(9 am. – promoted by ek hornbeck)
When the history of the early 21st century is written, we can only hope that Henry Paulson, America’s Secretary of the Treasury, will receive the praise he deserves for his role in hastening the collapse of capitalism. While Rosa Luxemburg will always be remembered for her brilliance and courage, and Che Guevara for his daring and love for the people, Henry “Hank” Paulson will never be forgotten because of his incredible cunning in service of the revolution.
Paulson’s cover for his incredible mission was established by fate. He was born into a bourgeoisie family in the famous luxury resort of Palm Beach. They later moved with little Hank to the wealthy Chicago suburb of Barrington Hills, Illnois. From there, he proceeded to check all the necessary boxes and jump through all the required hoops to join the American ruling class: an undergraduate degree from Dartmouth and a M.B.A. from Harvard Business School.
While Paulson still refuses to reveal much about his contacts with the Party, most sources claim that it was in Cambridge where Henry was first exposed to Marxist philosophy through the efforts of a sociology grad student who was part-time bartender at Charlie’s Kitchen near Harvard Square. Whatever happened during those years, we know now that from his mid-20s onward, Henry Paulson was dedicated to destroying American capitalism.
Like many in the Power Elite, Paulson jumped back and forth between high finance and government. He worked in the Pentagon during the Nixon years, went on to Goldman Sachs in the mid-70s where he eventually became CEO in 1998 when Jon Corzine left to become Governor of New Jersey. As part of his extraordinary masquerade as a capitalist, he even managed to amass personal wealth estimated at one time to be $700 million.
All of this was nothing more than a masterfully clever disguise concocted so that he could slip in to the role where he could do the most damage to decadent post-industrial capitalism.
On May 30, 2006, George W. Bush nominated Paulson to become Secretary of the Treasury. On June 28, a gullible Senate confirmed him.
Hank generally kept a low profile over the next months, waiting for what he knew was coming–a financial crisis of unprecedented proportions. For a while, he let Ben Bernanke, newly appointed Chairman of the Federal Reserve, take the lead in dealing with the emerging calamity because he trusted in Bernanke’s incompetence.
It was only as matters worsened in the spring of 2008 that Paulson decided to take the actions he had been planning for decades. As the investment bank Bear Stearns neared failure, Paulson boldly refused the advice of those who said it would be better for the economy in the long run to let it go under. Instead, he engineered a last minute deal that soaked up precious billions of Federal Reserve money, thus limiting its future freedom of action.
Later in August, Paulson had to rely on all the credibility he had built after years of posing as an enthusiastic capitalist. This time, it was Fannie Mae and Freddie Mac who were about to go bust. Paulson talked the Democratic-led Congress, long in the pockets of the DLC and the corporatists, to effectively nationalize the two over-leveraged institutions, thus doubling the U.S. national debt.
At this point, some were beginning to get suspicious. Henry C.K. Liu wrote that Paulson’s moves were bad for the economy and would lead to even greater disaster than that already at hand, but Liu assumed that Paulson was driven by loyalty to the Republican Party rather than to THE Party:
The sooner the need for a systemic restructure is acknowledged and acted upon, the better it would be for the long-term health of the economy, or the future of regulated market capitalism itself. However, hybrid solutions of quick fixes to paper over seismic financial faults are being proposed to enable the evasion of responsibility and for political advantage in an election year.
Former Fed Chairman Paul Volker saw through Paulson’s brave talk that only encouraged more speculation even as the system was crumbling:
This bright new system, this practice in the United States, this practice in the United Kingdom and elsewhere, has broken down. Growth in the economy in this decade will be the slowest of any decade since the Great Depression, right in the middle of all this financial innovation. The current financial system is dysfunctional. That is a polite way of saying it failed.
Paulson’s comrades, and maybe even Paulson himself, were concerned when economic seer Nouriel Roubini reacted to the Fannie Mae/Freddie Mac nationalization by joking that the U.S.A. had become the U.S.S.R.A.:
So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.
Fortunately, none of the “serious adults” were paying Roubini any attention even after his projections had been largely proved right.
Cautious capitalists increasingly called for letting housing prices drop to their real levels–levels at which debt-ridden and benefit-stripped American workers could afford to buy them–but Paulson bet that the greed and penchant for lying that had characterized the Bush Administration and Wall Street would allow him to keep throwing good money after bad until all the financial backstops put in place by Roosevelt’s New Deal had been bankrupted and foreign creditors had been burned to the point that they would no longer even buy T-bills.
He was right. Every time another financial behemoth failed, Paulson was able to get the federal government, already-bankrupt state governments like New York or nearly broke private institutions like Bank of America, to pick up the pieces. Paulson had hoped that foreign banks and investors would be pulled in too, and he did have some limited success with the Europeans, but for the most part, they stayed clear of Henry’s trap.
Within weeks, another crisis hit, taking down two of the five largest investment banks and one of the largest insurance companies. Anyone with perception could see that the end was near:
I wish I knew whether this extravaganza of ruin might settle the question as to whether America goes into hyperinflation or implacable deflation, but the net effect is that money is leaving the system in big gobs. And if not money per se, then the idea of money as represented in certificates, contracts, counter-party positions, and gentlemen’s agreements. This is the day that America finds itself a much poorer nation. The capital we thought was there, is gone.
A lot of it was actually translated over the years into Hamptons villas, Gulfstream jets, and other playthings that will now go up on Ebay or some equivalent as we turn into Yard Sale Nation in a general liquidation of remaining assets. Of course, the trouble in a situation like this, where absolutely everybody is trying to pawn off assets, is that there are very few buyers on the scene, so the prices of all these things go down down down. Everything is for sale and nobody has any money.
The end result was a financial and economic collapse of unprecedented proportions. Paulson had succeeded in transforming what was already a Category 5 hurricane ready to send the U.S. into a years-long depression into the Armageddon of American capitalism.
For that, Henry Paulson, we will always revere you. Rather than waiting for a corrupt, dying system to enslave and make millions miserable for another decade or two, you brought it to a quick if painful end. Now we are free to build a new world on the ashes of the old.
Blow up your T.V. throw away your paper
Go to the country, build you a home
Plant a little garden, eat a lot of peaches
Try an find Jesus* on your own.
Thanks to Cheryl at MLW for this link.