Monday, September 29, 2008

Sympathy for the Devil: Henry Paulson's not such a bad guy, really.

There's been a lot of snarling in the blogosphere this past week about US Treasury Secretary Henry "Hank the Hammer" Paulson's cheeky attempt at an end run around the judicial and legislative branches in the initial language of the proposed bailout package. To wit:

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

But let's put this in perspective. Paulson has only been in charge of the Treasury for twenty-seven months, and the mantle of public servant has likely not yet settled well on his shoulders.

Don't forget that Paulson has spent his entire adult life as a dealmaker. What's that line about taking the tiger out of the jungle? Negotiation 101 is that your initial offer should ask for the sun, the moon and the stars. Everyone from car salesmen to labour union negotiators to peddlers in the merchant's quarter of Marrakesh know this. Aim high: likely your counterparty or their lawyers will tell you to go to hell and reply with a counteroffer significantly lower than what you asked for. And if your counterparty is caught napping and doesn't read the fine print, well, high-fives all around, and the drinks are on you!

I don't honestly believe Paulson's initial plan included this clause out of desire to assume the title of the Antichrist, I think it's just second nature to him (and by extension his staff) to start the negotiations with the most outrageous, self-serving conditions imaginable. That's how deals get done: ask for $700 billion, a white Rolls Royce, green M&M's and a shetland pony. If that fails, settle for $700 billion.

Never mind what a total schmozzle this whole bailout proposal has been, and will continue to be, democracy lovers should take heart that Congress didn't just roll over for him. That implies that the system still works, sorta.

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1 comment:

Anonymous said...

Brilliantly incisive and brilliantly funny.