Everyone in the country is talking about the Paulson Plan, wherein one clause would make Paulson de-facto financial dictator of the United States, accountable to no one. The article is a summary of my brief investigation and asks for help in finding out WHO IS THIS GUY? by Jake Towne, the Champion of the Constitution
(libertarian)
Saturday, September 27, 2008
Henry Paulson, Jr., our current Secretary of Treasury under President Bush deserves a little scrutiny. I've done some quick searching, but if anyone has anything else to add, please do so in the comments section. Add your documentation please. As an unelected official appointed by Bush (Strike One!) his recent $700 billion buy-up-illiquid-debt-with-taxpayer-money-to-save-us now known as the Paulson Plan has an odious clause. Per the Associated Press, Section 8 of the proposal stipulates that all decisions are "non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: Paulson would be financial dictator no longer subservient to Bush (who was elected!), Congress, the Federal Reserve, the Supreme Court (well, it does say "any court of law") and, in effect, We the People. Strike Two!
Paulson is a strong Keynesian, like most of the world's central bankers and investment bankers. Translation is that he strongly believes in central planning, fiat currencies, and market interventions. (Strike Three! says the free market and sound money Austrian in me.) This belief is illustrated most convincingly in a most stunning statement was when Paulson unveiled his "bazooka" economic theory, where prior to the US Treasury takeover of Freddie Mac and Fannie Mae, he asked for unlimited federal funds to deal with the failure of these mortgage companies.
"If you're not used to thinking about these issues it seems counterintuitive. But if you're used to thinking about the issues, it is very intuitive. That if you've got a squirt-gun in your pocket you may have to take it out. If you've got a bazooka, and people know you've got it, you may not have to take it out. By increasing confidence, it will greatly reduce the likelihood it will ever be used."
Sort of like the Cold War nuclear deterrent policy (otherwise known as MAD - Mutually Assured Destruction), if he had the power, there would be no danger of ever actually using it, but without the power, confidence would fail and the entire American financial system would collapse. Paulson was granted a largess of power by Congress, although not unlimited.
However, everyone knows what did and would have happened anyways - Freddie and Fannie collapsed and were nationalized by the government. Since the very need for the Paulson Plan disproves his logic that the problems could have been solved back in July, Paulson "bazooka" statement actually has some truth but for all his bluster, it is obvious he has not recognized his mistake. His tools are certainly not on par with a "bazooka." He tried the bazooka and now we have the $700 billion Paulson Plan. Everyone, Paulson is trying to put out a raging bonfire with his "squirt gun."
During the Fannie-Freddie collapse, Paulson creatively invented a new economics term in this September speech, "conservatorship," which any Soviet worth their salt would decry as stealing the Marxist idea of nationalization of companies and industries for the public need. If this continues, welcome to the Socialist States of America. If you want to hear him talk about the current crisis, try this video.
Here are some interesting facts about the man:
Per Wiki, Paulson holds a Dartmouth BA in English from 1968, and a Harvard Business School MBA from 1970. Paulson was an All-Ivy-League, All-East, All-American offensive lineman, but did not serve in Vietnam.
Upon receiving his MBA, Paulson served in the Department of Defense in Washington DC from 1970-1972 as Staff Assistant to the Assistant Secretary of Defense.
Paulson then took a job under John Ehrlichman in the Nixon administration from 1972-1973. The job ended when Ehrlichman resigned and was eventually convicted as a felon for conspiracy, obstruction of justice, and perjury in connection with the Watergate scandal. (His www.ustreas.gov bio fails to mention Ehrlichman by name of course.)
Paulson then worked for Goldman Sachs as an investment banker for the next 33 years. He eventually rose to CEO. His compensation in 2005 was $37 million, and in 2006 when he joined the Department of the Treasury, his compensation was estimated at $16.4 million.
Paulson's net worth is estimated at $700 million. [Hey do you think he would mind helping us out with the bailouts?]
