Former Treasury Secretary Henry Paulson has plenty of blame to spread
In a genteel event on Manhattan’s Upper East Side on Thursday night, former Treasury Secretary Henry M. Paulson had some sharp words for members of Congress who opposed the bank bailout two years ago and the push for financial regulatory reform today.
Paulson worked for a Republican president, but he said that during the negotiations to save the economy in fall 2008, as the Troubled Asset Relief Program was on the line, “the House Republicans were the biggest problem.”
Today, with legislation for financial reform nearly at a standstill, Paulson had some similar broad-ranging criticisms. “It is very difficult to get our government to act on anything unless there’s an immediate crisis,” he told an audience at the 92nd Street Y, a Manhattan cultural center.
Paulson particularly criticized politicians who are on the fringes of the left and right. “We have too many people who are on the outer edges -- and that’s not where the American people are,” he said. “Shame on us if we don’t get the regulatory reform we need.”
Paulson was interviewed by General Electric Co. Chief Executive Jeffrey Immelt at the event, which served as a promotion for Paulson’s new book, “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.”
The two men reclined in comfortable chairs and bantered like old friends. Immelt asked a lot of respectful questions about leadership, but he also tested Paulson on some hot-button issues, such as executive compensation.
Paulson, who was chief executive at investment bank Goldman Sachs Group Inc., acknowledged that the high bonuses that have gone to Wall Street bankers have “always been hard to explain.”
“I do believe that even during the good times, it’s just out of whack,” he said.
But Paulson didn’t think that legislation was the way to deal with the issue. Instead he deferred to the “leadership” of bank executives.
Paulson blamed government officials, Wall Street figures and others for the events that led to the financial crisis, but he did not accept criticism of himself and other federal officials over the bailout: “I believe the major decisions we got right.”
He also did not have to deal with one of the more contentious issues of the last few weeks, which involved Immelt. In his book, Paulson disagreed with Immelt’s accounts of GE’s financial health during the crisis, an issue that is the subject of shareholder litigation. But Immelt, who chose which audience questions to present to Paulson, let that one go.
At the end, Immelt and Paulson congratulated each other for being “heroes,” and the audience applauded at length before filing out.
