You entered the New York Fed never having worked in a bank, never having received an economics PhD. Was that outsider status in any way helpful, perhaps giving you a broader view of options during the crisis?
I think it was more a disadvantage than advantage. There is a lot of valuable knowledge about the structure of our financial system that I wish had had before I took that job.
In recommending you for the New York Fed job, Larry Summers praised your willingness to disagree with him. Is that a quality you seek in people you hire?
Of course. You need people around you who are willing to challenge you, and challenge each other. Good decision making, in any context, but particularly in a crisis, with its mix of high stakes and high uncertainty, requires a level of trust so that there can be open debate. It works better with people who are curious, willing to change their minds, express doubt, and work together. It works better with people who are willing to be for stuff, not just against stuff; people able to think about what do to, not just able to describe a problem.
After you and Larry Summers placed Steve Rattner in charge of the federal auto task force, he fired the CEO of General Motors without consulting you – for which you’ve praised him. Is it important not to micromanage a crisis?
Sure. If you have good people around you, as we certainly did, then it’s easier to give them responsibility. But you can’t be too remote. You have to have to have sufficient depth in the substance of the key choices.
You’ve talked about the danger of acting too soon versus the danger of acting too late in a financial crisis. In seeking that balance, on which side would you err?
There’s no bright line. In the early stage of a crisis, it make sense to move gradually. But when you are at the point where things are eroding rapidly and the run is spreading, then you have to be able to escalate quickly, with overwhelming force.
You avoided reading news stories about yourself during the crisis. Any other advice on how to stay true to course amid criticism?
Just focus on figuring out what is most likely to work. Don’t worry about whether people will praise or criticize you for it.
Your analysis of your strengths in Stress Test is balanced by a depiction of yourself as impatient, foul-mouthed and lacking charisma as a public speaker. Is there an advantage to appearing human as a leader, rather than flawless?
The important thing is to be true to what you believe is right. Without that, you will be less than authentic, and it will be harder to earn credibility. Nothing good can come from a desire to appear infallible.
It sounds as if you slept about three hours a night for two years during the crisis. How does one maintain one’s physical and mental health during such a prolonged period?
I need a fair amount of sleep and worked hard to preserve some room for that. My most important advantage was my relationship with my wife, Carole, and her calm mix of strength and wisdom. And I was very lucky to be able to work with, to share the fear and burden, with a wonderfully talented and ethical group of public servants.
You’ve said that you identified with the emotional intensity of “The Hurt Locker,” a film about a soldier who so misses the drama and danger of war that he returns to it. Do you ever miss the intensity of battling the financial collapse? Would you do it again?
No, I don’t miss that type of intensity, and I don’t miss the crushing weight of responsibility. I miss the people, though. And for those of you who haven’t had the thrill and the privilege of working for your country, I would encourage you to try it.
Kevin Helliker, a Pulitzer Prize-winning journalist, is Editor in Chief of the Brunswick Review. He is based in New York.
Top photograph: Taylor Hill/Filmmagic
Bottom photograph: Jeremy Bales/Bloomberg via Getty Images