Paulson takes on Congress
In a genteel event on Manhattan’s Upper East Side Thursday night, former Treasury Secretary Henry Paulson had some sharp words for members of Congress who opposed the bank bailout two years ago and the push for financial regulatory reform today.
Paulson worked for a Republican president, but he said that during the negotiations to save the economy in the fall of 2008, as the Troubled Asset Relief Program was on the line, “the House Republicans were the biggest problem.”
Moving to the current moment, when legislation for financial reform has stalled, Paulson also had some wide-ranging criticisms. “It is very difficult to get our government to act on anything unless there’s an immediate crisis,” Paulson said.
Paulson particularly criticized politicians who are on the fringes on both the left and right.
“We have too many people who are on the outer edges -- and that’s not where the American people are,” he said.
“Shame on us if we don’t get the regulatory reform we need,” he added later.
Paulson was interviewed by Jeffrey Immelt, the chief executive of General Electric, on the stage at the 92nd Street Y, a Manhattan cultural institution. The event served as a promotion for Paulson’s new book, "On the Brink."
The two men reclined in comfortable chairs and bantered like old friends, and the audience lapped it up. Immelt asked a lot of respectful questions about leadership, but he also tested Paulson on some of the hot-button issues of today, such as executive compensation.
Paulson admitted that the high bonuses that have gone to Wall Street bankers have “always been hard to explain.”
“I do believe that even during the good times, it’s just out of whack,” Paulson said about the compensation system at banks, though he added that legislation was not the way to deal with the issue. Paulson assigned blame around, but he did not accept the criticisms that have been thrown at him since the banking-system bailout: “I believe the major decisions we got right.”
He also did not have to deal with one of the most contentious issues of the last few weeks, which involved Immelt himself. In his book, Paulson disagreed with Immelt’s accounts of GE’s financial health during the crisis, which is the subject of shareholder litigation. Immelt got to choose which audience questions to present to Paulson, and he let that one go. At the end, Immelt and Paulson congratulated each other for being “heroes” and the audience gave a prolonged applause before filing out.-- Nathaniel Popper