Washington, DC - For a man who long championed free markets, the irony of being known as the architect of the greatest government intervention into markets in history sits just fine with former Treasury Secretary Henry Paulson. Paulson says he'd rather be the architect of the bailouts than the Treasury Secretary who presided over the second Great Depression.
"The president in his state of the union address captured the mood of the country when he said Republicans hate these, Democrats hate these, I hate them, and just let me tell you I hated them," Paulson says. "But they were much better than the alternative and you know what they worked. Because we needed working with imperfect tools and authorities…we were able to cobble together enough to prevent the system from collapsing and avoid disaster."
(CNN) - East Coasters are greeting the latest winter storm to roar from the nation's midsection Wednesday with dismay and delight. Following a record-setting weekend blizzard in Washington, the storm is expected to dump more snow - and, for the likes of Richard Bahar, more misery. Bahar's tutoring business had to cancel classes for the week, which has meant refunds and rescheduling. "It's a total mess," Bahar said Wednesday morning. "Most of my business colleagues are sitting at home all week."
But for many students such as Hadass Kogan, the snow days are a welcome respite from the rigors of graduate school. "It's been really refreshing to get time off," said Kogan, a second-year student at George Washington University Law School. "I still have plenty of schoolwork to catch up on."
The winter storm barreled in from the Midwest, where it kept cars off streets and planes off runways in cities such as Chicago, Illinois, and Minneapolis, Minnesota. It moved into Washington on Tuesday night and swooped toward New York. The storm is expected to dump up to 10 inches of snow in Washington, up to 20 inches in New York and up to 22 inches in Philadelphia, Pennsylvania.
Washington, D.C. has spent the past few days digging itself out from a record snowfall over the weekend. By Tuesday night, some city streets were again impassable. "The Potomac River is frozen, the George Washington Parkway a sheet of snowy ice," Bahar said. "It looks more like St. Petersburg, Russia."
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By Henry M. Paulson, Jr.
From 'On the Brink'
Thursday, September 4, 2008
Do they know it’s coming, Hank?” President Bush asked me.
“Mr. President,” I said, “we’re going to move quickly and take them by surprise. The first sound they’ll hear is their heads hitting the floor.”
It was Thursday morning, September 4, 2008, and we were in the Oval Offi ce of the White House discussing the fate of Fannie Mae and Freddie Mac, the troubled housing finance giants. For the good of the country, I had proposed that we seize control of the companies, fire their bosses, and prepare to provide up to $100 billion of capital support for each. If we did not act immediately, Fannie and Freddie would, I feared, take down the financial system, and the global economy, with them.
I’m a straightforward person. I like to be direct with people. But I knew that we had to ambush Fannie and Freddie. We could give them no room to maneuver. We couldn’t very well go to Daniel Mudd at Fannie Mae or Richard Syron at Freddie Mac and say: “Here’s our idea for how to save you. Why don’t we just take you over and throw you out of your jobs, and do it in a way that protects the taxpayer to the disadvantage of your shareholders?” The news would leak, and they’d fight. They’d go to their many powerful friends on Capitol Hill or to the courts, and the resulting delays would cause panic in the markets. We’d trigger the very disaster we were trying to avoid.