I don't normally read Rolling Stone magazine, unless somebody puts a gun to my head. This weekend, my wife put a gun to my head and made me read last month's issue, that had a long article by Matt Taibbi entitled "Secrets and Lies of the Bailout."
He was also the author of an excellent, highly-regarded article a few years ago on the corporate culture of the legendary investment banking firm Goodman Sachs, describing it as "the great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
So, I expected a "hachet-job" on former Treasury Secretary Hank Paulson, as well as current Fed head Ben Bernanke for the work they did during the dark TARP days of 2008, and I was not wrong. He maintains that both the Bush Administration and the Obama Administration demonstrated far greater concern for Wall Street than for Main Street.
I often speak to groups about the difference between recessions and financial collapse. We worry too much about recessions and too little about financial collapse. A recession lays the seed for its own recovery, but a financial collapse can be permanent and is always worse than a recession. A recession is more like a bad muscle pull, while a financial collapse is more like a heart attack. While a financial collapse may not be fatal, a recession never is.
Sequestration is likely to throw us into a shallow recession. Failure to raise the debt ceiling could cause a financial collapse.
Taibbi doesn't seem to understand that critical nuance, reducing his article to just another attack on the motivations of anybody and everybody in government. Hank Paulson and Ben Bernanke certainly made mistakes, but they were honest mistakes made during the rapidly-deteriorating financial crisis.
One famous comment by Paulson to justify the $700 billion of taxpayer money for TARP was that if the market knew he had a "bazooka" in his pocket, then he wouldn't have to use it. Before I read another article in Rolling Stone, somebody will have to put a bazooka to my head.
He was also the author of an excellent, highly-regarded article a few years ago on the corporate culture of the legendary investment banking firm Goodman Sachs, describing it as "the great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
So, I expected a "hachet-job" on former Treasury Secretary Hank Paulson, as well as current Fed head Ben Bernanke for the work they did during the dark TARP days of 2008, and I was not wrong. He maintains that both the Bush Administration and the Obama Administration demonstrated far greater concern for Wall Street than for Main Street.
I often speak to groups about the difference between recessions and financial collapse. We worry too much about recessions and too little about financial collapse. A recession lays the seed for its own recovery, but a financial collapse can be permanent and is always worse than a recession. A recession is more like a bad muscle pull, while a financial collapse is more like a heart attack. While a financial collapse may not be fatal, a recession never is.
Sequestration is likely to throw us into a shallow recession. Failure to raise the debt ceiling could cause a financial collapse.
Taibbi doesn't seem to understand that critical nuance, reducing his article to just another attack on the motivations of anybody and everybody in government. Hank Paulson and Ben Bernanke certainly made mistakes, but they were honest mistakes made during the rapidly-deteriorating financial crisis.
One famous comment by Paulson to justify the $700 billion of taxpayer money for TARP was that if the market knew he had a "bazooka" in his pocket, then he wouldn't have to use it. Before I read another article in Rolling Stone, somebody will have to put a bazooka to my head.
