NPR, Henry Paulson, Tim Geithner discussed on Morning Edition

Automatic TRANSCRIPT

When the global financial system was melting down in two thousand eight Ben Bernanke, he was head of the Federal Reserve Henry Paulson junior was Treasury Secretary. Tim Geithner was president of the Federal Reserve Bank of New York and later became Treasury Secretary as the crisis went on. Now, the three men of written a book together about their experiences called firefighting, the financial crisis and its lessons. They joined us to share those lessons, you write that many of the things we did appear to reward the very financial industry that a dragged the world into the crisis in the first place chairman banenky. Why was that? Well, it's tough to prevent a financial system from collapsing without indirectly helping some people in the financial system. Our goal, of course, was to try to prevent the financial collapse from having broad implications for the. US economy, which ultimately, of course, it did secretary Paulson in a system that is is complicated and intertwined is ours. You had to go to the source of the problem if you want to stop the bleeding that's Wall Street, and it's just a sensual preferred to continue to create jobs for people to to get the loans. They need to send their kids to college to to buy a car to buy a home. Timothy Geithner should the administration of been more populist in its approach to this lashed out at bankers, a little more prosecute people do anything we didn't the three of us. We're not the arbiters of Justice in the criminal side. We couldn't be that was not rule than the scandal. Is what was legal not so much was the legal and even in the typical financial crisis. You know, the the right? Thing to do is to protect the depositor, let the Bank fail the bankers lose their jobs. The from doesn't exist to survive to another day. But in the extreme crisis where you have to panic you'll end up with mass unemployment and a decade of bread lines soup kitchens across the country. And that's that's the dilemma that. What is necessary and essential injust feels moral in a normal crisis is dangerous and unfair because to sit back and let the crisis burn system collapse. And causing the most damage in the most unfair way on people completely innocent of most of the mistakes. People made that help close the crisis all the money put into the banks came back, plus almost fifty billion dollars. So the purpose was devoid a a collapse of the financial system. That's why we did it. But the money came back with the profit and the financial institutions alternately paid for it. You're never going to get credit for avoiding a collapse precisely because we avoided a collapse of the economy, and the people were rightfully unhappy about the huge burden that the crisis placed on Americans, many of whom you know, were of modest means enlists least able to it so trillion dollar deficits turned out not to be fatal in that situation. In fact, well over a trillion dollar deficits now we're in a situation where the deficit is climbing back up to a trillion dollars in good times. Is it possible? The deficits really don't matter at all if left unaddressed, then we're on a dangerous unsustainable path that doesn't mean they're things that we could borrow rationally for today. The would have very strong powerful comic returns for the country today. But there are limits. How much you can do that? And you can't safely need all the broad challenges. We face the country. By leaving the deficit path on the current. I would say scary trajectory, you say, it's scary. Because why because if there was a recession and the government needed to borrow in order to boost the economy the government ought to be borrowing. There'd be no way to go. Is that it in the long run, you'll leave yourselves with much less room to protect people from the next crisis for the next downturn. Do you believe the country is ready for the next financial crisis? If a crisis does happen. Many of the tools that we used and other countries have used would just not be available. So we better in a sense that the crisis might be less likely, but we are concerned, and this is a female of our book that if a crisis occurs. We just don't have the powerful tools that would end the crisis quickly in avoid the damage that otherwise might occur. I think the central lesson of this crisis is that it's very dangerous. Let your system outgrow the protections you need to put in place to limit risk. Limit the risk of pants in the financial system. And that's forever challenge. It never goes away. You can't sit there and let invasion a row those protections. They have to constantly evolving. Adapt. And you make sure that conservative enough that they provide protection when things are really bad secretary Paulson. Yes, I agree with that the other thing that I think is. Really important to keep in mind. Is the need for financial literacy there are many well educated people don't really understand finance to the that. They should every American is got to be more vigilant and God ask themselves. If I don't understand all the complicated language on this agreement of don't understand what's going on. I better worked understand that. And make sure that I don't get myself over extended to the point where we're I can't be seriously hurt by reversal in markets or a downturn. Chairman Bernanke you get the last word here financial systems are prone to to break down panic or a run or crash. You know, you can't leave it that's some supervision and smart supervision and the Federal Reserve and other agencies that oversee the finish system is really important to keep our system stable, and we want to avoid having a kind of events we saw a decade ago that danger again, not only the financial system, but but the entire economy, Ben as per Nike Timothy Geithner and Henry Paulson junior are the authors. Co-authors of firefighting, gentlemen. Thank you very much. Thank you. Thank you. This is NPR news. Well, Sudan was a student at Columbine high school twenty years ago when two classmates killed thirteen people now she's a school counselor on the lookout for troubled kids. I see little things that can be concerning. Like, you're having a hard time, controlling your anger. You have a lot of rage built up. How mental health care in schools has changed since Columbine plus reaction to the Miller report this afternoon on all things considered from NPR news. All things considered coming your way at five o'clock this afternoon here on. Roughly one in seven people around the world, do not have any form of identification. This is holding them back from accessing public services and the World Bank is now looking for new ways to think about ID's you'll hear about that coming up right after NPR news, which is next on K Q E D public radio. Live from NPR news in Washington. I'm Janine herbs. Russian agents leveraged social media platforms to so division. They broke into the networks of a major political party and the attack the American voting system special counsel, Robert Muller's report details all of that just in the first sixty pages. But now is NPR smiles parks reports. The question is how safe will the twenty twenty election be there's no question that US will be better prepared to combat election interference congress after all allocated three hundred eighty million dollars last year to improve election security, but security advocates that's not enough. They want money allocated every year on a rolling basis to combat an ever changing threat landscape NPR's, miles parks reporting strong storm system that hit the midwest and south yesterday, leaving at least three people dead and Mississippi and Alabama setting to the east today. National weather service meteorologist gerege ire as a day whereas on Friday. It does look like we'll have an increasing severe risk across the eastern thirty the United States running up from parts of Florida through Georgia and the Carolinas into for Julia in the Damara peninsula of the Senate does look like that severe risk will steadily increase during the day on Friday and likely peak somewhere in the afternoon and evening timeframe and tornado watch is already up for parts of the panhandle of Florida and Georgia Wall Street is closed today in observance of Good Friday. You're listening to NPR news. In paris. Members of the clergy at Notre Dame cathedral, which survived a ferocious fire on Monday are suggesting that a temporary cathedral erected nearby while the restoration work. Proceeds and ofeibea Quist arcton reports the rector of the cathedral says an interim structure should be made available for everyone. The rectal of that most senior you'll be says, well, the Catholic is being repaired. An interim wooden church should be built in the shadow of the famous bell towers, the nearly nine hundred year old gothic masterpiece has been closed since swept through condemns rooftop and destroyed its distinctive spy president Emmanuel McCoy's promising the cathedral will be restored within five years. The rectus suggests a temporary structures needed to serve as a home for west as visitors alike. French media reporting, an electrical short-circuit as likely called the blaze that governor. Them. Prosecutors say they're not ruling out any hypothesis and a fulling several lines of inquiry of Akwa Stockton NPR. News Paris, the National Enquirer has been sold. James Cohen, the former head of the airport newsstand retailer Hudson news, the paper, the sale comes months after the tabloids owner American media was accused of trying to blackmail Amazon CEO Jeff Bezos and amid allegations of buying stories to protect candidate Donald Trump. I'm Janine Herbst. NPR news in Washington..

Coming up next