November 24th, 2008
05:41 AM ET
14 years ago

Forbes: Paulson is 'worst' treasury secretary in modern times

[cnn-photo-caption image= caption="Steve Forbes says he doesn't have confidence in Treasury Secretary Henry Paulson."]

WASHINGTON (CNN) - Forbes magazine President and CEO Steve Forbes called Treasury Secretary Henry Paulson “the worst treasury secretary we’ve had in modern times”, citing, among other things, the government’s handling of the housing crisis.

In an interview with CNN’s Wolf Blitzer on Sunday, Forbes repeatedly called on the treasury secretary to be more straightforward about the money used to bail out mortgage giants Fannie Mae and Freddie Mac.

“Have Henry Paulson do at least one thing right, and that is, have the government explicitly guarantee the debt of Fannie and Freddie,” the financial mogul and former Republican presidential candidate said.

When asked if he has confidence in Paulson, Forbes responded “No, sadly, Wolf. He's about the worst treasury secretary we've had in modern times.”

The Treasury Department had no comment on Forbes’ remark, but in a speech on Thursday, Paulson said that the administration’s proactive response to the troubled economy “prevented a far worse financial crisis.”

Bill Clinton’s former labor secretary Robert Reich was slightly less blunt than Forbes, but equally uncertain on Paulson’s ability to turn around the economy.

“I think that the great bailout that he engineered was really sold to Congress on false pretenses,” Reich said on Late Edition. “Paulson has not been very transparent. He's been very opaque. And it has riled markets.”

Filed under: Henry Paulson
soundoff (115 Responses)
  1. Chris

    To bail out these behemoths without oversight is the height of irresponsibility. Where was their 'plan?' What did the executives at the top give up? What a sham. Good riddance...

    November 24, 2008 07:45 am at 7:45 am |
  2. BruceG

    I blasted my Senator and congressman here in Vermont and told them not to suppport the original bailout package.

    They were conned(and they are Democrats!!) by the Bush administration. What happened to the plan for using the bailout money to buy up subprime derivatives..and shore up the housing market?

    November 24, 2008 07:47 am at 7:47 am |
  3. lieNoMore

    Steve Forbes is just plain full of it and just as WRONG about the economy as Bush, Paulson, and their hero Reagan was. Forbes supported and indeed advocated for most of the policies that have gotten us here.

    We have had 30 years of the wealthy getting wealthier (like Forbes) while American industry has been frittered away on junk bonds, S&L, dotbomb, Enron, and now banking bomb paper pushing/manipulation.

    Meanwhile, increasingly Americans have come to devalue industrial and productive work and take part –along with so-called leaders like Forbes– in the drift toward phony paper nation...

    November 24, 2008 07:48 am at 7:48 am |
  4. Dave

    I remember few weeks ago Donald Trump gave the guy an "A" for his performance!

    November 24, 2008 07:48 am at 7:48 am |
  5. Dem in NE

    Just the most critical time in our nation's security, we had the most incompetent President the country has seen, and now in an dire economic times we have the most incompetent Treasury Security. Just wonderful.

    November 24, 2008 07:49 am at 7:49 am |
  6. Ernie

    I disagree with Forbes and most of the postings here. Paulson has been Treasury Secretary for just over 2 yrs. This mess has been brewing for decades. There have been many more recent contributors to the current problems who have played a much bigger part. How about Reagan, Clinton, Greenspan, and Lil' Bush? Paulson has always believed in reigning in free market cowboys as opposed to the Bush admin where free market is a mantra but that's certainly something he didn't have the time or authority to pursue.

    I do agree that Paulson needs to be more transparent with his actions, his rationale for those actions, and the long term plan.

    November 24, 2008 07:52 am at 7:52 am |
  7. beevee

    Lot of people think he is a financial wizard but it did not show up during his term as treasury secretary. particularly the way he wanted the 700 billion dollars to bailout the banking industry without explaining to the tax payers or the legislators how exactly the money would be spent and how the home owners in mortagage trouble would be resuced. In the end it seemed like a plan to help his rich banking industry friends. No transperancy at all and the problem still remains, well - a big problem

    November 24, 2008 08:04 am at 8:04 am |
  8. charlie in maine

    That's a little like the captain of the Exonn Valdeze accusing the captain of the Titanic of being a bad driver. I have a timeline to offer for things to start getting better.... in 57 days 3 hours and 55 minutes we get another chance. I used to think of 01-20-09 as Bush's last day and that gave me some joy. But now I see it as Obama's first day and I cant wait.

    November 24, 2008 08:06 am at 8:06 am |
  9. Peter Thatcher

    Forbes gives Paulsen a very bum rap. It is only because of Paulsen's steady hand in dealing with this totally unprecedented series of financial events (the "Perfect Storm" of financial phenomena?) that the World is not in total chaos. The team in place, Paulsen, Geithner, Bernacke, but particularly Paulsen and his very personal clout, make a positive outcome of these terrible events possible and likely.

    Bad guy: Rubin. Best guy: Paulsen. I've never met an unimpressive Goldman Sachs guy.

    November 24, 2008 08:08 am at 8:08 am |
  10. avatar

    Paulson is incompetence and a scammer. He came out of Goldman Sach. 100Billion USD went down the toilet. Last week he announce the bailout shows some positive effect but in facts like his boss George Bush, the economy is worsen than before.. .. All of these bailouts are scams. All the corporate exec got all of the $$. The American truly indeep trouble and they don't really care much..

