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MEMORIES, JOHN RECORDS

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LANDECKER IS HERE

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BUT

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FIRST, IS

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THE U.S. ECONOMY IMMUNE TO A

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CRASH LIKE THE ONE FIVE YEARS

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AGO?

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THAT WAS THE

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MAIN QUESTION AT A

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CONFERENCE TODAY THAT BROUGHT

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TOGETHER MONEY OF THE KEY

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PLAYERS FROM THAT

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CRISIS.

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PARIS SHUTZ SAT DOWN FOR

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A RARE

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INTERVIEW WITH ONE OF THE

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CENTRAL FIGURES FROM THAT

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TIME,

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FORMER U.S. TREASURY HENRY

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PAULSON WHOSE

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DECISIONS HAVE

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HAD

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REPER CUSHIONS.

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>> LET'S REMEMBER BACK TO 2008,

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THIS WAS THE REAL

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ESTATE BUBBLE

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THAT HAD BURST, THE

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FINANCIAL

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MARKETS HAD

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CRASHED, LEHMAN

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BROTHERS WANT BANKRUPT AND

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THERE'S A FEDERAL

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TAKE-OF OF

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FANIE MAY AND

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ENTER HENRY

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PAULSON, THE

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ARCHITECT

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OF THE

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BANK

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BAILOUT.

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THERE

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WAS $85 BILLION

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TO

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THE

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INSURANCE GIANT AIG AND U

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P

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TO

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$700 BILLION TO BE DOLED TOUT TO

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OTHER BANKS.

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NOW,

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PAULSON

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SAID IF WE DIDN'T

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DO THAT WE

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FACED A

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WORLD-WIDE

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VERIFY.

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FAST FARRED TODAY, MOST

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OF THE TARP MONEY HAS BEEN PAID

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BACK AND WE'VE HAD THINGS LIKE

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THE OBAMA

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STIMULUS,

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PLEX OF THE

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DODD FRANK

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REGULATORY FINANCIAL

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REGULATORY

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LAWS, AUTO INDUSTRY

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BAIL-OUT, THE FEDERAL RESERVE

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STIMULUS BUT A

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WEAK ECONOMIC

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RECOVERY.

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SO I ASKED THE SECRETARY WHAT

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WORRIES HIM THE

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MOST ABOUT THE

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CURRENT STATE OF THE

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ECONOMY.

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>> WE HAVEN'T

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FIXED FANIE

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MAY

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AND FREDDIE Mc.

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FREDDIEMAC.

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THIS WAS A KINGLE MOST IMPORTANT

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THING WE DID.

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CAN YOU JUST IMAGINE

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WHERE

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HOUSING PRICES WOULD HAVE GONE

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IF WE DIDN'T HAVE MORTGAGE

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FUNDING AVAILABLE?

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BUT THAT WAS SUPPOSED TO BE

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A

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TIME-OUT.

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BUT FIVE YEARS

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AFTER, WE

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HAVEN'T

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FIXED IT AND WE STILL

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HAVE THE

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GOVERNMENT RESPONSIBLE

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FOR

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GUARANTEEING

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ALMOST 90% OF

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RESIDENTIAL

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MORTGAGES.

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SO WE'RE WILLING TO SEIZE FUTURE

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PROBLEMS.

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I HAVE CONCERNS THAT STILL

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HAVE

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NOT BEEN DONE IF SHADOW

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BANKING

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MARKETS, TO FIX

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MONEY MARKET

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FUNDS?

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WE HAVE THE

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POWERS THAT WERE

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ESSENTIAL, POWERS WE

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NEEDED.

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BUT THE MAJOR PROBLEM WE STILL

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HAVE IS

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WE HAVE

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FIVE

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REGULATORS

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COMPETING WITH EACH OTHER AND

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I

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THINK THAT'S

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COUNTERPRODUCTIVE

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COMMISSION AND SO MUCH OF DODD

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FRANK HASN'T BEEN

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PLEASANTED

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YET.

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>> PAULSON IS THE HEAD OF

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THE

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PAULSON INSTITUTE AT THE

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UNIVERSITY OF CHICAGO, A

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FULL-TIME CHICAGO RESIDENT AND

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TODAY'S CONFERENCE

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WAS PUT ON

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BY

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HE AND DAVID

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AXELROD, AND IT

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FEATURED THE TWO OF THEM AND

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OTHER MAJOR PLAYERS FROM THE

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CRISIS, LIKE

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FORMER CONGRESSMAN

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BARN

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Y FRANK,

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FORMER SENATOR

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CHRIS DODD,

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LARRY OFFICERS AND

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MAYOR EMANUEL WHO, OF COURSE,

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SERVED IN CONGRESS AND THEN AS

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OBAMA'S CHIEF OF STAFF

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DURING

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THE RECOVERY.

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PARIS, THINKING BACK, THERE

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WAS

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SO MUCH CONTROVERSY OVER THE

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DECISION TO BAIL OUT OF

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BANKS.

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HOW DOES PAULSON

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REACT TO

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THE

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BACKLASH THAT THAT CREATED?

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>> WE SAID THAT

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WAS THE

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AMBITIOUSEST SHOCK TO HIM.

