How the U.S. Department of Treasury came up with the “$700 billion” in the $700 billion TARP bailout.
“Seven hundred billion was a number out of the air,” Kashkari recalls, wheeling toward the hex nuts and the bolts. “It was a political calculus. I said, ‘We don’t know how much is enough. We need as much as we can get [from Congress]. 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.”
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Whizzer 12.06.09 at 2:57 pm
The linked piece by Laura Blumenfeld in today’s WaPo is a bit of a read, but is excellent and fascinating (to me).
I guess the stock market performance said a lot, but I sure had this sense that at the very top, they were terrified. It’s also fascinating how those that deal in billions .. at the end of the day (or some days) are driven by pure emotion (or panic).
My favorite quote: “We didn’t know if it would work. We had to project confidence .. HOLD UP THE WORLD.”