On the Brink, By Hank Paulson

So here is Hank Paulson, an Atlas holding up the world – in his boxer shorts. Shaven but unshowered, still in his night clothes, the Bush administration's final Treasury Secretary is on a 5am conference call that will determine the fate not just of a tottering investment bank but the whole financial system. Within the hour, with central bankers, Wall Street executives and the president, he will have fashioned a rescue deal, calling out that he couldn't care less if the Treasury had the authority to step in, this was an institution that was simply too big to fail.

And this was just Bear Stearns, in March 2008. Fannie Mae and Freddie Mac, Lehman Brothers, AIG, the entire $4 trillion money markets, Citigroup... these were collapses not even yet imagined. It is the relentlessness with which the crises keep breaking, in wave after wave, and the sheer physical effort required by Paulson and his team, that strikes a reader of his memoir. Theirs were heroic efforts, you must admit, no matter where on the spectrum of fury you come out with regards to the Great Bailout of 2008.

By the time the relief army comes, in the form of the Obama administration, Paulson is sleeping barely three hours a night, having to duck out of political meetings to dry heave because of the stress and the tiredness. Many of his Treasury team have given up almost every weekend, and most nights, for more than six months to work on ever more complex and expensive firebreaks against the spreading panic.

This is the list of their deeds. It is a who-was-in-which-meeting kind of a memoir, infuriatingly devoid of self-examination or engagement with the controversies that surround Paulson's extraordinary interventions.

Henry Merritt Paulson Jr is the pivot in this biggest story of our times, chief executive of Goldman Sachs as a credit bubble inflated and head of the government rescue team when it popped. There could scarcely be a more eagerly anticipated memoir. So how do we come to have such an unhelpful book?

Partly it is because the narrative is already well established (there is almost no anecdote in On The Brink not also in Andrew Ross Sorkin's monumental Too Big To Fail). It seems likely, too, that Paulson is writing under the gaze of his lawyers, since so many incidents are subject to shareholder lawsuits, criminal investigation or examination by Congress.

And the exercise is hobbled by Paulson's failure to address his own culpability in the credit bubble, as a former Wall Street boss who argued in front of Congress for laxer standards on bank risk-taking. This is not a memoir that takes in his career at Goldman. In the only nod to the double life, he recounts a presentation to the White House on taking over as Treasury Secretary in 2006, when he warned that a financial crisis could be brewing because of how highly leveraged the industry had become. When Bush asks how it had come to this, Paulson admits the question was "humbling... for someone from the financial sector".

The conclusion, too – that after a bit of regulatory tinkering, the 25-year march of free-market capitalism must again be unleashed – rings hollow after the horrors within. But if Paulson lets his readers down, he lets himself down, too. From a safe distance, we are now furiously debating whether all his bailouts were necessary, or even motivated by a nefarious desire to help his friends on Wall Street. He spends far too little time setting out just what he was scared of, the consequences of an untamed panic. He never did so in 2008, for good reasons – "scaring the public to win support would only make things worse economically" – but now?

It's all in here, from Jeff Immelt, chairman of General Electric, telling Paulson he was having trouble getting access to cash, to the run on the money-market funds which millions of Americans treat like bank accounts. But Paulson passes up an opportunity to set out more vociferously how, in his nightmares, he saw the dominoes falling, as one bank after another pulled down the economic system which keeps people in their jobs and homes.

It all just seems self-evident to him. The suggestion that he might let Citigroup fail is dismissed here as a "jaw-dropping" idea – even though it is made by one of the chief bank regulators. Since bank runs were taking systemically important institutions down in days, there hardly seems time to have had a debate. But Paulson does admit to being "tormented by self-doubt and second-guessing" as he lay, insomniac, night after night. His memoir would have been more illuminating if he had told us less of what he did in those relentless days, and more about what he thought on those sleepless nights.

Stephen Foley is Associate Business Editor of 'The Independent'

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