Paulson’s big defense: I’m just like John Maynard Keynes

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I wrote a piece for Time.com about Hank Paulson’s chat with the world this morning. It begins:

It was his first formal public defense and explanation of his actions since the dust settled from the financial panic of late September and early October, and Treasury Secretary Henry Paulson had clearly been thinking about it for a while. Normally a believer in brevity, especially at press conferences, he arrived in the Treasury press room Wednesday morning with a 3,500-word speech prepared. He then proceeded to read the whole thing, taking a few big swigs of water along the way, before hoarsely submitting to questions.

It goes along like that for a while. Then I get to the part where Paulson is explaining the great TARP-and-switch from buying illiquid mortgage securities to injecting capital into banks (a story broken on this blog! And before that on Planet Money! And before that on this blog!):

Why the big switch? “The facts changed and the situation worsened,” Paulson said during the Q&A. He kept coming back to that phrase, “the facts changed,” in what seemed to be a conscious reference to economist John Maynard Keynes’ famous line, “When the facts change, I change my mind.” As Paulson put it in an answer to another question, “I will never apologize for changing the approach or strategy when the facts change.”

When asked what exactly had turned out to be wrong with the idea of buying up mortgage securities, Paulson launched into what seemed likely to become an in-depth explanation. But when he paused early on, a reporter interrupted with another question, and that explanation was over.

By the way, the Sorkinator caught the Keynes reference too. So I’m not just making it up.