Blinder on the Credit Crisis

Alan wants action.

On the Treasury Secretary, he writes:

On Sunday, Treasury Secretary Henry Paulson, who has been eerily silent as this crisis unfolded, made the rounds of the morning talk shows. It was not reassuring to see this former titan of Wall Street recite his talking points. Wolf Blitzer asked him five times, "Why did you bail out Bear Stearns?" He never got an answer.

I think Alan is being unfair to Paulson. Here is what Paulson was probably thinking:

"We are not bailing out Bear Stearns. We are in effect organizing an orderly liquidation of the firm. JP Morgan will take it over at a price not much above zero, so Bear's equity holders will leave with close to nothing. But that resolution of the situation is not going to be announced until later in the day. Now, on Sunday morning, I cannot say much. I will stick with broad generalities, knowing the specifics will be revealed shortly."