On the Brink: Inside the Race to Stop the Collapse of the Global Financial System

[one...two...tree 2,762]

by Matthew Philips, Newsweek

By now we've read everyone else's account of the Great Crisis of 2008, told most notably by reporters Andrew Ross Sorkin and James Stewart. Now, we finally get to hear Uncle Hank's side of the story. This is the guy who as the CEO at Wall Street's top bank (Goldman Sachs) initially turned down George Bush's offer to be Treasury secretary. There is great irony in a man such as Paulson, a life-long free-market investment banker, presiding over the biggest government bailout ever. Paulson spent the past year sequestered at Johns Hopkins, refusing to speak to the press, penning what is essentially his memoir, which he hopes will redeem his name and answer critics who blasted his efforts to save the crumbling financial system.

"This, the most wrenching financial crisis since the Great Depression, caused a terrible recession in the U.S. and severe harm around the world. Yet it could have been so much worse. Had it not been for unprecedented interventions by the U.S. and other governments, many more financial institutions would have gone under—and the economic damage would have been far greater and longer lasting" (page 436).

1. Paulson provides a lively description of a meeting with congressional leaders debating the TARP plan on Sept. 25, the same day that Sen. John McCain suspended his presidential campaign and returned to Washington. "The room descended into chaos as the House and Senate members erupted into full-fledged shouting … It got so ridiculous that Vice President [#######] Cheney started laughing … Finally, the president just stood up and said: 'I've clearly lost control of this meeting. It's over'" (page 299). Paulson is particularly critical of McCain in this scene, calling the suspension of his campaign "impulsive and risky" (page 298) and saying that "when it came right down to it, he had little to say in the forum he himself had called" (page 299).

2. Paulson delivers a continual and biting critique of Republicans. Right out of the gate, he takes a swipe at Sarah Palin, saying that while he encourages everyone he works with to call him Hank, when she did it over the phone during the campaign, "for some reason, the way she said it over the phone like that, even though we'd never met, rubbed me the wrong way" (page 15). Kentucky Sen. Jim Bunning is a "cantankerous conservative" (page 275). Meetings with Senate Republicans were "a complete waste of time for us, when time was more precious than anything" (page 275). Ideas that Republicans do add are "unformed," like Virginia Rep. Eric Cantor's plan to replace TARP with an insurance program. In a rare moment of sarcasm, Paulson goes off on the minority Whip: "I got a better idea. I'm going to go with Eric Cantor's insurance program. That's the idea to save the day" (page 285).

3. Apparently, when Paulson gets stressed and tired, he gets the dry heaves. As the financial system spiraled out of control, Paulson wretched on more than one occasion. After a meeting with senators to discuss the AIG bailout, Paulson "ducked behind a pillar for a few seconds, in front of an American flag" (page 241). Then, toward the end of a late-night bull session on Capitol Hill to hammer out the details of TARP, Paulson gets "a bout of the dry heaves in front of [Republican Sen.] Judd Gregg … I made a lot of noise, which seemed to galvanize Rahm Emanuel" (page 313).

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[I AM NOT THAT GUY 5,715]

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So, where did you get that "quote" form Einstein?

"Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius -- and a lot of courage -- to move in the opposite direction."

http://rescomp.stanford.edu/~cheshire/EinsteinQuotes.html

"We can't solve problems by using the same kind of thinking we used when we created them. "

"We cannot solve our problems with the same thinking we used when we created them."

http://www.brainyquote.com/quotes/authors/...einstein_9.html

Edited February 20, 2010 by Lone Ranger

[I AM NOT THAT GUY 5,715]

"If the facts don't fit the theory, change the facts."

"Reality is merely an illusion, albeit a very persistent one."

"Whoever undertakes to set himself up as a judge of Truth and Knowledge is shipwrecked by the laughter of the Gods."

http://www.quotationspage.com/quotes/Albert_Einstein/31

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2. Paulson delivers a continual and biting critique of Republicans. Right out of the gate, he takes a swipe at Sarah Palin, saying that while he encourages everyone he works with to call him Hank, when she did it over the phone during the campaign, "for some reason, the way she said it over the phone like that, even though we'd never met, rubbed me the wrong way" (page 15). Kentucky Sen. Jim Bunning is a "cantankerous conservative" (page 275). Meetings with Senate Republicans were "a complete waste of time for us, when time was more precious than anything" (page 275). Ideas that Republicans do add are "unformed," like Virginia Rep. Eric Cantor's plan to replace TARP with an insurance program. In a rare moment of sarcasm, Paulson goes off on the minority Whip: "I got a better idea. I'm going to go with Eric Cantor's insurance program. That's the idea to save the day" (page 285).

[I AM NOT THAT GUY 5,715]

Think he may have an ax to grind? Or, is he still looking for cover?

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Think he may have an ax to grind? Or, is he still looking for cover?

