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. honeychild

    Once again the American people have been hoodwink & bamboozled by the Bush administration, first the war & now the 700billion bailout!

    Hopefully Pres. Elect Obama & his administration will pride themselves on honesty and real solutions.

    November 24, 2008 09:35 am at 9:35 am |
  2. A Kickin' Donkey

    Let's drop the myth that these guys are rare geniuses that have to be given wide latitude in both their authority and the blind trust that Congress places in them.

    There are thousands of highly intelligent Ivy-leagure graduates (Columbia, Harvard, Dartmouth, Wharton) MBAs with many years of experience in industry, finance ...(not just banking) ... that know far more than the current members of Congress and are far more trustworthy, and less selfish, than the current crop of executives on Wall Street, including Paulson.

    Put a team of smart outsiders in a room and they will figure it out. With a team, any "pitfalls" will be revealed ahead of time.

    Paulson is fruit of the posioned tree and is only interested in feathering the nest of his country club buddies .... we saw the same thing with Bush, Cheney and their oil-industry buddies. When will Congress wise up and expect graft & corruption FIRST from these revolving names instead of writing these blank checks?

    We need a bunch of early 40 somethings that are unknown to the popular press but that are brilliant and we need to incentivize them with a life long pension for 12 years of good work. Give them the kind of golden parachutes that Congress has. In exchange for that, we can get them to leave their Vice President & Director level jobs at America's best run corporations.

    November 24, 2008 09:38 am at 9:38 am |
  3. diana

    Well did you ever think that if Barney Frank, Polosy and other congress members told the truth this might not have happened.....I moved from Ma. 3 yrs ago and i cant believe they were dumb enough to put Barney Frank back in congress....Sometimes I wonder where the brain is

    November 24, 2008 09:39 am at 9:39 am |
  4. Indiana Steven

    Quite a downfall in 2 short years: from Master of the Masters of the Universe to the most reviled man in America not in a prison.
    In fairness, he cannot disclose that he has encumbered the Treasury with contingent liabilities in excess of $2 trillion and rising with each new takeover. Every takeover means that AIG, Citicorp, etc. cannot be allowed to default on any of their claims since the US has stood in. If these failures went through bankruptcy court, there would be some severe haircuts given to the hedge funds, etc. that brought them down. Can't let that happen!
    Let's see if Congress cancels the capital gains tax treatment on hedge fund managers payouts. That is a no-brainer but cuts right to the quick on how corrupt Congress is.
    You can't really fault Barney Frank for wanting to drop a paltry $25 billion on the auto industry when Treasury is throwing $100 of billions out the windows.

    November 24, 2008 09:41 am at 9:41 am |
  5. Rolling eyes

    This entire administration is the worst in history. I just hope the damage can be repaired.

    November 24, 2008 09:42 am at 9:42 am |
  6. clarence virginia beach va

    most or should I say some people voted for G.W. Bush twice, you reap what you sow enough said as the economy goes towards that downward spiral, but wait Bush did do one thing good I guess, social security was saved!!

    November 24, 2008 09:43 am at 9:43 am |
  7. A Kickin' Donkey

    Elect more engineers to Congress ... they think for a living .... they are trained to contemplate the bad "what ifs" and take mitigating steps. Engineers in Congress would prevent this stagnation we're experiencing.

    We need some intelligence in Congress. We've got women engineers, black engineers, hispanic engineers, and white male engineers. We don't have to sacrafice diversity for brains.

    All Congress does is point fingers after the fact. They don't add any value ... and certainly don't worke to prevent graft, corruption, mismanagement, etc.

    November 24, 2008 09:43 am at 9:43 am |
  8. jackie ohio

    I beleave that the Cpuntry needs help but to allow certain Banks to file bankruptcy and then help city group now is unbeleaveable. I for one think that the Oil, Banking, Insurance, and the government are greedy money hungry animals who want the rest of america to suffer, and then get on there knees and kiss butts of the rich to eat!!!!!! we need to get things back to normal like earn a living wage not expect to get rich but beable to pay yur bills and live with in our means. Every time the little people get a little a head then the prices go up. This is so funny back in sept. a few states had a large wind storm here in Ohio we went with out electric for a few days some little over a week. what do you think AEP is asking its customers to do Yea Pay for the over charge that it cost them for over time. we have paid for our use of the electric and they make enouph pophet to cover the cost.

    November 24, 2008 09:47 am at 9:47 am |
  9. Leah from FL

    The healing is coming – we're in the painful scabby part right now, but soon the new skin will emerge and the healing will commence! bye-bye -bush and your posse too.

    November 24, 2008 09:47 am at 9:47 am |
  10. Sam

    I did vote for Obama but I am cynic (and pessimistic) enough to believe that things may get better but not by a whole lot...That's because there are too many cooks in the kitchen and too many hands in the pot (and too many egos in the administration)...and too little time (say 18-20 months) before the next election cycle begins...Sorry if I sound too gloomy...I have lived in the US for three decades and I never felt as bad about state of affairs as I do now.

    November 24, 2008 09:52 am at 9:52 am |
  11. mary dale

    I think this financial failure was Bush's final gift to the American people. It fits the bill – it put fear into Americans. Was there really the need to come out that Friday in September that said if we didnt come up with $700b by Monday that the whole economy would fail. The media (like always only having one story at a time to repeat over and over and over) kept the fear growing until something really does have to be done. Paulson was just an arrogant tool used to give more money to the rich people before a sensible administration came into power.

    November 24, 2008 09:54 am at 9:54 am |
  12. CanIcallyouJoe

    Wasn't that cool how he told us that he believed 100% that a major institution wouldn't fail.... right before CitiGroup took a huge hit?

    The Bush Administration is staffed by crooks and failures.

