Given the headline (which I agree with), I was expecting something different. Instead, we have, almost verbatim, the criticism leveled not from the right, but from the Democrats. The article essentially says that Paulson should have done more of what he did wrong, and less of what little he did right. Not helpful.
“Paulson didn’t do enough”
“Paulson didn’t regulate that market fast enough”
“Paulson didn’t take the first steps toward federalization until blah”
“Paulson didn’t socialize my risk before I lost tons of money from blindly gambling all of my retirement egg, waaaaah”
“Paulson stalled on the national socialism, and now I am down 70%”
If it was *just* a crisis in confidence, then walking out for press conferences shaking in fear, with rhetorical apple juice spilled on your crotch, and suggesting all manner of drastic actions (some involving numbers Americans were NOT used to hearing in any context) probably wasn’t a good idea. If the problems are structural (i.e. a speculative real-estate tumor fueled by benevolent government free-money programs, which then ate through its containers and spread biohazardous waste through the rest of the susceptible, massively-leveraged economy), then even the proposed “solutions” (all of which involve extending the free-money programs in various novel forms - some more transparent than others) merely postpone the reckoning for another cycle - in a form more formidable than what is faced now. You can’t keep digging deeper, but some folks are always keen to suggest a larger shovel.
Paulson was at Goldman Sachs when he insisted that their leverage be increased 30 to 1. Thus they can lend $30 for every dollar they have in reserve.