A few days ago Warren Buffett interviewed Former Treasury Secretary Henry Paulson on his book, On the Brink. The interview, which you can watch here, offers a few interesting behind-the-scenes nuggets on what went down at the height of the financial scare during the Fall of 2008.
For example:
–During a very heated meeting with Congressional leaders, tensions got so high that Paulson apparently knelt down in front of Pelosi in an effort to restore a civil discussion.
–If you read between the lines of what he is saying, he implies that during campaign 2008 McCain was difficult to work with and frankly didn’t “get” the magnitude of the financial crisis. Obama was receptive and engaging in their discussions.
For those who like to point out Obama’s faults–and he’s certainly not perfect–it’s periodically a useful exercise to imagine how much more disastrous things would be today if McCain were in charge.
Paulson also discusses our present plight and near-term outlook. I find this quote interesting (at 38:25):
I have spent a lot of time outside of this country. And I’ve spent time in all of the major economies. And believe me, every other major economy, China included, has many more really significant challenges and problems than we do. They really do. And we’re the richest, strongest economy in the world. But we have to deal with a relatively few, very important challenges.
I interpret this comment as more of an indictment on the sad state of everyone else’s economy rather than an affirmation of our own.
That being said, is Paulson’s assessment is correct? Or is this just an indirect way of patting himself on the back for having “saved” us? I still go back and forth on the health of the U.S. economy. Is it simply really bad? Or is it really, really, really bad.
This observation (at 39:15) is beyond dispute:
One of the things I’ve learn, and one of the things that I write about in this book, is that it’s very difficult to get government to act–to get Congress to act–and do anything that’s big and difficult and controversial unless there’s an immediate crisis.
Indeed. We’re almost 18 months after the U.S. government shelled out hundreds of billions of dollars to keep our financial system afloat, and we still haven’t implemented a serious financial services industry regulatory overhaul. It’s mind-boggling.