“It’s dangerously urgent,” says Paulson, intimating that some unspeakably bad consequence will happen if we don’t pay up. Yet he gives no guarantee that his scheme – which puts taxpayers at considerable risk – will work, and he demands immunity from criminal or civil prosecution if it doesn’t.
Henry Paulson, the current Secretary of the Treasury, believes that he, and he alone, knows best, so we should just trust him and he’ll care of everything. His euphemistically titled, rescue plan – barely masking the offensive reality that it is in fact a bailout – ended up being called simply, The Paulson Plan.
After lawmakers worked their magic and stuffed the bill with considerable billions of dollars of pork and earmarks (daring detractors to vote against it), it was passed and signed into law on October 3rd 2008.
But. . . I still have serious doubts. I’ve got this gut wrenching feeling that we just got screwed; and Paulson and his cronies are celebrating, with high-fives all around, that they just pulled of the biggest scam in history.
Having lived life for some six decades and more on this planet; having survived the “slings and arrows of outrageous fortune” that life sometimes presents; having experienced first-hand how confidence is too often betrayed in spite of passionate, ongoing assurances to the contrary; I think this scheme Paulson has sold to the U.S. public and the world has a bad smell about it. To me, the plan reads like a page lifted from the con artists handbook.
One of the greatest confidence men in American history was Charles Ponzi. He perfected a fraudulent investment scheme where investors were paid unbelievably high returns from money paid in from subsequent investors. This Ponzi scheme, named after its originator, was taking in over $250,000 per day until it collapsed in 1920. Impressive? Yes, but it’s nothing compared to what King Henry just pulled off with this scheme of his own.
In a Ponzi scheme, there is never a real business. The “profits” are generated by an accounting sleight of hand with little or no transparency or oversight. Preying on greed, fear, vanity and gullibility, the confidence man tells the people what they want to hear. Investors suspend their common sense because they are hearing what they want to see.
Like Charles Ponzi before him, Henry Paulson could well go down in history as the greatest con-man that ever existed. Certainly “King Henry’s scheme,” is a top contender for the largest confidence game in American history.
I’ve got to give him credit. He has summoned up a clever new use of one of the oldest negotiating tactics there is: “Give me the money . . . or else.” Plus, he managed to throw in enough lies and complexities to mask his true intentions very effectively. But no matter what you call it, to the man on the street – the taxpayer – this plan was and still is: extortion.
We have now been saddled with a $700 billion debt against our will – by fear, intimidation, dominance of personality and position – and the generalized threat of unimaginable pain and suffering seems far worse than capitulating and giving in to his demands.
A version of this coercive (and illegal) technique was used In the 1972 film, “The Godfather,” very effectively, when Don Corleone explained to Johnny Fontane: “I’ll make him an offer he can’t refuse” – the phrase itself a euphemism for threatened or actual cruelty, violence and/or death.
Fear and greed – the stock in trade of criminals and confidence men throughout history – are opposite sides of the same coin, used liberally to dominate and control their victims for nefarious purpose.
The French say, “l’extorsion de fonds est la force,” but in any language, extortion is force, whether physical, emotional, mental, spiritual, financial, political or otherwise. There is nothing really subtle about it and every schoolyard bully that ever existed has used it. Whether accomplished by outright domination, covert intimidation, nullification or manipulation, the intention is the same: “Do as I say, or else.”
However, King Henry takes this technique to a whole new level with his current scheme, which, if it weren’t so obvious, it would be admirable. He could have been open and direct and simply asked the taxpayers to invest in the companies in trouble, receiving an ownership position in the company in return. But no, that would have been too transparent.
Instead, he developed this elaborate, complex financial maze of confusing, meaningless terms and misdirectors that no one can really understand, except him. Because to King Henry, we are the great unwashed, we’re just unsophisticated, ignorant rubes compared to the East Coasters who are educated in the ways of high finance and know the secret handshake. We just “don’t understand” and consequently we should just turn over the keys to the kingdom to him because he knows best.
But, wait just a minute: if this $700 billion bailout plan is really an investment – as he claims – then why can’t it be treated as such?
No savvy investor would ever make such an investment without extensive research and a business plan to outline precise milestones for achievement and make additional monetary investments based upon successes.
No venture capitalist would think of investing in a company where the CEO was only on the job for four more months, after which time, they would be leaving permanently – as is the case with Paulson – with no hint of who the replacement might be. Then who’s watching the store?
It just doesn’t make sense – unless you see it for what it is: King Henry’s scheme is the biggest con game in history.
Will Rogers got it right when he said, “We’ve got the best politicians money can buy.”
daniel w. jacobs
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