On this anniversary of the Fall of Lehman, I’d like to take a moment to discuss one of the big “villains” of that era: Mr. Hank “King Henry” Paulson, the former treasury secretary. About a week ago, I stayed up late to devour Todd Purdham’s lengthy, three-years-in-the-making piece on Paulson, which I recommend. Of the Current Events must-reads on my list this fall, Hank Paulson’s memoir of the crisis probably makes the top ten. I’m really (really!) not an ongoing Treasury Secretary Stalker, I promise (and not just because it’s a condition of my parole). Instead, I want to read Paulson’s book because I find him to be a compelling character in our recent national drama: For better and worse, he’s simultaneously the man who said in mid-2008 that the system was strong and everyone was handling things just fine and the man who only weeks later went down on one knee to beg Nancy Pelosi to pass the bank bailout. He’s the man who was — it seems — very much driving the bus when Lehman went under it.
But he’s not that simple. At times he seems like a Democrat trapped in Republican cabinetry: He’s rumored to have willed the entirety of his fortune, upon his death, to nature conservation, because “saving the environment is a ‘race against time, the ultimate global issue.'” While working for Goldman Sachs in Illinois, he and his wife lived in a farmhouse that had, at one point, four named raccoons running freely through it, along with Paulson’s pet snakes, flying squirrels, mice, dogs, cats and turtles. He names Nancy Pelosi and Barney Frank as his favorite congresspeople in the Purdham interview. He is the author of the bank bailout and about the first advocate for cash infusions into banks — also known in GOP circles as socialism — that we saw last year.
He’s also the guy who engineered some rather shady deals while in the Bush administration, deals (like the AIG bailout) that have benefited Goldman Sachs, his old company, and deals (like the failure of Lehman Brothers) that seem to have been botched as much through neglect and disorganization as malevolent intent. While at Goldman, he pushed for and benefited from the rule changes in the 1990s and early 2000s that contributed to the current crisis. And he still seems to believe that he wouldn’t do much differently, given the chance.
In short, I do not know what to make of Henry Paulson. I do not believe Purdham’s claim that history will figure this out; I think, perhaps, that questions about the character and make-up of a man, any man, but particularly a distant, celebrity figure like Paulson, are often unanswerable, because they require a level of objectivity people just cannot achieve. I would like to believe that Hank Paulson was a villain, but I am increasingly aware that it’s just not that simple. He, like even those I hate the most, was usually doing what he thought was best. He was usually doing the best that he could, and if that is his failing, well, it’s really the failing of the man who hired him.
Just as I don’t know what to make of Paulson, neither, it seems, does Todd Purdham, even after three years of semi-regular meetings with the man who had the nation’s ATM card in his pocket. Purdham’s piece is a wonderful example of post-event journalism, the kind of thing for which Bob Woodward is pretty famous. Purdham essentially traded continuing access for a guarantee not to print anything as it happened. This is a bit of a Faustian bargain — a journalist trades away the opportunity to report on news as it happens for better long-term access to the source. The idea is that seeing someone more regularly, and talking to them over the longer term, often provides a more accurate picture — with that much-lauded journalistic ideal, context — of the man in the center of the storm. Beyond which, of course, there are dozens of other journos covering the day-to-day.
It took me a while, but I think this bargain was worth it, even with how ultimately unsurprising the long piece on Paulson is. Was Paulson more candid with Purdham than he’s been in other interviews? Sure. Purdham’s promise to keep things off the record until they couldn’t change the immediate course of things most likely did elicit commentary that will help future journalists and historians clarify what exactly happened last year.
But there’s a price for all of that, and reading something like Purdham’s piece so quickly after the fact, the cost seems particularly clear. If, a year ago, Henry Paulson had come out and said, Pelosi is right, the Republicans are wrong, and I’m being obstructed from adequately doing my job by the ideological bent at the White House, he could have changed the course of our current national crisis. At the very least, he could have changed the tone of the conversation about it, instead of letting it become an even deeper, more entrenched partisan battle. A member of the Bush cabinet speaking out about the Bush madness — and speaking out clearly, in a language of numbers, from the strength of his Goldman Sachs, friend-of-the-street credentials — would have meant something in September 2008. Hearing it a year later is interesting, but has less effect.
I’d apply that to most of the post-mortems I’m seeing today about Lehman, as well. Understanding what happened after the fact is nice, but I don’t think we’re yet so far away that we can understand things.
SATURN SMITH 