Paulson Warns Of "Fragile" Economy

Treasury Secretary Talks To Scott Pelley About The Controversial $700 Billion Bailout

(CBS)  Congress is working on the controversial $700 billion bailout of the national economy. A lot of Americans are angry about it, but Henry Paulson, the secretary of the Treasury, says an extraordinary emergency demands action that was once unthinkable. Paulson has helped to nationalize two mortgage giants, seize the nation's largest insurance company, manage the biggest bank failure in U.S. history, and oversee the end of Wall Street as we know it.

Who is Henry Paulson? 60 Minutes shadowed him these past two weeks as he worked to convince the Congress that it should give him perhaps more power than any Treasury secretary has ever had.

---

"What if the plan doesn't work, what if 700 billion doesn't do it?" correspondent Scott Pelley asked Sec. Paulson.

"Scott, it's gotta do it and we're going to make this work, and we're going to do what it takes to work," Paulson replied.

"Shouldn't the price of failure be failure on Wall Street?" Pelley asked.

"And failure and the market discipline that goes with it is the right thing, but unfortunately we have a system that is way out of whack, where our institutions are too big to fail. We don't have the regulatory authorities and structure in place to protect the American people," the secretary said.

"You can't be proud of Wall Street," Pelley remarked.

"I'm not proud of a lot of things. You know, as I go around the world right now, representing the United States of America, it's a humbling experience," Paulson replied.

Paulson's office in the Treasury building overlooks the White House next door, but the view that has seized his attention is behind his desk: four market monitors that have signaled one emergency after another.

"What was the most difficult moment, what was the moment that put a knot in your stomach?" Pelley asked.

"Scott, I've had a lot of knots in my stomach, but I would say last Wednesday night, when the capital markets froze, when there started to be a run on money markets, banks stopped lending to each other. And, I know people in America won't understand what that means, but if money doesn't flow freely between financial institutions, then it impacts everyone in the country," Paulson explained.

"The economy had a heart attack in that moment," Pelley remarked.

"I would say this: whether it had a heart attack or not, the arteries were clogged," Paulson said.

That was Wednesday, Sept. 17, and Paulson told 60 Minutes that was the night he realized the collapse of Wall Street needed a sweeping intervention.

How much jeopardy is the economy in?

"It's a fragile situation, a very fragile situation. There were times, a couple days, last week, and a day this week, when U.S. Treasury bills were trading for well under one percent," Paulson told Pelley.

"People were buying Treasury bills knowing that they would get almost no return. But it was a safe place to stuff their money," Pelley said.

"It is, in some ways, the equivalent of sticking money in your mattress," Paulson said.

[hkp93]

I hope that the "cap" on executive compensation also includes some pay back for what they''ve already taken! And the comment that those emails were scandalous is not enough. I hope that those employees who were giving out ratings that were meaningless are all out of work right now. As a middle income American who is working hard to support my family I am outraged at being asked to take on all of this "bad debt". The people who have already lost everything and ended up homeless did not get "bailed" out. Where is the help for them?!?

[lynnjf]

Re the 9/28 edition of %u201C60 Minutes%u201D: I%u2019m watching Lesley Stahl walk through the perilous streets of Iraq, wearing%u2026 a bright green jacket! And now%u2026 a bright red blouse! Her blonde hair is uncovered. Everyone else is in camouflage, or at least earth tones. Is she trying to be a walking target?

[brucejones65]

I have just seen the item on 60 Minutes about the bailout, and I have never heard such drivel in my life.
The problem started with the free trade agreements, that were mostly signed into law by Clinton. They were warned about what it would do to our economy, but it was ignored. People out of work, or making less than they were before do not pay debts. Add that to the fact that big companies are only cash cows for executives, and a crash is inevitable. Well it has begun, and spending 700 billion in tax payer money, will only deepen the problem worse. This depression we are headed into, will make the 29 crash look like kids playing hopscotch.
Throwing 700 billion at wall street, instead of on jobs for the tax payers, will be like fighting a flood with a fire hose.
Congress needs to back away from this mess, and get to work on fixing the bleeding of jobs from this country.
I am here to tell you that this bailout will only speed up the crash.

