I do not consider myself a journalist. Nobody else would consider myself a journalist. I took on the life of being an interviewer even though i will run even though i run a private equity firm. How do you define leadership . Tick . Akes somebody secretary oft as treasury, hank, you did something unusual. Many go back into the finance world or go into the finance world if they had not been there before. You chose not to do that. I really enjoyed my business career. I had 32 years there. I had not per two to serve my country. Experiencestake my and apply them to addressing to of what i believe are the most u. S. Chinasues relations and Climate Change. When you left treasury, you basically said, i have enough money and i will do nonprofit things. Had what i call the disease or addiction to money. Sachs, itt to goldman was 1974. The firm had a couple loss years. In working oned Financial Issues, working with clients. I was interested in markets. David you are not a person who bought their own private plane, you did not have a big house in the hamptons . We continued to live in the same house we built when i was making 36,000 a year. Thati go skiing, it is arapahoe basin, not a place where fancy people go. David is it your view that Climate Change is due to human activity . Documentedeen well that it is largely caused by human conduct. This poses an enormous risk for our economic security, our social stability. As thehis climate risk single biggest and most certain and fermentable and formidable risk mankind faces. David the Current Administration has pulled the u. S. Out of the paris accord. The people in the government say we do not want to take Climate Change actions that some people are advocating. We want out of the paris accord. What constituency are they appealing to . What is the constituency that is saying lets not do something on Climate Change . Stronglieve there are vested interests that have different viewpoints than the average american. If you look at the average american, there is a High Percentage concerned about Climate Change. It is just not there number one issue. When you look at all of the industries that have a vested with the oilinning industry and all the carbonbased fuels. Of thetance, i think one things that will be very important in dealing with this problem are economic incentives. There are a whole variety of incentives we could put employees to put a price on carbon, taxes and cap and trade systems, but also eliminating the huge subsidies we pay to discover carbonbased fuels. We have no shortage of them today. There is no excuse for doing that. David i think you have been to china 150 times. A lot. David how did you happen to come to deal with china so much . Almost by accident. Chicago office of Goldman Sachs working with clients in the midwest. I was not looking to move to new me to bethe firm asked investment our Banking Division with a couple other individuals in new york. As we were looking at how we might divide things, we had a big business in europe and almost nothing in asia. Said, the guys said to me take asia because it is closer to chicago than new york. I was not overly curious, but i was interested, so i began going to asia. I came back and i talked to my bosses and said, i get the feeling is about the feeling china is about to take off and i would like to look at opportunities in china. When i made the first trip there 1991, we had five people in the hong kong office. Inn i left to go to treasury 2006, i think we had 1500 people in greater china. Have two great economies china and the united states. In your view, is a clash between the two of them inevitable, leading to a real war, not a cold war . I would begin by saying that china is a strategic competitor. There are some compelling differences when we look at our National Security interests. Importantalso some shared interests in terms of global stability and things like Climate Change, but to get to your question, i am very concerned about what i see as a viewarization of the u. S. Toward u. S. China. Security veryl seriously, but National Security has bled into basically every aspect of the economic relationship. Say i hearnd i cold war all the time. There is no way this is a sovietstyle cold war. China is very integrated into the global economy. We are looking at the number one manufacturer, the number one trader, a big exporter of capital. Worked under president nixon for jon erlichman. What was that like . Ini started in the pentagon april 1972, six weeks before the watergate breakin. David lets talk about your background. It might not have been predicted when you were growing up that you would be treasury secretary, head of Goldman Sachs. You were born in palm beach. I ruined a vacation. My parents were in a place called stuart, florida and i came prematurely. David your parents had a farm. I grew up on the farm. I milked some cows, slopped some hogs, did a lot of weeding in the garden. David this is white you wanted to do this is what you said you wanted to do for the rest of your life . No. Could go up into the northwoods in canada intake canoe trips in the boundary waters. We ate fish we caught, picked berries and so on. So i wanted to be a forest ranger when i was growing up and in high school. David your parents talk to out of that . Me to doey encouraged what i wanted to do. They really encouraged me to get a good education. My mom had gone to wellesley. Her father had gone to yale. Because itdartmouth was in the northwoods and it had small classes and was focused on the undergraduate. David before you got to dartmouth, you are a champion Football Player and wrestler. You were in ,ll ivy Football PlayerHonorable Mention allamerican, and phi beta kappa. Your nickname was the hammer. What was that associated with . I hited to be pretty hard and i tended to be pretty forceful. David when you graduated in 1960 eight, you went to Harvard Business school. Had you had an interest in business . And wanted to go to oxford study english, but the vietnam war was in full force. I had a low number in the draft. It turned out the easiest place to get into was Harvard Business school. I wish i could tell you this have been part of a career plan, but that is how i ended up at Harvard Business school. David you graduated at Harvard Business school then you went to work for the pentagon. How did that happen . I basically worked at dartmouth at Harvard Business school. I did not have any business background. I spent most of my time at wellesley courting my wife to be. One class i did a fair amount of work in was a class taught by someone who had been a former assistant secretary of defense. He recommended me to work in the pentagon for a small Analysis Group that worked on projects for the top leaders in the pentagon. That transformed my life. Assigned a little bit of time in the government at the white house. You worked for jon erlichman. What was that like . I started in the pentagon in april of 1972, six weeks before the watergate breakin. You did not understand the implications at the time. Thes there through election, the landslide victory over mcgovern. I got this big promotion. I was going to be jon erlichmans deputy for economic policy. Up and irgate blew watched these people who had very senior positions get carried off. Convictedman got after i had left, but i looked at a number of people there in deep trouble. It made a huge impression on me. The positive