It’s hard to imagine a better endorsement of Donald Trump’s economic
policies – whatever they may be, whenever he finds the time to explain them –
than the recent endorsement of Hillary Clinton by former Goldman
Sachs CEO and U.S. Treasury Secretary Hank Paulson. As the man in
charge of the biggest explosion of corporate welfare in world history – the
“TARP” bailouts, he defined himself as a sworn enemy of capitalism and a
socialist when it comes to the capital markets. Socializing billions of
dollars in investment bank, insurance company, and automobile industry losses
with taxpayer dollars qualifies Paulson as deserving of the S-word
label. As such, Hillary Clinton may well have found a new political and
financial soulmate.
Paulson began his career and cut his political teeth with some of the
sleaziest and most disastrous political hacks in American history – first as
a Pentagon assistant to the secretary of defense from 1970-1972, then as a Nixon
administration assistant to John Ehrlichman, the convicted Watergate
felon. Such sterling credentials earned him a position at Goldman
Sachs, where he presumably mastered the political dirty trick skills that he
must have learned from Ehrlichman and the rest to eventually claw his way up
to the CEO position.
Paulson and Hillary Clinton might as well be cloned twins when it comes to
using their positions of political power to line the pockets of the
wealthiest people in America in return for kickbacks and political
support. As the chief corporate welfare czar during the Bush
administration, a first order of business was the $180 billion bailout of the
insurance company AIG, ninety percent of which was totally solvent, as
documented by David Stockman in his book, The Great Deformation (p.
6). Rather than allowing a healthy free-market purge of AIG’s bad
assets, Paulson showered the company with taxpayer dollars in a totally
unnecessary bailout.
The real purpose of the bailout, Stockman shows, was “protecting
short-term earnings and current-year executive and trader bonuses,” not
saving the company from bankruptcy. “The bailout’s primary effect was
to provide a wholly unwarranted private benefit at public expense; namely,
the shielding of highly paid bank traders and executives who had exposed
their institutions to embarrassing losses from taking the fall . .. . “
Not that saving the company from bankruptcy with tax dollars would be
wise or desirable. Capitalism is a profit and loss system, not
an I-keep-the-profits/you-pay-for-my-losses system.
Paulson’s employer, Goldman Sachs, was paid nearly $19 billion on various
claims against AIG, which means that the “AIG bailout” was also a giant
bailout of Goldman Sachs. Then there was the $13 billion bailout of
General Motors, “justified” by Paulson by the outrageously false theory that
GM did not have enough assets to justify private loans to keep the company
afloat. He warned America that the bankruptcy of GM could cost a
million jobs even though the entire industry employs only about 750,000
workers according to the U.S. Bureau of Labor Statistics.
The real purpose of the bailout of GM (and Chrysler) was a demonstration
of why the Republican Party is known in some quarters as The Stupid
Party. Had those two companies downsized or even declared bankruptcy,
and the free market was allowed to work, there would have simply been a
transfer of automobile production (and jobs) from the older, less-efficient, unionized
factories to the mostly non-union factories in Kentucky, Tennessee,
South Carolina, Mississippi, Georgia, and Alabama. These are all
right-to-work states where Republicans are more prevalent than in the heavily
unionized “rust belt” states. The “GM bailout” was partly bailout of
the United Autoworkers Union and its bankrupted pension plan. It is
safe to assume that it did not result in a single vote, or a single dollar in
campaign contributions to Paulson’s Republican party.
After showering Goldman Sachs and his other Wall Street cronies with tens of
billions of tax dollars, Paulson returned to Goldman where he must have been
very handsomely rewarded indeed. When it comes to the Wall Street
banksters like Hank Paulson, the “revolving door” between business and
government is literally paved with gold. His endorsement of
“pay-to-play” corporate welfare queen Hillary Clinton is as perfect a
political match as one can imagine.
The Best of
Thomas DiLorenzo
