Back From The Brink: Henry Paulson CBS Interview (Video And Transcript)
The Hammer's reputation restoration tour has begun. Broadcast yesterday morning on CBS Sunday Morning, Hank talks about his tenure as Treasury Secretary, bank bailouts, and a regulatory system that's 'still very sick.'
The reporter doesn't mention that Paulson is singularly responsible for the SEC decision in 2004 that exempted Goldman Sachs and the other 4 large investment banks from previous limits on leverage. Seems a rather salient detail to conveniently leave out of the interview.
The immense value of these clips will become apparent as you watch Paulson stutters his way through difficult answers. No miss.
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Video: Former Treasury Secretary Henry Paulson talks with Anthony Mason about how the U.S. came close to an unemployment rate of 25 percent -- Runs 1 minute -- 1/31/10
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Video: Paulson on paying huge bank bonuses -- Runs 1 minute
This clip is priceless as you play along while the Hammer stutters his way through an answer.
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Comment from Benny:
F you Henry Paulson. Every day I pray someone prosecutes this criminal for destroying our Country. He allowed criminal enterprises like Goldman Sachs, JPMorgan, Bank of America and Citi to earn disgusting bonuses from bogus transactions. And when it was revealed the transactions were make believe, he dumped their debts onto people who work and save their money. I hate you Henry Paulson.
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Video: Paulson on 'calculated risks' -- complete interview -- January 31, 2010
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Transcript courtesy of CBS News >>
Seventy-five men have served as Treasury Secretary of the United States. Few have had the impact of Henry Merritt Paulson, Jr.
In 2008, as the global economy teetered on a precipice, he became the face of the financial crisis and he was still answering for his decisions at a hearing on Capitol Hill last week.
Paulson left the Treasury last January after a turbulent two-and-a-half-year tenure.
"When I walked out, in some ways I was ready to go," he said. "We did things that were unpopular at the time, are even more unpopular today as the public has gotten angry."
In his first television interview since stepping down, he acknowledged history is judging him harshly.
"And do you think that anger is justified?" Mason asked.
"I tell you I understand that anger," Paulson said.
The crisis tested Paulson. A prince of Wall Street and ardent defender of free markets, he became perhaps the biggest government interventionist of modern times. "King Henry" became the "Bailout King."
"Did you find yourself sort of wrestling with your economic and political philosophy?" Mason asked.
"I didn't have to wrestle," he replied. "I didn't think a lot about theory. I just understood how bad it could be. And so I just felt like I was racing against time with inadequate tools and authorities, to try to stave off disaster."
Critics have accused him of "lurching from crisis to crisis": Paulson has spent the past year answering them, writing a book he calls "On the Brink" (Hachette Book Group).
"I believe that if the system collapsed, we easily could have seen unemployment of 25%," Paulson said. "And so that reality was staring me in the face, and it was an awful reality."
"How close in your view did we come to that?"
"Oh, I think we came very, very close."
When President Bush tapped the Goldman Sachs CEO to become Treasury Secretary, he chose a straight-talking deal maker who has never liked playing defense.
An all-Ivy tackle for Dartmouth in the 1960s, "Hammering Hank" was known for his aggressive play.
"Who first gave you the nickname the Hammer?" Mason.
"I don't remember," Paulson said, who admitted, "It stuck."
After college, Paulson landed a job in the Pentagon and was assigned to help the failing Lockheed Corporation.
"It's rather ironic, I got some early bailout experience," he said.
He moved over to the Nixon White House for a year and a half, before rising up the ranks of the powerhouse Wall Street investment bank Goldman Sachs.
When he left the company to become Treasury Secretary, he sold his stock for nearly half a billion dollars.
But Paulson and his wife Wendy, who are avid environmentalists, have never liked the flashy New York lifestyle.
"I grew up on, actually, a farm not far from here, through sixth grade," Paulson said. "And then we sold the farm and moved here."
