Oh, Hank

I wish Hank [Paulson] would just shut up. It seems every time he does a press conference, the market sells off. It could be a coincidence, but maybe not. Regardless, his press appearances are not helping things. I bring this up because many, many people are being hard on Hank right now. Few commentators seem to approve of anything he does, says or proposes.

In my opinion, Hank is okay. This won't be a popular post, especially for those who follow the markets and such figures closely like I do, but we will just have to agree to disagree for now. Let's get the bad stuff out of the way: He could have had more foresight in heading off the problem. He could have saved Lehman. He could have come up with a better plan. He could act faster. He could stop doing press conferences and save me money. He worked for Goldman and has reached out to Goldman and his friends on Wall St for advice and information, therefore it is not certain he is completely unbiased. He is terribly awkward and if I may say, verbally clumbsy in public speaking. All this is very much true.

Yet Hank is a very smart man with a considerable amount of integrity. How do I know this? Well, it is just an opinion of mine, based on seeing Hank run Goldman and attending a few meetings with him years ago. He commanded much respect from people who knew him on Wall St, not just because he was CEO, but because they respected him. Of course, it could all be a charade and he could turn out to be a bumbling, self interested ass- stranger disappointments have happened. More importantly, he said a couple of things in yesterday's press conference I was delighted to hear.

First, he said the plan was changing from the original intent to buy troubled assets. (How much e-ink did I waste discussing it? Ugh). That is an acknowlegement of the decisions and consequences made in real time. There is no playbook for this crisis and everyone is learning as it develops. As people, we expect larger than life figures to be prophets of sorts- to have the answers, to be right and see solutions clearly. Yet that isn't the real world, is it? How many can you think of in office that would admit a mistake? (Iraq comes to mind).

Second and more importantly, he defended his pitch of the TARP ("Paulson Plan") to Congress after saying they won't be buying troubled assets after all. When questioned about revising the $700 billion plan's primary mechanism, he said "I will never apologize for changing a strategy or an approach if the facts change." Music to my ears! Recall that we named this blog after John Maynard Keynes' famous 'long run' quote, but I mentioned his other famous quote in my introductory post: "when the facts change, I change my mind. What do you do sir?" Hank even shot back that the apology should come the other way- that the one who sticks to a rigid program when the situation does not call for it should apoligize. How is that for fact-based action? Hank is a logical, pragmatic thinker- exactly what you want in this predicament.

So yes, Hank made mistakes and is sure to make more. He may even turn out to be an Economic Idiot of the Week- or century. But for now, he still has my vote of confidence. I just wish he'd shut up.