Update: yes, the Paulson Plan was just theft

Opening of “The Paulson Plan will buy assets cheap, just as all good cons offer easy money to the marks” (30 September 2008):

“Buy this because it is extraordinarily cheap. The owner must sell right now because…”

This is the opening line of a thousand confidence games. Stories told by well-dressed, smooth-talking grifters. Like many of those sent out to sell the Paulson Plan (which is not dead, as Congress will certainly reconsider some form of it later this week).

The government can buy financial assets from the world’s leading financial firms at prices so low that substantial profits are likely.

Read those words. Confidence tricks require marks, people who believe preposterous statements about promised gains if stated authoritatively and backed with a slick story.

Now the Congressional Oversight Panel tells us the tab after the first few months of the “THEFT TART (Troubled Assets Relief Program):  $78 billion.  Don’t worry, the money was not lost.  It’s just moved from your pockets to those of people with great political influence.

Only fools expected any other outcome.  And the meter is still running, with the losses mounting day by day.  To read the unpleasnat details see “Congressional Oversight Panel Releases Third Monthly Oversight Report: Valuing Treasury Acquisitions“, 6 Feburary 2009 — Excerpt:

The report acknowledges that Treasury may have had valid policy reasons for making these transactions, and that it is possible that the value of the investments may eventually be worth more than the amount Treasury paid—or they may be worth much less. The report does not take a position on whether Treasury pursued the correct strategy, instead focusing on the contrast between the quantitative results of the study and the statements made by Secretary Paulson last year.

Last fall, Treasury sold the American public on the TARP program by claiming that it would help banks while protecting taxpayers. Secretary Paulson described the transactions as ‘at or near par’—that the value the assets Treasury received was roughly equal to the money being spent. But that didn’t happen. Treasury got less than it spent.” said Elizabeth Warren, the Chair of the Oversight Panel. “Treasury should have leveled with the American people about the purpose of the program. It’s time to explain what’s happened so that we can have a good, old-fashioned debate about whether this is the smartest way to spend our money.

Afterword

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To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp interest these days:

Posts about Theft pretending to be solutions

  1. Slowly a few voices are raised about the pending theft of taxpayer money, 21 September 2008
  2. The Paulson Plan will buy assets cheap, just as all good cons offer easy money to the marks, 30 September 2008
  3. A reminder – the TARP program is just theft, 24 November 2008
  4. A solution to our financial problems: steal wealth from other nations, 2 February 2009
  5. Stand by for action – more theft of our money being planned in Washington, 4 February 2009

Originally published at Fabius Maximus and reproduced here with the author’s permission.

2 Responses to "Update: yes, the Paulson Plan was just theft"

  1. Bob Freedman   February 20, 2009 at 2:31 pm

    When you’re getting robbed and you don’t know it … that’s unfortunate. But when you’re getting robbed and you become aware of the fact, but you feel powerless to act and justice seems to lie somewhere beyond the moon, what does one do? I don’t know, but I’d like to have one of those heavy chains with the big spiked ball attached (what do they call those?).Here’s what I’d like to see happen: Round up the Banksters and the Bushniks and the Cheneyacs, and send them all off to Gitmo. But before you send ’em away, take ALL of their money.

  2. Guest   February 23, 2009 at 9:41 am

    TAX revolts ! REVOLUTION !