Paulson was raised by his parents (and remains) a Christian Scientist. Per Wiki, this splinter group "teaches that the reality of God denies the reality of sin, sickness, death and the material world. Accounts of miraculous healing are common within the church, and adherents often refuse traditional medical treatments." This church is a major landowner in the Boston area and was founded in 1866 by Mary Baker Eddy, who allegedly was near death but fortunately was able to cure herself by reading the Bible's Book of Matthew. Also per Wiki, although the religion claims to be Christian since they follow the teachings of Christ, several Orthodox Christians disagree since Eddy's interpretations of the Book of Matthew state that "Jesus never claimed to be God and that even implicily denied it." [My aside - Perhaps if we pray for a miracle, our financial system will fix itself. Fortunately, the reality is that the material world does exist, although perhaps Paulson would beg to disagree.]
Paulson also strongly believes in global warming theory and has advocated immediate changes to decrease its effect. [My aside is that I just survived the coldest winter on record in China, so perhaps this belief may also be incorrect, but that is a topic for another article.]
In 2004, Fortune Magazine wrote an article on Paulson that reveals him to be an avid nature and animal lover. He stated during that interview: "I love [snakes]. Yes, I like to hold them and look at them." He also allowed raccoons to freely roam his home with his wife and two children, saying "It's hard to think of an animal I'm not interested in." Paulson's raccoons were named Twinkie, Sam, Hershey, and Rambo. He has also kept flying squirrels, alligators, mice, birds, dogs, cats, turtles, frogs, lizards, a tarantula and snakes as pets.
With all of the above documentation, I think you would agree with me that Paulson is a rich and pretty atypical American. He fits my personal definition of a wackjob, and I am writing this article to see whether you agree with my assessment or not, or if you have other facts to offer. Am I scared to have this man be Secretary of the Treasury, or financial dictator? No, I don't do fear, but I do think he will do a lousy job as Secretary until he is removed from office.
If you like, I recommend reading my Money Matrix series (links below) for an introduction into Austrian economic thought, which Ron Paul and I both claim would get us out of this financial mess, although all of the past interventions will cause a temporary severe recession (RP estimates 1 year, I have no expert opinion for you on the length of time but agree with the general assessment). With more governmental intervention, we are looking at another Great Depression, which I nicknamed the Great Calamity. I suppose Great Depression II is also fitting. Thanks a lot Hank.
For the Restoration of the Republic and the Return of Honest Money!
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
America, Were Michael Phelps' Eight Olympic Gold Medals Worth Winning? Published: August 24, 2008 Michael Phelps and other American athletes are bringing back loads of Gold, Silver, and Bronze Medals from the Beijing Olympics. A young libertarian economist asks if it was worth it.
The Money Matrix - Prelude (PART 1/15) Published: August 1, 2008 Prelude and Source List to a Series on Global Monetary Policy of Control and Explaining Big Government's Finances
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US Treasury Seizes Fannie Mae and Freddie Mac! And What It Means Published: September 8, 2008 "You poor kid, there have been centuries of philosophers plotting to turn the world into just that - to destroy people's minds by making them believe that that's what they are seeing. But you don't have to accept it. You don't have to see through the eyes of others, hold on to yours, stand on your own judgment, you know what that is, IS - say it aloud, like the holiest of prayers, and don't let anyone tell you otherwise." - Ayn Rand
FDIC Closes the Silver State Bank in Nevada as a McCain Resigns in Disgrace Published: September 7, 2008 Andrew McCain, son of John McCain, resigns from the board just before yet another small bank goes under. $20 million in uninsured deposits lost. And by the way, did you know the American banking system may crash? Learn how to protect yourself and your family.
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Henry Paulson, Jr., our current Secretary of Treasury under President Bush deserves a little scrutiny. I've done some quick searching, but if anyone has anything else to add, please do so in the comments section. Add your documentation please. As an unelected official appointed by Bush (Strike One!) his recent $700 billion buy-up-illiquid-debt-with-taxpayer-money-to-save-us now known as the Paulson Plan has an odious clause. Per the