I Come to You, Cashmere Hat in Hand . . .
"I don't like to be in this position, asking for things and, you know, answering to the American taxpayer," Treasury Secretary Hank Paulson informed the Senate banking committee yesterday.
His discomfiture was easily understood.
He left Goldman Sachs two years ago with hundreds of millions in his pocket and an invitation from President Bush to take over the U.S. Treasury. Now, after assuring lawmakers for the past two years that the markets would take care of themselves, he was asking Congress for perhaps $1 trillion in borrowed taxpayer money to bail out his former peers and colleagues on Wall Street. He wanted the money so desperately -- "quickly and cleanly . . . avoid slowing it down . . . immediate implementation . . . urgency . . . immediate need" -- that, if he had any hair, he probably would have set it on fire right there in the Dirksen Senate Office Building.
The senators were none too pleased to receive this panhandler. Though they've collectively accepted more than $33 million from Wall Street and related industries in this election cycle alone, the committee members took turns channeling their inner Huey Longs.
"This massive bailout is not a solution -- it is financial socialism, and it's un-American," fumed Jim Bunning (R-Ky.).
"It does not make any sense; it will reward the banks first, who got us in the financial mess," protested Mike Enzi (R-Wyo.).
The fury of Bob Menendez (D-N.J.) caused his metaphors to collide ("I am not going to be stampeded into rubber-stamping this proposal"), and even the demure Elizabeth Dole (R-N.C.) found the whole thing "infuriating."
Much of this was posturing, of course. Lawmakers, afraid of being blamed for the next Great Depression, have little choice but to give Paulson much of what he wants. But after the Bush administration railroaded them on other emergency measures that later turned out to be problematic -- the Iraq war, the Department of Homeland Security and the USA Patriot Act -- the bipartisan outrage suggests that, this time, Congress will make the administration squirm a bit.
Paulson, a college football star before his ascent on Wall Street, was unaccustomed to squirming, but he did his best. "I share your frustrations; I feel those frustrations," he told the senators. "Again, I'm frustrated the taxpayer is on the hook," he added moments later. He went on to remind them that "some of the frustrations here I share, you know," that "I did not want to find myself in the position of being here asking for these authorities," and that, truth be told, "I hate to be on this side of the table, because this is not something that I ever wanted to ask for." Indeed, said the author of the greatest market intervention in nearly a century, "I've never been a proponent of intervention."
But Paulson's conversion was okay, because the committee members were undertaking their own conversion, to Main Street populism.
"This legislation must be passed to help Main Street, not because the federal government is being held hostage by Wall Street," Enzi posited.
"We've tried to avoid propping up failed businesses on Main Street; we should not prop up failure, malfeasance and avarice on Wall Street," submitted Wayne Allard (R-Colo.).