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Henry M. Paulson Jr., the US Treasury Secretary was recently head of Goldman Sachs — one of the embattled investment banks in the thick of the current financial crisis. Arguably he is one of the actionable architects of the mess we’re in — yet today he leads the way out of it? I’m not so comfortable nor sure about that!

Not only did Paulson head one of the gluttonous investment banks, together with four other banks he took the lead in getting the Securities and Exchange Commission to change the net capital rule which limited how much debt they could take on, thereby deforming the normal boundaries of risk management.

After Sachs Paulson became Treasury Secretary in May of 2006 and with the passage of H.R. 1424 Paulson becomes manager of the Troubled Assets Relief Program (TARP)/United States Emergency Economic Stabilization Fund. There’s an idiom that describes this absurd situation which escapes me now but I can opine how risky this is — and isn’t taking bad risks what got us here in the first place?

Is anybody in Congress asking Paulson to give some of his reputed $700 millions back and I wonder if anybody is keeping an eye on his portfolio in relation to what gets rescued and what he buys into and sells out of now?

I wish I felt more comfortable with letting Paulson take charge of spending our bail out money, but I don’t. I have this uneasy feeling that he and his old cronies are shoring up their own retirement funds with more of our money and that as soon as nobody is looking they’ll switch to hard assets and discounted properties — and leave the stock market to implode.

Suggested reading: Wikipedia’s bio on Henry Paulson | A The New York Times story covering Paulson’s involvement is changing SEC’s rules
Agency’s ’04 Rule Let Banks Pile Up New Debt by Stephen Labaton | The Business Inside’s Clusterstock writes that Documents Reveal How Paulson Forced Banks To Take TARP Cash

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