Henry Paulson: #1 Reason Why Bankers Should Be Banned From White House Cabinet Positions
Yesterday, Bloomberg Markets broke news that Henry Paulson provided inside information to hedge fund managers before Fannie Mae and Freddie Mac were placed in federal conservatorship. Like Paulson himself, at least five of the men were Goldman Sachs alumni.
Bloomberg Markets reported yesterday that in 2008 former George W. Bush Treasury Secretary Henry Paulson essentially gave inside information to a roundtable of hedge fund managers, including at least five former Goldman Sachs alumni. This news, though not shocking, should open debate again on whether it is wise to allow former investment bankers, speculators and other financial “experts” into U.S. cabinet positions.
Should, mind you. Of course, this is not happening. Once the story broke, many online news sources and blogs ran the report but offered little to no analysis of the real story: that a former CEO of Goldman Sachs, Paulson, was once the Secretary of the Treasury—that we routinely install such Wall Street insiders in influential White House positions.
It is bad enough that former Goldman Sachs bankers were given inside information by a former Goldman CEO about Fannie Mae and Freddie Mac’s bleak futures. But, again, this is not the real story—this is just scenery.
The information Paulson supplied detailed a “scenario” in which the government-sponsored and publicly-traded mortgage lenders would be placed in conservatorship. Earlier in the day, according to Bloomberg Markets, Paulson had told New York Times reporters that he expected the Federal Reserve and the Office of the Comptroller of the Currency inspection of Fannie Mae and Freddie Mac would restore confidence in the two enterprises.
Thus, Paulson was saying one thing to the public and quite another to private enterprise—in this case, various hedge fund managers (who thrive in economic crises), of which, again, at least five men were old Goldman chums.
Read Bloomberg’s report for more complete information—that is not the aim with this article.
In all truth, who is actually surprised that Paulson tipped off his buddies?
The emphasis here is on the real story: that if we are to move forward as a country, if we are to inoculate ourselves against the socialization of the rich and powerful, we the people must call for a ban on any former bankers and investors being placed at the highest levels of government, in positions that do not require a democratic vote no less.
The revolving door policy must end.
We don’t need these former financial wunderkinds, these Wizards of Oz of banking, these dime-store illusionists, for a functioning democracy. The fact is, they need us.
They need the government to allow them to keep raping and pillaging America’s wealth. This is the only reason they position themselves and ultimately receive appointments like Secretary of the Treasury—to serve as Wall Street’s invisible fourth check and balance on the government or, more precisely, the people.
It is time to deny them the pleasure.