EXCERPT: Henry M. Paulson Jr.'s: 'On the Brink'

As we had with Fannie Mae, we swore everyone in the room to silence. (Nonetheless the news leaked almost immediately.) When the meeting broke up, I made some more calls to the Hill and to the White House, where I gave Josh Bolten a heads-up. I spoke with, among others, New York senator Chuck Schumer; Alabama senator Richard Shelby, the ranking Republican on the Senate Banking Committee; and Alabama representative Spencer Bachus, the ranking Republican on the House Committee on Financial Services.

I went home exhausted, had a quick dinner with my wife, Wendy, and went to bed at 9:30 p.m. (I'm an "early to bed, early to rise" fellow. I simply need my eight hours of sleep. I wish it weren't the case, but it is.)

At 10:30 p.m. the home phone rang, and I picked it up. My first thought, which I dreaded, was that maybe someone was calling to tell me Fannie was going to fi ght. Instead I heard the voice of Senator Barack Obama, the Democratic nominee for president.

"Hank," he began, "you've got to be the only guy in the country who's working as hard as I am."

He was calling from someplace on the road. He had learned about the moves we'd made and wanted to talk about what it meant. I didn't know him very well at all. At my last official function as Goldman Sachs CEO before moving to Washington, I'd invited him to speak to our partners at a meeting we'd held in Chicago. The other main speaker at that event had been Berkshire Hathaway CEO Warren Buffett. I would, in fact, get to know Obama better over the course of the fall, speaking to him frequently, sometimes several times a day, about the crisis. I was impressed with him. He was always well informed, well briefed, and self-confident. He could talk about the issues I was dealing with in an intelligent way. That night he wanted to hear everything we'd done and how and why. I took the senator through our thinking and our tactics. He was quick to grasp why we thought the two agencies were so critical to stabilizing the markets and keeping low-cost mortgage financing available. He appreciated our desire to protect the taxpayers as well.

"Bailouts like this are very unpopular," he pointed out.

I replied that it wasn't a bailout in any real sense. Common and preferred shareholders alike were being wiped out, and we had replaced the CEOs.

"That sounds like strong medicine," Obama said. He was glad we were replacing the CEOs and asked about whether there had been any golden parachutes.

I told him we would take care of that, and he shifted the conversation to discuss the broader issues for the capital markets and the economy. He wanted to hear my views on how we'd gotten to this point, and how serious the problems were.

"It's serious," I said, "and it's going to get worse."

In all, we were on the phone that night for perhaps 30 minutes.

Arizona senator John McCain's selection of Sarah Palin as his running mate had energized the Republican base, and McCain was surging in the polls, but at least overtly there didn't seem to be "politics" or maneuvering in Obama's approach to me. Throughout the crisis, he played it straight. He genuinely seemed to want to do the right thing. He wanted to avoid doing anything publicly -- or privately -- that would damage our efforts to stabilize the markets and the economy.

But of course, there's always politics at play: the day after the election Obama abruptly stopped talking to me.

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