8/3/2019 Caroline Campus News Event

1/2

Former Treasury Officialpresents Insider Tell-All on Financial

CrisisFrom housing to political constraints,ex-Treasury official reveals his thoughts on what

could have been done differently during his years in Bush Administration

By: Caroline PaclStudents and faculty filled a Kogod lecture hall last week to hear former Assistant Treasury Secretary

of Economic Policy Phillip Swagel reveal his insider role at the at the peak of the financial meltdown.

good.Swagel is a new recent faculty member at addition to Georgetowns McDunnus School of Business.

His lecture mirrored his recent essay for the Brookings Institute, The Financial Crisis: An Inside

View- this link doesnt work. in which he sheds light on the contributing forces leading up to the

economic crisis. why is this up here in the lead unless someone has read this, it really doesnt tellthem anything? Nobody would stop- read this essay and then go back to reading your article.

Swagel worked at the Treasury under Secretary Hank Paulson from 2006 to 2009.

Housing: The Root of the Crisis

The real question is who do we blame? Swagel says. To me whats remarkable iseveryone. Youcan start at the top and go to the bottom.

Outlining nearly everyone involved in the housing crisis, Swagel pointed the finger to the investors, thebanks, the ratings industry, mortgage brokers, the homeowners, and finally the government, as having

made mistakes along the way.

Swagel described the public need for government action on preventable housing foreclosures, but

explained how politically difficult it is to accomplish, because of the larger underlying forcescontributing to the crisis.

He used a metaphor that Fed Chairman Ben Bernankee often used: If your neighbors house is burning

and he smoked in bed, you might say, HAH! Let it burn. But if your house is made of wood and youlive this far apart, well maybe you pick up the phone and call the fire department.

The government, he explained, wasnt doing a good job as the fire department and werent relating tothe public why they werent putting the fires out. this metaphor- doesnt work or tell me anything.To put into perspective heSwagel compared the current housing crisis with the Great Depression.

During that time, stating that in the early 20 th century depression more than 50 percent of homebuyers

were delinquent on their mortgages. Right now, while only 10 percent of current mortgages are

delinquent.so what does this mean? I am still confused by what he is saying and what it really meansto real people. Stories about the economy are very complicated to tell- so you have to be very very

careful about being clear.

Going Mad to Save the Banks

The housing bubble burst and in the aftermath it was difficult to tell which firms were good, and which

firms were not good. who is saying this? You? You cant just make a statement like this.Keeping his audience captivated, Swagel had another metaphor from a colleague about the banking

crisis:

Theres some mad cow disease. You cant look at a piece of beef and know which piece is good orbad, so no one eats any, He says.

And its the same thing. Banks have mortgage backed securities and you cant look at it and say this

ones good, this ones no good, and so people just avoided the financial sector as a whole

A Different Outcome?

http://www.http/www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_swagel.pdfhttp://www.http/www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_swagel.pdfhttp://www.http/www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_swagel.pdfhttp://www.http/www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_swagel.pdf

8/3/2019 Caroline Campus News Event

2/2

He explained how much more damage could have occurred had there been a nation-wide run on the

banking system.this needs some context.

Swagel concluded with some ideas on how the government could have weakened the blow to the

financial crisis, like deploying a larger fiscal stimulus or sending out TARP earlier on in 2008, butreasonably Congress would not spend money on a crisis that hadnt occurred yet.this sentence is too

long, and it makes no sense.. read it aloud.

Also, Swagel suggested that an outright housing bailout in 2008 could have potentially altered thecourse of the deepening recession, but political and social forces would have made it nearly impossible.

Caroline-please see me about this article. I know you can do better than this.

Source list? -5- Who did you actually interview face to face for this article? I didnt see 3-quotes.. onlyquotes from Swagel and they didnt seem like they were from a face-to face interviews. Did you read

the guidelines for this article on blackboard b/c you did not follow them.

Writing/Reporting: 40/80 Need organization, clarity, and context. I read this, and didnt really get

anything out of it as a reader.Multi-media 8/20 where is your video? What is the 3rd element the link didnt work.

Final Grade: 43/100