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Corruption or Incompetence; the Economic Effects Seem the Same

1:16 pm in Uncategorized by dakine01

Hank Paulson and Helicopter Ben Action Figures! (Photo: parapolitical, flickr)

Hank Paulson and Helicopter Ben Action Figures! (Photo: parapolitical, flickr)

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One of the on-going arguments across the blogosphere and even the entire world is whether the economic problems of the last ten years are more related to incompetence or basic corruption. I must say, just the last week has offered plenty of evidence for both views. For example, we had this article from Bloomberg yesterday (Tuesday, November 29) about how then Treasury Secretary Hank Paulson met with his hedge fund buddies and gave them the first class insider information on his plans to place Fannie Mae and Freddie Mac into “conservatorship.”

Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said.

The fund manager says he was shocked that Paulson would furnish such specific information — to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.

…snip…

And law professors say that Paulson himself broke no law by disclosing what amounted to inside information.

…snip… Read the rest of this entry →

Henry Paulson and His Blind Trust

8:01 am in Uncategorized by dakine01

The other day as I was checking out various online news sites, I came across an article from Bloomberg via Yahoo titled Paulson to Discover Fate of his $500 Million Fortune.

Jan. 7 (Bloomberg) — Treasury Secretary Henry Paulson, a $500 million man when he entered office, said he’s about to discover how much of his fortune remains after two years of financial market turmoil.

“I’ve got to find out where my money has been invested,” Paulson, 62, said today after a speech, drawing laughter from the Washington Economic Club.

The former chairman of Goldman Sachs Group Inc. sold his 3.23 million shares of the investment firm before he was sworn in as Treasury secretary in July 2006. As a government worker, he’s bound by ethics rules that require him to put his wealth in a blind trust and in assets that don’t present conflicts of interest.

Now this got me to thinking about how some of the so-called "blind trusts" used by politicians turned out to be not-so-blind after all. While trading emails, a friend reminded me of 1988, when Poppy Bush pointed out that Bob Dole and Liddy Dole’s Trust might not have been so blind:

A day after Vice President Read the rest of this entry →