[jaxon20001]

That CBS/60 Minutes could turn their cameras and so-called journalists upon the biggest bail-out in human history and not so much as mention the issue of accountability tells me all I need to know about the US media and its value to me as a source of reliable information.

[jaxon20001]

That CBS/60 Minutes could turn their cameras and so-called journalists upon the biggest bail-out in human history and not so much as mention the issue of accountability tells me all I need to know about the US media and its value to me as a source of reliable information.

[jaxon20001]

That CBS/60 Minutes could turn their cameras and so-called journalists upon the biggest bail-out in human history and not so much as mention the issue of accountability tells me all I need to know about the US media and its value to me as a source of reliable information.

[fkovacs1]

After watching this segment I was thoroughly nauseated. On the point of how money markets work, Henry Paulson has a lot of nerve to say " I know people in America won''t understand what it means". He seriously underestimates the knowledge of the American people, and has no right to condescend to us in that manner. There had better be a major investigation regarding how this happened, who was involved, and extremely heavy fines paid for this. The people both on Wall Street and up on Capitol Hill all need to realize that we are not the "suckers" they think we are.

[jaxon20001]

That CBS/60 Minutes could turn their cameras and so-called journalists upon the biggest bail-out in human history and not so much as mention the issue of accountability tells me all I need to know about the US media and its value to me as a source of reliable information.

[Susan Marie]

When is this country going to start helping the middle class people that are constantly taking the fall for all the BAD decisions of this government? Why doesn''t Mr. Paulson BAILOUT us and let us be debt free. An email that was going around made the suggestion that the government divides that $700 Billion between every born American Citizen from the age of 18 and above and split that among us and then we could pay our appox 30% taxes back to the government and pay off our debt. What a novel idea to give the Americans that deserve to get a second chance to start over instead of those that just get richer.

[Susan Marie]

When is this country going to start helping the middle class people that are constantly taking the fall for all the BAD decisions of this government? Why doesn''t Mr. Paulson BAILOUT us and let us be debt free. An email that was going around made the suggestion that the government divides that $700 Billion between every born American Citizen from the age of 18 and above and split that among us and then we could pay our appox 30% taxes back to the government and pay off our debt. What a novel idea to give the Americans that deserve to get a second chance to start over instead of those that just get richer.

[fkovacs1]

After watching this segment I was thoroughly nauseated. On the point of how money markets work, Henry Paulson has a lot of nerve to say " I know people in America won''t understand what it means". He seriously underestimates the knowledge of the American people, and has no right to condescend to us in that manner. There had better be a major investigation regarding how this happened, who was involved, and extremely heavy fines paid for this. The people both on Wall Street and up on Capitol Hill all need to realize that we are not the "suckers" they think we are.

[fkovacs1]

After watching this segment I was thoroughly nauseated. On the point of how money markets work, Henry Paulson has a lot of nerve to say " I know people in America won''t understand what it means". He seriously underestimates the knowledge of the American people, and has no right to condescend to us in that manner. There had better be a major investigation regarding how this happened, who was involved, and extremely heavy fines paid for this. The people both on Wall Street and up on Capitol Hill all need to realize that we are not the "suckers" they think we are.

[fkovacs1]

After watching this segment I was thoroughly nauseated. On the point of how money markets work, Henry Paulson has a lot of nerve to say " I know people in America won''t understand what it means". He seriously underestimates the knowledge of the American people, and has no right to condescend to us in that manner. There had better be a major investigation regarding how this happened, who was involved, and extremely heavy fines paid for this. The people both on Wall Street and up on Capitol Hill all need to realize that we are not the "suckers" they think we are.

[teejayniles]

the colossal ego of the deal-makers is rivalled by those of the camera crew and Correspondent/anchor Scott Pelley - - the people will have a chance to vote on November 4 and we''ll see on November 5 how many incumbents return to office to keep handing over power to Cabinet Secretaries and lame-duck administration (Bush-Cheney). . .such news treatments of the $700 billion bail-out make me mad and mad and mad !

