Tuesday, May 30, 2006

White House Conducts LBO of Goldman Sachs Talent

Dear President Bush,

Will the hiring of Goldman Sachs’ Chairman as Secretary of the Treasury keep Wall Street happy? That is one of the main goals of another prior Goldman executive, your recently appointed White House Chief of Staff, Josh Bolten. The market doesn’t seem excited as it is tumbling post announcement driven in part by falling consumer confidence. Can you blame it on John Snow as he exits? It would not be good to have Henry Paulson’s first tick mark be such a negative.

I did note your reasons for promoting Mr. Paulson. My question is why a seasoned business executive would take the job? Few executives purposefully cut revenues while dramatically increasing expenses year over year. Those that do usually are investing in a new product be it technology or medicine. Rarely does an ongoing operation fiscally behave like our federal government. If it did, shareholders would revolt or the company would be forced to declare bankruptcy. Thus the U.S. federal government fits the economic “marvel” label the new Treasury Chief applied to our nation’s economy. It is a surprise, a wonder that it is still afloat.

Did you share your vision of contracting out all government functions to American businesses? Did he get excited thinking about the opportunity to steer massive contracts to his friends on the Street? How will the investment houses charge fees for those hybrid Social Security personal accounts?

The trend of contracting for government services is well established in the military. Education and healthcare are experiencing a different shift, one towards for profit companies with insider White House connections. This all bodes well for Mr. Paulson’s friends on Wall Street as they will have their own personal insider advocating on their behalf.

In the world of Bulls and Bears, LBO normally stands for leveraged buy out. My guess is you used a different version of those letters in recruiting Mr. Paulson. Did your LBO stand for Long-range Business Opportunity? Did you suggest that after a relatively brief stint as Treasury Chief, he could make huge dollars as a lobbyist?

My guess is the new Treasury Secretary will implement LBO right away, even adding a letter. Will Henry enact LBOW, which stands for Lobbyists Better Open those Wallets!

What will happen to the people being served by your administration? If I happened to be disturbed or concerned, I might LBOP. Let’s Beware Our President. If I were optimistic about America’s future as we seem to be returning to traditional values I might LBOS. Let’s Belabor the Old School.

Which of the three versions of LBO might make their way into the American lexicon? If I were a betting man, I would throw my money down on Lobbyists Better Open those Wallets as some things never change.

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