It's worth reading what was written immediately after Paulson decided to let Lehman fail, but before the ramifications were known.
Paul Krugman, Sept. 14 2008: " Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish...And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes. "
Larry Kudlow, September 16, 2008: "Treasury Secretary Henry Paulson is the man of the hour. This weekend he drew a clear line in the sand: no more federal bailouts. Not for Lehman Brothers. Not for global insurer AIG. Not for Merrill Lynch. Not for anyone, at least as of this writing...Mr. Paulson talks about a housing and financial recovery in terms of months, not years. And I think he’s right."
Paul Krugman, Sept. 14 2008: " Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish...And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes. "
Larry Kudlow, September 16, 2008: "Treasury Secretary Henry Paulson is the man of the hour. This weekend he drew a clear line in the sand: no more federal bailouts. Not for Lehman Brothers. Not for global insurer AIG. Not for Merrill Lynch. Not for anyone, at least as of this writing...Mr. Paulson talks about a housing and financial recovery in terms of months, not years. And I think he’s right."