"Paulson Screws Taxpayers on Bank Equity Deal" ...(Dean Baker)

[KoKo]

Submitted by Bob Fertik on October 14, 2008 - 10:54pm.

Dean Baker says Paulson screwed taxpayers, despite all the promises from the White House and Congress. Both Barack Obama and John McCain are campaigning on a promise to protect taxpayers. So will the Democratic Congress engage in some oversight now? Or do we need to launch an Impeach Paulson campaign?

... there is a big issue about the terms under which they were given capital. Secretary Paulson decided that a 5 percent rate of return on preferred share was good enough for the taxpayers. Warren Buffet got a 10 percent return for his investment.

No one would confuse Henry Paulson for Warren Buffet, but come on -- he could get a 4.0 percent return buying treasury bonds. I can't believe that he had such bad business sense when he was CEO of Goldman Sachs.

The markets gave Paulson's investment strategy a big thumbs down from the taxpayer perspective. Goldman Sachs shares jump 10.7 percent after the details were made public. Shares of Bank of America rose 16.4 percent and Citigroup's stock rose 18.2 percent. Obviously the market thinks that Paulson gave the banks a really good deal.

It also seems unlikely that the executive compensation restrictions will have much effect. I doubt that we will hear about any top executives getting big pay cuts because of the bailout, but I will be very happy to be proven wrong.

In short, it seems that we have a whole new group of welfare dependents. Forget Reagan's mythical "welfare queen" who drove a Cadillac. These folks have private jets and homes on the Hamptons. And, they wreck banks and economies for a living.

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AND..this from a Commenter in Reply:

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Will Any of this Really Help Us?
Submitted by shakerdog on October 15, 2008 - 1:53pm.

Hey the name of the game is lobbyist's. Everybody and their brother has a lobby to get our politicians to do their bidding and send them favors and money and whatever except apparantly "we the people". I guess what we need to do is form a corporation called "we the people" and hire lobby groups to represent us so that we can get some of our own money that is being passed around back to us as well as have a say in how much debt we will allow ourselves to be gotten into. Then maybe we can get some sanity back into our systems.

Part of the problem is man is a creature of habbit and we keep addressing everything by doing the same things we have always done. There is also a lot of greed and deceipt involved as well as fear. But this is a changing world and these same solutions do not always work anymore. WE need accountability, fresh thinking, honest, and adaptability in a changing world. What is so confusing about it?

Take these carmakers that are having trouble now, well hey get a clue....Everyone does not need 500 horspower monsters to get to work and why spend millions on commercials trying to get us to think we do. What people really like most about big cars, suvs, and trucks is they feel safe. They feel that at least if they get hit by another car they can survive. So how bout some safe cars with really good gas mileage. Now some people like the truck for work so they can haul stuff. How bout a car that can convert to a truck or maybe a trailer package. The point is nobody seems to use any common sense anymore.

Take our insane school systems, WE just keep throwing money at them hoping everything will get better but it keeps getting worse because no one is willing to look at better ways of helping prepare our kids for the real world. WE just go through the same old motions. I could go on and on. WE just are not looking at solutions to a changing world's problems with a clear and unbiased look towards adapting for the future in a way that is beneficial to everyone.

The same can be said for the way local state and federal governments just keep doing stuff the same old ways and raising fees and taxes whenever they need more money rather than finding different ways of doing things or finding better sources for the supplies they purchase, etc...

Hey here is a thought, when a person has a job that he can feel fairly comfortable that he will have tomorrow then he or she will go out and buy stuff and support the economy. WE need jobs created by investing in our infrastructure and investing in new technologies in the field of alternative energies and providing for enough food production and clean water for everyone. As well as making our education systems more productive, more desirable to learn and more efficient without continually putting teachers out of work and sending kids into the workplace or world unprepared for life.

WE do not need to cling to outdated methods of doing things just to show that this group is more right than the other or that one group is favored over another or that divine intervention will come and make everything ok. And let's not get on this in the name of God stuff because the truth is all our actions are in the name of man. Few people actually do what would be considered "God's work" and I'll bet he knows who they are too.

WE do not need to have wars just so a small number of companies can create a small number of jobs that only helps a few. Our environment is changing, not just climatically but our systems, the way the world does business, and even our daily habbits and lives. WE just need to adapt in a common sense manner and not react to everything new out of fears.

WE have become part of the global economy and we were so caught up in all the profits and rewards we could get that we forgot to make sure that we did not put our bets in without making sure we did not get the low end of the stick. WE need fresh ideas that take everyone's best interest into account so that we can thrive and grow in a changing world where we can feel safe and secure. That let's everyone win. We just can't keep doing things the same old ways, and we can't be greedy little hoarders or warrior clans, or hold onto the same prejudices and allow the same old injustices to continue. We need to cooperate and share and respect each other and find common good in each other.

Let's get a clue people! There are better ways to do things and we need to use some of them in an honest, wise, compassionate way so that our children and our children's children can have a decent safe world to live in.

More at.........
http://www.democrats.com/paulson-screws-taxpayers-on-bank-equity-deal#comment-84422

[razors edge]

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[KoKo]

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