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Paulson has an OpEd at NY Times:

WE are going through a financial crisis more severe and unpredictable than any in our lifetimes.  [We] faced [big failures] in succession, as our financial system seized up and severely damaged the economy.

By September, the government faced a systemwide crisis. After months of making the most of the authority we already had, we asked Congress for a comprehensive rescue package so we could stabilize our financial system and minimize further damage to our economy.

By the time the legislation had passed on Oct. 3, the global market crisis was so broad and so severe that we needed to move quickly and take powerful steps to stabilize our financial system and to get credit flowing again. Our initial intent was to strengthen the banking system by purchasing illiquid mortgages and mortgage-related securities. But the severity and magnitude of the situation had worsened to such an extent that an asset purchase program would not be effective enough, quickly enough. Therefore, exercising the authority granted by Congress in this legislation, we quickly deployed a $250 billion capital injection program, fully anticipating we would follow that with a program for buying troubled assets.

[snip]

A troubled-asset purchase program, to be effective, would require a huge commitment of money. In mid-September, before economic conditions worsened, $700 billion in troubled asset purchases would have had a significant impact. But half of that sum, in a worse economy, simply isn't enough firepower.

A huge commitment of money? Whatever you ask, Paul.

There is no playbook for responding to turmoil we have never faced... [If] we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract.

I thought secretaries of treasury are supposed to look less clueless.

A list of top 11 Paulson's blunders is here.

by das monde on Tue Nov 18th, 2008 at 09:24:26 PM EST
Shorter Paulson:

  1. No one could have predicted this;
  2. Congress got in my way just when I was saving the world;
  3. The dog ate my homework.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Nov 19th, 2008 at 02:10:25 AM EST
[ Parent ]
You have a real talent for summarising ;-)

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 19th, 2008 at 04:46:19 AM EST
[ Parent ]
Thanks so much. You just saved me reading another 10,000 words of Paulson BS.
Phew! Smells better in here.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed Nov 19th, 2008 at 10:51:35 AM EST
[ Parent ]
Sheesh.
My take: I think Paulson's credibility with the financial markets has been exhausted. Now I am not sure what the magic solution was. Maybe some recapitalization of key players plus an Uncle Sam-led home refinancing plan. Or maybe a) suspending mark to market, b) a zero capital gains tax for the next five years, and a corporate income tax holiday.

Wow. What insight. Reduce taxes.
 
But I will give this to Paulson: He does strike me as a guy who is working himself near death to deal with an amazingly tough problem.

- James Pethokoukis
 I can agree with the last--Paulson's giving it his best shot. But through those good old neolib, market-as-God glasses, Paulson's useless.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed Nov 19th, 2008 at 11:13:04 AM EST
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