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Why are Taxpayers Paying Paulson’s Goldman Sachs Cronies Secret Billions?

November 4, 2008
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The Columbia Journalism Review’s Dean Starkman posted an analysis today on why we should be outraged.

He points out that the AIG bailout money ($123 billion, give or take) is going straight to counterparties -including Goldman Sachs-and not even stopping at AIG long enough for a cup of coffee. But who are all these counterparties being indirectly funded by this taxpayer “loan” to an insurance company that will probably (my prediction) default by the end of next year? We don’t know. It’s a secret.

Like the five or six monster banks that made the market in over-the-counter derivatives (a list the Fed has long kept under wraps), the list of AIG’s counterparties in the credit default swaps market remains confidential even as they receive billions of dollars from you and I.

As Starkman (a former Wall Street Journal and Washington Post reporter who I worked with briefly 20 years ago) says, this stinks. And he’s putting CJR’s moral heft where his mouth is:

“The case for AIG-bailout transparency is obvious. The Columbia Journalism Review is ready to stand with anyone interested in forcing disclosure of taxpayer spending on Wall Street. Just email me at dean@deanstarkman.com.”

I’m not sure what Dean thinks is possible (lawsuits? We’ll find out in five years!). But I see where this is going. The national debt is at $10.5 trillion, and every American’s life is going to change radically as we’re pressed to pay all this money back. Someday, someone is going to ask where these trillions went, and why. Then folks are going to get mad.

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