impression was George Schultz was secretary of the treasury. Himad two guys who work for , but i had a good working relationship. David you went back to the midwest and join Goldman Sachs. How did that come about . Careers are a funny thing. I have never been big on career engineering. When i graduated from dartmouth, i did not know what investment inker was, but i learned government that i like to economicing, i liked policy and Financial Issues and problem solving, so i figured out that Investment Banking might be a good thing to explore explore, and i also determined i never wanted to live in new york. That was my view. David you must have done a pretty good job at goldman because you got promoted. You end up being the ceo of Goldman Sachs, job you did not aspire to. Knew what it was like when we graduated from college and his new school. And business school. If you wanted to run something, you did not go into Investment Banking. That is why i picked Goldman Sachs. In 1994, the firm had some problems. I went to new york. I called wendy and said i had been drafted to help turn things around. I will be here only for two years. We always joked because that was a rolling two years. That was 12 years in new york. David goldman did pretty well. George w. Bush becomes president. He made a couple entreaties to you to be secretary of treasury, but you said you were not interested. Why were you not interested . I enjoyed what i was doing. That wasamily vehemently opposed to the president , my mother and my wife , my kids. I think at the root of things, although i did not tell myself it was a reason, i knew i was doing a pretty good job running Goldman Sachs, so i said no a few times, but they kept coming the last time jim baker made a compelling case. More than anything else, what hit me was i looked at things and i said, guess what. I go around and recruit at business schools. I tell people, welcome change. We all hate change. Maybe it was fear of failure that was preventing me from serving my country. As soon as i saw that, i said i am not going to let that stop me so i made the jump. David when you joined the government, you expected the economy would be in reasonable shape. It seemed to be in reasonable shape. What happened . Very firstly on, the meeting i had with president when he got david, his Economic Team together he wanted me to talk about entitlement reforms. That was one of the things that brought me to washington. I told him i wanted to talk about a financial crisis. I did not see one coming like we had, but i saw excesses. I had seen them in 1994 and 1998. I thought we were due for turbulence in the markets. David ultimately the Banking System came back. As you look at the system today, could Something Like that happen again . I hate to say this, but we have Less Authority today than we have been. Had then. We tried everything we could to get a buyer. Problem evenbigger then bear stearns because they were insolvent. There was a big capital whole hole. There was no way that alone was going to solve the problem. It was either capital or a loan guarantee. As i look back, we came very close to getting a deal done with barclays, but as we look was,on it, as bad as that that was not the worst outcome possible. The crisis had been grinding on for about a year. We had three going down the same weekend lehman, merrill, and aig. It turns out we had one buyer. Bank of america bought merrill. If they bought lehman, merrill would have failed and it would have been a bigger problem. The other thing i will say about , as badwhich was that as it was, and it accelerated the crisis, that it was a symptom, it was not the cause. David ultimately tarp less inflation tarp legislation congress, buth initially failed to pass the house. What did you think when it failed . Fmr. Sec. Paulson we had a number of terrifying moments and that was one of them. Heres the best way to describe it. For months, we wanted to go in get these fiscal authorities. It was a big thing for the president to authorize this because there was no way you wanted to go in say we have an emergency and give us these authorities and not get them and be naked with nothing can do to stave, to prevent the meltdown of the Financial System. Congress thent to cupboard was bare. The president needed to look ben bernanke in the eye and have him assure him there were no authorities the fed had. There was nothing more we could do. We had to get these authorities. David the legislation was designed to buy assets initially, but you ultimately decided not to buy assets but to inject money into various banks. Fmr. Sec. Paulson i felt putting capital in banks the only way i knew to do it was to nationalize banks. When you do that, it is a very costly thing to do and it precipitates other bank failures. I wanted to avoid that. That it washeory these illiquid Mortgage Securities that were clogging up the credit markets. Wouldbought them, it increase capital and recapitalize the banks. The situation worsened. Failures inuge bank the u. S. So when i went to the president and basically said, guess what . Illiquid asset purchases are not going to work. He said it, you told the world that is what you are going to do. We had to explain we made a mistake and we need to put capital in the banks, and that is what we did. David the Banking System came back. As you look at the system today, could something that happen again . Are we better able to protect against Something Like that . Fmr. Sec. Paulson our Financial System are much is a much stronger. It is much less likely. There is less dry tender to tort a fire dry tinder start a fire. But i hate to say this, but we dave less authorities we ha then. Regulatory system and authorities have been put in place after the depression when there was a run on banks. We had a situation where 60 of credit was flowing outside of the Banking System. David you worked with ben bernanke and tim geithner her, head of the new york fed. In the Current Administration, there has been tension between the treasury, the fed, and the white house. Can you comment on whether the fed is sufficiently independent . Fmr. Sec. Paulson the thing i am most proud of was that this was this solution came on a bipartisan basis. The last two Times Congress has acted on a bipartisan basis on anything consequential was tarp. Situation,he current i never want to bet against what we can do during a crisis. I do know Stephen Mnuchin is very competent and understands Financial Issues. I have a very high regard for the chairman of the fed and i believe that if we had a crisis, they would figure how to work together. David any regrets in this career and what would you see as your legacy . Fmr. Sec. Paulson if we hadnt had the financial crisis, i set up the first Environmental Department of treasury. I raised Clean Technology funds to be housed at the world bank. President bush had said i could work on coming up with some standards for Carbon Emissions because there are a lot of problems in the carbon market. There are plenty of things i would not do if i had not been waylaid by the financial crisis. Life toe honor of my serve my country during a time of crisis and help us get out of it. David thank you for an interesting conversation, hank, and for your career and service to our country. Fmr. Sec. Paulson thank you. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. 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