Deborah Lucas

And there was the sense that because of the crash in housing prices,

Mortgages were failing.

Those losses were hitting banks.

They were hitting the mortgage giants, Fannie Mae and Freddie Mac.

Had those key institutions in the financial system failed, had they been unable to keep on providing credit?

In the case of Fannie and Freddie, you know, could they keep on making mortgages?

Well, if they couldn't, that downward spiral would continue.

And there could be, you know, not just a great recession, but a great depression or worse.

So there was the sense that it was just...

extremely important to make sure that those large financial institutions stayed solvent.

Well, in the case of the 2008 crisis, it was clear that allowing those large financial institutions to fail could really be devastating for the entire economy.

What happened, as is often the case, is that...

Congress provided $700 billion and didn't really put a lot of restrictions about what would be done with it beyond saying that it was designed to keep the financial system afloat.

So it wasn't very specific.

And as is often the case with...

with kind of vague rules.

It's the tendency of the government to spend the money that's available to try to help people.

So I think some of the assistance that was given, particularly later on to small institutions as a reward, say, to continuing to make small business loans, there was some money that went to help the financial arms of automobile manufacturers.

None of that...

really had the urgency that, in my mind at least, justified putting more money at risk.