MEMORIES, JOHN RECORDS
LANDECKER IS HERE
BUT
FIRST, IS
THE U.S. ECONOMY IMMUNE TO A
CRASH LIKE THE ONE FIVE YEARS
AGO?
THAT WAS THE
MAIN QUESTION AT A
CONFERENCE TODAY THAT BROUGHT
TOGETHER MONEY OF THE KEY
PLAYERS FROM THAT
CRISIS.
PARIS SHUTZ SAT DOWN FOR
A RARE
INTERVIEW WITH ONE OF THE
CENTRAL FIGURES FROM THAT
TIME,
FORMER U.S. TREASURY HENRY
PAULSON WHOSE
DECISIONS HAVE
HAD
REPER CUSHIONS.
>> LET'S REMEMBER BACK TO 2008,
THIS WAS THE REAL
ESTATE BUBBLE
THAT HAD BURST, THE
FINANCIAL
MARKETS HAD
CRASHED, LEHMAN
BROTHERS WANT BANKRUPT AND
THERE'S A FEDERAL
TAKE-OF OF
FANIE MAY AND
ENTER HENRY
PAULSON, THE
ARCHITECT
OF THE
BANK
BAILOUT.
THERE
WAS $85 BILLION
TO
THE
INSURANCE GIANT AIG AND U
P
TO
$700 BILLION TO BE DOLED TOUT TO
OTHER BANKS.
NOW,
PAULSON
SAID IF WE DIDN'T
DO THAT WE
FACED A
WORLD-WIDE
VERIFY.
FAST FARRED TODAY, MOST
OF THE TARP MONEY HAS BEEN PAID
BACK AND WE'VE HAD THINGS LIKE
THE OBAMA
STIMULUS,
PLEX OF THE
DODD FRANK
REGULATORY FINANCIAL
REGULATORY
LAWS, AUTO INDUSTRY
BAIL-OUT, THE FEDERAL RESERVE
STIMULUS BUT A
WEAK ECONOMIC
RECOVERY.
SO I ASKED THE SECRETARY WHAT
WORRIES HIM THE
MOST ABOUT THE
CURRENT STATE OF THE
ECONOMY.
>> WE HAVEN'T
FIXED FANIE
MAY
AND FREDDIE Mc.
FREDDIEMAC.
THIS WAS A KINGLE MOST IMPORTANT
THING WE DID.
CAN YOU JUST IMAGINE
WHERE
HOUSING PRICES WOULD HAVE GONE
IF WE DIDN'T HAVE MORTGAGE
FUNDING AVAILABLE?
BUT THAT WAS SUPPOSED TO BE
A
TIME-OUT.
BUT FIVE YEARS
AFTER, WE
HAVEN'T
FIXED IT AND WE STILL
HAVE THE
GOVERNMENT RESPONSIBLE
FOR
GUARANTEEING
ALMOST 90% OF
RESIDENTIAL
MORTGAGES.
SO WE'RE WILLING TO SEIZE FUTURE
PROBLEMS.
I HAVE CONCERNS THAT STILL
HAVE
NOT BEEN DONE IF SHADOW
BANKING
MARKETS, TO FIX
MONEY MARKET
FUNDS?
WE HAVE THE
POWERS THAT WERE
ESSENTIAL, POWERS WE
NEEDED.
BUT THE MAJOR PROBLEM WE STILL
HAVE IS
WE HAVE
FIVE
REGULATORS
COMPETING WITH EACH OTHER AND
I
THINK THAT'S
COUNTERPRODUCTIVE
COMMISSION AND SO MUCH OF DODD
FRANK HASN'T BEEN
PLEASANTED
YET.
>> PAULSON IS THE HEAD OF
THE
PAULSON INSTITUTE AT THE
UNIVERSITY OF CHICAGO, A
FULL-TIME CHICAGO RESIDENT AND
TODAY'S CONFERENCE
WAS PUT ON
BY
HE AND DAVID
AXELROD, AND IT
FEATURED THE TWO OF THEM AND
OTHER MAJOR PLAYERS FROM THE
CRISIS, LIKE
FORMER CONGRESSMAN
BARN
Y FRANK,
FORMER SENATOR
CHRIS DODD,
LARRY OFFICERS AND
MAYOR EMANUEL WHO, OF COURSE,
SERVED IN CONGRESS AND THEN AS
OBAMA'S CHIEF OF STAFF
DURING
THE RECOVERY.
