Since it’s the anniversary of “Very Bad Things Happening Quickly”, I thought I’d point out a few: Lehman, Fannie Mae, Freddie Mac, AIG, and Primary Reserve Fund. This is the time when the Federal Reserve and the US Treasury decided to break the glass and get out the axe for the financial fire that was engulfing the world.
Now almost everyone will come to the defense of Bernanke and Paulson and their actions at that critical time. It’s almost impossible to be against what they did given that the outcome so far has been exactly what we wanted at this time. The equity markets have recovered, the economy has recovered, and the financial system has recovered.
However, I find it ironic that these men are seen as saviors when their departments were in charge of overseeing and regulating most of the financial system that was in need of saving. Even if you make the SEC and NY state insurance regulators the fall guys, the dynamic duo did something else extremely questionable. They committed vast sums of taxpayer money without approval of the taxpayers.