So he says in The Big Takeover, laying out exactly how the CDS/CDO clusterfuck started, who was responsible, and (most importantly) why the bailout is going to create more problems than it solves.
(The key takeaway is that bailing out these big banks—while leaving the smaller ones alone to either fail or get absorbed by the big ones—not only rewards the worst actors in this situation, but creates the very giant institutions that are the problem in the first place. You shouldn't reward AIG for being "too big to fail". But that's exactly what Paulsonian thinking (Taibbi's term) is all about: you reward your buddies who are members of the financial and economic elite, and let the rest of us proles go hang.
And, unfortunately, because of the way the Fed is run and the lack of real oversight, there's nothing the rest of us can do about it. Goody.