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Five years after Lehman Brothers declared bankruptcy and the U.S. financial system was plunged into crisis, former Treasury Secretary Hank Paulson is dismayed that few measures have been put in place to stop the same kind of thing happening in the future: “I am concerned that we seemed to have lost some of the urgency. It’s an embarrassment.”
More attention should be paid, says Paulson, to Fannie Mae and Freddie Mac — and how little has changed at the two mortgage insurers since the government took them over in early September of 2008. Paulson says it necessary at the time to put Fannie and Freddie in conservatorship, “but it never dawned on me when we did this that they would still be in the current form that they are today.”
“We made some very hard choices, we did some unpopular things, we did some things that were distasteful even to ourselves,” says Paulson, reflecting on decisions he and his team made at the time.
One of his greatest failures, he says was that he was “never able to convince the American people that this wasn’t for Wall Street.”
But says Paulson, the anger of the American people that lingers five years on is a good thing, in many ways. “It wouldn’t be good if the public got used to bailouts, got used to these rescues because we don’t want to have the rescues like we did.”
Paulson has reissued his book about the financial crisis, “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” hoping to remind people that there’s still more to be done to fix the financial system. He’s also the subject of a new documentary about the worst days of the crisis, from the frenzied sale of Bear Stearns to Congress finally passing TARP. “Hank: 5 Years from the Brink” is co-produced by Bloomberg Businessweek and RadicalMedia and goes live on Netflix on September 16th.
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