Capital Commerce

The Real Reason Behind Hank Paulson's Change of Mind

By James Pethokoukis

Posted: November 14, 2008

Right before I was interviewed this afternoon by CNBC's Erin Burnett, she interviewed Hank Paulson. During that chat, the Treasury secretary seemed to imply that one reason he abandoned the idea of using the $700 billion bailout to buy bad mortgage debt securities was that $700 billion might not have been enough money to do the trick.

So let me get this straight: Paulson tells Congress that if they don't give him the dough, the global financial system will collapse. And then it turns out the problem is even bigger than what he first thought. I do not find that comforting. ... I will tell you this, I don't think Paulson has to worry about Obama asking him to stay on for a few months in 2009.

Real Reason #2

Paulson is running out of time and money. He needs congressional approval to get at the other $350B of the $700B bailout package. Of course he's going to say "I've got a new plan.. this time I'll take your feelings into account..promise!"

Gustavo Corral of NY @ Nov 16, 2008 00:21:28 AM

Good point

Would take a few trillion to buy that toxic sludge. Amazing to me that Paulson "didn't know" that before encouraging the bail-out bill...

MooTrades.com of VA @ Nov 15, 2008 10:49:37 AM

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Capital Commerce

Capital Commerce

U.S. News business reporter Matthew Bandyk examines the issues, people, and debates that shape the nexus of political and economic life in the nation's capital.

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