A Fighting Chance

For COP’s critique of Treasury reaction to inadequate credit for small businesses, see note, “actual policies were anemic.”


financial system had stalled: On Thursday, September 19, 2008, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke began their push for broad bailout authority by meeting with members of Congress. See David Herszenhorn, “Congressional Leaders Stunned by Warnings,” New York Times, September 20, 2008. See Edmund L. Andrews, “Bush Officials Urge Swift Action on Rescue Powers,” New York Times, September 19, 2008. They sent a three-page written request to Congress. See “Treasury’s Bailout Proposal: The Legislative Proposal Was Sent by the White House Overnight to Lawmakers,” CNNMoney, September 20, 2008. Henry M. Paulson and Ben S. Bernanke appeared before the Senate Banking Committee on Tuesday, September 23, and the House Financial Services Committee on September 24. See “Prepared Text of Paulson’s Statement,” New York Times, September 23, 2008. Henry Paulson would later write in his book: “Going into the hearing, I knew I had to choose my words carefully. We faced a real dilemma: To get Congress to act we needed to make dire predictions about what would happen to the economy if they didn’t give us the authorities we wanted. But doing so could backfire. Frightened consumers might stop spending and start saving, which was the last thing we needed right then. Investors could lose the final shred of the confidence that was keeping the markets from crashing.” Henry M. Paulson, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System (2010), 281–83.

auto companies reported that they were on the verge of bankruptcy: See December 2008 COP report, “Questions About the $700 Billion Emergency Economic Stabilization Fund,” http://cybercemetery.unt.edu/archive/cop/20110402034700/http://cop.senate.gov/documents/cop-121008-report.pdf. For more on the auto companies, see Chris Isidore, “Big Three Face Bankruptcy Fears,” CNNMoney, August 6, 2008.

receiving a fair deal?: See December 2008 COP report, 8–9. The first COP report asked the following primary questions, with explanatory text and various secondary questions as well. The ten questions, paraphrased, were: (1) What Is Treasury’s Strategy?

(2) Is the Strategy Working to Stabilize Markets?

(3) Is the Strategy Helping to Reduce Foreclosures?

(4) What Have Financial Institutions Done with the Taxpayers’ Money Received So Far?

(5) Is the Public Receiving a Fair Deal?

(6) What Is Treasury Doing to Help the American Family?

(7) Is Treasury Imposing Reforms on Financial Institutions that Are Taking Taxpayer Money?

(8) How Is Treasury Deciding Which Institutions Receive the Money?

(9) What is the Scope of Treasury’s Statutory Authority?

(10) Is Treasury Looking Ahead?

Hensarling testified: For Congressman Hensarling’s testimony before the House Financial Services Committee on December 10, 2008, see http://votesmart.org/public-statement/401754/hensarling-testifies-before-house-financialservices-committee.

here’s what we got: See COP report, January 9, 2009. Treasury “did not provide complete. answers to several of the questions and failed to address a number of the questions at all” (1).

“that money is used”: “Tidy Up the Bailout,” editorial Boston Globe, January 15, 2009. Also Justin Rood, “Bailout Czar’s Secret? Copy. Paste. Repeat,” ABC News, January 9, 2009.