    November 24, 2008 08:09 am at 8:09 am |
  11. cj

    Our "leaders"wont give the big three 25 billion, yet they inject another bank with money. Looks like another at least 2 years of the same stuff. Tax and spend...... tax and spend. They are all the same, and neither group has Americans interest in mind. Seems to be a continued downward spiral and they don't care, Dems or reps. What a joke, change my butt. Here come the Clintons.

    November 24, 2008 08:10 am at 8:10 am |
  12. leadership?

    Wouldn't it be cool if the President showed some leadership at this stage?

    Oh that would be so cool.

    Alack and alas, why would it happen now?

    November 24, 2008 08:12 am at 8:12 am |
  13. Charles L. Shaw, Liverpool, NY

    I have to agree with Jeff here, the American citizens and our economy has been scammed. 8 trillion dollars gone from the American economy. To every American with a little common sense has witnessed fraud, and the American Citizen has seen their retirements and savings robbed. But we have not see one arrest? We have not seen any of these robber barons going to prison?
    Market confidence can not be restored if the American investor can not trust the Wall Street investers, Banks, and Federal(Big Brother)Government that their hard earned money is not going to be secure.

    November 24, 2008 08:14 am at 8:14 am |
  14. RS

    I'm sorry but it seems that the automakers are being required to submit a business plan to get some cash....Where is the business plan for Citigroup? AIG? More of the same? Is the business plan really that the Feds will buy $ 7 billion worth of a failing company and then underwrite the future losses?????? There is no plan other than to throw money at it. They have built themselves a big financial house of cards and I don't believe any of them knows how to keep it from falling.

    November 24, 2008 08:15 am at 8:15 am |
  15. Milton, Harrisburg, PA

    The duck isn't so much as lame as it is lobotomized. Bush is spending his waning days posing for pictures and trying to loosen environmental regulations on land, water, and air standards. He has treated the United States like his personal diaper and expects someone else to clean it up.

    November 24, 2008 08:15 am at 8:15 am |
  16. PJ

    Yep, love the way the financial orgs and banks were handed money without a required prerequisite of plans for the use of it but the auto makers are being forced to have a plan before the money will even be considered.
    Congress and Paulsen need to open their eyes – what will a reorganization bankruptcy of the auto makers do to the financial institutions and the economy? Oh, right – they'll just run to Congress for more help while the taxpayer goes further down the drain.
    This current administration is not just a lame duck group, they're a dead duck and they've decided to take all of us down with them.
    Problem is, we've got 2 months before the new administration can take office and even get started. What else can happen before then?

    November 24, 2008 08:19 am at 8:19 am |
  17. Spencer/Virginia

    Well as much as I disagree with the Bush Administration, you can not blame the economic meltdown on Paulson. When the predatory lending began Paulson wasn't even the Treasurer yet. He's catching the blame because heads have got to roll.

    November 24, 2008 08:21 am at 8:21 am |
  18. Andrew

    Look at Paulsons professional record (Goldman Sachs), and you'll see the *huge* conflict of interest. What else would you expect from him?

    The people have NO voice.

    November 24, 2008 08:21 am at 8:21 am |
  19. sandyj

    The worst president picked the worst Treasury Secretary...why would that be a surprise?

    November 24, 2008 08:23 am at 8:23 am |
  20. Dixon

    That is odd that the welfare program Paulson set-up for banks was not presented truthfully, WOW. Hard to believe that happened. I am weary of all the claims by banks how tough it is for them. Come on out here to the real world if you want tough. As long as we prop up these failed banks and business' we will have this problem.

    November 24, 2008 08:24 am at 8:24 am |
  21. John

    I am absolutely incensed that we would use the bailout funds to cover the reckless policies of Citigroup, but not use any for the Big 3 Automakers who have done nothing wrong directly except have no innovation in their business models...

    We are rewarding the criminals!!!!!!

    November 24, 2008 08:25 am at 8:25 am |
  22. ed

    Steve Forbes is a fanatical proponent of the free-market religion that has, as it was practiced, failed our nation and the world so miserably, He has real guts to surface as a reborn critic of Paulson, a saint of his former Wall Street religion. It is time for silence on his part and on the parts of others who have fostered the ridiculous idea that business should be left to do whatever it wants, with no input from the societies in which it flourishes. I guess the system is only imperfect when Forbes loses money. This is not the time for belated recognition that the Bush administration has been staffed by incompetents who poked fun at anyone who thinks. Forbes should express his support for the Obama administration, which will have to confront the train wreck created by people wjho share his beliefs. Name-calling seems to be a hard habit to break; it's easy, while finding solutions is difficult.

    November 24, 2008 08:28 am at 8:28 am |
  23. There ya go

    This is the start of Forbes' 2012 campaign.

    November 24, 2008 08:29 am at 8:29 am |
  24. Linda-IN

    It shouldn't have escaped anyone with common sense that this whole issue came down on us hard and fast from the Bush Administration in late August, just like the rush to war did a few years earlier. All the scammers from Wall Street to D.C. need to be found out and sent to prison. Why is it that companies are allowed to get so big that they "cannot fail". There have been federal laws and regulations in place for the SEC and Antitrust Division to monitor and make sure U.S. corporations don't get so big that the taxpayer has to keep propping them up because failing is not an option.

    November 24, 2008 08:31 am at 8:31 am |
  25. Linda-IN

    Would it be possible to have the swearing in of the new President now and not wait until late January. Bush and his trophies could go home.

    November 24, 2008 08:32 am at 8:32 am |
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