FT Editor: Paulson Bailout Aims to Enrich Paulson's Wall Street Pals

During the debate over the bailout, many of us [1] said that Treasury Secretary Henry Paulson, a former Goldman Sachs executive, had crafted the bailout specifically to enrich his friends at Goldman Sachs. Some said that was just exaggeration from liberal Bush haters, but check this out from Financial Times editor Wolfgang Munchau [2]:

The US administration’s TARP proposal [has] been lambasted by almost every economist, including those who normally disagree with each other on most things. Buying up toxic securities at above market prices is simultaneously the most expensive and unfairest way to recapitalise the banking system. It is very difficult to believe that the US treasury secretary can possibly be driven by a motive other than a wish to benefit the investment banks he once chaired, and which stands gain handsomely from such a package, and which would never dream of accepting any government capital infusions. The only alternative explanation for his behaviour is immense stupidity – and I know that he is not a stupid man. (Emphasis added)

Munchau and the Financial Times are not exactly peddlers of left-wing agitprop. Indeed, they are about as Establishment as you get. And so if they are saying this, we all ought to be worried.