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article imageHenry Paulson: I was scared, I didn't know what to do

By Andrew Moran     Feb 1, 2010 in Politics
Former Goldman Sachs CEO and Treasury Secretary under the Bush administration said in a CNBC interview that he was scared about the pending economic collapse and didn't know what to do.
On Monday, former Treasury Secretary Henry Paulson sat down with CNBC to discuss his new book “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System” and the current state of the economy. Paulson also revealed some surprising details about himself and the administration at the beginning of the economic collapse in the United States.
Paulson began that bank compensation is generally out of tune, even during his tenure at Goldman Sachs when he felt it was out of whack. Paul feels that the remuneration bankers received and still receive has created negative public sentiment and their role in the financial crisis, “When the government did what it did and saved the entire financial system … these paychecks just seem so out of whack and out of tune with what's going on with the public.”
As everyone in Washington states that the hundreds of billions of dollars, if not tens of trillions of dollars, of bailouts to Wall Street helped saved the US from experiencing a deeper and harder crisis, Paulson agreed that it did, “What I say in the book is that when I ran with Goldman Sachs, even during benign times, I had felt the compensation in the industry seemed out of whack, and I would occasionally go off in partners meetings and say something to the effect, 'I hope you guys all understand,' and remind them, 'people don't like you. Very few people do.”
According to the United Press International, Paulson explained that his remark the British “screwed us” was actually said in the heat of the moment and didn’t mean it and understood the British regulators had to look after their own interests. It was an “intense moment and I hadn't had a lot of sleep and I went from the brain to the mouth.”
Paulson later revealed, reports the Chicago Tribune, that one time he had to excuse himself from an emergency meeting that discussed the financial crisis in order to call his wife and tell her, “I’m scared.” The former CEO added, “I didn’t know what to do. Then, I put on my armor and went back into the room and acted like I knew what to do."
The comments came when British regulators opposed Lehman Brothers being taken over by Barclay’s when it collapsed in 2008, which was few months after Bear Stearns failed.
The former Secretary also said he discovered a lot of information that was pertinent to his job such as how housing debt was structured in various Wall Street projects. Prior to the collapse, his department conducted a study on housing in America and they came to the conclusion that nothing was wrong.
“We need one systemic regulator and we need resolution authority so no institution is too big to fail,” said Paulson.
More about Henry paulson, Economic collapse, Cnbc
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