Word: paulson
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...there are methods of communicating risk in a way that stills the heart, with words that inject dread into the populace. And Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and President George W. Bush used none of them. "The case wasn't made as to why the little guy needs this," says Paul Slovic, author of The Perception of Risk and a psychology professor at the University of Oregon. "The numbers and vague warnings are too abstract...
...most effective warnings are like the most effective TV ads: easily understood, specific, frequently repeated, personal, accurate and targeted. Paulson and his grim reapers managed only to repeat themselves frequently. They were not easily understood, partly because the problem is so complex. They did not personalize or target their warnings. And, as they themselves admitted, they did not know if their warnings were necessarily accurate, due to the novelty and unpredictability of the crisis...
...Shoot the Messenger If you want people to support the radical idea of rescuing rich investment bankers, don't send a rich, former investment banker (Henry Paulson) to convince them. And don't send a discredited, lame-duck President, either. As in normal life, people are more likely to believe the advice of someone they trust. There aren't many well-known experts in this field who aren't rich, but even Warren Buffett would have brought less baggage to the process than Bush...
...Paulson and Bernanke have been specific only behind closed doors. On Sept. 18, they warned congressional leaders what inaction would bring: a stock-market crash, sky-high unemployment, Americans unable to get car loans, banks failing so fast that they would quickly drain the federal deposit insurance fund and people's life savings...
...Paulson did not use those words when he went on TV a few days later - probably because he was afraid of provoking widespread financial panic. But that risk needs to be weighed against the risk that no one will panic...