In my own outrage over the events of the past few weeks, I've found it rather difficult to form anything relatively coherent enough to post so I've been rather silent. One thing that that has struck me in particular is the emergence of "King Henry" Paulson, as Rep. Jim McDermott (D-WA) has cleverly named him. I readily admit that I've never liked Paulson since the first time I heard him speak, at a Congressional hearing I happened to catch on C-SPAN about a year or so ago. I believe it was a hearing before the House about Bush's budget proposal. Prior to that, I'd never really paid much attention to him--admittedly, I didn't pay much attention to politics in general prior to that. As I watched, I remember thinking that he seemed very "slippery" and was doing quite well at not answering anything he was asked; this has continued into every appearance I've seen him in since. I recently watched a video on YouTube of Paulson, which is from that same hearing (although I don't recall seeing it "live") that demonstrates this quite well. Paulson is also prone to stuttering when answering questions, which doesn't do much for his credibility, in my opinion. (As far as I know, Paulson doesn't have an actual medical "stuttering" problem, but I apologize if I'm mistaken.) I'm also just naturally distrustful of anyone who has served as a CEO for an investment bank, insurance company, etc. and receives a multi-million dollar salary for such a position, unless they are the founder/owner.
Apart from the fact that I have serious issues with the fairly established trend of appointing former CEO's and the like to the position of Secretary of the Treasury (I also feel like there's something not quite right about the appointment of all these cabinet positions where the people have absolutely no say, but I haven't really formed much of an argument about this particular issue yet), the recent bill that our Congress passed does indeed seem to give this un-elected official nearly unlimited, unchecked "king-like" powers. When I started to read the "bailout" bill, I was dismayed after the first few pages at how much everything in it revolved around the "Secretary." In fact, in the final passed version of the bill, in only Section 1 (the section that really lays out the TARP) the word "Secretary" (referring to the Secretary of the Treasury only; it appears in other contexts but I haven't counted those) 159 times. Let me say that again--159 TIMES!!! How is this in the least bit appropriate? This bill isn't about protecting taxpayers or helping out "Main Street" (if I hear one more politician prattle on about how they're concerned about "Main Street," I'm going to punch someone)...it's really about Secretary Paulson.
In some vague way, I'm sure most average people can understand that such an unprecedented "gift" of powers to one individual is probably not a good thing. Consider some of the language in the bill--"on such terms and conditions as are determined by the Secretary" and "the Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following." Under the "following" are a number of authorities given to the Secretary that are defined in a manner so vague as to essentially allow him to do anything he chooses. Anyone can recognize that this is simply begging to be abused.
What I find even scarier is the huge, glaring conflict of interest here--as former CEO of Goldman Sachs, I believe it's simply not possible for Paulson to NOT have a conflict of interest in regards to the position he's been put into. The first two "General Principles" listed in Part A of the "Standards of Ethical Conduct for Employees of the Executive Branch" are as follows:
(1) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain.
AND
(2) Employees shall not hold financial interests that conflict with the conscientious performance of duty.
There are many more, but I think Paulson "fails the test" so-to-speak on both of these counts; it's just not possible for him to put aside his previous work experience and connections at Goldman Sachs so they don't "conflict with the conscientious performance of duty." I'm far from an expert at such things but don't many CEOs, executives, etc. get a large part of their compensation not in salary but in things like plain old company stock and restricted stock units (RSUs)? While I'm sure that Paulson sold all his "stocks" of Goldman when he accepted the appointment as Secretary, if he did hold any RSUs (I'm not sure if he did/does) he may very well still have them if the conditions for their "pay-out" haven't yet been met. This definitely wouldn't jive with the ethics conditions listed above. Of course, I could be way off base on how this works (RSUs, etc.) and, if so, would welcome someone more versed to correct me.
What troubles me more is not the usual "Paulson wants to help his cronies," etc. but that it doesn't seem to bother anyone that either Paulson will continue on as Secretary of the Treasury into the next Presidency (it's not an automatic that he'll be out, as some seem to suggest) with the same unrestricted authorities OR he'll resign. If he does resign, does it seem likely that he'll simply go away and retire? I certainly don't think so...no, he'll be looking for a job and what sort of job is he likely to get? Well, another as CEO of a financial institution certainly seems like a good candidate. This surely is the basis for another grave conflict of interest, as Paulson is sure to be careful that he helps out those companies who he might be working for, and getting multi-million dollar salaries from, after he is no longer Secretary. There's no way he wouldn't be thinking about that on some level...he's not that stupid.
Now, I'm not saying that I think Paulson is evil or is even a bad guy but I think he should have known better than to get himself into this position. When there is so much potential for a conflict of interest, no matter how much you'd like to "pretend" that you've washed your hands of your previous committments, people simply don't work that way...the brain doesn't work that way. This is most dangerous, I feel, when it manifests itself in high-level, appointed positions such as Paulson's...and if Paulson didn't know better, there should have been someone there who did to stop him.
I feel that I've rambled quite a bit now and fear that I've written something terribly incoherent, so I'll stop now but I'll leave you with a photo that struck me quite a bit when I saw it yesterday...creepy.
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