[txgrouch2006]

TERM LIMITS FOR ALL MEMBERS OF CONGRESS

[txgrouch2006]

OK, how about some "man on the street" real facts?

Has ANYONE on this discussion board been unable to borrow ANY money recently due to lack of available lenders????

How do we KNOW this bailout is really as necessary as they say?

[kklasman1]

Regarding:

"one Wall Street analyst to another wrote, quote, ''Let''s hope we are all wealthy and retired by the time this house of cards falters.'' They were writing these e-mails nearly two years ago. "

These two analysts obviously knew what they were doing, which was defrauding their customers and ultimately the American public. While I know it would be just a symbolic gesture, the Feds obviously know who they are and these two should be thrown in jail for the rest of their lives, and fined their entire ill-gotten fortunes.

[danstoned]

Paulson: Economy Is In A Fragile Situation

THANKS TO THE REPUBLICON CONGRESS OF 1995 - 2006! John McCain should be proud of his voting record that supported the deregulation of Corporate America, which is the number one cause of all that ails the US economy, and the only reason US taxpayers are called upon to bailout Wall Street. John McCain supporters: as dumb as they get!

[hermitdave]

GOSH Henry no kidding. Now just which of the top people in this mess should the common man try and take up a collection for? Is there any chance any of them could loose their yacht?

[walkerbigl]

Come on CBS. You provided continuous coverage of the Clarence Thomas hearings, particularly Anita Hill''s testimony and you also gave full coverage of Bill Clinton''s impeachment, including alot of provocative reports about Monica Lewinsky. Now, how about letting the public see the bailout debates, or is important news not a priority for you.

[txgrouch2006]

Mr. Paulson, We, the People, are demanding an explanation as to why we no longer have the regulatory authorities and structures in place to protect the American people? What happened to those protective devices?
Posted by sun247 at 08:07 PM : Sep 28, 2008

They were repealed by the Clinton-era Gramm-Leach-Bliley banking deregulation act of 1999 that was SIGNED BY BILL CLINTON. He could have vetoed it, and if his veto was overridden he could say the measure passed over his objections.

THIS ROBBERY OF THE PEOPLE BY DELIBERATE FAILURE TO PROTECT was a TRULY BIPARTISAN EFFORT. It gained the OVERWHELMING SUPPORT of both parties in the House.

[txgrouch2006]

THANKS TO THE REPUBLICON CONGRESS OF 1995 - 2006! Posted by danstoned at 08:38 PM : Sep 28, 2008

CUT OUT THE PARTISAN NONSENSE!

Everybody knows BOTH parties were mixed up in this.

You''re the one who thinks the people are stupid if you think they don''t know.

[txgrouch2006]

THANKS TO THE REPUBLICON CONGRESS OF 1995 - 2006! Posted by danstoned at 08:38 PM : Sep 28, 2008

CUT OUT THE PARTISAN NONSENSE!

Everybody knows BOTH parties were mixed up in this.

You''re the one who thinks the people are stupid if you think they don''t know.

[occams_taser]

Ralph Nader was right.
Here is your proof.

Case. Completely. Closed.

[samthetvcat]

---"A year ago, last April, you said this, and I''ll quote, ''I don''t see subprime mortgage market troubles imposing a serious problem. I think it''s going to be largely contained.'' Why did this seem to take you by surprise?" Pelley asked Secretary Paulson."---

---"Asked if this was not unforeseeable, Joseph Stiglitz, a Nobel Prize winning economist told Pelley, "Oh, not only was it foreseeable, it was foreseen. Stiglitz says the "sucker" is the American taxpayer."---

Sigh, that''s life I suppose. What are you going to do?

What are Paulson''s predictions as to the effect of his bailout plan? What does Congress expect to be the effect of it? They were very vocal about what they thought would happen in it''s absense, what do they foresee occurring with it''s passing?

[perform421]

I wonder why there was no mention of the fact that the "affordable housing" pushed by Democrats are really to blame for this. It was they that insisted that people who couldn''t afford homes were given the chance of "the American Dream". And then the Dems.(ie. Janet Reno) pressured the lenders to lend to them. That is the cause. As usual, it is "always GWB''s fault". Here we go again, another season of "60 Minutes" of Liberal Bias. Scott, I don''t take you seriously!

