Many decades ago, as a college junior, I contemplated a career in the banking industry.
My knowledge of banking was roughly comparable to, say, Sarah Palin’s knowledge of foreign policy. I knew that bankers wore suits, that they went to the office every day and that there was money involved.
Money appealed — but working hard and wearing a suit didn’t. A classmate was kind enough to explain banking.
“Don’t you know what the 3-6-3 rule is?” he asked.
“No,” said I, assuming that it involved some arcane financial principle that no fun-loving college student should ever have to learn.
“It’s the basic principle of banking,” he explained. “You pay your depositors 3 percent, you charge borrowers 6 percent, and you hit the golf course at 3 p.m.”
Oh, those halcyon days of yesteryear, when jobs were secure, bankers were models of conservative rectitude, Dwight Eisenhower was president and all was well with the world!
The 3-6-3 rule is long gone — so what’s replaced it?
Until the industry literally collapsed this year, the new paradigm might have been expressed as the 30-1-20 rule. Leverage your assets 30-to-1, commit every dime to speculation, book vast paper profits, collect a $20 million bonus.
Those were the bad old days. Now a new generation of patriotic, selfless bankers, inspired by President John F. Kennedy’s historic speech, has come to the Halls of Congress and declared: “Ask not what your country can do for you; ask rather what your country can lend to you!”
Lacking the keen understanding of the world financial system that was once mine, it’s clearly necessary to go beyond the fog and chaos of today’s crisis and focus once more upon the essentials. We need to think clearly and dispassionately. As Americans, we need to come together and find the answer to a single question.
How can I make money out of this deal?
Here’s my contribution.
Dear Mr. or Madame Taxpayer,
I am Treasury Secretary of United States of America, a very well known and respected country with its own banking system, and very respected and honest fine officials. I am writing to you because you have been recommend to me as a discreet and fine person who would be able to assist me in a highly confidential matter.
I require your most confidential assistance in a matter of monies that will be soon entrusted to me by the Congress of the government of the United States of the Northern Part of America. The sum of $700 billions of dollars will, as soon as this afternoon, be immediately deposited in very large and very sound banks located in my country, and also in the Great Capitals of Europe and Dubai, as well as Arabia where there is much oil. I cannot access these very enormous funds myself for delicate political reasons, but with your assistance, we can both benefit from these very large and enormous sums, which will enable us to buy very large houses, jet aeroplanes, and young Russian model girls similar to those in magazines.
If you will furnish me with certain bank informations, then I can discreetly start the process of transfer of these very massive and valuable funds to your accounts, which we can share together as trusted partners in a very good and profitable for both of us venture.
It is most singular and pressing in importance that we effect these most important transfers in this time, while President George Bush is busy moving to Texas, while new President Obama is not yet in office. I fear that Mr. President Obama may ask embarrassing and difficult questions about these moneys, but if I can tell him that they have gone to a good and reliable person such as yourself, Mr/Madam Taxpayer, then all will be well!!
To facilitate this very important transaction, a small fee is necessary as proof of your sincerity and goodwill, and to allow me to persuade others to be of assistance. As a person of the world, you will understand!
I thank you most sincerely for your kind and valuable assistance, and look forward to purchasing with you such things as the very nicely painted Dassault Falcon 7 that we may fly together to Aspen in the Colorado, or perhaps Fargo in the Dakota, and bring many Russian models, and live well on $US 350 billion each.
I am your servant, and grateful partner,
Henry “Hank” Paulson, Secretary/Minister/Supreme Director of Disbursements, Treasury of the United States, Washington, U.S.A.
Think it’ll work? Sure, it sounds badly thought out, clumsy, and amateurish — an obvious scam that only an idiot could fall for … like the bailout itself. And who approved the bailout?
“Suppose you were an idiot and suppose you were a member of Congress. But I repeat myself.” — Mark Twain
John Hazlehurst can be reached at John.Hazlehurst@csbj.com or 227-5861.