as a hedge against anyone being tossed in the Lubyanka. Paulson dashed to Bernanke’s rescue, turning populist and saying, “I share the outrage … There’s a lot of blame to go around.”

If any apologies are owed, apparently we’ll get them later but we’re not sure from who or when we’ll get them – if at all.

Meanwhile, Bernanke and Paulson clearly lost sight of the fact that Wall St. as the "market' is simply human nature writ large, with all the greed and malign intent of the worst of all evil empires. Without regulation and oversight, anarchy ensues and it is always the little guy who pays the price.

Isn’t it funny that the same people who rail against "socialized medicine" wholeheartedly support socialized banking?

Well, I guess they've got theirs so who else matters?

Yet there is a ray of sunlight shining through the thunderheads. Like every other proposed condition on the bailout money, Paulson and Bernanke spent much of the day trying to convince Senators to set aside punitive measures for executives until after the bailout. But Sen. Dodd drew a line in the sand. Any bailout would “include executive compensation,” he said. “Count on it.”

And so it goes, as the great Linda Ellerby would say as her sign-off line. And so it goes.

Fiction Is Better Than This Reality

– Guest post by Denis Campbell, editor of VadimusPost.com

“What will be the next thing that challenges us? That makes us work harder and go farther? You know, when smallpox was eradicated, it was considered the single greatest humanitarian achievement of this century. Surely, we can do it again. As we did in the time when our eyes looked towards the heavens, and with outstretched fingers, we touched the face of God. Here’s to (toasting) absent friends, and the ones that are here now.”
- President Bartlett, The West Wing, Season 1, Episode 5

When the running dialogue in the real Presidential race gets too much to bear, I take a moment away from this computer screen and pop a DVD in from the fictional White House to chase my own higher angels and prayers of a new White House. I look past the slimy ads, liars, crooks, thieves, agendas, polls, speeches, SPIN, and see moments here of pure inspiration, emotion and a government as it should be versus the government as it today is.

The people in that show serve a higher purpose, truly focused on Country First as more than a slogan.

When at the end of this current DVD, Josh Lyman stops the President in the portico and simply says, “Mr. President, we talk about enemies more than we used to.” He simply replies, “yeah.”

And while it was clear the seeds for where we are today in this epic campaign’s seeming archetypal struggle of good vs. evil were planted long before 1999 when this episode first aired, indeed nothing in the political landscape looks as it did back in 1994 when the Gingrich Revolution first hit Washington, or earlier.

I watch this DVD and am taken back to early spring of 1973 and a week-long excursion to Washington DC as a 16-year old high school junior in the Close-Up program. There we met giants of politics, including a freshman senator from Delaware, now Vice Presidential candidate, on the subway between the Capitol and Senate Office buildings. We sat next to him and the late Senator Heinz from Pennsylvania. These gentlemen and they remain as such in my memory, stopped their conversation to converse with two young kids from Massachusetts.

We were young and the antithesis of cynicism. We had high ideals as we sat at the feet of Senator Burke listening to him challenge us in a way no politician has since though inspiring oratory, not knowing or caring he was at that time having a torrid affair with television’s Barbara Walters. Those sorts of things happened in private, were no one else’s business and were not the fodder of tabloid journalism or dramatic television self confessions to boost book sales.

The Watergate story was breaking furiously all week and we clamoured to the hotel newsstand for the next big revelation in the venerable Washington Post, now a shadow of its former self. There was no CNN or even much cable television so we read newspapers and read great writers and editorialists and this was just two short months after the President was re-inaugurated for a second term.

We had faith the truth would come out and indeed it did and he was shown the door a year later. We believed in justice and accountability. We watched as Attorney General Elliott Richardson resigned as U.S. attorney general when he refused, as directed by President Nixon, to fire the special prosecutor investigating the Watergate scandal rather than take part in a cover-up.

Today, sadly, neither he nor Nixon would be gone because our own standards have so slipped so badly. As I watched Karl Rove pull the puppet strings in Texas for Bush 43 without a shred of dignity or decency, just how low can we go and what can we get away with, it was clear we’d not just lost our moral compass, it was thrown out with the trash.

And yet I always kept hope.

I lived in The Netherlands and was so inspired when Minister-President Wim Kok resigned on April 16, 1999, the day it became widely reported that Dutch UN Peacekeeping troops stood by and did nothing while the 1995 Srebrenica massacre of Muslim men and boys was carried out by Serbian troops.

That was a statement of honour that is much missing in today’s governance. If something bad happens on my watch, the buck stops here and I take personal responsibility. Sadly, I cannot see an American President ever again resigning unless frog-marched out of the Oval Office with a smoking gun in his hand, a dead body on the carpet.

