Now that the U.S. Senate has given the nod, Treasury Secretary Henry Paulson, in an unprecedented government intervention more socialist than Castro, Che and Mao combined, may do what many Americans do when they’re depressed - go shopping.
Do it, just do it, do it, do it, do it and I’m here and I’m there and I’m Big Bank Hank and I’m everywhere.
--Big Bank Hank Jackson 1979 “Rapper’s Delight” Sugar Hill Gang
Do it, just do it, Do it Do it, Do it,
--Big Bank Hank Paulson 2008 “Treasury Secretary” Capitol Hill Gang
Indeed the stark similarity to the witticisms of the two Big Bank Hanks could be dissected over and over again -- to the degree that even a graduate level anthropological linguistics professor would scratch his head to the bone at the sheer irony and sweet historical symmetry of it all.
But talking about “Rap” in its traditional form is so boring these days so let’s talk about something that makes you wanna Par-Tay: Monetary Policy! And, crickets. Okay, let’s talk about Treasury Secretary Henry Merritt Hank Paulson Jr. anyway.
His proposal is this: "give me $700 billion right now and I will save the economy and everyone it affects by paying off not people’s bills but bad bank debt -– a tab that most of my golf buddies ran up -- to free up credit so these same risky banks can make more loans and continue to contribute to the damning cycle of living on credit that is taking this country into a dark, dark place in years to come."
As the House of Representatives convenes on whether to cut-the-check and spite its face, Henry Paulson, the former head of investment banking stalwart turned indebted bank holding company Goldman Sachs, now faces a quandary similar to his ancestral career predecessor Treasury Secretary Andrew Mellon, who is credited with causing the last depression by using a weed out process and cherry picking the banks he wanted to fail.
Some may say Paulson’s strategy is the opposite of Mellon, who served under Herbert Hoover at the dawn of the great depression. Hoover is the second worst president in history by the way. Yes, detractors of this blolumn will say, "Nay J, Nay!" Paulson is borrowing this money to help the banks out so that we don’t have the onset of another great depression whereas Mellon refused to lend cash to failing banks and tightened interest rates that would have put more money into circulation. (Stay with me)
Paulson on the other hand wants to give ‘til it hurts, right? Wrong. First, in a week with the biggest point drop in the history of the friggin’ equity markets, we’re in a depression. Sorry. Truth is they didn’t know it then just as we don’t know it now. Plus they say the guy next door being foreclosed is a recession and you getting put out of your house is depression so it’s all newspeak anyway. So, yes, I said depression, maybe not "Great" but certainly depressingly depressive. When five major banks and one global insurance and financial services company have failed, if you adjust for inflation and take away all of the government stopgap programs put in place by Franklin Delano Roosevelt, it’s a depression, plain and simple.
And Paulson is a Mellon of a different color who stood by and let his old Wall Street nemesis Lehman Brothers Holdings Inc., fail. And for that matter with only JP Morgan, Citigroup, Wells Fargo and Bank of America nearly guaranteed to stay, everybody else besides of course Goldman is up for the chopping block. Morgan Stanley might stick around too but Big Bank Hank gets to pick. This is why he’s in the spotlight, until he isn’t of course.
Now, in an unprecedented government intervention more socialist than Castro, Che and Mao singing “We are the World” at a commune in Santa Clara, Paulson will do what many Americans will do when they’re sad – go shopping. The truth of the matter is that even with congressional oversight, all the other banks in trouble could still fail if Big Bank Hank doesn’t give these “suckers” a dime. Distressed institutions have to line up and at the end of the day it will be up to him, a rich emissary of the Bush Administration. You see, the government just needs to prove that one or two banks can be saved and snap some photos and wave with a big cardboard check and a thumb in the air.
And alas, we have two possible scenarios if this bill does pass the House:
Paulson will run the clock out and maybe spend $250 billion or so of the money with little to no accounting as to where it went except betwixt and among mostly white men in dark suits at the Federal Reserve, in Congress, with the banks themselves, and at the Treasury Department. He may ask for more, he may not and then either way the “Bushies” are out of here.
There are also other deflections to keep in consideration. Alright so, uh no one is going to care about this “ish” when that sexy lawyer who works hard and plays harder that you've been digging shows at the Halloween Party dressed like a cat. No one will blink and eye in the run up to the Election or when the Lions lose again on their Thanksgiving game or when little Jimmy Public gets the newest “put your eye out” toy that’s all the rage at Christmas. And you never know when Osama will drop another mixtape and muck up the whole news cycle. So, at the end of the year, right after Ryan Seacrest says “Happy New Year, I’m still Rich,” this whole credit crunch will be someone else’s problem.
Real quickly, here’s the second and last scenario :
Paulson somehow sends at least 50 billy goats ($50 billion for those of you who are not idiots like this blolumnist) to his buddies at Goldman and then also 10 or 20 years from now we may find out that $100 million to $1 billion ended up in something called “Paul's Son Charitable Trust Inc. LLC, LLP Ltd.,” which we might find out is a wholly-owned subsidiary of “I’m in the Cayman Islands Now Suckers PLC.”
Hear me talkin’ bout checkbooks, credit cards, more money than I could ever spend/but I wouldn't give a sucker/ or a bum from the rucker/ not a dime until’ I made it again.
Wow. Again it’s so hard to guess which Big Bank Hank said this as well but surely the syntax, tone and meaning of this sign of the times through rhyme if you will, is indicative of Paulson’s “%&*$@ you, pay me” plan that is supposed to be a cure all prescription for America’s woes. But it won’t be.
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