On The Brink by Henry M. Paulson, Jr. - Book review
On the Brink
Inside the Race to Stop the Collapse of the Global Financial System
By: Henry M. Paulson, Jr.
Published: February 1, 2010
Format: Hardcover, 496 pages
Publisher: Business Plus/Hachette
"It was September 4, 2008, and we were in the Oval Office of the White House discussing the fate of Fannie Mae and Freddie Mac,the troubled housing finance giants. For the good of the country,I had proposed that we seize control of the companies,fire their bosses, and prepare to provide up to $100 billion of capital support for each. If we did not act immediately, Fannie and Freddie would, I feared, take down the financial system, and the global economy with them", writes 74th Secretary of the Treasury from June 2006 until January 2009 under President George W. Bush, Henry M. Paulson, Jr., in his first hand and often controversial book On the Brink: Inside the Race to Stop the Collapse of the Global Financial System. The author describes the tense moments, from an insider perspective, that he firmly believes saved the entire financial system from collapsing into a major world wide depression.
Henry Paulson provides a rare glimpse into the decision making process of governments and the leaders of the global economic community, as they faced an unimagined financial crisis. The events unfolded in ways that shocked economists, Wall Street CEOs, and politicians in Washington, DC. The result was a series of hard choices, made almost on the fly, through the guidance of the author, Federal Reserve Chairman Ben Bernanke, and Timothy Geithner of the New York Federal Reserve. The author praises the efforts of their guidance for resolving the crisis. Henry Paulson takes the reader on the same roller coaster ride that he experienced as me made the soul searching decisions during that dangerous time. As the author saw the global economic situation, it was deteriorating by the minute, as credit and liquidity vanished from the system. To Henry Paulson, the alternative to his actions was total economic meltdown.
Henry M. Paulson, Jr. (photo left) recounts with vivid detail, his meetings with government officials, bankers, international leaders, and economists, as they sought a workable solution to the financial crisis. He points to the collapse of Bear Stearns as a warning sign that bank after bank could collapse. He shares the decisions that led to the action taken on housing GSEs Freddie Mac and Fannie Mae, and how their deep problems demanded immediate resolution. As a day by day narrative, this highly personalized account reads like a thriller, but unlike a story, this crisis was unfolding in plain sight and in real time. The concerns expressed by politicians and economists, and even by the author himself, as to the cost of the rescue are addressed openly and with a frankness that is often disarming in its clarity. The author emphasizes that the crisis was the worst one faced by the economy since the Great Depression, and as a result, required extraordinary measures to resolve the situation. Rightly or wrongly, Henry Paulson was prepared to make and carry out the difficult and heart wrenching choices that he believed were necessary to prevent financial Armageddon.
For me, the power of the book is how Henry Paulson shares his personal insights into how he saw the financial crisis of 2008 unfolding, and its potential for economic tragedy if left to run its course. While many people will disagree with the choices made by the author, he makes clear that that those decisions were not made lightly. In the opinion of the author, he and the entire global economy were in a deadly race against time to avoid a complete meltdown of the world's financial markets and the global economy. With the stakes that high, and the channels of communications vague at best, Henry Paulson did what he believed necessary to move the economy away from the abyss.
The author describes the alternative policy options available as being either uncertain or even more disastrous than the avenue chosen. He also shares some of lessons learned, and provides policy proposals to prevent a recurrence of the crisis in the future. The book is a deeply personal account of a public official and his team faced with resolving a potential global disaster, the conflicting advice they received, and the colossal obstacles they faced during that critical time. This book reflects both the assurance and doubt, and the confidence and trepidation, faced by the author as he did what he firmly believed was the right thing. History will decide whether those choices, often made on the fly, were the correct course of action.
I highly recommend the important landmark book On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry M. Paulson, Jr., to anyone seeking an insider account of the resolution of the global financial crisis of 2008. The book provides a first hand account from one of the principle decision makers during that dangerous time from the economy of the world. Whether a person agrees with the actions taken, the book is a fascinating insight, into how and why the policy choices were reached and acted upon, by the people involved in their execution.
Read the fast paced and highly informative book On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry M. Paulson, Jr., and relive those tense moments where decisions were made with little or no precedent as to their potential results. Discover, from one of the real insiders, how the policy choices were not reached or acted upon lightly. This book is one of the most important books written by one of the principle decision makers about the financial crisis of 2008. The book will stand as a crucial personal testimony to the events of those almost calamitous events.
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