Treasury Secretary Henry Paulson balked at modest proposals by
Congress over the weekend to protect taxpayers' investment if they
approve a $700 billion bailout of the financial services industry. A
proposal by Democratic leaders, as reported in the New York Times today,
would: help borrowers in danger of losing their homes by giving
bankruptcy judges the power to adjust mortgages; create greater
accountability for the Treasury program by requiring monthly reports to
Congress; and give Treasury the power to limit the pay of executives
with companies that seek taxpayer help. Paulson warned against
'punitive' measures, for fear that companies might not participate. I
have a hard time believing that companies threatening to go under
without a $700B taxpayer bailout are going to bite
the hand that's giving the handout. But Paulson's reticence to inject
some oversight also reminds me that he came from the Street.
Paulson, the former chairman of Wall Street investment
powerhouse Goldman Sachs, was estimated to have a net
worth of about $700 million when he took office in July 2006.
He was awarded an $18.7 million cash bonus for his final
half-year of work for Goldman Sachs. (Reuters, April 2007)
Seems like he's personally feeling executives' pain.