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Henry M. Paulson Jr.
July 19, 2009
by Loren Mayshark
If this Man ever fixes his steely blue eyes on you and desires what you have, know one thing….you’re fucked.  Hank Paulson has been chosen as the Featured Man because as Time Magazine said, when selecting Paulson as a runner up Person of the Year in 2008, “if there is a face to this financial debacle, it is now his.”  (Fox)
 
The 6’1” bruiser was an All Ivy offensive lineman during his college years at Dartmouth and a member of Phi Beta Kappa.  It was on the gridiron where Hank Paulson earned the nickname the “Hammer,” for his ability to punish opposing defenders.  After graduation Paulson began getting his feet wet in the dark arts of thievery and political deception while working in the Nixon administration.  The Hammer assumed a post under John Ehrlichman, a member of Nixon’s “Plumbers,” and a key figure in the Watergate scandal. After the scandal broke Ehrlichman was convicted of conspiracy, obstruction of justice and perjury.  However, Paulson had enough good fortune to dodge a prison sentence and escape into one of the most powerful institutions in finance, Goldman Sachs.  He began at Goldman’s Chicago office in 1974. 
 
Founded in 1869 in Lower Manhattan, Goldman Sachs has become a popular destination for individuals with flexible morals and lofty political ambitions.  Goldman Sachs is where the big boys on Wall Street play both sides of the political game wearing Democrat blue as well as red Republican uniforms.   In 2008, Goldman Sachs gave approximately $6 million in political contributions, about $4.5 to the Democrats and $1.5 to Republicans; in 2004 they gave about $4 million and $2.5 million respectively.  (www.opensecrets.org)  Goldman Sachs alums like the Hammer also play both sides of the field, effortlessly floating from private investment firms and major corporations, into government and then back again.  If you have the opportunity just ask former Goldman Sachs heads Robert Rubin (secretary of the Treasury during the Clinton administration, former chairman of Citigroup) or Stephen Friedman (a.k.a. “Mr. Inside,” U.S. Assistant to the President for Economic policy 2002-2005).  In May of 2009, Friedman was forced to resign as New York Federal Reserve Chairman after raising suspicion by buying thousands of shares of Goldman Sachs after the stock rally, a move which netted him millions of dollars.  (Hilsenrath)   Rubin, Paulson and Friedman are only a few captains in an army of former Goldman Sachs employees who have found their way into vast fortunes by making the rules and then exploiting them to make enormous profits.
 
As CEO of Goldman Sachs from 1999 to 2006, Paulson acquired a reputation as a risk taker willing to take on debt if he smelled a future profit.  He proved to have a Midas touch during his years with the firm by capitalizing on a prosperous market, thanks in a large part to the mortgage boom.  However, a deeper look reveals that Paulson’s success was based on more than luck and financial wisdom.  He was selling mortgages that everyone at Goldman knew were garbage.
 
How did these men know that the mortgages were bad and how did this help Goldman Sachs reap billions in profits?   The reason for their Godlike success is that former CEO Robert Rubin inflated the market, while working under Bill Clinton, by deregulating it.  Rubin pushed for the type of deregulation that would allow mortgages to anyone who could spell their name and count to twenty, taking the old industry standards and tearing them up.  Then, the financial wizards at Goldman started a giant game of hot potato with the bad mortgages until the market was on the brink of imploding.  Once they had extracted as much money as they could, Goldman dumped the garbage mortgages and went home with a yacht load of cash.
 
Matt Taibbi brilliantly exposed Goldman Sachs’s parasitic existence since the Great Depression in an article in Rolling Stone entitled “The Great American Bubble Machine.”  Taibbi explained in the article how Goldman Sachs has made a killing by finding a market that is ripe to grow a bubble, like the internet boom in the 1990s and the most recent mortgage bubble.  Goldman Sachs has people inside government deregulate the markets, and then they have the members at the firm exploit the deregulation and thus inflate the bubble.  Goldman Sachs buys and sells as the bubble expands and then pulls out just before the bubble bursts.  Goldman Sachs was so distraught by the article that they publicly attacked Taibbi’s piece, claiming that it was “an hysterical compilation of conspiracy theories,” insisting that Goldman is a misunderstood source for “good.”
 
The sad truth is that Goldman Sachs is continuing to take advantage of the American people with the magical spirit of “Reganomics,” where deregulation is a religion and high priests like Paulson manage our money and somehow everyone works hard and everyone prospers as the money trickles down from the top.  In actuality, the people on the inside know that they are creating a climate where people with no business owning a home are signed up for mortgages that they can never pay back (using the mortgage boom as an example).  Goldman Sachs buys and sells these time bombs until the bubble is ripe to explode then they wash their hands, escaping just before detonation.  
  