He's a Republican. I haven't read his book, so I don't know everything he thinks. I don't think he's blasting all Republicans indiscriminately. Only those, particularly in Congress, who were obstructionist at a crucial time when that obstruction could have spelled disaster. I know that Congressional Republicans were not alone, there were Democrats as well. Congress, particularly the Senate, is broken. Broken, broken, broken. Evan Bayh is leaving the Senate because he can't take it any longer. If it doesn't get fixed nothing of consequence will ever get done in DC.

[one...two...tree 2,762]

He's a Republican. I haven't read his book, so I don't know everything he thinks. I don't think he's blasting all Republicans indiscriminately. Only those, particularly in Congress, who were obstructionist at a crucial time when that obstruction could have spelled disaster. I know that Congressional Republicans were not alone, there were Democrats as well. Congress, particularly the Senate, is broken. Broken, broken, broken. Evan Bayh is leaving the Senate because he can't take it any longer. If it doesn't get fixed nothing of consequence will ever get done in DC.

Yep. Except you can't ignore that for the RWN of the Republican Party, demonstrating an ineffectiveness to govern suits them happily because in their twisted minds, it only proves their ideological mindset that government can't help to solve these problems. So it's a bit of poetic justice to see a free market capitalist like Paulson acknowledge the necessary role government has in dealing with such issues.

Edited February 20, 2010 by Galt's gallstones

[I AM NOT THAT GUY 5,715]

free market capitalist like Paulson

I always thought the free market won't work, unless you set it free. That means free to succeed, and free to fail. There is something inherently wrong in the concept of too big to fail.

Edited February 20, 2010 by Lone Ranger

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Yep. Except you can't ignore that for the RWN of the Republican Party, demonstrating an ineffectiveness to govern suits them happily because in their twisted minds, it only proves their ideological mindset that government can't help to solve these problems. So it's a bit of poetic justice to see a free market capitalist like Paulson acknowledge the necessary role government has in dealing with such issues.

Paluson is a pragmatic man, who wanted to solve problems and gets things done. Our nation owes a debt of gratitude to him and to Ben Bernanke and many others behind the scenes in 2008/09 for their tireless actions. I thought it was the ultimate chutzpah when Bernanke came up before Congress recently for his reconfirmation hearings, and had to take a tonguelashing from the very body that had been obstructionist during the crisis.

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I always thought the free market won't work, unless you set it free. That means free to succeed, and free to fail. There is something inherently wrong in the concept of too big to fail.

I think you'd get a more rounded explanation from Hank Paulson about that, that doesn't take such an absolute meaning of the term free market.

[one...two...tree 2,762]

Paluson is a pragmatic man, who wanted to solve problems and gets things done. Our nation owes a debt of gratitude to him and to Ben Bernanke and many others behind the scenes in 2008/09 for their tireless actions. I thought it was the ultimate chutzpah when Bernanke came up before Congress recently for his reconfirmation hearings, and had to take a tonguelashing from the very body that had been obstructionist during the crisis.

It'd sure be nice to one day see moderate and pragmatic Republican leaders of the party. Hell, I'm even beginning to miss Reagan...even he was more pragmatic than some of the knuckleheaded RWN's in Washington.

[I AM NOT THAT GUY 5,715]

I think you'd get a more rounded explanation from Hank Paulson about that, that doesn't take such an absolute meaning of the term free market.

UR killing me!

[one...two...tree 2,762]

UR killing me!

To give you a comparative example. We have a free society, but you can't just do anything you want...and if you tried to jump off a high rise building, we'll spend a lot of manpower and tax money to stop you if we can. That doesn't mean we don't live in a free society any more than having a government involved in solving economic crisis through financial intervention makes the market no longer free.

[I AM NOT THAT GUY 5,715]

Paluson is a pragmatic man, who wanted to solve problems and gets things done. Our nation owes a debt of gratitude to him and to Ben Bernanke and many others behind the scenes in 2008/09 for their tireless actions. I thought it was the ultimate chutzpah when Bernanke came up before Congress recently for his reconfirmation hearings, and had to take a tonguelashing from the very body that had been obstructionist during the crisis.

He is an egotist.

Paulson was interviewed by General Electric Co. Chief Executive Jeffrey Immelt at the event, which served as a promotion for Paulson's new book, "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System."

The two men reclined in comfortable chairs and bantered like old friends. Immelt asked a lot of respectful questions about leadership, but he also tested Paulson on some hot-button issues, such as executive compensation.

Paulson, who was chief executive at investment bank Goldman Sachs Group Inc., acknowledged that the high bonuses that have gone to Wall Street bankers have "always been hard to explain."

"I do believe that even during the good times, it's just out of whack," he said.

But Paulson didn't think that legislation was the way to deal with the issue. Instead he deferred to the "leadership" of bank executives.

Paulson blamed government officials, Wall Street figures and others for the events that led to the financial crisis, but he did not accept criticism of himself and other federal officials over the bailout: "I believe the major decisions we got right."

http://www.latimes.com/business/la-fi-paul...0,6062567.story

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He is an egotist.