Henry M. Paulson, Jr.
On the Brink:
Inside the Race to Stop the Collapse of the Global Financial System
New York: Business Plus, 2010
Most people, including most members of the elite, are unaware that the financial system of the United States—and through it the global economy—nearly collapsed in 2008. But it did; the dramatic title of ex-Treasury Secretary Henry Paulson’s memoir is not an exaggeration. Had events unfolded without timely government intervention, the consequences would have equaled, if not exceeded, the Great Depression.
Paulson was appointed Secretary of the Treasury by George W. Bush and served from 2006–2009; the credit crisis hit in 2008–2009.
Contrary to Paulson’s guarded optimism, it is unclear whether the financial crisis is actually over, or whether the medicine that was administered (massive fiscal debt combined with deliberate ballooning of the money supply) will contribute to another, possibly uncontrollable, disaster down the road.
A Triumvirate Confronts the Storm
It would be nice to report that On the Brink, which is told in chronological format, is a page turner, but it is not as compelling or informative as it should be. Ex-Goldman Sachs head Paulson is a lifelong businessman-politician, not a historian, so he pulls too many punches. Nowhere does Paulson even concisely summarize the essence of the near-collapse, which uncannily paralleled that of the Great Depression: destruction of money on a massive scale, and through it the ruin of real-world wealth, assets, jobs, and basic economic activities of every imaginable description. But at least his narrative style is admirably crisp and clear.
A surprising revelation in the book is that Paulson, an experienced financier, expected a financial crisis to occur, despite prevailing healthy economic and market conditions when he took office. “My number one concern was the likelihood of a financial crisis,” he writes. Similarly, in 2010 he believes that “We will inevitably be confronted with the failure of another large, complex institution.” By this he means a systemic failure.
Even so, Paulson did not anticipate the magnitude or specific nature of what actually transpired, including the massive role of race-driven housing policies that triggered the crisis. (Paulson never even alludes to the racial roots of the crisis.)
The ensuing emergency was managed by a triumvirate consisting of Treasury Secretary Paulson, Jewish Federal Reserve Board chairman Benjamin Bernanke, and New York Federal Reserve Bank president Timothy Geithner (currently Obama’s Secretary of the Treasury).
Geithner’s ethnicity is unclear. Paulson never identifies anyone by race or religion. From what is known he has some WASP ancestry, and some German or German Jewish ancestry. The name “Moore” (the maiden name of Geithner’s mother, Deborah) was originally “Monarch.” Geithner looks rather Jewish, and at any rate his wife and children are Jews, thereby tying him biologically to Jewry regardless of his own nominal racial background.
Many staff members working for the triumvirate were also Jewish, particularly members of George W. Bush’s White House staff. Paulson lieutenant Neel Kashkari was an Asian Indian.
Paulson’s thankless role was that of Gentile fixer. A blue-eyed Nordic, he’s one-quarter Norwegian, part German, and part old stock American. His Wisconsin-born grandmother was the descendant of Yankee Civil War general and West Point superintendent Wesley Merritt. (Merritt, his grandmother’s maiden name, is Paulson’s middle name.)
Paulson belongs to that staggeringly large class of whites one encounters again and again fortifying Jewish ranks throughout history and today—virtual caricatures of Jack Armstrong, The All-American Boy. Paulson is ambitious, forceful, energetic, capable, born to prosperous, hard-working parents from Illinois, Eagle Scout, All-Ivy, All-East Dartmouth College football star, ROTC, Harvard Business School, outdoorsman, environmental activist, fitness buff, devout Christian Scientist who refuses to take medicine, married to the daughter of a Marine colonel (a Wellesley graduate and friend of Hillary Clinton’s), one son, one daughter, grandkids.
A formidably healthy and vigorous man, Paulson nevertheless suffers from “dry heaves,” which he attributes to lack of sleep. These are sudden, uncontrollable episodes of dry gagging or retching unaccompanied by vomit. At key moments during the crisis Paulson quickly escapes to places of privacy so that his colleagues won’t witness such attacks.
The author also exhibits the hallmarks characteristic of positive thinkers, including a mystical belief in Providence. Struggling to decide whether or not to accept the Treasury post in 2006, Paulson gradually realizes that his hesitation is due to fear.
Once I understood this, I pushed back hard against the fear. I wasn’t going to give in to that. I prayed for the humility to do something not out of a sense of ego, but out of the fundamental understanding that one’s job in life is to express the good that comes from God. I always believed you should run toward problems and challenges. Fear of failure is ultimately selfish; it reflects a preoccupation with self and overlooks the fact that one’s strength and abilities come from the divine Mind.
Later, overwhelmed by anxiety when Lehman Brothers and insurer AIG teetered on the brink of collapse, he phoned his wife in a scene straight from the pages of Norman Vincent Peale. “What if the system collapses?” he asked. “Everybody is looking to me and I don’t have the answer. I am really scared.” She replied, “You needn’t be afraid. Your job is to reflect God, infinite Mind, and you can rely on Him. ‘For God hath not given us the spirit of fear, but of power, and of love, and of a sound mind.'” (2 Timothy 1:7)
Two minutes later, fortified by the divine Mind and his wife’s prayers, Paulson phoned two Jews, Joshua Bolten at the White House and billionaire New York mayor Michael Bloomberg, to apprise them of the impending collapse of Lehman Brothers.
