In an interview for the March/April 2010 issue of the Dartmouth Alumni Magazine, Jake Tapper of ABC News asks Hank Paulson about his role as Treasury Secretary during the financial meltdown. Here is one question that caught my attention (page 37):
Should there not be any organizations that are too big to fail?
Well they are as big as they are, so the key question is how do you regulate them and how do you have the proper authorities and tools in place so you can let them fail without taking down the rest of the system? This is something that Ben and I had talked with Congress about before Lehman went down. We saw we needed these powers. There’s no way we could get them, and the president and current Treasury secretary still haven’t gotten them. But I believe that with the right tools no institution needs to be too big to fail. You just need the power to unwind them outside of bankruptcy.
Treasury Secretary Hank Paulson, December 6, 2007, talking about the Bush administration's mortgage program:
"...the risk of litigation should be manageable."
Treasury Secretary John Snow, July 18, 2003 and throughout his tenure talking about the federal budget deficit:
"...our deficit level is manageable..."
Does the second statement give anyone confidence about the first?