His mother still lives in that house in Barrington, Ill., outside Chicago. In the Seventies, the Paulsons built a house next door on land they bought from his parents.
"Gave 'em a note because I didn't have any money to buy it with, and we paid it off over time," he said.
They planned to move back here after he left Wall Street, but then the president called.
"You probably figured it was going to be a couple of quiet years in Washington?" Mason asked.
"It's never a couple of quiet years with Hank," replied Wendy Paulson.
Unwittingly, Paulson walked into an economic earthquake - first the rescue of Bear Stearns, then the takeover of Fannie Mae and Freddie Mac.
When he took the first steps toward the ultimate seizure of the mortgage giants on a July Sunday outside the Treasury, he thought he had contained the crisis:
"That was the time I was perhaps most hopeful," he said. "I remember going out on the steps and we were racing to beat a thunderstorm."
"As it turned out that's exactly what you were doing," said Mason.
"That's exactly right!"
Within weeks, Lehman Brothers, the 157-year-old investment bank was on the brink of collapse. Holed up on the 13th floor of the New York Federal Reserve with Timothy Geithner, Paulson worked the phones to find a buyer, but failed.
"My stomach tightened up and it was one of those times during the crisis where I was momentarily overcome by fear," Paulson said.
A Christian Scientist, Paulson called home to his wife Wendy:
"And I said, 'Everybody's going to be looking to me for answers, and I don't have any. Please help me, pray for me.' But boy, that was, that was a dark, dark hour."
It would get darker.
When Lehman went under the next day, the stock market plunged more than 500 points. It didn't help that Paulson implied he'd been unwilling to save Lehman: at a press conference he said, "I never once considered that it was appropriate to put taxpayer money on the line."
"You took a lot of heat for the outcome of Lehman," said Mason. "The French Finance Minister called it horrendous."
"These critics look and say, 'Well, look at Bear Stearns, look at AIG, why not Lehman?'" Paulson said. "But the fact, the situation at Lehman was very different. No human being could have worked any harder than I did for a long period of time to help Lehman Brothers."
Paulson insists that without a buyer, the government had no authority to help save Lehman.
The crisis was wearing on the Treasury chief, and when Paulson grew exhausted he was prone to an embarrassing condition: the dry heaves.
"Were you concerned that if people saw you . . . ?" Mason.
"Oh absolutely," he said. "I knew I was fine, but for someone to see the Treasury Secretary doubled over with the dry heaves! They heard it once."
"How do you explain that?"
"I didn't explain it. I just kept goin'."
This past week, Paulson was asked to explain his role in the controversial AIG rescue. Billions pumped into the collapsing insurance giant was used to pay off banks in full - including Paulson's former company Goldman Sachs, now run by Lloyd Blankfein.
"Some have suggested that you had a special interest in protecting Goldman," Mason said.
"When I became Treasury Secretary, I sold my Goldman Sachs stock. I severed my relationship with Goldman Sachs. My responsibility was to the American people."
"And you spoke to Lloyd Blankfein 24 times in 6 days. Why?"
"Well, first of all I doubt I spoke with Lloyd Blankfein 24 times in 6 days ..."
The phone records say he did.
But they also show he talked constantly with Wall Street executives, he says to keep track of the markets.
Many will remember him only as the man who bailed out the banks:
"And I will tell you right now and tell the American people, they're not going to lose a dime on the money that we put in those banks."
History may prove him right. Most of the major banks have already paid back the TARP money, with interest. They're also paying themselves billions in bonuses again.
"If you were back running a bank today, would you be paying the kind of bonuses that are being paid on Wall Street?" Mason asked.
"I think some of these numbers seem ridiculously high," Paulson said.
A year after he left the Treasury, Paulson says not enough has changed.
"Is the patient still sick?" Mason asked.
"The patient is stable and recovering if the patient is the banking system," Paulson said. "But if the patient is the regulatory system, that patient is still very sick."
