Friday, October 17, 2008

An Interview with Hank Paulson

I sat down Wednesday night with Treasury Secretary Hank Paulson in an exclusive interview for CNBC’s Kudlow & Company. The full transcript follows:

Larry Kudlow: A very special evening here. The man in the eye of the financial storm. Treasury Secretary Henry Paulson joins me live here in our nation’s capital. Thank you very much for coming back.

It’s a tough day. You know all about that. The market is down over 700 points. Your announcement was yesterday, but we still have the bumpy markets. Fear seems to rule. Volatility seems to rule. A lack of confidence everywhere. Let me ask you, sir. Are markets missing something with respect to your new plan? How do you comment on this, because it just doesn’t seem like there is a wave of confidence.

Hank Paulson: Well, Larry, there’s a lot going on right now and a lot going on in the markets. We knew that the financial markets and all the turmoil in the financial markets were going to have a significant impact on the real economy.

Today there was some evidence of that. The retail sales numbers came in at a disappointing level, but not a surprising level. So, I think what the markets are saying today is that they understand that we are going to have a difficult few months ahead of us. But what I would say is let us remember that we have a very resilient economy. Last quarter we grew at 2.8 percent.

The steps we’ve taken are absolutely the right steps. They are bold steps. They are strong steps to stabilize the financial markets and inject confidence into the banking system along with capital. When banks start lending to each other, feel comfortable dealing with each other, they will start lending to businesses and we’ll see this make a big difference in the economy.

Kudlow: Do we have to take a recession? Are we in a recession right now, sir?

Paulson: Well, Larry, what I'm saying is, we’re clearly in a difficult period...

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