The Post’s Paulson Puff, Part Two

The Washington Post graces us this morning with part two of its Henry Paulson hero-worship series.

I was skeptical yesterday when the Post let Paulson spin wildly that his hands were tied legally on Lehman Brothers, the failure of which turned a financial crisis into a near-apocalypse.

Turns out I was right. Today, the Post lets Paulson be the “wartime general” who blows up the rules when they stand in the way of him saving the planet, in this instance regarding Fannie Mae and Freddie Mac:

The federal government would have to seize the firms. But the law said their management would have to agree, and his own staff had reservations about whether Paulson had the legal authority to force them to surrender.

“Trust me,” came Paulson’s curt answer. “I’ll get it done”…

“Even if you don’t have the authorities — and frankly I didn’t have the authorities for anything — if you take charge, people will follow,” Paulson said in an interview. “Someone has to pull it all together.”

In fact, about half the story is about how Paulson has acted when his legal authority was unknown or questionable, which makes the pass the Post gave him on Lehman yesterday look even dumber. These stories could have used a big dose of skepticism.

Here the Post makes him sound like Superman, boldly, brazenly bursting, bending and filling the impotent void with his ex-football player body:

During his 28 months at the Treasury, Paulson has accumulated more power than nearly any of his predecessors and has wielded it boldly, even brazenly at times, in a bid to tame the financial crisis of a lifetime. He has burst through the customary boundaries that separate federal agencies, bent regulations to his will and pushed up against legal limits. As financial firms tumble and traditional oversight agencies prove impotent, Paulson has filled the void with his 6-foot-1 frame, summoning the rest of Washington and Wall Street to get in line.

And it even lets Paulson spin some more on Lehman in the man-in-charge kicker.

When the investment bank Lehman Brothers released disastrous second-quarter earnings this summer, shortly before it went bankrupt, Paulson asked its chief executive, Richard S. Fuld Jr., what the next quarter would look like. Fuld said it might be worse. Paulson demanded that he find a buyer for the company.

Fuld balked, looking for other ways to save the firm. So Paulson moved ahead himself and tried, ultimately unsuccessfully, to engineer a deal.

“I was the only guy who drove that,” Paulson said. “I called two banks when none of them were interested. I tried to get them interested. I urged them to do it… . That’s what a Treasury Secretary needs to do when you are in a war.”

You’d never know from these stories that there are people who question the guy.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.