Henry Paulson’s Spiritual Journey

In a few short weeks US Secretary of the Treasury Henry M. Paulson Jr has gone from free-market libertarian, (letting the market take its own natural course and allowing Lehman Brothers to collapse), to capitalist philanthropist with the support for AIG, to semi-socialist with the bail out plan, and now potentially full blown pinko with the G7’s move towards nationalising the banking sector. This journey of enlightenment is surely not over yet though – and where now can Paulson go? We explore:

1. Sept 15 (Lehman Collapse): Libertarian free-market champion. “What we are going through in the short term doesn’t make anything easier. But in the longer term, it’s going to make things better, because we’ve got excesses we need to work through…We do not take – and I don’t take – lightly ever putting the taxpayer on the line to support an institution… There is a reasonable chance that the biggest part of the housing correction can be behind us in a number of months – I’m not saying two or three months but in months as opposed to years..”
2. Sept 16 (AIG): Pro-regulation with a bit of spare cash for handouts. “We are working closely with the Federal Reserve, the SEC and other regulators to enhance the stability and orderliness of our financial markets and minimise the disruption to our economy. I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers.
3. Sept 19 ($700 billion bailout): Accidental Socialist. “It just happened dramatically. There was only one way that we could reassure the markets and deal with a very significant and broad-based freezing of the credit market. There was no political calculus. It was overwhelmingly obvious.”
4. Oct 10 (G7 crisis talks) Pro-nationalising closet pinko. “We can use the taxpayers’ money more effectively and more efficiently, have it go farther and get more for their dollars and more protection if we develop a standardized program for making and encouraging equity participation.”
5. Oct 20 (Total banking collapse): 21^st century syndicalist. “If we can’t have credit markets, let’s try just, you know, sorta start swapping goods for services without the whole money bit  – I propose, from now on, we switch to a barter economy. Bring your goods out of your house and let’s begin trading. I declare today ‘National Garage Sale’ day, and this government is pledging 100 million trestle tables to support this plan.”
6. Nov 3 (Riots sweep US): Hobbesian ultra-realist. “It is everyman for himself –chaos reigns, band behind the prince. The Prince has the power to protect and destroy. I declare a state of nature. This is what you’ve got guns for America.” 
7. Nov 17 (End of modern capitalism): Buddhist, anti-materialist. “There is no market, only a million beams of glowing light.”

Posted by Daniel Stacey in Hot Money | October 12, 2008 6:52PM |