But Hank Paulson is not the doctor anymore. He is now visiting scholar at Johns Hopkins University in Washington, teaching classes, and at 63, considering his next step.
"You said, I think, that you didn't want to be Treasury Secretary just to be Treasury Secretary -
you wanted to have an impact," Mason said.
"That's for sure, yes."
"You did have an impact."
"I did have an impact, although I would have settled for having a much smaller impact," Paulson said.
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Feb 1, 2010 at 3:19 PM
Reader Comments (40)
Congress Is Blowing It On Financial Reform (Again): Where Are The Limits On Leverage?
Sunday, January 31, 2010
Massive Layoffs Coming in NYC, Nevada, California, Colorado, Arizona, Everywhere
http://globaleconomicanalysis.blogspot.com/2010/01/massive-layoffs-coming-in-nyc-nevada.html
it's getting uglier and uglier folks..
all I can say is WOW....we are heading for riots in the streets
All you cowards busy with keyboard rants ..made in china and refused to revolt
The Bank Bailout Verdict: We Are A Nation Led By Idiots
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Both of these links have some good background and outrage on the leverage issue...dylan ratigan goes off on Paulson in the above clip...
..and that government: of the idiots, by the idiots and for the idiots, has thus PERISHED from the earth.
GROW BALLS and chase them, hang them SADDAM STYLE
http://www.pushhamburger.com
or Stay busy here to edit or delete Ken postings?lol
Throw the fucking Made in China Key Boards now.........and throw that remote control and pick up what?lol
Kenbot SHIT SCREAMS.....COWARD......LOL CUT-AND-PASTE COMMANDO......LOL!!!
USA REPUBLIC ROBBED, BUSTED and cowards still glued to the WEB REVOLUTION
WASHINGTON CRIMINAL TRAITOR RULERS HAVING A LAUGH AS TRILLIONS math fucks don't know?LOL
http://www.pushhamburger.com
lol
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Nice comment Benny...i added it to the post...
lol
JESUS is not coming down...he will be put on the cross in seconds by HOME GROWN FINANCIAL AL QAEDA
LOL
Cowards Grow balls to revolt
@DB jokers pray for punisihment?LOL
Tyranny is fought.......Pray does not work?LoL
http://www.pushhamburger.com
Why haven't you begun to fight...where are your bamboozled balls?...seriously...
gobias and james are right...you are annoying...
just so you know, the reason i leave some of his Push hamburger posts up, is that the responses from you and james and others are SO FUNNY sometimes that it would ruin the humor if I then deleted his original posting...
"a few weeks"! OMG, my stomach is in knots from laughing. You are a patient soul, DB. Job was afflicted with boils. You've got Kenbot.
I tell you this kind of stuff a lot. You could learn something from O'Reilly Factor, he rides the fence. I hate the guy but many people on the right think he is on the right and at the same time I watch the show now and again and all his leftist crap makes me want to throw up.
You should embrace the opposing views and make your sites political stance appear less obvious. Most of your go to sites (Jon Stewart, Colbert, Huffington Toast, SNK, and the like) make people peg you as an obvious leftist. Mention them to some of my fiscal conservative friends on the right and they laugh at how ridiculous and one sided they are. DB, time to face some realities, you chase all the conservatives away with that crap and they are the ones most likely to embrace parts of your more attractive side, the fiscal conservative side. You can call it Libertarian or whatever but you agree more with Sarah Palin than you do with Barry Soetoro.
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i agree 100%...it destroys the flow and looks bad...i hate it...but the responses from the regulars to Ken make me laugh...with time i usually get to everything and clean it up...
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This is the eternal question between us gobias...because i BELIEVE and i will attempt to show in the next comment that you completely MISREAD ME...
Huffington Post....you are correct that they are a political-left site...but you fail to appreciate that I NEVER POST THEIR POLITICAL STORIES...they do an outstanding job with covering geithner, bernanke, paulson, aig, the crisis, etc...i ONLY link to them on those stories...
