Panic: The Untold Story of the 2008 Financial Crisis

- Nice to see you. - Good to see you.

Thanks for coming All the usual suspects.

It's a pretty good concentration of talent.

Are you in the middle of the China mess now?

Oh yeah, I'm in the middle of the China mess.

I'm going back on forth on that. It is a mess.

- Professor. Tycoon. - Good to see you.

Hi, Janet. How are you?

It's nice to see you, Barney.

Can you imagine putting different administrations...

No, it's amazing.

Franklin Roosevelt told Herbert Hoover,

- see you in March. - Go fuck yourself. Yeah.

Exactly! Great.

How come I got Paul Giamatti to play me,

and you got Billy Crudup or somebody?

I changed my view,

after going through all this, about housing.

It's hard to keep people in their homes,

you know, if they can't afford to stay in their home.

This dinner is a remarkable moment.

It brought together all of the players

from the financial crisis of 2008.

The people who were actually in the room, in the moment,

to have a conversation about what went right

and what went wrong.

In the 2008 financial panic,

there's no playbook for this stuff,

there's no road map,

there's no... instruction manual on what to do.

We're trying to think of the most hated moment in the crisis.

Yeah, there's a lot... of candidates.

- I think the most hated program was AIG, by far. - Yeah.

But when you think about this group of people,

Hank Paulson, Ben Bernanke,

and Tim Geithner,

and you think about their different experiences,

their sensibility, how they approach life...

Oh, my God!

In Hank, you have the dealmaker.

His word is his bond.

If he says he's good for something, he's good for it.

We've come up with a whole bunch of policies,

which are about jobs and growth.

Ben Bernanke, he was

an economics professor at Princeton.

He had spent his whole career thinking about

and studying the Great Depression.

He was built for this moment.

I have a research paper that I'm giving on Thursday

at the Brookings Papers fall meetings on the crisis.

And then there's Tim Geithner.

You know, some people thought he looked too young for the job

or he looked like he worked on Wall Street.

But he was a government guy.

He had spent his whole career in government

working on global financial panics.

I remember McConnell saying to me in January,

"We're against almost everything you're doing,

and we're gonna fight you on all of it, and it's working for us."

It's pretty remarkable to think about

how they came together, and what ultimately happened.

The 2008 financial crisis was

far beyond the confines of Wall Street.

The good news is that the economy rebounded.

The bad news is how the public understands

and thinks about what happened.

Because of the financial crisis,

today there is distrust in government.

There's distrust in the big institutions.

There's distrust in this idea of elites.

It has lead to the populism

that we see in our politics today.

It's a straight line.

Big trouble for millions of American homeowners

as a slowing housing market has turned

some mortgages into time bombs.

One failed mortgage might not threaten

the whole financial system, millions of them could.

: ...millions of them... ...millions of them...

Thirty-four subprime mortgage companies

have gone bust in just the last few months.

Bear Stearns is hurting.

The stock cut in half, investors, in general, cutting out.

Fannie and Freddie may not have enough money on hand

to stay in business.

If you're used to thinking about the issues,

it is very intuitive that if you've got a bazooka,

and people know you've got it, you may not have to take it out.

Bernanke needs to open the discount window.

He has no idea how bad it is out there!

He has no idea!

The Dow tumbled more than 500 points

after two pillars of the Street tumbled over the weekend.

Lehman Brothers filed for bankruptcy.

The Dow Industrials finished

with their worst one-day point loss in history,

down 777 points.

If our nation continues on this course,

the economic damage will be painful and lasting.

For this is no longer just a Wall Street crisis.

This is an American crisis,

and it's the American economy that needs this rescue plan.

How many of you people want to pay

for your neighbor's mortgage,

that has an extra bathroom and can't pay their bills?

Raise their hand.

President Obama, are you listening?

: ...listening? ...you listening?

We are tired of the one percent of the one percent

and what they have done to the country,

what they've done to the world.

Government is finished.

This American carnage stops

right here, and stops right now.

- Good morning. - Welcome to the White House.

In the first quarter of 2006,

the US economy grew at an annual rate of 5.3%,

the fastest growth in two and a half years.

We added 5.2 million new jobs since August of 2003.

When I became chief of staff

at the beginning of 2006,

the president gave me a mandate

to refresh the cabinet.

I felt strongly

that the president needed a secretary of the treasury

who was experienced in the markets,

and whom the markets would respect,

and Hank Paulson really stood out.

He is the leader of Goldman Sachs,

perhaps the most successful financial institution

in the history of the world at that time.

Josh Bolten, who was the chief of staff

to George Bush,

called and made a pitch.

I talked with people around me,

and no one advised me

that that was the right thing to do.

First, he said his family would be against it.

His wife was a friend

and classmate of Hillary Clinton.

My wife, Wendy, clearly didn't want to,

and I... didn't want to.

So, I turned it down a couple of times.

Wendy's reticence came largely

from the work years ago,

when I was in the White House.

I went to the Nixon White House.

Great sense of timing,

six weeks before the Watergate break-in.

And what Wendy didn't like had to do

with the whole political scene.

But a few weeks later, they came back.

It had occurred to me, the reason I was turning this down

was, you know, due to fear of failure.

And I tell you, as soon as that hit me,

I just reversed on a dime.

Hank came up to the Treaty Room,

there, in the White House.

He was reluctant, but he wanted to serve the country.

And I assured him of one thing

that I think was important to Hank,

and that is when he picked up the phone

and called me, I'd answer it.

In other words, he wouldn't have to battle his way

through a lot of layers of staff.

He agreed to come,

and one of the best decisions I made in my presidency.

Good morning. Welcome to the White House.

I'm pleased to announce that I will nominate Henry Paulson

to be the Secretary of the Treasury.

Our economy's strength is rooted

in the entrepreneurial spirit and the competitive zeal

of the American people, and in our free and open market.

It is truly a marvel,

but we cannot take it for granted.

I didn't know Hank before he came to Washington.

It was customary for the Fed chairman

and the Treasury secretary

to meet at least once a week,

over breakfast or lunch.

We both liked oatmeal,

so we used to have an oatmeal breakfast,

either in my dining room or in the Treasury dining room.

Hank was a markets person.

He had been very successful on Wall Street.

He's very high-energy.

He and I are very different people.

I tend to be, personally, kind of quiet.

I was an economics professor, full stop.

I liked being an economics professor,

and I never expected to be at the Fed or in government.

But in 2002,

I got a call They needed to fill a slot

on the Board of Governors at the Federal Reserve. Would I be interested?

I recognized that I had been spending my academic career

studying monetary policy and financial markets,

and that maybe I could put some of that to use.

And moreover, it was just a few months after 9/11, and I was kind of feeling

that it was important for me to do some public service.