By Dave Lindorff

A brief conversation I had earlier this week with a car dealership
executive while standing in a post office line demonstrated simply both
why the bank deregulation and consolidation process of the past two
decades has been a screw job for ordinary people, and why the
Washington bailout has been both a taxpayer rip-off and a failure (if
it was even intended to work!).

I was chatting with the guy standing behind me who works at one of
the 14 dealerships in a Philadelphia-area regional family-owned chain
of GM dealerships called Bergey’s. Noting that a number of big dealers
like Knopf (a Chrysler Dealer) and McGarrity’s (Ford) had been closing,
I asked this Bergey’s manager if the problem was that the banks had
frozen lending, making it hard for people to buy new cars.

Paulson Says Troubled Assets Will Not Be Purchased
Paulson: bailout program won't purchase troubled assets; focus remains on financial markets
By MARTIN CRUTSINGER | ABCNews.com | November 12, 2008

Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.

He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

Goldman Sachs ready to hand out £7bn salary and bonus package... after its £6bn bail-out
By Simon Duke | DailyMail.co.UK

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday.

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million.

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

By William Greider, The Nation

The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson's transaction, the taxpayers were taken for a ride--a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public's money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.

William Greider: United Steelworkers Union prez Leo Gerard cracks open the sweetheart deal that bailed out nine banks--and likely lined the Treasury Secretary's own pockets--with billions of taxpayer dollars. Does anybody care?

The Guys From ‘Government Sachs’
Julie Creswell and Ben White | Blue Ridge Now
Published: Sunday, October 19, 2008 at 5:17 a.m.

Mr. Paulson, Mr. Kashkari and Mr. Shafran no longer own any Goldman shares. It is unclear whether Mr. Jester or Mr. Wilson does because, according to the Treasury Department, they were hired as contractors and are not required to disclose their financial holdings...."The appearance of conflict of interest is everywhere, and that used to be enough. However, we’ve decided to dispense with the basic principles of checks and balances and our ethical standards in times of crisis."

THIS summer, when the Treasury secretary, Henry M. Paulson Jr., sought help navigating the Wall Street meltdown, he turned to his old firm, Goldman Sachs, snagging a handful of former bankers and other experts in corporate restructurings.

In September, after the government bailed out the American International Group, the faltering insurance giant, for $85 billion, Mr. Paulson helped select a director from Goldman’s own board to lead A.I.G.

And earlier this month, when Mr. Paulson needed someone to oversee the government’s proposed $700 billion bailout fund, he again recruited someone with a Goldman pedigree, giving the post to a 35-year-old former investment banker who, before coming to the Treasury Department, had little background in housing finance.

The Day Hank Paulson Lied (Audio)
Original Song by Don McLean
Lyrics by David Swanson
Performed by Great Rain, Vashon Island's "acoustic insurgents," Frank Hein, Greg Parrott, and introducing Hannah Smith on Vocals. Visit their website http://www.greatrain.com

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.

By Dave Lindorff

After watching the markets plunge and the credit freeze become
glacial, Treasury Secretary Henry Paulson backed away from his scheme
to rescue his investment banking colleagues by spending hundreds of
billions of dollars buying up worthless credit derivatives. His new
strategy: follow Britain’s lead and invest that same money--$250
billion for starters—into the banks as equity—specifically into the
shares of nine of the country’s largest banks.

This might sound a little like socialism—the kind of mandatory
nationalization that the US has devoted decades, and tens of billions
of secret dollars to trying to undermine and attack when practiced by
leaders in countries like Venezuela, Cuba, Chile or post-war Italy. But
Paulson’s no red.