A Fighting Chance

Insiders Don’t Criticize Insiders

By the time our February report came out, America had a new president. This might have been a moment for a new direction in economic policy and a chance to rethink the bailout strategy. But the crisis was still accelerating, and the economy remained on the edge of collapse. After his election, President-elect Barack Obama had quickly signaled that the new administration would continue Paulson’s strategy, especially with his choice for a new Treasury secretary: Tim Geithner. As head of the Federal Reserve Bank of New York, Geithner had worked as a regulator of the Wall Street banks for years, and in 2007 he had been approached about becoming CEO of Citibank. He was experienced with bailouts, too: in the spring of 2008, he had managed the rescue of Bear Stearns, and as the markets collapsed in the fall of 2008, he had worked alongside Secretary Paulson to engineer the bailout for insurance giant AIG.

The COP panelists met with the new secretary a few times during his early months on the job. In mid-March, the story broke that AIG had paid $168 million in bonuses—bonuses that would go to employees in the very same division that had brought the company to its knees. People were furious; one Republican senator called for the AIG executives to either “resign or go commit suicide.”

COP was expanding its investigations, and we were starting to make a stir about what we saw as the shortcomings of Treasury’s approach on the bailout. I started hearing that many Washington insiders were surprised (and some were aggravated) that we were going just as hard on the Democratic administration as we had on the Republicans, but I wasn’t going to stop and worry about that.

In early April, I got a call from the office of Larry Summers. I didn’t know Larry well, but I’d met him a few times while he was president of Harvard in the early 2000s. According to reports, Larry had been Tim Geithner’s mentor when they were both in the Treasury Department in the 1990s. Now Larry was the director of the National Economic Council, which meant that, along with Secretary Geithner, he advised President Obama on economic issues. Would I be interested in meeting him for dinner?

Sure, I replied. Larry’s office suggested the Bombay Club, an Indian restaurant near the White House. Quiet and softly lit, it served Washington’s power elite.

When Larry arrived for our dinner, he ordered a Diet Coke as soon as he sat down. He glanced at the menu, ordered quickly, and soon the food started coming.

It was a long dinner, with plenty of intense back-and-forth about everything from the bailout, to deregulation, to the foreclosure crisis. I also talked to Larry about an idea I’d been working on for a new consumer financial agency, and he seemed interested. We didn’t agree on everything, but I give Larry full credit: I’ll take honest conversation and debate any day of the week over the duck-and-cover stuff I so often saw in Washington that spring.

Late in the evening, Larry leaned back in his chair and offered me some advice. By now, I’d lost count of Larry’s Diet Cokes, and our table was strewn with bits of food and spilled sauces. Larry’s tone was in the friendly-advice category. He teed it up this way: I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People—powerful people—listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.

I had been warned.





Jon Stewart

I had been doing short interviews about the bailout and COP’s work for several months, but I was still nervous about appearing on national television. On April 15, a week after my dinner with Larry Summers, I had more than a bad case of nerves.

It was early evening. I was standing in the tiny guest bathroom near the set of The Daily Show with Jon Stewart. I glanced nervously at the front of my jacket to see if it was clean. I examined my face closely in the mirror, specifically my mouth, nose, and chin. I had just vomited.

I blotted my face with wet paper towels, and then I was hit by another wave of nausea. As I leaned over the toilet again, I wondered if I had messed up my lipstick and powder. The show’s makeup person had already fluffed and buffed me for the show, and I didn’t want to have to explain why I needed repairs.