  
 
Hammer Time
 
 
Late in his final term as president, George W. Bush needed another tool in Washington to help dismantle the U.S. economy.  So in the summer of 2006, Hammer was named the Secretary of the Treasury.  In order to woo the big shot who netted over $40 million as CEO of Goldman Sachs in 2006, Bush allowed Hammer an unprecedented amount of freedom for his position.  As Paulson stated in an interview after accepting the appointment, "I've always said I don't want to be irrelevant."  But, why would Paulson walk away from a job as a CEO netting $40 million per year for a modest six figure salary in the U.S. Treasury?  The reason is that those who leave the private sector for government office are not required to pay capital gains tax.  Hammer was able to dump $500 million of Goldman Sachs stock back into a market that he knew was about to become volatile and save himself a tidy $200 million that he would have had to pay to the U.S. in tax.   
 
 
The appointment as Secretary of Treasury made Paulson the central figure in crucial decisions of the more than $1 trillion of tax payer money that he was given to dole out to financial institutions that had lost money gambling on Wall Street.  Hammer will be forever known as the Man that took it upon himself to give these gamblers back their chips.  Much of the money went back into the pockets of the wealthy alums of Goldman Sachs.  Some the money was given to banks that were chaired by former members like Rubin who was on the board of Citigroup, which received better than $45 billion in Paulson’s bailout.  $85 billion was given to AIG which happened to owe Goldman Sachs $13 billion which was paid back, when former Goldman Sachs board member Ed Liddy was put in charge of AIG after the government handout.  Goldman Sachs came out of one of the biggest financial disasters as a clear winner, recently reporting $3.44 billion in profits for the second quarter, making it the richest quarter in the history of the company.   The large earnings have allowed the company to earmark about $11.4 billion to hand out in bonuses to their employees at the end of the year.  (Bowley)
 
Following his departure from the government in January of 2008, Hammer accepted a position at Johns Hopkins’ University, because he needed a place to “hang his hat.”  Ironically, Paulson will be part of the school’s forum on Constructive Capitalism.  (Schlosser) Publicly, Paulson claims he wants to serve the academic community.  In actuality, Paulson hopes that people are more interested in Reality TV, Michael Jackson’s death and desperately clinging to their jobs to realize what has happened.  He hopes that we will forget the hundreds of millions that he has stolen for himself and the billions of dollars in tax payer money that he happily doled out to his cronies.  The Hammer has smashed down on the backs of hard working American citizens and crushed the hungry masses of the world. 
 
Now Hank will disappear into the smog like so many others that have raped trillions from failing global economies around the world.  Now billions of people around the world are left jobless, homeless and starving; fleeced by the myth of the free market.  Fancy rhetoric is all that we are left with to hold on to, as our years of hard labor evaporate into the hands of the few.  We have been taken by a club of dorky gangsters who buy politicians for what is, in comparison to their lavish feasts, mere table scraps.  Barack Obama, not free from Goldman’s grasp, received $981,000 from the company for his campaign fund. (Taibbi)  Goldman Sachs, eager to strip the market of regulations and privatize as much of our lives as possible pushed for privatization Social Security.  This means that the wealthy of Wall Street will be allowed to play with future wages that the government takes out of your weekly check.  When the money for social security is gone you will be spending your golden years searching for a second job, while Hank Paulson’s children will be shopping for a third home.  Once they stack the deck, it’s an easy game to win.  
 
Paulson is an elitist, who like his predecessors at Goldman Sachs, portrays himself as an individual with the kind of financial intelligence that walks on water.  He, like former Enron front men Jeffery Skilling, and the man George Bush called “Kenny Boy” Lay are the type of personality that is so in love with themselves, that they believe they are justified in stealing.  Why?  Because they think that the masses are too stupid to realize when they are having train run on them. 
 
 
 
 
 
 
 
 
 
Works Cited:
 
Bowley, Graham  “With Big Profit, Goldman Sees Big Payday Ahead.”
 The New York Times July 14, 2009. 
  
 
Fox, Justin.  “Runner-Up Person of the Year 2008” Time Magazine Online
www.time.com  December 17, 2008  

Goldman Sachs www.opensecrets.org Center for Responsive Politics  

Hilsenrath, Jon., Kelly, Kate. “New York Fed Chairman's Ties to Goldman Raise Questions.”  The Wall Street Journal Online. Link:  http://online.wsj.com/article/SB124139546243981801.html
 
Taibbi, Matt “The Great American Bubble Machine.”  Rolling Stone
            Is. 1082-83
 
Schlosser, Julie.,  “Paulson’s Next Gig.”  www.cnnmoney.com 
Link:  http://money.cnn.com/2009/01/21/news/economy/paulson_job.fortune/index.htm
 
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