So That's What the Bended Knee Thing Was About...

Let the blame games begin: Phillip Swagel, formerly the assistant Treasury secretary for economic policy under Hank Paulson, is out with a 50-page memoir on how the whole economic mess went down behind the scenes. The WSJ has very good cliff notes here, though you should absolutely check out the essay itself (here's the PDF).

But there's more to that story. Wealth of Nations' own Mike Hirsh actually talked to Swagel for his column this week. In the process, he learned that Geithner's new plan for toxic legacy assets had its roots in an idea Warren Buffett proposed to Paulson back in October, backed by PIMCO's Bill Gross and Goldman Sachs' Lloyd Blankfein. But Paulson rejected the idea, instead placing his bets on fast-track capital injections as the financial world crumbled around him. Why does this matter now? Mike says the issue goes straight to the heart of a still-unresolved philosophical divide--even within the Obama administration--over just how broken the Street's machinery really is. Pretty fundamental stuff, really.

To recap: Swagel gives you the inside view. Mike gives you the big picture. Both are must-reads.

(Photo of Philip Swagel by Haraz N. Ghanbar / AP)

So That's What the Bended Knee Thing Was About... | News