    November 24, 2008 09:57 am at 9:57 am |
  13. Paula

    This entire mess goes back to Clinton and the idiots who elected HIM twice!!! Bush just inherited the mess! I can't believe there are so many people in our country stupid enough to elect Obama and continue this downward spiral. Talk about not knowing what he's doing. Our country elected someone who is all talk with very little actual experience (look at his Congressional record)

    November 24, 2008 09:58 am at 9:58 am |
  14. ran

    Paulsen shoud go to jail just like Bush and the rest of his Admin.

    November 24, 2008 09:59 am at 9:59 am |
  15. The worst long-term memory

    The worst treasury secretary...the worst president...the worst vice-president...the worst defense this century

    November 24, 2008 10:00 am at 10:00 am |
  16. Stop The Insanity

    I'm a 50 year old graduate from The Wharton School of Business. I'm one of the most capitalistic guys you'll ever find. I believe in the American free enterprise system.

    However, the risk versus reward equation is skewed in this country. Our senior-most executives are paid far in excess of the value that they create. In some cases, they are NO VALUE ADDED.

    I can't justify paying ANYBODY ..... and I mean ANYBODY more than $2M per year as a salary and total compensation (salary, stock, options, deffered cash) should be limited to $4M per year and should be at risk for at least 5 years.

    Nobody is worth more than that. Nobody does that much good for the country or an organization that they need more than $2M. How many Ferraris can a guy buy, how many 8,000 ft2 mansions?, how large a diamond should he buy for his supermodel girlfriend that he keeps on the side?

    If shareholders won't put bounds on this then the government should. It is determental to the nation's interest for these types of inequities to exist.

    Honestly, CEO's making 100 times what the floor worker makes is absurd. 10-to-20 times ... reasonable ... 100-times-to-5,000 times .... that's IDIOTIC

    November 24, 2008 10:01 am at 10:01 am |
  17. Mobius

    Welcome to the fire. Frying Pan Paulson may look a lot better once a Fed President gets hold of our checkbook...

    And by the way, the new guy's not exactly 'change', is he?

    November 24, 2008 10:02 am at 10:02 am |
  18. Jean

    All of you are delsusional idiots if you think Obama will make thngs better. He merely looked at what FDR did and decided to do it again. You can expect 10 YEARS of depresion, not 18 months under the Democrat administration with a hefty tax increase for all of us to boot. The only idiots here all of us. Check out economists Nouriel Roubini and Peter Schiff and get a clue.

    November 24, 2008 10:05 am at 10:05 am |
  19. Jim

    A question rather than a remark denagrading Mr. Paulson or the current administration. How is it that all the people in high places in DC (economic advisors to the government) did not have any idea that these problems were on the forefront? Why are we still paying exhorbitant salaries to these people and not removing them from their positions.

    Relative to the bailout of "The Big 3", why not bring back the ability of taxpayers to write off the interest on new car loans as it was several decades ago, but limit it only to those vehicles built in the US. It seems that would be more practical than just giving them 25 billion at taxpayer expense without seeing a benefit to those paying the money
    (the taxpayer). It seems it might help stimulate sales of new cars and continued employment of those in the industry.

    November 24, 2008 10:07 am at 10:07 am |
  20. autoprt

    i pray that we make it to jan 20, 2009. it seems light years away.

    November 24, 2008 10:12 am at 10:12 am |
  21. John Anzuoni

    Nobody of any worth signed on Bush's admin team especially during the second term. Look who is the head of the Dept of Interior-Dirk Kempthorne who was the worst and most crooked governor we have had in the State of Idhao and we have produced such winners as Larry Craig and Helen Chenoweth-Long live the Robber Baron Republicans-thanks for putting us back to our grandparents times in terms of wealth.

    November 24, 2008 10:15 am at 10:15 am |
  22. AEJ - Miami

    Remember George Bush did not WIN the elections twice. He stole the elections. Bush is the worst president the US will and ever had. Whenever anyone with any sense stands up to him, he gets rid of them, eg. Colin Powell.

    America is paying dearly for the Republicans choosing of someone who has no sense. A president who cannot think, is not an intellect, and has brought down the USA and the world at large. Bush should be charged for all the crimes/sufferings he committed his 8 years in office. This is not what the people of America deserve.

    November 24, 2008 10:17 am at 10:17 am |
  23. rob

    If these morons like Paulson are going to give vast amounts of my money to banks, why can't my Congress demand that the money will be used as it is supposed to used: To Open Up The Credit Markets! Most of these banks have been hoarding the money and buying other banks with it! I mean, it's like me taking out a car loan and buying a turkey farm with the money. I am very skeptical of the large mounts of money being given out with no strings. It sounds like a "pay my friends on Wall Street before my Republican Administration ends" scam. My only other probelem with all of this mess is our Democratic Congress is letting it happen. Some on this Comment Forum suggest they (the Democrats) were "duped" into doing it. Do you really believe that? If you all do, I've got some swamp land in South America I want to seel ya! I think all of them know exactly what they are doing. Lobbiest have mauch power and influence in the hall of Congress.

    November 24, 2008 10:17 am at 10:17 am |
  24. rodondo

    Wow, Ken in Dallas, a blogger who has some grasp of the actual facts instead of the standard left/right rhetoric that usually fills these pages. It does seem that Obama’s centrist pragmatic inclined economics team will be better. They could hardly do worse.

    November 24, 2008 10:20 am at 10:20 am |
  25. Kelcie

    I feel very uncomfortable with the government engaging in all of these 'bailouts/rescue packages' for companies that are not performing well. Thousands of Americans are still losing jobs, the markets seem to be more unstable than ever, and I just don't believe anyone really knows what to do at this point.

    I'm surprised more people aren't outraged by all of this.

    November 24, 2008 10:21 am at 10:21 am |
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