Sept. 28, 2008
Paulson Warns Of "Fragile" Economy
Treasury Secretary Talks To Scott Pelley About The Controversial $700 Billion Bailout
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Play CBS Video Video Paulson On The Bailout Scott Pelley gets rare access to Treasury Secretary Henry Paulson as he deals with the nation's unfolding economic crisis.
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Treasury Secretary Henry Paulson (CBS)
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Timeline Financial Meltdown Track major events that lead to one of the most tumultuous times in Wall Street's history.
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"I called Secretary Paulson. And I said, 'Mr. Secretary, we would like to meet with you tomorrow morning because of some of the chaos we see in the markets.' And he said back to me, 'Madam Speaker, it cannot wait until tomorrow morning. We have to come today.' And so they came in and painted a very, very, very grim picture. A couple of days later we got in writing their request, which was even more shocking," Rep. Pelosi recalled.
60 Minutes was with Paulson and his team later in the week as they wrote that first draft to send up to Congress. It ran three pages, and would put him in charge of the largest bailout in American history.
"We've got to get this up to the Hill quickly," Paulson instructed his top advisers in his office that afternoon. "We’ve got to keep it simple, very simple… this is about recapitalizing our banks and financial institutions."
"It was shocking in that the Treasury Department wrote the bill in a way that gave the secretary czar-like powers. And also it had a $700 billion figure, a number that had never been used. And that was pretty shocking," Pelosi told Pelley.
"I want strong oversight and transparency," Paulson explained. "Scott, the last thing in the world I wanted to do was be sitting in this seat and be going up to Congress asking for these kinds of things. It is a terrible position to be in. The only thing worse is the alternative."
The President called Congressional leaders and the two presidential candidates to the White House this past Thursday. Behind closed doors, there was a tense, angry debate over how the bailout would be structured. Republican House members revolted. Speaker Pelosi led Democrats out for a break and Paulson followed.
Asked what happened, Pelosi told Pelley, "We had our conversation."
"I'm given to understand that Secretary Paulson kneeled down on his knees and begged you to move this bill forward," Pelley said.
"No, no, no," Pelosi said.
Asked if that did not happened, Pelosi said, "Well, Secretary Paulson injected a moment of levity into the conversation but…"
"Levity on one knee?" Pelley asked.
"Well, for a thousandth of a second," Pelosi replied.
"There was a lot of tension. And frustration. And I thought we needed a moment of levity. And I wanted to break that tension. There was some shouting going on," Paulson remembered.
"He said, 'Please, please, I beg you. Don't blow this up.' And we said, 'We're not blowing up. It's the Republicans.' To which he said, 'I know. I know,'" Pelosi told Pelley.
Henry Paulson, who tells his staff to call him "Hank," is a negotiator. He was chairman of perhaps the most successful Wall Street investment bank, Goldman Sachs. He's 62 years old and spends much of his free time on environmental issues. When he left Wall Street for the Treasury, he was worth about $500 million.
"You were asked to take this job as secretary of the Treasury by the White House more than two years ago. First time they asked you what did you tell them?" Pelley asked.
"I told them I would prefer not to do this," Paulson replied.
But the White House asked again, and he said yes.
Produced by Henry Schuster and David Gelber
© MMVIII, CBS Worldwide Inc. All Rights Reserved.
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See all 178 Commentsevery 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.
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?
I was discussing
TERM LIMITS FOR ALL MEMBERS OF CONGRESS
It''s time.
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????
DENIAL at it''s finest, no more Fannie Mae, off with their heads!!!
Corruption in government...No WAY!
This is informative
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.
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