Hank Paulson, AIG, and ethics
The significance of the former Treasury secretary's contact with Goldman Sachs during the AIG bailout
Was the AIG bailout a sweetheart deal for Goldman Sachs?
(EPA/Corbis/Everett Kennedy Brown)
The New York Times just “dumped a gigantic bucket of kerosene on the Goldman Sachs conspiracy fire,” said Joe Weisenthal in Clusterstock. The Times obtained records showing that then–Treasury Secretary Henry Paulson was in steady contact with Goldman, his former firm, as the government was planning the AIG bailout last September. He got ethics waivers to talk to Goldman, but that shows he was “specifically” worried about Goldman’s survival.
I’ve certainly been “skeptical” of the Goldman “conspiracy theorists,” said Andrew Clark in Britain’s The Guardian. But 26 phone calls in one week between Paulson and Goldman CEO Lloyd Blankfein? That’s “almost stalker-like behavior.” Paulson had no financial stake in helping Goldman, but since Goldman indirectly got $13 billion in the taxpayer bailout of AIG, it seems fair to question his loyalties.
Why are people looking for “behind-the-scenes winks and nods,” said Yves Smith in Naked Capitalism, when the government’s open favoritism toward Wall Street is so “blatant”? Goldman has better Washington access than other banks, but just because it was the biggest beneficiary of the AIG unwinding doesn’t mean it was the only one. Wall Street would have collapsed, along with AIG, if not for the “generosity of the American taxpayer.”
For that, Paulson actually deserves some credit—the bailout “prevented a 1929-style meltdown,” said Doug J in Ballon Juice. But it's hard to escape the fact that saving AIG and letting Lehman Brothers collapse both "benefited Goldman immensely.” I’m still not “a Goldman conspiracy theorist, but I can certainly see why a lot of people are.”
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2 Comments
Posted by Geo, Monday, August 10, 2009, 5:51 pm Their actions didn't prevent a 1929 style meltdown.If we follow the pattern of the 1920's it still has a few more years to happen.They actually exacerbated the financial displacement and haven't cured any of the underlying causes of the consumer problems which have all their basis in the loss of spendable income which led to an increase in borrowing.what pray tell has anyone done ot address the loss of jobs for consumers and their loss of wages which caused all the house borrowing to begin with?
Posted by nikolai, Tuesday, August 11, 2009, 2:33 pm Lloyd Blankcheck, eh? What a name fits doesn't it? Kings and kingdoms, Fifes and Feifdoms. The more things change the more they stay the same and will until taken by sheer force I'm afraid. When will that be? When your children are starving. Maybe.
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