Isaac: Paulson On Paulson
Some 3,000 bank and thrift failures, including many of the largest firms in the country, were handled during the 1980’s without creating a panic. This compares to roughly 300 failures this time around. The 1980’s provided a recent and highly successful model for handling a major financial crisis. Secretary Paulson clearly did not have to “fly by the seat of his pants and make it up as he went along.”

In the crucible of 2008, virtually the entire leadership of our nation was in lock step at Secretary Paulson’s side. Yet, fundamental reform has not taken place either in the U.S. or globally, and we remain as vulnerable as when Mr. Paulson stumbled his way through the crisis of 2008.

I end with this passage from Senseless Panic:

“Financial markets and the public can handle almost anything except uncertainty. If they believe they are being told the truth, someone is in charge with a sensible plan for dealing with the problems, and the system is aboveboard and fair, they can accept almost any negative news.

“When the problems surfaced at major financial institutions in 2008, the government’s actions were ad hoc and inconsistent. No one appeared to be in charge with an overall plan, statements were made that proved false, the public was provided with inadequate information, and decision making seemed dominated too much by political considerations, and specifically by Wall Street. The markets and the public lost confidence and financial panic swept the world.”

