I have been very critical of Paulson, Bernanke and Geithner.
By Daniel at 6 February, 2010, 11:27 pm
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But I am willing to hear an opposing argument if credible. I have read multiple books on the crisis and am 80% through “Too Big to Fail” by Andrew Ross Sorkin, which is a detailed account of the events leading up to and during the meltdown. He leaves the reader with the impression that Paulson, Geithner and Bernanke were trying to do the right thing. But considering the events leading up to the crisis, I still question their motives.
They claim to have averted GD2. Maybe all they did was defer it. Besides printing massive amounts of money, and piling debt on the taxpayer, what have they done to actually solve the problems? And the next crisis may come in the form of sovereign debt default or a currency crisis. The common thread that runs through the “solutions” of many nations, but especially the US and UK, is to transfer mistakes from the financial sector to the public sector. These mistakes by the “masters of the universe” were driven by greed, magnified by excessive risk, and facilitated by fraud at every level from loan origination, to securitization, to unpayable derivatives sold. Yet WE are still paying for THEIR mistakes, while THEY again pass out big bonuses.
One disappointment from the so-called financial journalists, is how frequently they fail to disclose the active role the “saviors” played in creating the crisis:
1) Excessively loose monetary policy. Bernanke encouraged Greenspan’s actions, and now is even worse.
2) WS and banksters actively dismantling regulations to reduce risk, because it interfered with their profits (and bonuses). Robert Rubin as Treas Sec was instrumental in killing Glass-Steagal. Immediately after, he quit and went to C, where he got massive compensation while helping to destroy that company.
3) WS (Paulson in particular) led the charge to allow dramatically higher leverage ratios.
4) According to FNM, WS pressured them to provide more subprime mortgages because crap brought higher fees to WS.
5) The rating agencies were pressured by WS to give AAA ratings for the securitized crap they were selling to unsuspecting investors. WS paid the agencies, an obvious conflict of interest.
6) And after the world knows the banks brought this crisis, these bastards are still heavily lobbying Washington to prevent any legislation that would interfere with THEIR profits, even though it adds risk. Their insatiable greed knows no bounds, and apparently has no conscience.
The overwhelming evidence is that the malfeasance of many in the financial sector brought this disaster, and all 3 of these guys were part of it. If a fireman saves your house from burning to the ground, that is a good thing. If he helped set the fire, he would still be prosecuted, not congratulated. Paulson was at the forefront pushing Washington to allow WS to take on much greater leverage. If that mistake alone wasn’t made, perhaps we would never have been “At the Brink” in the first place.
Until proven otherwise, my opinion remains that these 3 guys are creatures of the financial system, and it is to them they are beholden. Whether they intentionally screwed the rest of us to save their cronies we will never know. However, the cover-up by the NY Fed of the AIG backdoor bailout suggests deliberate malfeasance.
- basehitz
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