What Is This, A Cruel Hoax?

Tue, 15 Sep 2009 20:18:56 +0000

The title of the post is borrowed from this piece in GQ by Matt Latimer, recalling what it was like to be a speechwriter at the White House around the failure of Lehman Brothers. It is quite sensational. Here's a passage that I found interesting:

Finally, the president directed us to try to put elements of his proposal back into the text. He wanted to explain what he was seeking and to defend it. He especially wanted Americans to know that his plan would likely see a return on the taxpayers’ investment. Under his proposal, he said, the federal government would buy troubled mortgages on the cheap and then resell them at a higher price when the market for them stabilized.

“We’re buying low and selling high,” he kept saying.

The problem was that his proposal didn’t work like that. One of the president’s staff members anxiously pulled a few of us aside. “The president is misunderstanding this proposal,” he warned. “He has the wrong idea in his head.” As it turned out, the plan wasn’t to buy low and sell high. In some cases, in fact, Secretary Paulson wanted to pay more than the securities were likely worth in order to put more money into the markets as soon as possible. This was not how the president’s proposal had been advertised to the public or the Congress. It wasn’t that the president didn’t understand what his administration wanted to do. It was that the treasury secretary didn’t seem to know, changed his mind, had misled the president, or some combination of the three.

Read the whole thing. You can order the book, Speech-less: Tales of a White House Survivor, from which it is an excerpt here.