early and often

Into the Woods With Hank Paulson

Former Treasury secretary and noted nature lover Henry Paulson always wanted to be a forest ranger, he told General Electric chairman Jeffrey Immelt at a talk promoting his crisis memoir, On the Brink, at the 92nd Street Y tonight. And “I never wanted to be a forest ranger more than during the crisis,” he quipped. This got a big laugh from the full house. But over the course of the hour-and-a-half-long rehashing of the market meltdown and his role in fixing it, the forest motif arose so often, we started to think Paulson — who was clearly traumatized by the events — might soon be joining his deputy Neel Kashkari in the woods.

A sampling:

On not seeing the crisis before it happened: “Everyone says, ‘You idiots! How did you miss it!’ But I remember I said to President Bush in 2006, you know, I think we have a situation in the mortgage market. And he said, tell me where. And I said, well, there’s a lot of dry tinder. You don’t know what’s going to catch fire.” (As we now know, it all caught fire.)

On the methods the government used to stem the crisis: “We were first responders to a forest fire … and we did not have the right tools. I was out there with an ax and a hose trying to put it out.”

On regulatory reform: “I think that we need a regulatory structure that will withstand the test of time. I would like to see a systemic risk regulator, with broad authority. Any type of institution that is exhibiting behavior that would threaten to take the system down. Right now we’re focused on the trees, what we need is someone focused on the whole forest.”

Into the Woods With Hank Paulson