‘Was This a Good Old-fashioned Brooklyn Shakedown?’

By
Paulson and Towns.
Paulson and Towns. Photo: Getty Images

Members of the House Oversight and Reform Committee stopped short of calling former Treasury secretary Henry Paulson a craven, bum-licking ass-goblin today, but they did manage to get their digs in. “Was Bank of America really forced to go through with the deal, or was this an old-fashioned Brooklyn shakedown?” Representative Edolphus Towns asked, kicking things off. Later, Representative Michael Turner of Ohio called Paulson's Troubled Asset Relief Program “a crock” and the “largest theft in American history.”

Then there was this:


In a particularly contentious exchange, Marcy Kaptur, Democrat of Ohio, claims Mr. Paulson knew all along that there were problems in the financial system and orchestrated the TARP to be the biggest public bailout of the private sector in history.

“It looks like some very rich people are now profiting,” Ms. Kaptur says, referring to the record-setting quarterly profits at Goldman Sachs. She compares the terms of the government’s TARP investment in Goldman with the terms that Warren Buffett, the famous investor, got on his preferred stock investment in Goldman. Why did Mr. Buffett get a better deal than taxpayers?

Mr. Paulson’s answer: At the time, Mr. Buffett’s type of capital wasn’t available. “You do not stop a financial panic by offering capital to banks at the only terms available in the middle of a crisis,” he says.

Four words: Hot high-school mess. We're glad we missed it, and we're sorry that Bess Levin and Zachary Kouwe had to be there. Except not, because reading their live blogs is fun.