SNK doesn't get linked nearly enough and she's a Libertarian...she's not a Debtocrat...
I link to the Hill, the WSJ, the FT, and many others from the right...
You are the only person around here that thinks I favor the Democrats (debtocrats...my phrase...thought of it yesterday, fwiw)....I'm a global warming skeptic...hmm where does that put me...
I care about balanced budgets and very little else besides ending the wars...
My anti-war stance is the only thing that you could argue, historically would make me a leftist, but the Ron Paul Republicans demonstrated that that historical maxim is DEAD...
I am a Ron Paul Republican...shrink government, balance the budget, get government out of our lives, and live and let live...those are my philosophies...now tell me what part of that makes me someone who leans left?
I THINK the problem is one of PERCEPTION on your part...you think any criticism of Republicans is bad and makes the criticizer automatically a Debtocrat...this is where you are wrong...
the only 2 controversial things i discuss occasionally are Palin and global warming fraud...
so the left would hate me for exposing global warming fraud and the Right would hate me for my negative Palin comments...
i think i do a pretty decent job of 'riding the fence'...
http://www.factcheck.org/elections-2008/born_in_the_usa.html
When will anyone take a look at the Senate "free pass" vote to allow both candidates to run, which was unconstitutional. Oops thats right, we can't hold anything against our divinely inspired herd animal "congress critters".
"You chase all the conservatives away with that crap and they are the ones most likely to embrace parts of your more attractive side"
Would that be these guys? http://online.logcabin.org/
I think what Gobias is trying to say is that since his bed is on the right wall, and since only he can fit under it, we all have no choice but to be left of him and his gun banning, pro choice, crossdressing pal.
I met an HOA busybody once... We urinated on him.
COWARD FUCKS >>>>>YOUR WEB RANTS>>LOL
CRIMINAL TRAITOR RULERS LAUGH IN WASHINGTON DC
WHY NO PROTESTS IN WHEN THESE CRIMINAL HEARINGS DRAMA IN DC GOES ON?
RLR...is one great roaring here
all others screaming what?lol
http://www.pushhamburger.com
You are the only one SCREEEEEAAAAMIIIING!!!!
Do you see black helicopters?
Screaming is wasted energy, You are not checking your loop as I asked. How do you think you will achieve anything when you cannot apply one basic tactical theory.
By the way, those e-mails you send to the goobermint, nobody reads them. But if you send enough, you will be visited by some men in white with big butterfly nets.
WATCH WHEN U ALL GET SUCKED IN CIVIL UNREST
TIME LINE NOV 2010-2011
HTTP://WWW.PUSHHAMBURGER.COM
YOU ALL COWARD FUCKS REFUSE TO GROW BALLS AND REVOLT NOE GET READY TO GET SUCKED INTO RIOTS AKA CIVIL UNREST
U ALL WILL L KNOW SOON WHAT AFGHANISTAN AND PAKISTAN TURMOIL LOOK LIKE
PAYBACK TIME FOR US ..CIA/BANKER/MILITARY COMPLEX WAR AND BANKING SCAMS WILL HAUNT US ALL NEXT
DR. RON PAUL/KAPTUR MY HEROES
HTTP://WWW.PUSHHAMBURGER.COM
I told you once before, keep it out of my peaceful little fiefdom. I know how to handle "terrorists", and I won't be all touchy feely, political correct about it.
I guess I will see you in November, thanks for the warning.
By the way, you forgot your nonviolent disclaimer for your violent intentions this time... Looks like the truth is revealed.
WHERE WERE YOU WHEN 9/11 HAPPENED?LOL
Coward fucks
We have HOME GROWN FINANCIAL AL QAEDA : Scammed /robbed us all and now our we are DEBT SLAVES
What the fuck are you proud about cowards?
GROW BALLS come out of your desk rat holes now..............
