“These Are Not Normal Times”

Saturday, December 22, 2007
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Treasury Secretary Henry Paulson visited the editorial offices of the LA Times and offered up some chicken soup for the libertarian soul.

Jon Healey: Many of the people we speak with don’t like this because they see the results of the government’s work being sustaining housing values that should have been allowed to come down.

Henry Paulson: Again, I’ve given my answer to that. I think what we’re doing is avoiding a market failure that would have forced housing values down in a way that was not in the investors’ interest, and in a way that the market wasn’t intended to work.

Tim Cavanaugh: How can you force values down? Why aren’t values finding their natural level?

Henry Paulson: The way values would go down is, as I’ve said, you’d have market failure. You’d have a situation

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