Paulson, Bernanke Defend TARP - Black Enterprise
Black Enterprise Magazine September/October 2018 Issue

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From left, U.S. Treasury Secretary Henry Paulson, Federal Reserve Bank Chairman Ben Bernanke, and Federal Deposit Insurance Corp. Chairman Sheila Bair testify before the House Financial Services Committee today. (Source: Getty Images)

Treasury Secretary Henry Paulson defended his management of the $700 billion economic bailout today to the House Financial Services Committee, whose members are questioning the wisdom of the government’s new direction of dispensing funds.

In prepared testimony to the House Financial Services Committee oversight hearing on the Troubled Asset Relief Program, Paulson said that the program has helped “prevent the collapse” of the U.S. financial system, but there’s still work to be done.

“There is no playbook for responding to turmoil we have never faced,” said Paulson. “We adjusted our strategy to reflect the facts of a severe market crisis always keeping focused on Congress’s goal and our goal — to stabilize the financial system that is integral to the everyday lives of all Americans.”

Members of Congress took Paulson to task on recent changes he made to TARP, expressed their concern about his lack of consistency, and questioned his reasons for not supporting a bailout to automakers.
Also at the hearing were Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Last week, the Bush administration abandoned the original strategy behind the rescue. Instead of stabilizing the financial system by buying bad assets from financial institutions, the centerpiece of the original plan, the government is now focusing TARP on putting billions into banks to boost their capital and bolster lending to customers.
“We recognized that a troubled asset purchase program, to be effective, would require a massive commitment of TARP funds,” Paulson said. “It became clear that, while in mid-September, before economic conditions worsened, $700 billion in troubled asset purchases would have had a significant impact. Half of that sum, in a worse economy, simply isn’t enough firepower. If we have learned anything throughout this year we have learned that this financial crisis is unpredictable and difficult to counteract. So early last week, we concluded it was only prudent to reserve our TARP capacity, maintaining not only our flexibility, but that of the next administration.

Several members of Congress including Rep. Barney Frank, chair of the House Financial Services Committee expressed concern that the $700 billion given to the Treasury Department isn’t being used appropriately and that the businesses and individuals who need it most do not have access to bailout funds.

“I have serious concerns about the improvised and ad hoc nature of Treasury’s implementation of the Capital Purchase Program and other elements of the TARP,” said Rep. Spencer Bachus (R-AL), a ranking member on the committee in his opening statement. “We all understand that when conditions on the ground change, policymakers must be agile enough to adjust to those changed circumstances.  But changing too quickly, without adequately explaining why you’ve changed or what you’re going to do next, risks sending mixed signals to a

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.