KARL DENNINGER is right on: AMERICANS ARE COWARDS WITH NO BALLS
http://www.pushhamburger.com
Biggovernment has presented an explosive story related to AIG and The NY Fed in which the claim is made that the trust agreement that established AIG's "grab" by The NY Fed was in fact outright unlawful:
This afternoon on Secure Freedom Radio we announced a breaking news story concerning the Administration’s ongoing cover-up of AIG financial wrong-doing. In an interview with David Yerushalmi, senior litigator on the Murray v. Geithner et al lawsuit, we expose possible fraud, money-laundering and criminal activity.
Money laundering?!
I looked at the source document folks - and while most of it looks ok, there's one little line in the trust agreement that might be the problem referred to - specifically, here:
Section 1.03. Trust is Irrevocable. This Trust Agreement and the Trust shall be irrevocable and, except as provided in Section 5.01 hereof, unamendable except that the Board of Governors may terminate or amend its authorization pursuant to Section 13(3) of the Federal Reserve Act, thereby revoking or amending the Trust in accordance with Federal law, provided, however, that a Trustee’s rights to resign as a trustee hereunder and to compensation and indemnification with respect to acts or omissions occurring prior to any such revocation or amendment may not be modified without the written consent of that Trustee.
A trust of this sort, to be lawful, has to be irrevocable - you can't reserve the ability to modify it later. The NY Fed knew they didn't have the authority to take equity - thus, these "trust" agreements.
I'll note for the peanut gallery that I'm not an attorney, but I do have a reasonable understanding of the requirements for an irrevocable trust of this general sort to be valid. A phone call with the plaintiff's attorney, David Yerushalmi this morning confirmed that this indeed was the primary problem. Mr. Yerushalmi went on to assert that this establishes a prima-facie violation of the money laundering statute - an extremely serious allegation as that law, if violated, carries very heavy criminal penalties.
There is also apparently a second issue in that the beneficiary is named as The US Treasury, which is, effectively, a bank account and not a "person or entity." That's a potential problem too although I can see the counter-claim being made that "The Treasury" is in fact The institution of The Treasury, not the account called "The US Treasury."
This is an explosive allegation - if the trust is defective then it is as if it never existed, and the entirety of the AIG bailout and everything related to it may be criminally unlawful. In addition the shareholders of AIG may have effectively had their equity interest improperly stripped!
A call to AIG's corporate offices for comment was redirected to a media contact person by email (they apparently don't take phone calls) and an inquiry to that office was not immediately returned.
Stay tuned -this has the potential to get rather interesting, as the admissions related to this agreement, if I read the transcript accurately, were revealed in a deposition - that is, with the folks doing the talking under oath.
http://market-ticker.denninger.net/
I lost a friend that day Ken, and I ain't laughing.
You and Al Qaeda have a lot in common, you both want to destroy America for your own perverse views. You could not handle freedom, look at how you try to desecrate it. No wonder you reference them a lot.
I am sorry you are a slave Ken but I am not. You have obviously chosen your yoke. That won't help you. To me that day is real, to you it is pictures on tv to mock other people with, just like your buddy Osama does.
http://www.msnbc.msn.com/id/35212549/ns/us_news-washington_post
I am sorry you are a slave Ken but I am not. You have obviously chosen your yoke. That won't help you. To me that day is real, to you it is pictures on tv to mock other people with, just like your buddy Osama does.
WOW GOMPERS?LOL
HOME GROWN FINANCIAL AL QAEDA VS BIN LADED
BIN LADEN TRAINED AND WORKED FOR CIA
SAME TALIBAN KICKED RUSSIANS OUT WITH USA MILITARY TRAINING AND SUPPLY AND NOW USA KILLS SAME TALIBAN?LOL
U R ONE FUCK COWARD..THAT IS ALL
BASH AND TRASH THE HARSH REALITY MESSENGER?LOL
HTTP://WWW.PUSHHAMBURGER.COM
SADDAM WAS OUR CREATION ..WHAT ELSE?
You are going to find that your timeline will hit an immovable object. If you only knew what I could do to you...