In a 50-page essay to be presented tomorrow at the Brookings Panel on Economic Activity, Phillip Swagel — the former assistant Treasury secretary for Economic Policy and, it seems, the Jonathan to Henry Paulson's Jack Donaghy — presents a passionate defense of his boss's actions during the TARP negotiations with Congress this past fall. In it, we learn that football was "the metaphor of choice at the Paulson Treasury," as well as a few other things. Paulson "truly meant to acquire troubled assets" when he asked Congress for a $700 billion fund, Swagel says, but he changed his mind when markets deteriorated and it became necessary to provide a capital injection. "It was too easy — and wrong — to believe that Secretary Paulson was looking out for the interests of Wall Street rather than the nation as he saw it, or of one particular firm," Swagel wrote. He went on:
“Paulson knew that canceling the auctions would make it seem as if he was switching course yet again … He was willing to take the criticism … to keep the resources available for more capital injections.”
Don't you see? He sacrificed himself to save us all!
And Swagel is the only one who appreciates it:
So far as I know, I provided the only detailed public defense of the Paulson plan that addressed criticisms from academic economists and market participants in a September 25, 2008 posting on Greg Mankiw’s blog.
Nobody loved Hank like Swagel, you see. Nobody.