One of my recent diaries talked about Hank Paulson's idiotic decision not to put up the pocket change needed to rescue Lehman Brothers and sell it to Barclays in 2008.
My question now is why didnt Ben Bernanke and Tim Geithner do anything to stop Paulson from making that decision.
Lehman was a company bigger than Bear Stearns and had debts and obligations worth nearly 10% of GDP. How could these three people not have seen that having a company default on debts this big would destroy the economy?
There are reports that Bernanke and Geithner were prepared to rescue Lehman Brothers. They had a willing buyer in Barclays who would have bought Lehman had they simply got about $30 billion from the government to help guarantee bad assets.
The question is why didnt Bernanke and Geithner speak up and force Paulson to reverse himself and stop an economic meltdown.
Bernanke and Geithner will give us all a bunch of crap about not have the "authority", but that simply isnt true. They could have put together a Bear Stearns style rescue that would have cost no more than $30 billion and this probably would have prevented a meltdown.
This all makes absolutely no sense to me.