nixon administration Archives

A financial crisis is a terrible thing to waste. Treasury Secretary Henry Paulson faced the largest crisis in our country’s modern history with a great opportunity. His first hand account of the near collapse of our financial economy is detailed in On the Brink: Inside the Race to Stop the Collapse of the Global Financial System.
His strongest writing are the 20 pages in the book’s Afterward, written one year after his departure from Treasury with the opportunity to look back and reflect upon the events and the solutions including TARP and the role of the G20.

Paulson was certainly the right type of person for the job having served as the former Chairman and Chief Executive Officer of Goldman Sachs. He previously served in the Nixon administration as an assistant to John Ehrlichman during the Watergate scandal.

Although reluctant to accept the job as United States Treasury Secretary under George W. Bush, Paulson acknowledged upon his arrival in Washington a credit crisis was on the horizon. Clearly Paulson notes he was naive of regulatory powers in Washington and any suggestions of financial reform in an election year were all dead on arrival.

It’s worth repeating that between March and September 2008, eight major US financial institutions failed — Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Brothers, AIG, Washington Mutual and Wachovia. Six of them in September alone.
Paulson jumps right out of the gate on page 1 as all Americans would have wanted:

Do they know it’s coming Hank? President Bush asked me. “Mr. President we’re going to move quickly and take them by surprise. The first sound they’ll hear is their heads hitting the floor….For the good of the country I proposed we seize control of the companies, fire their bosses and prepare to provide $100 billion of capital support for each.”

Regrettably its not Wall Street but rather Fannie Mae and Freddie Mac, the government backed lending institutions (GSEs) that Paulson is addressing. Paulson should could have done the same for Lehman, Bear Stearns.and ALL the other institutions since they received taxpayer money to keep them afloat….on their yachts.
–When you learn that someone at a financial company made a 1 Billion bonus (yes a billion for one person) you can see where the ship was heading…right into the rocks.

Latest read: Secrets A Memoir of Vietnam and the Pentagon Papers

Daniel Ellsberg‘s Secrets: A Memoir of Vietnam and the Pentagon Papers is about his direct experience in Vietnam and more importantly his role in leaking The Pentagon Papers. Daniel’s lessons in both academic research and military battlefields helped me learn more about the times he lived in and how it ultimately caused him to steal and publish top secret files regarding the war in Vietnam.

The Pentagon Papers showed world the surprising role of US involvement in Vietnam dating back to Harry Truman through the Nixon Administration. His influence is not to be under estimated. I was impressed to learn of his work with President Kennedy in David Halberstam’s The Best and the Brightest. There was more to Ellsberg than meets the eye.

His background: undergraduate studies at Harvard and post graduate Woodrow Wilson fellowship at Cambridge in England. Daniel returned to apply for Marine officer candidates courses but had to wait a year — so he went to grad school at Harvard (during the Korean War) where he was expected to serve. In the beginning Ellsberg was a political hawk regarding communist expansion in the world especially Soviet aggressiveness in Czechoslovakia and Poland.

A week after getting his PhD he was in the military training to be a lieutenant. He would command a rifle unit in the second Marine division. As his tour was ending his first son was born. He was awarded a three year junior fellowship back at Harvard, but asked the Marine commandant to extend his tour as war in the Middle East appeared imminent. Daniel drafted secret plans against Egypt and Israel. As a research fellow back at Harvard in economic and decision theory he attracted attention of the Rand Corporation and in ’58 accepted an economic position with RAND in California. The Soviet Union launched Sputnik during this time-frame. The cold war was beginning to really heat up.