PARIS, THINKING BACK, THERE
WAS
SO MUCH CONTROVERSY OVER THE
DECISION TO BAIL OUT OF
BANKS.
HOW DOES PAULSON
REACT TO
THE
BACKLASH THAT THAT CREATED?
>> WE SAID THAT
WAS THE
AMBITIOUSEST SHOCK TO HIM.
HE WAS SHOCKED BY HOW
ANGERED
THE AMERICAN PEOPLE WERE OVER
THE BANK BAIL-OUTS AND
REGRETS
NOT
COMMUNICATING THAT IT
WAS
ABOUT
BAILING OUT
MAIN STREET
NOT WALL STREET.
YOU BRING UP
THE
STOCKMARKET
THAT CLOSED THE A RECORD
HIGH.
SO MANY PEOPLE ON
MAIN STREET
MIGHT QUESTION THAT LOGIC YOU
BUT I ASKED PAULSON TO
GIVE HIM
A GLIMPSE
INTO HIS
DECISION-MAKES AND HOW DIFFICULT
IT WAS TO GET
CONGRESS TO
AUTHORITIES SOMETHING SO
UNPOPULAR.
>> WHEN I WENT UP T
O THE HILL
WITH
BENEFIT
BERNANKE
IN
SEPTEMBER OF 2008, I SAID TO
THEM, THE FINANCIAL SYSTEM
IS
FROZEN.
CREDIT ISN'T FLOWING.
THE ECONOMY WILL BE
TURNING
DOWN, NO MATTER WHAT
WE DO IN A
COUPLE OF AMONGS BUT IF WE
DON'T
GET THESE POWERS THERE WILL BE A
CATASTROPHE.
WHAT BARNEY FRANK SAID AT THE
TIME IS THIS IS A
DIFFICULT,
POLITICAL VOTE.
YOU'LL
NEVER GET CREDIT,
VOTERS
WILL NEFF GIVE US CREDIT FOR
PREVENTING A CATASTROPHE THEY
DIDN'T
SEE AND MAYOR EMANUEL
WHO
SPOKE TODAY SAID YOU'VE GOT YOUR
MARKET, WE'VE GOT
OURS.
AND THE ONE HAND, YOU DON'T WANT
TO
COMMUNICATE ABOUT HOW SERIOUS
THE PROBLEM IS BECAUSE YOU DON'T
WANT
TO INDUCE A GREATER
PANIC.
ON THE OTHER
HAND, FOR OUR
VOTERS, IN CONGRESS, TO GIVE YOU
THE
AUTHORITIES YOU NEED,
THEY'RE GOING TO HAVE TO BE
CONVINCED.
SO IT WAS A TOUGH
COMMUNICATION
CHALLENGE.
BUT I'M VERY
PLEASED THAT BOTH
SIDES
CAME TOGETHER
AND STRONG
BIPARTISAN SUPPORT.
>> BE SURE TO GO TO THE WEBSITE
FOR THE FULL
UNEDITED
INTERVIEW
WITH TREASURY SECRETARY
HENRY
PAUL SANTA MONICA.
I ASKED HIM ABOUT HIS REACTION
TO MOVEMENTS LIKE THE TEA PARTY
AND THE OCCUPIED MOVEMENT WHO
GREW OUT OF THE
THIS FASCIAL
CRISIS AND PARTIALLY IN RESPONSE
TO A LOT OF THE
DECISIONS THAT
HE MADE.
I ASKED HIM,
GIVEN WHAT HE
LEARNED IN THE WAKE OF
THIS
CRISIS
ABOUT SUBPRIME MORTGAGES
AND
CREDIT DEFAULT
SLOTS H
OW WAS
IT NO ONE CAUGHT THIS
SOONER.
THAT'S ON OUR WEBSITE,
WTTW.COM/"CHICAGO
TONIGHT"TONIGHT.
>> AFTER THE BREAK WE MEET THE
NEW