Refurbishing Wall Street

Hey, building materials are really expensive these days.
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Henry Paulson.

Hey, building materials are really expensive these days.

Flip Side: In early September the cost of the AIG renovation was estimated at $25 billion.

Treasury Secretary Henry Paulson: Right.

Flip Side: But one week later, you raised the amount to $85 billion. What happened?

Paulson: $25 billion was just a guess. The written estimates came in much higher, particularly the carpentry. The cabinet pulls were way over budget — something to do with the price of nickel.  And how were we to know the wiring was shot?

Flip Side: How could you? Still, $60 billion is a lot for carpentry, wiring and cabinet pulls.

Paulson: AIG has a very big kitchen.

Flip Side: That explains it. On Oct. 9 you announced that AIG needed an additional $37.8 billion. What was it this time?

Paulson: We budgeted for wooden studs but decided to use metal. While metal was more expensive, we think it will be best in the long run.

Flip Side: That's reasonable, but on Nov. 10 you added an additional $27 billion, bringing the total cost to $150 billion. Can you explain?

Paulson: Halfway through the countertops we ran out of Blue Pearl granite. We could not get more from any supplier. So we had to rip it all out and start all over again with Arabian Blue.

Flip Side: You can't get a break. You are allocating $150 billion to AIG while Hillary Clinton's health care plan cost only $110 billion. Is the AIG renovation really the best use of resources?

Paulson: Universal health care reeks of socialism.

Flip Side: Good thinking. However, with the $40 billion left over after universal health care, we could hire 400,000 schoolteachers, and provide full tuition scholarships for a million college students. 

Paulson: Education is overrated. It can't compare to the AIG renovation.

Flip Side: Why?

Paulson: AIG is an investment. We expect a good return.

Flip Side: How?

Paulson: By entering the catering business. We could book the celebratory partner's dinner for Lehman Brothers, Merrill Lynch, and Bear Stearns. We could cater Steve Schwartzman's next birthday party. These guys are big spenders.

Flip Side: Excellent plan! This will restore confidence in the Treasury Department. Is $150 billion the final price?

Paulson: Yes, unless ...

Flip Side: Unless what?

Paulson: Unless we need to repaint. The original color scheme clashes with the Arabian Blue granite countertops.

Flip Side: What will repainting cost?

Paulson: Roughly $35 billion. 

Flip Side: So the total will come to $185 billion.

Paulson: $185 billion plus plumbing. The pipes are older that we thought. We are rebidding the plumbing. This will add about $40 billion.

Flip Side: So the total cost will be $225 billion.

Paulson: Right. That should be it for the kitchen. But the guest room needs work and Gods know what the reroofing will cost. Of course, if we find dry rot, all bets are off.


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