Henry “Hank” Paulson Jr., the former Treasury secretary, shared his thoughts on the financial crisis and his tenure with President George W. Bush with an audience of about 1,500 financial advisors and investment professionals on Wednesday, June 9, during the opening session of Pershing’s 2010 Insite confab in Hollywood, Florida.
While generally sure of himself and his decisions during the crisis, Paulson said, his biggest errors during his time in office were in communications. (He served as head of the Treasury Department from June 2006 to January 2009.
For instance, he says, rather than stressing how the $700 billion TARP (Toxic Asset Relief Program) funds were needed to ensure that a complete financial-market meltdown wouldn’t happen, his message should have focused on how saving Wall Street was essential for preserving Main Street.
As Rep. Barney Frank (D-Massachusetts) told him, “You can’t prove a counterfactual.”
“I’m better speaking one on one or with small groups,” Paulson explained.
During the Pershing session, Paulson answered questions from Ted Bragg, a Pershing managing director and fixed-income trading executive. Bragg principally asked Paulson questions based on issues and opinions shared in Paulson’s recently published book “On the Brink.”
The former Goldman Sachs leader described the government’s decision to not rescue Lehman Brothers in 2008 as more of a non-decision. “We did not have the power to bail Lehman out,” he said, “and we could not find the legal authority [or other ways] … to guarantee the liabilities and to inject capital,” he said.