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Hank Paulson on Government Reform

 


2008: Pushed trillion-dollar Wall Street bailout

Just before the pivotal election in 2008, Pres. Bush and Secretary Paulson convinced Congress to pass a Wall Street bailout bill giving the Treasury Department nearly a trillion dollars (all borrowed) to buy up bad loans clogging up the credit markets. The explanation for this massive intrusion into the private markets was too complicated for almost anyone to understand, but Americans instinctively knew something was desperately wrong with this plan. They blamed Bush, McCain, and the Republicans in Congress.

The result was a bloodbath for Republicans in the 2008 election and the installation of a powerful majority of Democrats who believed they were elected with a mandate to expand government regulation and control of the financial market. Democrats believed the financial and economic crisis was caused by deregulation and a failure of capitalism. They are now working to further centralize government power over the financial markets in the US and internationally.

Source: Saving Freedom, by Jim DeMint, p.119 , Jul 4, 2009

Oversaw federal takeover of Fannie Mae and Freddie Mac

In the last months of the lame-duck Bush administration, something very odd happened. As the situation became more dire, with threats to the largest banks and to mortgage giants Fannie Mae and Freddie Mac, as well as the looming risk of a general financial collapse, Treasury Secretary Henry Paulson became a reluctant paladin of big government. Paulson had assumed office in June 2006 with an agenda of further financial deregulation.

However, by March 2008, reality had overtaken his design. In mid-2007, credit makers had suddenly frozen because of a fallout from the subprime collapse. The Federal Reserve had to advance hundreds of billions of dollars to banks to keep credit flowing. So Paulson's 2008 report was a thoroughly contradictory overlay of two documents--one expressing his earlier dogma praising the genius of unregulated markets, the other promoting government rescue and promising stricter supervision of large banks that posed systemic risks.

Source: Obama`s Challenge, by Robert Kuttner, p.133 , Aug 25, 2008

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Page last updated: Mar 09, 2014