A few notes from Economics of Contempt's notes on David Wessel's new book:
Quotes/Revelations from Wessel Book. Economics of Contempt: I was traveling all day yesterday, so I had a chance to read almost all of David Wessel's new book, In Fed We Trust. I think it's very good (and, just as importantly, accurate). Among the most interesting quotes/revelations from the book are:
- Hank Paulson, to Geithner and Bernanke, on the possibility of bailing out Lehman: "I'm being called Mr. Bailout. I can't do it again." ...
- Harvard economist Martin Feldstein, in his capacity as an AIG board member, actually opposed accepting a Fed rescue. According to Wessel, Feldstein "said it wasn't the government's role to forcibly buy private companies." (Apparently Feldstein thought his duty was to his personal economic philosophy, rather than to the shareholders. What a clown.) ...
- Sheila Bair sucks. Okay, this isn't really a new revelation, but still, Wessel's book drives home that Bair is truly an atrocious regulator. She sought to undermine Bernanke, Geithner, and Paulson's efforts to save the financial system whenever she got a chance. This is in addition to the colossal mistake she made in forcing WaMu's bondholders to take huge losses at the absolute height of the panic. No wonder the other regulators were so eager to avoid including her in any rescue policies. She has a grand total of 0 years of experience in banking, and is concerned with only one thing: her image. The sooner this walking train-wreck is out at the FDIC, the better.
- Sen. Harry Reid, cautioning Bernanke and Paulson (as well as Pelosi, Boehner, and McConnell) that TARP may not sail through the Senate quickly: "This is not an easy thing to do. ... This needs hearings. I know the Senate. It takes two weeks to pass a bill to flush the toilet."
Good stuff from Wessel. Highly recommended.