Magazine article The American Conservative

Freeze! This Is a Bailout

Magazine article The American Conservative

Freeze! This Is a Bailout

Article excerpt

Call it a reverse mugging: Treasury left the nation's largest banks no choice but to take $250 billion in taxpayers' money. Henry Paulson began placing personal calls Sunday afternoon, summoning top banking executives to Washington. They expected a briefing on the bailout plan. Instead, they got an ultimatum.

The New York Times described a scene any Hollywood screenwriter would have rejected as too unrealistic: "The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left."

Richard Kovacevich, chairman of Wells Fargo, protested. His bank wasn't struggling and didn't need a crutch. Ken Lewis, head of the also healthy Bank of America, spoke to "60 Minutes" about the meeting: "No negotiation was allowed? …

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