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.

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"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.

[hieroweb]

So we should be okay with a government that comes out and tells us this bill needs to be passed right NOW without any checks and balances in place? Does anyone have any idea why a government would come out and make an unbelievable request? Why are they trying to shove this down the throat of every American? Could it be that Paulson wants to take care of his own base? Paulson who is an ex Chairman and Chief Executive Officer of Goldman Sachs with ties to AIG and other recently taken over companies is the man pulling the strings. It seems that the hurry to get this bill approved is more about not finding out certain details about Paulson%u2019s past than it is about helping our country. This administration has never been up front with the American people so why would they start now. Americans should be in an UPROAR over what is going on right now!

[sherri723]

You want stimulation of economy - GIVE THE MONEY TO
every US citizen adult, 21 and over (with some exclusions i.e., inmates) - and watch us roar! Give US the power to get ourselves back in shape and it will immediately affect every rural and metro. city in this country! How can the economy work when there''s little or no money in our hands to give into it? Give us an equal share, rich or poor and TRUST US to return it back into the system and relieve our pressures of debt and livelyhood! To be able to repay, to build and provide for ourselves, which in turn stimulates us all. It''s simple - and it''s the only answer to get the entire country moving again. Every bank, company, business and family would benefit from it and give us all a chance to recover.........not just Wall Street, investors, banks, etc. who got us into this mess!! Share it and watch it heal in no other way.

[wfl56]

I thought you guys had a repputation for asking the hard questions. During this past Sunday''s interview with Mr. Paulson, I saw no evidence of that. In my opinion there were a few hard questions that weren''t asked.

1. What do you see would be the outcome if the government did nothing and allowed the market correct itself?

2. What exactly would the government get for it''s $700b dollars?

3. Who would the government sell these risky loans too? If no one is buying them now, who would be our market?

[txgrouch2006]

Oops, sorry for dropping off the topic of my previous post.

I was discussing

TERM LIMITS FOR ALL MEMBERS OF CONGRESS

It''s time.

[txgrouch2006]

Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''''d ALL be Palins if we did this.
Posted by mbfaust at 01:06 AM : Sep 30, 2008

I suspect that there is SOME WAY to accomplish this without creating the obvious conflict of interest with Congress.

THERE ARE NO GOOD ONES. Any "institutional memory" IS BAD MEMORY.

How much good did the "good ones" and "institutional memory" do us to this point????

[corbon2]

http://www.youtube.com/watch?v=_MGT_cSi7Rs

DENIAL at it''s finest, no more Fannie Mae, off with their heads!!!

[corbon2]

http://www.youtube.com/watch?v=NU6fuFrdCJY

Corruption in government...No WAY!
This is informative

[mbfaust]

txgrouch2006:
Small problem. Term limits for members of Congress are unconstitutional. Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''d ALL be Palins if we did this.

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.
com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[joelewiz75]

Wolf, wolf... no wait I am serious this time. Peter''s trajedy may be our own.

[firelight2]

Here''s a video on how we got into the financial crisis..it''s pretty good!

http://www.youtube.com/watch?v=NU6fuFrdCJY