Vying for DNC Chair, Howard Dean Praises Wall Street Bailout Architect
Hank Paulson, former Goldman Sachs exec who secured Wall Street bailout deal as Treasury Secretary under Bush, remembered fondly for holding it all "together" in 2008
Everyone has their version of history.
Even as he vies to reclaim his position to head the battered Democratic National Committee, former governor of Vermont Howard Dean on Wednesday morning went out of his way to praise Hank Paulson, the former Goldman Sachs executive who served as Treasury Secretary under George W. Bush during the financial crash of 2008.
While discussing Donald Trump's newly announced nominee for Treasury—another Goldman Sachs alumnus Steven Mnuchin known for his penchant for predatory foreclosures—Dean wondered if the latest Wall Street insider tapped to lead the Treasury Department would be seen as the same kind of respectable "heavy hitter" as Paulson.
"You can say a lot of bad things about Hank Paulson," Dean said on MSNBC's Morning Joe, "but Hank Paulson was one of the people who kept the show together while the country and the world was falling apart."
— Jon Queally (@jonqueally) November 30, 2016
During an infamous scene that took place during the congressional battle to bail out the nation's big banks in 2008 as the collapse took hold, Paulson made headlines around the world for kneeling before then Speaker of the House Nancy Pelosi (D-Ca.) as he begged for taxpayer funds that would save the crumbling financial sector.
As Rolling Stone journalist Tim Dickinson later wrote, "Crony capitalism isn't usually this bald. But then again, this is Hank Paulson we're talking about." In that 2011 article, Dickinson details just how dastardly a process it was when Paulson, as Dean phrases it, was keeping it all "together":
With the passage of the massive TARP bailout that Ocotober 2008, Paulson gained unprecedented command over the American economy, and he decided to inject hundreds of billions of bailout dollars into the nation’s banks. At the time, Paulson assured his fellow Americans that the government would be receiving valuable assets exchange for the flood of liquidity: "This is an investment, not an expenditure," he said.
This was a baldfaced lie. Paulson required all banks, even those with relatively healthy balance sheets to participate in TARP. And he gave every bank a sweetheart deal. For every $100 in bailout funds handed over to healthy banks, the American taxpayer received just $78 worth of assets, according to a report by the Congressional Oversight Panel (COP) chaired by Elizabeth Warren. The exchange rate for struggling banks was $44 for every 100 taxpayer dollars.
All in, COP reported, Treasury paid $254 billion, for assets worth just $176 billion — a stealth bailout of $78 billion to the financial sector never approved by Congress, including a cool $2.5 billion for Paulson’s cronies at Goldman.
Meanwhile, one of Dean's rivals for the DNC chair is Congressman Keith Ellison of Minnesota who has received the backing of prominent progressives like Bernie Sanders and is on record repeatedly criticizing the influence of Wall Street and advocating reforms to curtail their power both in Washington, D.C. and within the Democratic Party. Ellison has a different take on Paulson's role in the crisis—in 2008, he openly criticized Paulson for his handling of the economic meltdown and for misleading congress on the bailout.
In promoting his case to be the next chair of the DNC, Ellison has specifically argued the party must acknowledge its failure to address the concerns of working people and break free from the perception—backed by much evidence—that Democrats have become too reliant on, and subservient to, corporate interests and the financial elite. Blasting Trump's economic vision, including key appointments to his cabinet, Ellison recently noted how the Trump team is full of "lobbyists and big-time investment bankers," a clear betrayal of the frequent populist rhetoric he espoused during his campaign.
"He's not doing what he's said he's gonna do for average working Americans," Ellison said.
In their recent endorsement of Ellison, the Communication Workers of America said he is the best choice to lead the DNC in the wake of crushing defeats suffered by Democrats this year at the ballot box.
"Ellison supports the economic policies that are critical to addressing the needs of millions of Americans who have been left out and left behind by unfair trade deals and trickle-down austerity economics," the CWA declared.
What Trump's election has proved, the union continued, is that millions of "Americans fell for the siren call of phony, right-wing populism." But Ellison, the CWA concluded, "understands that in order to win these voters back, the Democratic Party must clearly embrace its historic core values of racial and economic justice."