Earlier today, NB’s Lachlan Markey covered Bill O’Reilly’s interview with the Fox Business Channel’s Charles Gasparino. In that interview, Gasparino confirmed what the New York Post reported in April of last year, namely that “GE Execs Encouraged CNBC Staff to Go Easy on Obama.” The suits at GE, including Chairman Jeff Inmelt, had a clear motivation for encouraging their reporters to lighten up, namely that “General Electric at the time was hoping to profit handsomely from policies that would benefit a few companies, including GE, at the expense of the majority of the economy”– specifically cap and trade. But speaking of motivation: What about former CNBCer Gasparino’s? The easy answer would be that sometime in the past two years he has seen the light and realizes his past reporting at CNBC was lacking in fairness and balance. Despite his move to Fox, there’s reason to doubt that. In October 2008, Gasparino and CNBC’s Dylan Ratigan smirked their way through their report on what has turned out in retrospect to have been the event that marked the official beginning of Washington’s financial tyranny (“arbitrary or unrestrained exercise of power; despotic abuse of authority”) over the banking system. That tyranny has largely been codified into law in the recently passed and laughably misnamed “Financial Services Reform” legislation. On October 14, 2008, less than two weeks after Congress passed legislation creating the Troubled Assets Relief Program (TARP) with the supposed intent of using the money to buy up specific “toxic assets,” mostly subprime mortgages, Treasury Secretary Hank Paulson radically shifted course, forcing the nation’s largest banks to take TARP money directly (i.e., to accept government “investment”) regardless of whether they wanted it or believe they needed it. What follows is a transcript containing most of the early portion of what Ratigan and Gasparino reported before going to other talking heads for their comments (video is still here at CNBC, and must be seen to fully appreciate the conversation’s smarmy arrogance, especially with Gasparino; bolds are mine): Ratigan: Well we all know that obscene amounts of risk (were) taken inside of the banking system, leaving some banks crippled, some banks frozen, and other banks with huge opportunities. Uh, many of the banks didn’t want to be tainted with the government bailout funds because they didn’t want to be mistaken for a fool when they actually felt that they were the smart one that didn’t do it. Well Hank Paulson said “The heck with that.” He stuck all of them with some of the bailout money. And he said “Listen, we’re going to reset the clock here and move forward.” Charlie, how are the banks that felt they basically didn’t commit the crime, as it were, of excess or reckless risk, uh, respond to the fact that even they will be stuck with this capital? Charlie Gasparino: Well y’know they were all kind of stupid to some extent ….. ….. the Treasury Secretary Hank Paulson put all these egos in the room, and basically put guns to their heads, forcing them to take the money to bolster the banking system. Some of the firms say they didn’t want the cash, but it’s pretty clear that all of them did need to take the cash, given the continued upheaval in the banking system that crushed shares last week of Morgan as well as Goldman Sachs and just about everybody else. So this is essentially, uh, Dylan, a case where, y’know, you can deny you have any problems. Even the best-capitalized banks have problems. They own this stuff. And Paulson at one point said, “Listen, if you don’t want it, it doesn’t matter, gun to your head, you gotta take it.” Ratigan: Yeah, whether you think you’re sick or not, you’re taking the medicine. Gasparino: Because you’re sick anyway. Ratigan: Exactly. Part of my reax at the time: It was very unsettling to see the two CNBC reporters basically smile and smirk their way through the opening segment of the clip, with what I saw as an air of insufferable “we know it all” arrogance. … This “bailout” was originally advertised as being targeted towards troubled loan situations, principally mortgages. Instead, Paulson, Bernanke, and Bush have turned it into a de facto, no good deed goes unpunished (i.e., responsible lending) tool for partial nationalization. How many Congresspersons, or presidential candidates, thought this was what they were voting for, or that this is what the people wanted? Commenter dscott’s reax at the time : Something is up because this is not how a government official acts in a Democracy. “Something” was up all right. We should never forget that the congressmen and senators from both parties, including each party’s presidential candidate, voted TARP into existence despite the intense opposition of the vast majority of Americans, thereby allowing a loophole-laden law to open the door to what has since transpired. Then, less than two weeks later, virtually everyone just stood around while tyranny took its first sweeping steps. Charles Gasparino thought it was sort of funny at the time, as if the financial system’s private players were getting a richly deserved comeuppance. That attitude is consistent with the theme of his most recent book, and of the one that will be released shortly. In November of last year, Gasparino’s ” The Sellout ” was subtitled “How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System.” Given what we have learned about the frauds by design known as Fannie Mae and Freddie Mac in the two years since they went into government conservatorship, it’s more than a little odd that he would mention Wall Street first. Gasparino is releasing a book in October whose title is, “Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street.” The book’s tagline: “A top reporter exposes the deep ties between the Obama administration and the big banks that are bankrupting our country.” I’m sure there’s no shortage of material. But fundamentally, Charles, how could it be that Wall Street perpetrated this mess with just a bit of cooperation from and co-opting of Uncle Sam, when it’s Fan and Fred who led the way in compromising prudent lending standards, and it’s Fan and Fred who lied about the underlying quality of their securitized mortgages for about 15 years to the tune of hundreds of billions and perhaps trillions of dollars, doing damage that Wall Street couldn’t hope to do even at its most malicious? Someone –maybe Bill O’Reilly — should ask Gasparino if he still thinks Wall Street is the primary culprit. He clearly did at crunch time in October 2008. Cross-posted in longer form at BizzyBlog.com .
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The Strange Case of Charles ‘Paulson Put a Gun to All Their Heads’ Gasparino
