James Forsyth

Bush didn’t understand Paulson’s bailout

Bush didn't understand Paulson's bailout
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Those who think that the financial bailout in the US was rushed through without sufficient thought and that the Treasury Secretary Hank Paulson had far too much latitude will find plenty of ammunition in a tell-all book by a former Bush speechwriter, Matt Latimer. Latimer worked in the White House in the final two years of the Bush administration and the extract from his book in GQ gives a sense of the confusion as the administration tried to deal with the crisis. What is most revealing to me is how even the president didn’t know what the bailout was trying to do:

“the president was clearly confused about how the government would buy these securities. He repeated his belief that the government was going to “buy low and sell high,” and he still didn’t understand why we hadn’t put that into the speech like he’d asked us to. When it was explained to him that his concept of the bailout proposal wasn’t correct, the president was momentarily speechless. He threw up his hands in frustration.

“Why did I sign on to this proposal if I don’t understand what it does?” he asked.”

Now, I’m sure some people will seize on this as evidence of Bush’s cluelessness. But Latimer—who is in general fairly scathing about the president—is convinced that it was Paulson who was to blame for this:

“It wasn’t that the president didn’t understand what his administration wanted to do. It was that the treasury secretary didn’t seem to know, changed his mind, had misled the president, or some combination of the three.”

Indeed, Latimer reports White House gossip that at one meeting, an exasperated Bush told Paulson, “You’ve got to tell me what you’re doing.”

PS One thing that is worth noting is how Bush, who say what you like about him had good political insincts, didn’t get caught up in the wave of Republican excitement about Sarah Palin after her convention speech, presciently telling staffers:

“This woman is being put into a position she is not even remotely prepared for,” he said. “She hasn’t spent one day on the national level. Neither has her family. Let’s wait and see how she looks five days out.”