Paulson Trying to Rewrite His Own History

by: Bespoke Investment Group November 20, 2008    

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Treasury Secretary Henry Paulson spoke at the Reagan Library this afternoon, and judging by the speech, it appears as though Mr. Paulson is embarking on a PR campaign to rewrite the history of his handling of the credit crisis.  One line that stood out was when he said, "By pro-actively addressing the problems we saw coming..." 

Judging by excerpts of prior comments the Treasury Secretary made during 2007, if Mr. Paulson saw the problems coming, he wasn't telling anybody:

Marketwatch 3/13/07: Paulson also said the fallout in subprime mortgages is "going to be painful to some lenders, but it is largely contained."

Reuters 4/20/07: "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained."

Bloomberg 5/22/07: Paulson, also speaking to CNBC, said the housing slump was ``largely contained'' and that market's correction was mostly ``behind us.''

Bloomberg 6/20/07: Subprime fallout ``will not affect the economy overall.''

Forbes 7/27/07: Appearing on CNBC with other members of the Bush administration's economic team, he again said mortgage industry problems would be 'largely contained.'

Boston.com 8/1/07: Paulson added that he did not see anything that caused him to reconsider his view that the economic damage from the housing correction was "largely contained."

Another classic line from today was, "As I assess our current situation, I believe we have taken the necessary steps to prevent a financial collapse."  Mr. Paulson, what is it going to take for you to consider this a financial collapse? 

Given that the extent of the credit crisis was underestimated by almost everyone, you can give Paulson somewhat of a pass for missing it.  But to try and rewrite history through speeches even while the credit crisis is still playing out is inexcusable.

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This article has 13 comments:

  •  
    Nov 20 08:29 PM
    One way to understand Paulson (at least his character), is his original insistence that TARP be effected with zero congressional or judicial oversight.

    This tells you a lot about the arrogance of this man.

    I'm not saying he's unintelligent...I'm saying he's got a seriously flawed character.

    Putting the arrogant 35 year-old Neel Kashkari in charge of disbursing these funds is yet another example of poor judgement.

    The waning days of the Bush admin. are turning out to be quite the swan song.
    Reply | Link to Comment
  •  
    Nov 20 10:55 PM
    Well Paulson only has little over 6 weeks to go before he joins his friends probably in AIG!

    I don't think anyone could have predicted how bad the situation would get. I thought it would be a bad year in Jan, but this way beyond my expectations.

    Worse thing is Paulson don't understand impact of his decisions.
    Reply | Link to Comment
  •  
    Nov 20 11:51 PM
    This should utterly surprise no one.

    Next will be "W", just like everyone else that pissed on the American leg and pointed to rain.

    Get over it, Paulson is a loyal "bushie" and therefore doomed to the toilette paper history books of America.
    Reply | Link to Comment
  •  
    Nov 20 11:53 PM
    Opps! Hit Enter, my apologies.

    For those that seem to think that "arrogance" is a word to describe it, when asked (and I quote) "Does Wall Street owe Main Street an apology", both Paulson and Bernanke clammed up tighter than a snare drum.

    That single gesture made it clear enough for Helen Keller that they were in it to save their own skins...

    Shame on Congress for buying it -- to save their own skins.
    Reply | Link to Comment
  •  
    Nov 21 12:16 AM
    The new Treasury Secretary can't be appointed soon enough. Paulson inspires no one. New leadership is required.
    Reply | Link to Comment
  •  
    Nov 21 12:17 AM
    Henry who?
    Reply | Link to Comment
  •  
    Nov 21 01:37 AM
    Every day I wake up appalled that Paulson has not been forced to resign.
    Reply | Link to Comment
  •  
    Nov 21 04:45 AM
    There's a wonderful book on this sort of retrospective reconstruction: <I>Mistakes Were Made (But Not by Me)</i>. Here's the link:

    www.amazon.com/Mistake...
    Reply | Link to Comment
  •  
    Nov 21 04:45 AM
    There's a wonderful book on this sort of retrospective reconstruction: <I>Mistakes Were Made (But Not by Me)</i>. Here's the link:

    www.amazon.com/Mistake...
    Reply | Link to Comment
  •  
    Nov 21 06:17 AM
    Thanks for calling him out.
    Reply | Link to Comment
  •  
    Nov 21 09:20 AM
    And while all this is happening ......... king george iii bush-it is running around to other countries (who despise him for his failures) giving his formal goodbyes. king george iii bush-it..... IS ... the decision-maker who can't think of any errors (maybe we can!) and basks in his "mission-accompli... ............. it would be great if the king would leave his throne early and depart for Crawford to spend additional time working on his library legacy ......... Hurry Jan 20th 2009..... PLEASE....HURRY!
    Reply | Link to Comment
  •  
    Nov 21 10:38 AM
    Bald Paulson had been the chief of Goldman Sachs for years and he wrote the book on Wall Street Rule number one: Cover your ass.
    Reply | Link to Comment
  •  
    Nov 21 01:10 PM
    Every time Paulson speaks, the market sells off. So to say the market is not "inspired" by Paulson is a fair statement. Increasingly over time his credibility has diminished, his arrogance has risen to the forefront of his persona. It is no surprise that at this juncture Paulson is more concerned with how he is viewed by history then the Nation's economy.

    Let this be a lesson that the Treasury Secretary should be one who comes out of the "public service" sector rather than Wall Street, where focus is upon how one is perceived by others.
    Reply | Link to Comment
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