His Name is Henry Paulson

[prole]

Dart throwing chimp, incompetent, calculating con-man, clueless or conniving, victim of historical events far beyond anyone's ability to contain or platinum-plated opportunist serving his class's interests or loyal civil servant?

[ivan]

why is it that every time i hear homeboy's name i can only think of this guy?

[prole]

It's not looking good...

 

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

 

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

 

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

 

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

 

The story of the obscure provision underscores what critics in Congress, academia and the legal profession warn are the dangers of the broad authority being exercised by Treasury Secretary Henry M. Paulson Jr. in addressing the financial crisis. Lawmakers are now looking at whether the new notice was introduced to benefit specific banks, as well as whether it inappropriately accelerated bank takeovers.

 

The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists...

 

...The guidance issued from the IRS caught even some of the closest followers of tax law off guard because it seemed to come out of the blue when Treasury's work seemed focused almost exclusively on the bailout.

 

"It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

 

More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

 

Several other tax lawyers, all of whom represent banks, said the change was legal. Like DeSouza, they said the legal authority came from Section 382 itself, which says the secretary can write regulations to "carry out the purposes of this section."

 

Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

 

Lawmakers decried the tax shelters as a scam and created a formula to strictly limit the use of those purchased losses for tax purposes.

 

But from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world.--from Washington Post 11/10/08

 

I was a bit skeptical of Klein's "shock doctrine" thesis in relation to this financial crisis, but this kind of shit epitomizes it.

Edited November 13, 2008 by prole

[ivan]

i don't pretend to understand the complexities of the national finances as i can't even do that for my own meager treasure

 

still, i suppose i could get myself worked up over this if you could explain to me how paulson's actions were in no way pursuant of fixing the overall economy, which no doubt would be repudiated by someone else and leave me wanting to drill a large hole out of my ::

[Bug]

You have to look at who is who in the current administration and how many of them came from the boards of banks that will profit from this royal decree.

Basically, they used their positions in the treasury dept to hand themselves billions of dollars.

On the bright side, they will retire from public service now.

 

This whole bail out package is another huge money grab just like Iraq was for Halliburton et al, Katrina, etc.

 

These boys will watch us go down in smoke while waving to each other from their respective penthouses in Dubai.

 

My take, Obama should make his first order of business to be shutting down Dubai as a sanctuary for ex-Bushites.

[Bug]

why is it that every time i hear homeboy's name i can only think of this guy?

 

Thanks Boob.