[txgrouch2006]

I wonder why there was no mention of the fact that the "affordable housing" pushed by Democrats are really to blame for this.
Posted by perform421 at 09:10 PM : Sep 28, 2008

Just today, the Wall Street Journal quoted a 2003 New York Times interview with Democrat Barney Frank, who said at the time that Fannie Mae and Freddie Mac should not be more closely regulated because it could hurt their ability to provide "affordable housing."

[fkovacs1]

kklasman1- Excellent, excellent, EXCELLENT idea.

[gary4books]

This is following the pattern of the savings and loan problem. The first step was to over value the mortgage bundles. The second phase (and possibly the biggest profit maker) would be to under value the mortgage bundles. Since each has a dwelling with it and can either be ruined or made profitable by the degree of care and attention paid - it is a perfect example. Scott is perhaps following one of the propaganda line if he has decided that all of these instruments have no value. I suggest they could be mostly salvaged, given the proper skills and attention and rules.

[txgrouch2006]

TERM LIMITS FOR ALL MEMBERS OF CONGRESS

[davidwms-2009]

The only way this bailout will work is if the American people demand that Congress add The Fair Tax to the bill or pass it shortly afterward. It''s called ''quid pro quo'', the American people will do something to fix Wall Street and Congress'' mess if they will do something for us.

Americans spend $250-$300 billion a year just complying with our current complicated tax code. We could recoup the cost of the bailout in 3-4 years if we had the Fair Tax. This in additon to the Fair Tax helping the poor and bringing jobs back to the US.

If ever there was a time for the Fair Tax, that time is now. It is ineveitable that we will have to pass it, otherwise, America will implode financially.

[fkovacs1]

Txgrouch2006- I''ve been saying this for years.
WE as Americans need to DEMAND term limits on senator and representative seats. We need to get a bill going NOW. It''s a win-win for the people- if the senators and representatives vote against it, we simply vote them out of office come next term.

[tony0452]

Talk about having the fox in charge of the hen house. I do not see Hank Paulson as a solution but rather a major part of the problem. Wall Street insider for how long? Now, going to bailout all the buds on the Street, I am sure Jamie Dimon, John Thain, et al will all have "Hank" on their short Christmas list. Just how much are the American people willing to accept? Experts my foot, I worked in a factory and told many who supported Mr. Bush that by the end of his presidency the United States economy would be close to a depression. So, what has the Global Economy done for your family? Think about it.

[danstoned]

Lot of LogCabin Republicons on board tonite. Time to *******, ***?

[txgrouch2006]

WE as Americans need to DEMAND term limits on senator and representative seats. We need to get a bill going NOW.
Posted by fkovacs1 at 09:37 PM : Sep 28, 2008

I seriously doubt the members of Congress will vote for term limits on themselves. As for voters voting them out - history shows this is VERY unlikely.

An executive order or some such is needed to get it done IN SPITE OF Congress.

[tony0452]

Looks as though Dan Rather had this guys number who lives up there on PA. Ave right from the get-go. Today the problem is honesty, morals and ethics to the point that people entrusted with leadership or fiduciary responsibility do not have any. CBS, call Mr. Rather tonight and apologize!

[jerr11]

Hey didn''t we see this before?

Some big shot General, I think his name was Powell, went infront of the UN and told them Iraq was in a fragile situation with WMDs?

So we went to war and gave all those no-bid contracts to Halliburton?

Hey This Paulson guy looks just like Gen Liar Powell.

So who''s getting the no-bid contracts this time?

And why''s that Pelosi Bush Hoe caving in again to her master Bush?

[ursodumb]

every single member of our government is a scumbag criminal and they should all be hung.

[vicentefox2]

WHY DOESN''T PAULSON CONTRIBUTE SOME OF THAT 500 MILLION HE MADE AT GOLDMAN SACHS?

Congress doesn''t get that Americans do not support BANKER BAILOUT.

