A year has passed since the bankruptcy of Lehman Brothers and the even more catastrophic public policy failure exactly a week later, when Henry Paulson, President Bush’s Treasury Secretary, peremptorily demanded a $700 billion bank bailout from Congress. It was Mr Paulson’s testimony before the Senate on September 23, to explain what he would do with this money, that turned the crisis into a previously unimaginable nightmare, by revealing that the man supposedly in charge of the world’s most important economy literally did not know what he was talking about.
Anatole Kaletsky: Economic view
Astonishingly, we can now see with hindsight that this nightmare phase of the crisis actually lasted only three weeks. The weekend of October 10-12 was when Gordon Brown, to his enormous credit, took control of the situation from the crumbling Bush Administration. That weekend he led other European governments in offering to recapitalise the banks and effectively guaranteeing all bank liabilities with the full faith and credit of their nations.
Leave a comment
No comments yet.