Mr. Paulson, Can you spare.a minute?

What Really Happened


By Msgt Gunny


Retired, USA

Dear Mr. Paulson,

Can you spare a minute. Go ahead, take a break. Lean back, wipe that speck of brinksmanship from your eye, steady your flailing arms. Wed like to take your pulse, is that okay? Sit back a few minutes, relax.

Well, sort of anyway, maybe get a glimpse of feeling your pain , as you have expressed at least six times Tuesday before the Congressional Banking Committee.

Whats that, 173 over 94? My O My Hank, thats not too good. Is it okay if I call you Hank?

You been running? I know youve been going full speed since last week, and that 173/94 is a bit too high. Risky would be a better choice to describe it. But then, youve been around risk all your life, right? Bankers have a tendency to associate their career with risk.

I was wondering, Hank, have you thought about the pain that many taxpayers and other households in America are feeling? You see, that pain theyre having is all due likely to outrage .

The outrage of seeing our own Treasurys top executive saying to America, your already on the hook, referencing your proposal for a $700 billion bailout of banks, who, for the sake of greed, took far too much risk and now have a balance sheet black eye, and you now want to put the debt burden upon the public if the plan simply doesnt work.

The Public Pain

Pain -- like how they will be saddled with a new debt of over $2,100 per person, from a population in the USA of about 303 million. And while many of the youngsters dont understand it all, they do see the pain in their parents.

You know, the flashing eyes, the foot stomping, a few remembering that movie, Network where Peter Finch in that starring role bellowed out, Im mad as Hell and Im not going to take it no more! and feeling the same way.

Many People are on the ropes so to speak, Hank, just trying to make that next mortgage payment, cutting back on groceries for the family, running a little late on the phone bill, or the electric company, and hoping the water company wont shut the spigot off for being 10 days late, and then have to face a late fee and a reconnect charge.

Now I know it must be hard for you to feel their pain , Hank, for after-all you did manage to receive a bit over $50 million for your short tenure less than 2 years when you left Goldman Sachs as the CEO to become the top Treasury guy.

But maybe you can try, huh? I mean, imagine if you can, what it must be like earning a paltry weekly salary, like a close by neighbor named Ernest, with a wife and three kids who got laid off from his regular skilled job because his company sent the factory to another country, and now has to work for minimum wage at a well-known local home builders and supply retail store. And, hoping he will not get the pink slip there any day now also.

No, he doesnt make much, Hank, once his FICA, Medicare and Withholding Tax is taken out, and recently they put him on a 38-hour weekly schedule to prevent overtime pay, and well, his check is barely over $200 per week. No, unfortunately, he doesnt get a medical plan where he works.

So he supplements his pay by holding down a second job, driving an old yellow worn out looking cab on the 9pm-2am shift, but not many people ride around in cabs at that hour, as you can imagine. So his pay is kind of low. Hes looked elsewhere, but says there just isnt any available jobs.

Ernest recently asked his wife if she could go to work, and did, about 90 days ago. She had to update her license so she could go back into hair dressing, a short career she formally had before the three little kiddies came along.

But you know what Hank? Not many people are getting their hair coiffed these days, because of the economy and well, many people are laid off too. And it is getting worse every day. Many homes in Ernests neighborhood are already in foreclosure.

Around the 15 th of each month, the Ernest family have to make a mortgage payment, and have twice now in the past two months, barely got the payment in before the 10-day Late Payment would have kicked in.

Their house isnt a mansion, Hank. It has 3 bedrooms, 2 baths, well 7 rooms in all, and a carport. They bought it in 2004, just before the prices of homes nationwide started going up, and believed they got a bargain for $135,000 on a line of equity first mortgage arrangement, based upon a 20-year term, and because they had good credit then, got the lenders prime rate, tied to the Wall Street Journals prime rate. This means if the rate goes up, so do the payments. The lender makes adjustments up or down every quarter.

When your pal, Ben had rates up to 8 % in 2005-06, things were pretty tough, as the mortgage payment increased significantly, and it was about the time his employer shipped his company to Mexico .

Slowly, ever so slowly, ol Ben started to drop the rates, which now are at 5% on the remaining balance, which, as you know being a banker and all, the interest is all front end loaded, so the mortgage balance has only dropped about three grand.

So the monthly mortgage is about $825 right now. Gas prices went up to $3.98 where Ernest lives, and groceries rose immeasurably in the past few months. He has to pay car insurance, and annually buys new license plate tags. It all adds up, Hank.

His hot water heater went out two months ago, and he was able to buy a working unit at a garage sale for $50, but he isnt sure how long it will hold up. About the same time, Hank, his exterior air handler quit, and the A/C companies wanted about $2,000 for a new 13-seer 2.5 ton unit. He didnt have the money, and so during this summer his children go to bed every night in sweltering temperatures. Have you ever slept in sweaty sheets, Hank?

Two weeks ago, his 3 rd grader picked up a case of the measles right after school started, and well, Hank, what does a good parent do? Ernest took his child to the doctor, but didnt have the money to pay the doctors bill for office call of $110, let alone medications that ran up another $80. So he called his brother, and got the medication, and wrote a note to the doctor that hed pay him as soon as he could.

The 15 th of October isnt that far off, Hank, and well, Ernest has only about $273 saved towards that $825 payment on the mortgage. To do this, the family has to eat Pop Tarts for breakfast; the kids get a half-glass of milk each, the balance with water added. The kids used to eat in the school cafeteria, but when food prices went up, so did the cafeteria. So now the kids carry a sack lunch. Ever carry a sack lunch to school, Hank? It gets squished, and sometimes others steal the little lunch pail. Guess other kids are hungry too, you suppose?

I dont know if you can feel Ernests pain Hank, maybe you can, then maybe your too busy feeling your own pain . But in any event, Ernest is worried now that he may not make the next payment.

That means his worst fears would be that his banker will foreclose on their home they have lived in now for the better part of four years now. The family has no where to move to, and the children are already in school.

Ernest wanted me to ask you Hank, just what will your bank bailout plan do for Ernest and his family? Hes one of those guys who is proud, doesnt want a hand-out, is willing to work for everything he receives, but hes on the edge right now, against the ropes, so to speak. Can you relate to that, Hank?

Ernest says he cannot believe how the economy has turned. He doesnt do the stock market, never has. Doesnt understand it, but he reads real good, and sees that you are trying to persuade Congress to help these bankers out the guys who took 3 points over prime from him for several months with increased monthly mortgage payment that has drained his meager reserve. He figures that ploy trickled right up to the decision your pal, Ben did.

Now, youre talking with Ben, and say the taxpayer is on the hook and Ben agrees that interest rates are going to have to rise. Can you feel that sinking feeling that Ernest must feel about now, Hank?

Now, Ernest doesnt want to blame you for NAFTA, CAFTA, jobs outsourcing overseas, and all that Hank, he just wants to know why you and Ben didnt do your jobs. Why the Bankers could be so usurious on interest charges with him, and like others? Are you going to say he shouldnt have a home, Hank?

Oh, by the way, his property taxes comes up in November, but they havent gotten around to lowering the fair market value on the home yet, (yep, prices on homes are falling dramatically, and his home certainly isnt what he paid for it four years ago) so hes going to get a bill from the County Tax Assessor, with increased taxes this year. If he cant pay that bill, the property goes up for sale on the Court House steps, where somebody will buy a certificate, and well, you know how that goes, right Hank?

Seems to me Hank, that Ernest understands pain and hes living it. So are another 25 or so million other working fathers!

All of us will be watching TV Hank, waiting for the answer to Hank, and millions more just like him.

What are you going to tell him?


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