None of these Wall Street bankers deserve this free pass. If your factory is being closed they just say "hard luck there pal, find a new job!" Privatise profits, socialize risk they are all traitors.

[lemonskink]

Most of his statements are outright lies put together by this administration to continue the propaganda used to control with fear.

http://www.youtube.com/watch?v=EcZSh1diQRQ

[txgrouch2006]

If your factory is being closed they just say "hard luck there pal, find a new job!"
Posted by VicenteFox2 at 10:08 PM : Sep 28, 2008

But wait - they say if we don''t do this bailout, the factories and small businesses might close.

But you''re right - when was the last time they gave a RAT''S A$$ if some small business failed.

THIS SOUNDS VERY, VERY FISHY....

Could it be their REAL concern is BAILING THEMSELVES OUT because THEY ARE PERSONALLY INVESTED IN SUBPRIME LOANS???

Could this be a CONFLICT OF INTEREST???????????????

[kezarite]

"I would be angry too," Secretary Paulson said. Would be? That he is not say more about the lack of sensitivity the Bush administration and Republicans has for Everyman in America (and the rest of the world).

[txgrouch2006]

And I''ll ask again - after getting NO response last time:

Has ANYONE in this discussion been unable to borrow ANY money due to lack of available lenders?????

HOW DO WE KNOW THIS "CRISIS" ACTUALLY EXISTS, before we throw hundreds of billions of dollars at a crisis that might NOT EVEN REALLY EXIST?????

This sounds VERY, VERY much like the WMD "crisis..."

[txgrouch2006]

I just saw the movie "Igor."

Sounds SUSPICIOUSLY like this bailout plan, and the events leading up to it.

We don''t HAVE to be evil. The king is just tricking us into THINKING we do.

[jerr11]

Could this be a CONFLICT OF INTEREST???????????????

Posted by txgrouch2006 at 10:20 PM : Sep 28, 2008



Paulson was of course CEO of Goldman Sachs.

Conflict of interest.

That''s when the former CEO (******** C) of Halliburton was the prime proponent for the Iraq war, a war that benefited Halliburton the most.

Let''s see what Goldman Sachs and all the other criminal enterprises get out of this deal.

[thereichels]

Scott Pelley should have asked Sec. Paulson.

Will you want the taxpayers to buy out the next round of wreckless investments?

I am guessing the answer would be yes. Especially if this goes through.

[missingamerica]

Once upon a time a mighty nation - we''ll call it nation "A" - suckered another mighty nation - we''ll call it nation "U" - into an arms race in order to dissuade them from their imperialistic ways.

"A" had a strong economy, with happy and productive workers spread across many industries and service sectors producing goods and services valued the world over for their advanced technology, quality, and uniqueness.

Nation "U", not so much.

As a result, nation "U" shattered their economy in attempting to fund the arms race. Much turmoil ensued, and nation "U" - streamlined and reborn as nation "R" said: "What the hell. Maybe they are telling the truth; we will try playing it their way."

Nation "A", having declared victory, decided they could dispense with their factories and their services and their workers...and even better, get "something for nothing" by using those displaced workers in a fit of imperialism.

Soon enough, nation "A" found their economy in "a fragile situation"...as nation "R" watched, bemused, and pondered the hypocrisy - the outright lies - of "A"...

[kurtck1]

Why are we not marching in the streets demanding the ouster of these criminal capitalists? Oh yeah because we live in a police state.

Don''t believe me? Look at what happened at the RNC! If you don''t tow the line you get beaten tear gassed and arrested.

We need to stop ******** and start the revolution. We''ll never get our government back from the corporations who have stolen it unless action is taken.

[danstoned]

Republicons: PRIVITIZING PROFITS, SOCIALIZING LOSSES!

John McCain: PRIVITIZING PROFITS, SOCIALIZING LOSSES!

Airhead Palin: John McCain is a maverick!

[am_sumner]

I will NOT pay a cent towards bailing out these hubristic ***.I call on all middle-class Americans to stand up for themselves! This is another profit-oriented move that will paralyze the workers and subsidize the greedy money-mongers.

REBEL! QUESTION AUTHORITY! SAY NO!