CEI Director of the Center for Investors and Entrepreneurs, John Berlau, released a statement on former Treasury Secretary Henry Paulson’s testimony before Congress (prepared version) on his alledged strong-arming of Bank of America during last year’s bank bailouts. You can read the original release here or see below.

Paulson Must Be Held Accountable for Alleged Bank of America Threats

Statement by CEI John Berlau

Washington, D.C., July 15, 2009—Former Treasury Secretary Henry Paulson is set to testify July 16 before the House Oversight and Government…

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Your host Richard Morrison welcomes back guest co-host Jeremy Lott and special guest Greg Conko for Episode 47. We start with the new Obama-Geithner plan for expanding regulation of financial markets, the protests over the disputed presidential election in Iran and the Federal Trade Commission’s investigation of telemarketing robocalls. We then move on to the “beer bikes” of Amsterdam and some potentially scandalous investment choices made by Sen. Dick Durban. Finally, we talk health care with CEI Senior Fellow Greg…

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One week after Washington Examiner ace investigative reporter Timothy P. Carney broke the blockbuster story reporting that American International Group’s post-bailout CEO Edward Liddy owned a large stake in Goldman Sachs. a top recipient of the AIG bailout, the New York Times has decided that this is news “fit to print.” But for some reason, the so-called paper of record didn’t think it was “fit” to give any credit to the original source of this story.

Almost all of the significant details…

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The ouster of General Motors CEO Rick Wagnoner by the Obama administration isn’t the first time in the recent history of bailouts that the government has forced out a CEO. That first happened in September when Bush admnistration Treasury Secretary Henry Paulson forced out American International Group CEO Robert Willumstad in favor of Paulson’s friend Edward Liddy.

The lesson from AIG is that replacing a CEO is no panacea. There is no love lost for the poor managment of Rick Wagoner. He…

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National Review editor Rich Lowry, who mistakenly supported the financial system bailout because he trusted the Bush Administration, now realizes that he was deceived by Treasury Secretary Hank Paulsen, and that the bailout was sold to the public under false pretenses.

Having promised to use bailout money to buy up troubled assets, the Bush Administration instead used the money for completely different purposes, and now wants to use some of it to bail out an entirely different industry — the automakers.  The…

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When the Germans are laughing at you, things are in a pretty serious mess. That’s the case with the British version of the bailout, which the German finance minister has just ridiculed:

Criticising the UK government’s decision to cut VAT from 17.5% to 15%, Mr Steinbruck questioned how effective this will be.

“Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90?” he said.

“All this will do is raise Britain’s debt to a level that…

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Today, in addition to Treasury Secretary Henry Paulson’s expected announcement of a major mortgage modification plan through the $700 billion TARP, Barney Frank’s House Financial Services Committee is holding a hearing entitled “Private Sector Cooperation with Mortgage Modification.” However, despite the word “cooperation” in its title, it’s clear from letters Frank and others sent out that the hearing will be confrontational rather than cooperative. Specifically, Frank and some fellow committee members seek to villify investors in mortgage-backed secuties who assert…

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The $700 billion financial-system bailout was billed as a miracle cure for the economy, but the stock market dropped dramatically after it was enacted, falling more than 500 points.  In the Washington Post, the liberal journalist Sebastian Mallaby points out that “blaming deregulation” for the financial crisis makes no sense.   He puts some of the blame for the crisis on the Fed’s easy-money policy — an argument made by commentators across the political spectrum, including the conservative Wall Street Journal, and international investors.  He also notes…

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Today — five days after a courageous independent vote against Treasury Secretary Hank Paulson’s $700 billion bailout for Wall Street — the U.S. House of Representatives disappointingly approved the same basic measure. Many of the bill’s other “sweeteners”, such as earmarks and a regressive increase in deposit insurance for upper income bank customers –will also cost taxpayer hundreds of billions of dollars.

All this week I and my colleagues have pointed out ways this bailout could, in addition to being costly,…

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Treasury Secretary Paulson wants the American people to fork over $700 billion to bail out Wall Street, even though he admits that his prior multibillion dollar bailouts failed to stem the crisis.  Banking expert and law professor Todd Zywicki, a former Bush Administration official, notes that “by exploding the national debt, the bailout plan has ignited inflation fears and threatens to ruin the dollar while gold and oil prices skyrocket.”  The proposed bailout has triggered “bailout envy” and a flood of demands for more…

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The financial bailout bill is not just “dangerous, inflationary, unnecessary, and unconstitutional.”  It’s also a lot more costly than the government admits, judging from the hypocritical arguments made by government officials.  The Treasury Secretary in the past has resisted calls to loosen federal accounting rules, so-called “mark-to-market” rules that require mortgages to be assessed at their current fire-sale prices, rather than their estimated value if held to maturity.  These rules can result in banks being declared insolvent even if few of their loans have defaulted.

Now, however, the government hypocritically plans to ignore its…

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The stock market sank as the Bush Administration capitulated to liberal demands that its proposed $700 billion bailout of the financial system be expanded to add more costly give-aways, like “systematic” limits on foreclosure, that would allow irresponsible borrowers to remain in their homes at taxpayer expense.   The bailout is so extreme that it is unconstitutional.

Because of rigid federal accounting regulations that require Enron-style “mark-to-market accounting,” the bailout could actually deepen the financial crisis.  The bailout will reduce economic growth over the long run, and is logically inconsistent.

The bailout rips off people who lived within…

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My colleague Hans Bader is correct that most of the aims of Treasury Secretary Henry Paulson’s $700 billion bailout — stopping the “contagion” of securitized loans that have become illiquid — could be achieved if mark-to-market accounting rules were “immediately relaxed by federal agencies like the SEC that enforce them.” As I wrote in my Wall Street Journal op-ed this weekend, because the mark-to-market rules require writedowns of performing loans based on the last sale of similar assets, good “banks holding mortgages…

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Bush is seeking $700 billion to buy “bad mortgages” in the largest bailout in history.  The proposal attempts to bail out the entire financial system, rather than individual banks.  This sweeping federal intervention will turn out to be either excessively costly, or unnecessary.  Defenders of this bailout, like Treasury Secretary Hank Paulson, claim it is needed because the mortgage meltdown and ensuing panic have led to mortgages having a market value of far less than they are truly worth, drying up markets for mortgages and resulting in “frozen” credit markets.

But…

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