Former Treasury Secretary Hank Paulson described his personal experience of the financial crisis at a Brookings Institution conference on Wednesday.
“To me, by and large, the worst moments were waking up. Because I would invariably put my head on the pillow, go sound asleep immediately, but I would wake up around midnight,” said Paulson, who led the U.S. Treasury from 2006 to 2009. “At night, little problems seem big and big problems seem insurmountable.”
“I would look into the abyss and … see food lines, see a second Great Depression, wondering if another institution went down [and ask:] ‘How would we ever put it back together again?'”
Paulson said he was too busy during the day “to be fearful.” But certain events stood out. One was the “Sunday of Lehman Brothers weekend,” September 14, 2008, the day before the bank failed.
And Paulson knew banks. Prior to becoming Treasury Secretary under former President George W. Bush, Paulson served as the CEO of Goldman Sachs (GS).
“When we learned … that Lehman was going to go down, I remember then just being overcome by a sense of fear,” Paulson said. “I stepped out, called my wife, Wendy, told her: ‘I’m scared.’ And she immediately brought me back to one of our favorite verses from” the Bible.
The verse, 2 Timothy 1:7, reads: “For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind.”
“And I immediately snapped back and was fine,” Paulson said.