Political memoirs are often designed to inflate the importance of the author.
Usually the gist of these books is something along the lines of "I saved the day," or "if they had only listened to me, things would have been better."
In the case of former Treasury Secretary Henry M. Paulson Jr., some of the self-generated pats on the back are deserved. He took office in 2006 (leaving his post as chairman/CEO of Goldman Sachs) at a time when the economy was in reasonably good shape but also showed signs of trouble. Things quickly began to collapse and Paulson et al performed the economic equivalent of emergency surgery.
His new memoir, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, takes readers behind the scenes in the trenches during the efforts to avoid another Great Depression.
Though an adamant free marketer and lifelong Republican, Paulson proved to be a pragmatist who helped engineer unprecedented programs of government intervention in the workings of the marketplace.
Among the earliest signs of difficulty were at mortgage buyers Fannie Mae and Freddie Mac, which he noted were an "extreme examples of a broader problem that was soon to become all too evident-very big financial institutions with too much leverage and lax regulation."
Paulson describes the meetings in which he and other government officials fired the CEOs of the Fannie and Freddie and placed the GSEs into conservatorship: "Fannie even tried to make it seem that their plight was our fault, that our having gotten the bazooka had caused everyone to lose confidence in them."
He gives readers front row seats inside negotiations with members of Congress (and has generally nicer things to say about Democrats than Republicans) about the creation of the Troubled Assets Relief Program and other controversial measures aimed at stopping the economic bleeding.
At one point he went down on his knees in front of House Speaker Nancy Pelosi and implored her, "Don't blow this up."
That incident followed the White House meeting during the presidential campaign where John McCain and Barack Obama weighed in on the crisis, and McCain tried to grandstand. Paulson was, to put it charitably, underwhelmed by McCain's behavior and aghast at his lack of knowledge about economics, though he was even less impressed by Sarah Palin.
Paulson had mixed feelings about others, such as FDIC Chairman Sheila Bair. While he "admired her energy and her efforts to deal with problem mortgages" he disagreed with her efforts to pressure the Treasury Department to use TARP funds for mortgage relief. He felt that the idea was problematic because if a loan went bad, the government would have to write a check to the bank, not the homeowner.
His book also provides a tutorial on some of the intricacies of the rules regarding the limits of government intervention in the markets.
For example, during the ultimately unsuccessful effort to save the investing banking giant Lehman Brothers, Paulson and Federal Reserve Chairman Ben Bernanke were urged to have the government use federal funds. Paulson explains the rationale for their actions.
"The Fed had no authority to guarantee an investment bank's trading book or for that matter any of its liabilities. And without an acquirer with a big balance sheet to ensure solvency, a Fed liquidity loan would not have been sufficient to hold Lehman together during a shareholder vote."
Paulson occasionally faults himself for being overly short with people and criticizes himself for not realizing early enough the potential threats to the economy from the collapse of the housing bubble. But for the most part, there's not a great deal of self-reflection in this book.
Despite those shortcomings, On the Brink, is an engaging and informative account of a difficult period in American economic history.
One of the reasons for the recent economic crisis was that some people weren't knowledgeable about how to manage personal finances.
Credit unions have long been at the forefront of improving financial literacy and a great example of one of those efforts is Westie's Triple Decker Decision: A Westie Adventure From Northwest Federal Credit Union.
Joelle Hahn, a marketing specialist at Northwest Federal Credit Union, has written a short work that discusses the importance of saving money by telling the story of a dog who has to decide whether to use his allowance to buy things or to save money.
It's a fun book and the advice to consider whether to spend money for yourself, for gifts or to save is a valuable lesson for children and adults alike.
"I am proud of you, Westie. You've considered today, you've considered others and considered the future," Westie's mother said to him.
The book also contains a page of advice for parents on how to talk to their children about financial literacy and information about some of the credit union's youth accounts.
It's an innovative approach to a serious topic.