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Hank Paulson, disingenuous bufoon

January 4, 2009

The inspriation for this post comes from reading a piece in the Financial Times, titled (lamely enough) Paulson rues shortage of firepower as battle raged .

There are some who will take offense at the subject line. However, “asleep at the wheel” does not approach accuracy when describing good old Hank’s job performance. Others will feel that I’m stating the obvious and ask why I don’t advocate the formation of a possee and lynch mob chartered with bringing old Hank to justice. Please spare me your wrath and indulge my blathering for a few moments.

First, I’d like to define the words disingenuous and bufoon for those on both sides of the spectrum addressed above. I’ll use definitions found in the Merriam-Webster dictionary.

Disingenuous: “lacking in candor; giving a false appearance of simple frankness; calculating.”

Bufoon: “a ludicrous figure; clown; a gross and usually ill-educated or stupid person.”

Mr. Paulson’s interview with FT.com begins with a statment that he feared a meltdown of the world’s financial system no less than three times in the last six months. The first of which was when he “realized” that Fannie and Freddie, with their $5.4 trillion in global liabilities were in “serous trouble.”

Where was our illustrious Treasury Secretary during House and Senate testimony about the financial instability and imminent danger that Fannie and Freddie represented to the U.S. economy? The congressional hearings have been ongoing since 2004 and Rep Ron Paul (R-Texas) sounded the warning bell as far back as 2001.

It’s hard to believe that a man as well educated and well connected as Mr. Paulson could not understand the monumental risks to the wealth of this nation represented by cheap credit and irresponsible lending practices. As Chairman and Chief Executive Officer of Goldman Sachs he must have dealt with the concept of risk, yet the word only found meaning in three events over the past six months.

As Chairman of the President’s Working Group on Financial Markets (aka: the Plunge Protection Team or “PPT”), he was charged with providing legal recommendations for legislative and private sector solutions for “enhancing the integrity, efficiency orderliness and competitiveness of U.S. financial markets and maintaing investor confidence.” Ambrose Evans-Pritchard in the Telegraph reported Mr. Paulson reactivated this team in Oct of 2006

An entry in Wikipedia states that some allege that the PPT illegally manipulates U.S. stock markets by using government funds to buy stocks, or stock futures to prevent a market crash. When you read the second paragraph details of former Federal reserve Board member Robert Heller, it’s easy to see why some accuse the PPT of conspiracy to manipulate markets.

There are those, Mr. Paulson included, calling for more regulation and oversite of the markets. They are loath to admit that our current economic crisis it due to regulation and government meddling in what is falsely called a free market.

I’m sorry, but I do not agree with more power and authority for the Treasury Secretary and Federal Reserve Chairman. That is a concept akin to giving a vat of whiskey to an alcoholic or a 5 gallon gas can and a couple of flares to an arsonist. Investing those characters with more power will not avert future finanancial crises.

Our centrally managed economy has produced nothing but bubbles, recessions and depressions. It is time to return to sound monetary policy. Return to the Congress the responsibility to “coin money, regulate the value thereof” as defined by Article 1, Section 8 of the U.S. Constitution. End the Federal Reserve, now!

Now, getting back to the subject of this missive… I think the description fits good old Hank — and for that matter, good old Ben — like a glove.

Until next time,
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2 Comments leave one →
  1. January 4, 2009 1:00 am

    I discovered your homepage by coincidence.
    Very interesting posts and well written.
    I will put your site on my blogroll.
    🙂

  2. Terri Kurowski permalink
    January 8, 2009 12:54 am

    A friend sent me a link to your post. Well done! And I agree!

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