Treasury bailouts

Paulson forced banks to accept bailout money

I hate the Wall Street banks as much as anyone else, but we have to acknowledge that not all the Wall Street banks are the same, and that the federal government is as responsible for this mess as anyone is.

(Bloomberg) -- Former Treasury Secretary Henry Paulson, describing nine U.S. banks as “central to any solution” of the credit crisis, told their leaders to take government aid or be forced to by regulators, according to a memo his staff prepared for a private meeting in October.

“If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance,” Paulson’s one-page list of talking points for the session with the banks’ chief executive officers said.

“We don’t believe it is tenable to opt out because doing so would leave you vulnerable and exposed,” the memo said.

Is it time to fire Tim Geithner and Ben Bernanke?

A lot of serious people are questioning the Obama economic team. Paul Krugman has accused the administration of dithering. Henry Blodget is not feeling like the ship of state is under control. Willem Buiter feels that the Fed is working at cross purposes to correcting the fundamental problem. And Ralph Nader, perhaps the last principled liberal left in the US, is questioning the sanity of it all.