The Kudlow interview was interesting, and this Liesman interview is also interesting: http://www.cnbc.com/id/35126472
An excerpt:
——-
LIESMAN: Do you think the outrage over compensation on Wall Street is warranted?
Mr. PAULSON: Here’s what I think. OK, here’s what I think. And it’s very–the American public, and me included, none of us like to see private business of any kind, and particularly banking–no one likes bankers–but likes to see the benefit from public assistance, number one. In our system, risk takers are supposed to–supposed to have their–have the impact of their losses. They’re supposed to take their own losses. So of course the public is angry, but what I keep saying to people is let’s not let that divert us from what we need to do. Let’s channel that anger and then frustration to getting the kinds of reforms we need so that we never again see a situation when the taxpayer needs to bail out big banks. And so that’s why I keep coming back over and over again and saying we need really strong resolution authority so that when any institution, regardless of type, financial institution, is facing failure, that whoever is sitting in the seat where I was sitting has the ability to liquidate them and liquidate them in a way in which it doesn’t hurt the markets and the economy. And that’s really where the–where the problem came from.
——-
After reading the interviews, I do think the man was generally concerned and afraid of the consequences of major institutional failure.
However, it boggles the mind to think that the only conceivable alternative to “Doing nothing + Armageddon” is writing the Treasury Dept a big blank check so that they can shoulder a huge chunk of the tab for liquidating a failed institution.
Paulson’s first draft of the TARP legislation he proposed was, if I recall correctly, not longer than two pages, essentially a blank check for $800 bil and had the curious requirement to detach all strings and scrutiny from the Treasury Dept.
It was so offensive and provoked such an outrage, that GW should have fired the man on the spot. He was clearly unfit to serve if he took no action to deal with the disaster (which he now claims to have seen coming) and then, when hit with it, his first instinct is to scare Congress with “write me a big friggin blank check or it’s Armageddon.”
The Secretary of Treasury of the biggest economy in all human history needs to better qualified than that. It’s for this that GW committed a perhaps-inpardonable sin.
