In defence of Hank Paulson, by Hank Paulson

Did Bush or Paulson have a clue what they were doing? It’s an intriguing question. James flagged up the view of Bush’s speechwriter Matt Latimer that Paulson, not Bush, was to blame. But, in this month’s Vanity Fair, Todd.S. Purdum flips the coin.

Based on interviews with Paulson, conducted as the bailout unfolded, the article’s a brilliant piece of long-form journalism: describing the chicanery on Capitol Hill as Paulson, Tim Geithner and Ben Bernancke sought desperately for a deal with Democrats Nancy Pelosi and Barney Frank. Paulson was in no doubt that Congressional Republicans were responsible for the foul up. At the height of the crisis he told Purdum:

“Republicans, in particular in the House, were very vulnerable, and so it was against their philosophy, against everything they’d been saying about markets. And because the Democrats would rub their noses in it and say, You know, we’re working with Paulson. And so every time Barney Frank would say, ‘I’m working with Paulson,’ that was like waving a red rage in front of a bull.”

But behind Paulson’s explanation, lurks the impotent President – loathed by voters and his Congressional party alike:   

‘Bush was a non presence… Paulson told me that this strategy had been deliberate – that having the President involved simply would have been counter productive, and the President himself knew it. “Given the political dynamics, given where we were in the electoral, given his relationship, you know, with the people up there, he said to me, ‘You will be more successful if we do it this way.’ The President didn’t have the stick to get some of the things we would have liked to have gotten.”'

Bush might not have comprehended the deal he signed, but would it have made a difference if he had?