Paulson Defends Bailout Management

Treasury Secretary Henry Paulson defended himself from criticism of the Treasury’s management of the $700 billion in bailout funds, writing today in an op-ed for the New York Times.

“[T]he purpose of the financial rescue legislation was to stabilize our financial system and to strengthen it,” Paulson wrote. “It is not a panacea for all our economic difficulties.”

Paulson said the banking system had become significantly more stable due to capital injections from the controversial Troubled Asset Relief Program (TARP) approved by Congress earlier this year.

“There is no playbook for responding to turmoil we have never faced,” Paulson said, defending against criticism by some that the Treasury had no set plan to deploy TARP funds. “We adjusted our strategy to reflect the facts of a severe market crisis, always keeping focused on our goal: to stabilize a financial system that is integral to the everyday lives of all Americans.”

–Michael O’Brien