Did he or Federal Reserve Chairman Ben Bernanke discourage Lewis and others from disclosing the issues to shareholders?
Paulson insists that neither he nor Bernanke asked Lewis essentially to keep his mouth shut. A large argument in the episode centers on this point. Republicans in Congress insist that Lewis was essentially beaten into submission. And this is where they argue the government went way over the edge. Paulson’s maddening inability to communicate with the nation as a whole probably worsened the situation and provided the fuel for all this wrangling that Paulson will testify about on Thursday. Part of the problem was simply that things were happening so quickly that nobody had much time to think. Worse, the legal framework to act on Lehman Bros. or American International Group (AIG) didn’t exist. (That’s why he supports President Barack Obama’s financial regulation proposal.) That he and the Fed realized that letting Lehman Bros. collapse was a terrible mistake is seen in their efforts to make sure Bank of America and Merrill merged. Nobody was exactly happy at the end — least of all, probab