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HE WAS SHOCKED BY HOW

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ANGERED

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THE AMERICAN PEOPLE WERE OVER

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THE BANK BAIL-OUTS AND

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REGRETS

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NOT

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COMMUNICATING THAT IT

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WAS

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ABOUT

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BAILING OUT

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MAIN STREET

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NOT WALL STREET.

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YOU BRING UP

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THE

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STOCKMARKET

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THAT CLOSED THE A RECORD

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HIGH.

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SO MANY PEOPLE ON

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MAIN STREET

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MIGHT QUESTION THAT LOGIC YOU

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BUT I ASKED PAULSON TO

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GIVE HIM

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A GLIMPSE

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INTO HIS

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DECISION-MAKES AND HOW DIFFICULT

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IT WAS TO GET

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CONGRESS TO

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AUTHORITIES SOMETHING SO

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UNPOPULAR.

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>> WHEN I WENT UP T

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O THE HILL

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WITH

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BENEFIT

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BERNANKE

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IN

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SEPTEMBER OF 2008, I SAID TO

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THEM, THE FINANCIAL SYSTEM

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IS

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FROZEN.

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CREDIT ISN'T FLOWING.

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THE ECONOMY WILL BE

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TURNING

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DOWN, NO MATTER WHAT

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WE DO IN A

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COUPLE OF AMONGS BUT IF WE

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DON'T

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GET THESE POWERS THERE WILL BE A

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CATASTROPHE.

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WHAT BARNEY FRANK SAID AT THE

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TIME IS THIS IS A

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DIFFICULT,

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POLITICAL VOTE.

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YOU'LL

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NEVER GET CREDIT,

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VOTERS

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WILL NEFF GIVE US CREDIT FOR

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PREVENTING A CATASTROPHE THEY

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DIDN'T

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SEE AND MAYOR EMANUEL

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WHO

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SPOKE TODAY SAID YOU'VE GOT YOUR

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MARKET, WE'VE GOT

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OURS.

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AND THE ONE HAND, YOU DON'T WANT

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TO

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COMMUNICATE ABOUT HOW SERIOUS

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THE PROBLEM IS BECAUSE YOU DON'T

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WANT

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TO INDUCE A GREATER

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PANIC.

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ON THE OTHER

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HAND, FOR OUR

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VOTERS, IN CONGRESS, TO GIVE YOU

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00:04:44,418 --> 00:04:45,252
THE

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00:04:45,252 --> 00:04:46,286
AUTHORITIES YOU NEED,

239
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THEY'RE GOING TO HAVE TO BE

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CONVINCED.

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SO IT WAS A TOUGH

242
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COMMUNICATION

243
00:04:51,758 --> 00:04:52,125
CHALLENGE.

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BUT I'M VERY

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PLEASED THAT BOTH

246
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SIDES

247
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CAME TOGETHER

248
00:04:58,832 --> 00:04:59,600
AND STRONG

249
00:04:59,600 --> 00:05:00,200
BIPARTISAN SUPPORT.

250
00:05:00,200 --> 00:05:01,435
>> BE SURE TO GO TO THE WEBSITE

251
00:05:01,435 --> 00:05:03,237
FOR THE FULL

252
00:05:03,237 --> 00:05:04,137
UNEDITED

253
00:05:04,137 --> 00:05:04,605
INTERVIEW

254
00:05:04,605 --> 00:05:06,139
WITH TREASURY SECRETARY

255
00:05:06,139 --> 00:05:06,507
HENRY

256
00:05:06,507 --> 00:05:07,007
PAUL SANTA MONICA.

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00:05:07,007 --> 00:05:08,542
I ASKED HIM ABOUT HIS REACTION

258
00:05:08,542 --> 00:05:10,043
TO MOVEMENTS LIKE THE TEA PARTY

259
00:05:10,043 --> 00:05:11,445
AND THE OCCUPIED MOVEMENT WHO

260
00:05:11,445 --> 00:05:12,779
GREW OUT OF THE

261
00:05:12,779 --> 00:05:13,213
THIS FASCIAL

262
00:05:13,213 --> 00:05:14,381
CRISIS AND PARTIALLY IN RESPONSE

263
00:05:14,381 --> 00:05:15,516
TO A LOT OF THE

264
00:05:15,516 --> 00:05:16,116
DECISIONS THAT

265
00:05:16,116 --> 00:05:16,783
HE MADE.

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00:05:16,783 --> 00:05:17,751
I ASKED HIM,

267
00:05:17,751 --> 00:05:18,719
GIVEN WHAT HE

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00:05:18,719 --> 00:05:19,987
LEARNED IN THE WAKE OF

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THIS

270
00:05:21,221 --> 00:05:22,489
CRISIS

271
00:05:22,489 --> 00:05:23,924
ABOUT SUBPRIME MORTGAGES

272
00:05:23,924 --> 00:05:24,758
AND

273
00:05:24,758 --> 00:05:26,159
CREDIT DEFAULT

274
00:05:26,159 --> 00:05:26,527
SLOTS H

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00:05:26,527 --> 00:05:27,427
OW WAS

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IT NO ONE CAUGHT THIS

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00:05:28,862 --> 00:05:29,296
SOONER.

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THAT'S ON OUR WEBSITE,

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WTTW.COM/"CHICAGO

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00:05:35,035 --> 00:05:35,569
TONIGHT"TONIGHT.

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>> AFTER THE BREAK WE MEET THE

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00:05:36,403 --> 00:05:40,403
NEW