Blogs are buzzing about the role Hank Paulson played late last year in preventing the financial system from collapsing.
WSJ’s Evan Newmark stirred the pot yesterday with a blog post saying it’s time to enshrine Paulson as a national hero. He applauds the TARP for stabilizing credit markets and saving the banks “at the lowest possible cost.”
“TARP was the beginning of the end of the crisis,” he says.
Many deemed Paulson and the TARP as failures, especially after the Obama administration took office. But Newmark argues Tim Geithner hasn’t exactly really done anything significantly different from the previous administration.
Yes, the Treasury dressed the TARP up with the rigor of the “stress tests,” but at its core Geithner’s primary policy is the TARP.
Nothing wrong with that. If something works, it works. Just give credit where it’s due. And that would be with Hank Paulson, national hero.
Time’s Curious Capitalist blogger Justin Fox piggybacks off of Newmark’s commentary, saying Paulson deserves criticism for the way he handled Lehman’s fall and sloppily bailing out AIG.
But Fox agrees that Paulson should also be praised for doing everything in his power that kept the financial system from going under, especially when it was “on the brink of collapse” last fall.
The Obama administration has not significantly strayed from the course set by Paulson. It has elaborated upon it, and in some cases improved upon it. But if we are going to celebrate the fact that the world hasn’t ended, Hank Paulson has to get some of the credit for that.
Trolling through some of the reader comments on both blogs shows people feel it’s still too early to label anyone from the financial crisis a hero. And it’s obviously impossible to know if a different route would’ve yielded better results.
Reader DaveR, commenting on Newmark’s blog, offers a great synopsis:
Let’s wait until the smoke clear before we start handing out trophies. You don’t stand on the podium and get your gold medal until you actually finish the full event and this one is far from over. Let’s give it another year and see where we are. If things are still good by then and the government has recovered most of its funds then congratulations are in order.