Thursday, September 3, 2009

“Henry Paulson’s Longest Night”

The newly released Vanity Fair Magazine contains a very interesting feature on Treasury Secretary Hank Paulson. Author Todd Purdum had unique access to Mr. Paulson over his tenure with the promise not to release any information until it was over. This article provides an inside perspective behind Mr. Paulson’s thinking during that period. What is clear is that the man worked very hard and did the best he could. What was missing for me in this article was his full acknowledgement and explanation of how he, the Treasury, the administration failed to diagnose the problems so much earlier.

This is all rather personal. I worked at Goldman Sachs for 14 years and the last 2 of those was spent in the executive office reporting to the senior leadership of the firm, including Hank, reporting to him on all areas related to human capital management. I knew him, and he had become Treasury Secretary during a period of unprecedented economic crisis. I knew him, and he was telling me, telling us at the beginning of 2008 that everything was ok. I was so outraged that my first oped ever, published in The HuffingtonPost, was directed straight at him and was called “The Confidence Man.” In that piece I (we) said this....

"Today's ( Jan 18th - 2008) announcement by U.S. Treasury Secretary Henry Paulson is but the latest effort by the current administration to downplay the severity of the current economic crisis. In the grand old American tradition of hucksterism, Paulson's prescription is a sorely misleading sell.

It's time to wake up and smell the economy. Sadly, there's no short and easy fix to the longer-term problems created by excessive borrowing combined with rampant consumerism. Yet Paulson insists (White House Stimulus Fact Sheet, Jan. 18, 12:03pm,, "By passing an effective growth package quickly, we can provide a shot in the arm to keep our fundamentally strong economy healthy and help keep instability in the housing and financial markets from more adversely affecting the overall economy." Believing the economy to be grounded on a "solid foundation," Paulson is ignoring the walls falling down. "

To this day I do not understand what he, what they, were thinking. How could they possibly not have seen how bad it was going to be? I went on to write a number of opinion pieces ( see Huffpo pieces on the right) directed to our administration and specifically Hank, finally ending with this one – “Dear Hank – A Letter to the Departing Treasury Secretary.” Do I think Hank did a good job? At the beginning, no, towards the end I believe he did the best he could and did in fact prevent a collapse of the system which could have happened.

The problems facing our country are far, far from over. This article leaves me deeply troubled that the nature of our political system means finding and implementing solutions will be tough in deed. Finding the best people to do serve in governmental roles will also continue to be very difficult. We may be out of the heart of the fire but the embers continue to burn. Now more than ever we need strong, courageous leaders that understand the political process but more importantly can and will fight for the right long term solutions. I know... I’m dreaming............

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