Paulson and Bair, Together Again
CHESTERTOWN, MD—Sharing a stage at Washington College Thursday night, former FDIC Chair Sheila C. Bair and former Treasury Secretary Henry M. Paulson, two of the policymakers who steered the nation away from disaster during the financial crisis, looked ahead to the economic and environmental challenges that will define the future for today’s college students. Topics for discussion included climate change, outdated fiscal policies and college affordability.
The event was moderated by John Harwood, Chief White House Correspondent for CNBC. The participants were introduced by Atlantic editor at large Steve Clemons. Described by Clemons as “economic gladiators,” Bair and Paulson assessed the effectiveness of American leadership and considered what it would take to make real systemic change, particularly in tax code reform and stagnant wage growth.
Paulson called climate change “a huge economic risk,” and said those who discount the science behind it “have to be pretty sure that you’re right to not want to take out insurance when you look at some of the outcomes that are possible.” While acknowledging that taking action on the environment, and specifically carbon emissions, will cause “dislocations” in certain business sectors, he said that the past has shown that ultimately such action helps a country’s long-term economic growth.
“I lived through it in this country at the time of the Clean Air and Clean Water acts. I heard businesses screaming that it was going to hurt our competitiveness, and guess what, it enhanced it,” he said. “So I think the two can be balanced.”
Paulson also said that countries that drive sharp economic growth without regard to the environmental impact will experience growth that is unsustainable. “That’s what China is seeing right now,” he added.
Responding to a question from Brad Janocha ’16, about college debt for graduating seniors, Bair said that one of the major thrusts of her presidency at Washington College will be “a razorlike focus on philanthropy for scholarships, so when students can’t meet costs they can find scholarships instead of borrowing money.” With tuitions so high across the country, even middle-class and upper-middle-class families can struggle to cover college bills, she added.
At the close of the event Bair and Larry Culp, chair of the College’s Board of Visitors and Governors, surprised Paulson with an honorary doctorate of laws and environmental policy.
This was the first joint appearance for Bair and Paulson since both left government service, and it kicked off the official celebration of Bair’s inauguration as the 28th president of Washington College, a private liberal-arts college founded in 1782 in Chestertown, on Maryland’s Eastern Shore. Bair will be officially installed in a formal ceremony Saturday morning, Sept. 26.
Prior to his appointment at Treasury, Paulson built a 32-year career at the investment firm Goldman Sachs, rising to the top executive spot. Since leaving the Treasury in 2009, he has focused his energies on environmental issues and America’s business ties with China. In 2011 he founded The Paulson Institute, a non-partisan think tank that fosters international sustainability efforts and closer collaboration with China’s government and business leaders on responsible economic growth. He also is a co-chair of the Risky Business Project, which quantifies and publicizes the real and potential economic impacts of a changing climate. His 2010 book On the Brink details his experiences as Treasury Secretary. His latest, Dealing with China, published in April 2015, discusses the evolution and future prospects of China’s state-controlled capitalism.
After leaving the FDIC at the end of her term in 2011, Bair was named a senior fellow at the Pew Charitable Trusts, where she still chairs the Systemic Risk Council, a public-interest group formed to monitor the implementation of financial reforms. A regular contributor to Fortune, she continues to share her expertise as a speaker, media guest and news commentator. She chronicled her time at the FDIC in the bestselling 2012 book Bull by the Horns and in Bullies of Wall Street, published in April 2015 and targeted at young adults.
Photos by Chris Gardner.