Meanwhile, the current looting of the Treasury produced this e-mail in my box today:

Dear American Friend:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had a crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gramm, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully,
Minister of Treasury
Henry Paulson

Denis Campbell edits a daily e-newsmagazine at www.vadimuspost.com.

From A Dog Named Checkers To The Looting Of America.

On today in 1952, Republican vice-presidential candidate Richard Nixon went on television to deliver what came to be known as the “Checkers” speech. Appearing on flickering, black-and-white sets across America, his wife seated next to him like the stage prop she’d play for the rest of Nixon’s life, he denied allegations of improper campaign financing. At stake was whether Nixon would remain on the GOP ticket with Dwight Eisenhower; at issue was a vicuna coat purportedly given to Pat and a dog supposedly given to their daughters by Republican Party bigwigs seeking favors.

A coat and a puppy! How quaintly innocent it all seems now.

Now, if all you came to offer a politician a coat, you wouldn’t get to take it off before being hustled out of the office and, oh, take that damn dog with you before it pees on the carpet. The whole point of Grover Norquist and Tom Delay’s brainchild, the K Street Project, was to lay tens of millions of slimy corporate dollars across the greasy monkey palms of the Republican Party and its greedy minions on Capitol Hill.

The McCain-Palin campaign is the K Street Project taken to its logical conclusion. It is managed, staffed and run by K Street men who made small fortunes from corporations seeking access to and favors from politicians. One look no further than Rick Davis, the campaign’s manager, who received $5-million from Freddie Mac and Fannie Mae.

"The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again," says Robert McCarson, a former spokesman for Fannie Mae. McCarson told the New York Times that while he worked there, Fannie and Freddie together paid Mr. Davis's firm $30,000 a month, which eventually totalled a handsome $2-million fee.

At the time that Davis was recruited by the two mortgage giants to run the Home Ownership Alliance in 2000, they were under pressure from private industry rivals and deregulation-minded Republicans who argued that the two companies' federal sponsorship gave them an unfair advantage and put taxpayers at risk. As a result, the financial service industry’s go-to guy on the Hill, John McCain’s BFF Phil Gramm, the two institutions were set free to become public companies.

In the end, of course, the de-regulate everything Republican Congress was right. Freddie and Fannie put taxpayers at severe risk but not because they were federally regulated. Instead, cut loose from their minders, Freddie and Fannie joined the Wall St. crowd hanging over the roulette wheels, tossing chips on every number in sight. Odd, even, black, red, it didn’t matter; the thrill was the action more than winning. Eventually, like all addicted gamblers, they – along with their playing partners on Wall St. – played away everything until they didn’t have enough money for a bus ticket home.

So Congress is sending money for a ticket. A whole lot of money for a whole lot of tickets, as it turns out.

But instead of insisting that the addicts agree to go to Gambler’s Anonymous meetings as the price of a free ride home, Hank Paulson – Morgan Stanley’s former $35-million a year man who now runs the US Treasury – says forget any conditions or restrictions or penalties for the not-so-repentant gamblers; just trust me with a trillion dollars, give or take, to straighten things out and I’ll deal with my former lunch club buddies.

Here’s the best part.

The way Paulson and the White House insist the be law written, Treasury alone would hire “consultants” to decide which lousy loans should be purchased, how much they’re worth, to whom they should be re-sold and at what price. Since Paulson wants to do this with no oversight by Congress, administrative agencies or court review, then clearly “consultant” means bankers and other Wall St. moguls. In other words, the people who screwed the pooch in the first place and need rescuing by Washington would be hired to decide which pieces of their toilet paper should be bought up and at what price.

And not Congress nor the courts nor any regulatory agency could override their decisions.

Shorthand: The Ponzi scheme artists who got us into this mess we’re all paying to clean up will make money off of us three more ways, besides the fees they got when they originally packaged, sold or bought the garbage loans. Now, they’ll get fees for untangling their own mess; fees for pricing and re-packaging the garbage being laid off on taxpayers; and, finally, fees for selling the new paper.

“Fees” doesn’t mean minimum wage.

Pres. Bush is said to be balking at some of the restrictions Sen. Chris Dodd and Rep. Barney Frank – chairmen of their respective banking committees – are insisting be written into the law. Despite some jawboning, Bush doesn’t have any real choice but to go along with added provisions such as Congressional and regulatory oversight, homeowner relief and provisions such as controlling bonuses for executives of banks seeking help.

Why? Because if Bush refuses to sign the eventual measure, the good news is that no one will remember his Iraq disaster; the bad news is he will be remembered as the 21st century’s Herbert Hoover.

We sure have come a long way from when a vicuna coat and a puppy were major scandals.