Prior to joining Goldman Sachs Paulson worked as deputy to Defense Secretary David Packard (co-founder of Hewlett-Packard) at the Pentagon, and as an employee of John Ehrlichman’s in the Nixon White House.
A Goldman Sachs partner since 1982 (he resigned upon joining the Bush Administration), his mentors at the firm were Jews Robert Rubin (later Bill Clinton’s Treasury Secretary) and Steven Friedman. At Goldman Paulson was in charge of insinuating the firm into Asia, especially China, ultimately making it “the leading banking adviser in the world’s fastest-growing economy.”
Named co-chairman and co-CEO of Goldman Sachs with Jon Corzine in 1998, he found power-sharing distasteful. So within a year Paulson ousted his fellow Illinois native (who has a remarkably similar background) in a palace coup. Corzine went on to become Democratic U.S. Senator and governor of New Jersey. Though still married, he also carried on a sexual affair with a New Jersey woman named Katz, the high-living president of a union for public employees, which ultimately cost him in excess of $6 million in a settlement with the predatory female and her attorney.
Paulson used the same strong-arm tactics during the financial crisis, demanding unlimited power from Congress in order to deal with every imaginable contingency in the grand tradition of governance associated with Oklahoma City, NAFTA, the “PATRIOT” Act, and massive “fast track” legislation of every kind that Congress rubber stamps without debate or, as in the case of the totalitarian PATRIOT Act, even reading.
The difference in this instance was that the power was actually needed. Still, one cannot overlook the sham that “democracy” has become, or refrain from cheering a lone dissenter like Senator Jim Bunning (R.-Ky.), who responded to Paulson’s assertion that the unlimited power he demanded would never be used: “The Fed’s purchase of Bear Stearns’ assets was amateur socialism compared to this. Every time we propose and do something it always gets used. And you want an unlimited amount.”
In contrast to the Gentile Bunning, whom Paulson heartily disliked, a Paulson hero is the powerful chairman of the House Committee on Financial Services, Congressman Barney Frank (D.-Mass.)—a Jewish homosexual whose lover in the 1980s ran a call-boy ring from the Congressman’s apartment—without any blowback on Frank’s career, of course. (Paulson mentions Frank having dinner with his current “partner,” Jim Ready, in the congressional office building.)
Frank is among those responsible for the housing debacle. His insistence upon promoting the corrupt Reconstruction practices of Fannie Mae and Freddie Mac, and otherwise insuring privileged access to subsidized taxpayer-funded housing for non-whites who can’t afford it helped precipitate the catastrophe—again without any political or social consequences. Indeed, Frank perpetuates toxic, race-driven policies to this day.
Paulson also offers praise for President Bush: “In any accurate recounting of the financial crisis, you won’t find the president playing politics with these decisions—not one instance. ‘If we suffer political damage, so be it,’ he said”— this in the middle of a presidential election.
(As an aside, power and celebrity elites work hard to keep their trim figures in an age of rampant obesity. Besides exercising ferociously they consume few calories. At White House lunches Paulson invariably ate soup and a chicken- or tuna-salad sandwich; President Bush “always ate the same thing: a little bundle of carrots, a chopped apple, and a hot dog in a bun. Sometimes we’d have low-fat soft frozen yogurt for dessert.”)
A Bleak Future
One finishes the book with the impression that probably no one is really on top of the financial situation—not so much for lack of power, which contemporary states possess in spades, but because global institutions have become too complex and interwoven for business executives, politicians, or regulators to fully comprehend or control.
“Someday you guys are going to have to tell me how we ended up with a system like this and what we need to do to fix it,” an exasperated President Bush tells Paulson after the Treasury Secretary comes to him for the umpteenth time with the unexpected news that the world is again teetering on the brink of collapse.
This is an unintended consequence of the worship of centralization of power and the blind insistence that everyone and everything must and will be subordinated to a One World order—”values” which Paulson devoutly shares—combined with deeply-institutionalized anti-white policies that are beyond criticism by anyone.
In the book, Paulson promises Negro Congresswoman Maxine Waters (D.-Calif.) that the Bush White House will implement even more draconian discrimination of the sort that precipitated the crisis in the first place—sweeping racist legislation that has since been incorporated with a vengeance into the Obama Administration’s [Chris] Dodd-[Barney] Frank “reform” bill.
Reigning elites, it seems, cannot change their stripes to save their own skins.
For the harried Paulson, a poignant “reminder of the pain the crisis was inflicting on our nation” came when he and his wife Wendy had dinner with their friends, New York Times columnist Thomas Friedman and his wife Ann:
[Ann’s] father, Matthew Bucksbaum, had co-founded General Growth Properties in Des Moines with his brother Martin in 1954. The company was the second-largest mall operator in the U.S., but its stock had been tanking and I knew that it was struggling to avoid bankruptcy. Ann was stoical, and we didn’t talk much about the situation that evening.
So much for the human element.