Gulag Blog

“Holding up the world” with the American Bailout Nightmare

Stacy Summary:   Kashkari’s Freudian slip, we had to “hold up the world.”

• “Was it real?” – the American Bailout Nightmare

Mr Kashkari admitted that he plucked “a number out of the air” when deciding with Mr Paulson how much funding to request from Congress for the Tarp.

He told The Washington Post that he used his BlackBerry to calculate the bailout figures: “We have $11 trillion residential mortgages, $3 trillion commercial mortgages. Total $14 trillion. Five per cent of that is $700 billion. A nice round number.”

Recalling a conversation with Mr Paulson, he said: “It was a political calculus. I said, ‘We don’t know how much is enough. We need as much as we can get . What about a trillion?’ ‘No way,’ Hank shook his head. I said, ‘Okay, what about 700 billion?’ We didn’t know if it would work. We had to project confidence, hold up the world. We couldn’t admit how scared we were, or how uncertain.”

Tags: 700 billion, neel kashkari, TARP

No comments yet.

Leave a comment