Stacy Carlson in her Treasury Building office.
In “You, Me & the U.S. Economy,” Carlson writes about her experiences as former Treasury Secretary Henry Paulson’s speech writer from 2007 to 2009, when the nation’s economy headed for meltdown and the stock market could rise and fall with every word she wrote. In her first book, Carlson also explains in a plainspoken manner about what caused the crisis.
Paulson, President Bush’s third and final treasury secretary, writes in the book’s forward:
“We knew that the words we chose would play an enormous role in determining whether we would be successful. My communications team at Treasury was essential to meeting this challenge, and my speechwriter, Stacy Carlson, was a pivotal part of that team. … it was very difficult, in the midst of an unprecedented financial crisis, to educate the American people about all of the complex subjects that caused the crisis.”
Carlson came to the Treasury Department job with an MBA from Stanford University and years of experience in the banking industry. In between, she was a lobbyist in Washington, D.C., founded the business writing firm Invisible Hand LLC, served as the executive vice president of global government affairs for the Motion Picture Association of America, and was a member of California Gov. Arnold Schwarzenegger’s senior Washington staff.
She cut her political teeth as a teenager in Bakersfield working on Republican President Gerald Ford’s 1976 reelection campaign. Her first paying political job was as an intern and later legislative assistant on Bakersfield Congressman Bill Thomas’ Washington, D.C., staff. In late 1984, she returned to Bakersfield to work as newly elected Kern County Supervisor Roy Ashburn’s chief of staff, before entering graduate school. She also worked on George Bush’s 2000 presidential campaign and was a member of his transition team.
Carlson knew her way around Capitol Hill and politics when a friend told her Paulson was looking for a speech writer in 2007. Although she admits the speech-writing experience on her resume was a bit thin, the man she replaced, who was leaving to go to law school, assured her the office pace “was pretty slow” and he often had months to work on projects.
Carlson was in for a rude surprise. Filling her book with a good deal of humor – much of it pointed at herself – Carlson wrote about the stress of keeping up with the dire, breaking news.
“I wasn’t an expert in anything, yet was expected to write expertly about everything,” she wrote, adding that there “were days when I chewed erasers off pencils and the inside of my cheek until it was raw. I smoked too much and swore I would quit, tomorrow.”
Economic warning signs had started to appear when Carlson was settling into her tiny Treasury Building office. But “we were still optimistic. People were working, buying houses, getting raises,” she wrote.
“Who knew that 15 months later, lack of trust and confidence would push us to the brink of financial meltdown?”
She recalled that by the summer of 2008, “We watched the housing market and thought it would bottom out soon. We expected to speed down the economic highway for the foreseeable future, and the August recess waved like a good friend with a beach house and a boat drink.”
But with the presidential election fully underway, home prices continued to fall, home mortgage lenders were going out of business and two Bear Stearns subprime mortgage hedge funds were about to go bankrupt. By the fall, the clouds over the U.S. economy were very dark.
As Paulson and others in the Bush administration scrambled to head off a catastrophe, Carlson wrote that she “was the silent scribe and witness to acts of courage, clarity and confusion.”
“At Treasury, the lead writer was called the person ‘with the pen.’ … I became [Paulson’s] pen: not his muse, not his advisor, not his whisperer. I needed to be quiet and to be confident. I needed to do my job.”
Carlson listened intently. She turned even some of the treasury secretary’s “throwaway phrases” into quotes that were repeated around the world.
“At one point [Paulson] put his hands on the table, leaned forward and said, ‘People are impatient; they want results.’ From that I wrote for his [U.S.-China talks] opening statement: ‘Americans have many virtues – we are hard-working, innovative people – but we are also impatient.’
“That sentence was the key news bite in the Dow Jones wire, the AP and in Time magazine’s ‘Verbatim’ column. I would never have captured that sentiment if I hadn’t listened differently.”
She admits in her book that she struggled with the complexities of some of the topics she wrote about. She draws on her Bakersfield roots to laugh at herself about that.
“What I knew about China, I’d learned in books, movies and my first job as a hostess at Bill Lee’s Bamboo Chopsticks in Bakersfield, California,” she wrote, recalling that Mrs. Lee “sat on a stool at the cash register and yelled at me in Chinese. I vaguely recalled Nixon going to China and something about ping-pong.”
“I would eventually write about every issue Treasury touched, yet wouldn’t ever be wholly a part of anything except the words,” she wrote. “Sometimes I was as much a translator as a writer, trying to turn policy wonkese, the dense language of experts, into understandable English.”
And that is what she tries to do with her 225-page book, which includes a glossary, or listing of definitions of sometimes mind-boggling concepts and alphabet soup financing programs.
In a recent interview, Carlson was asked to list four top lessons she hopes people will learn from reading her book. They were:
“There is plenty of blame to go around. President Bush said ‘Wall Street got drunk.’ That’s true, but Washington, with reckless housing policies, and the failure to catch the problems through regulation, and Main Street, with reckless borrowing and debt, hoisted a few, too.
“There are always economic cycles – what [the treasury secretary] used to call the ‘economic gravity’ of what goes up does come down. Don’t think we can defy economic gravity, but instead prepare for it by saving and keeping debt low so your entire personal wealth isn’t at risk.
“There is no substitute for prudent risk management. That was a big failure at ‘regular’ (FDIC regulated) banks, investment banks, Fannie Mae, Freddie Mac.
“If we’re better informed about how banks and the economy works, then we’ll make better decisions, and demand our elected officials make better ones, too.”
Carlson acknowledged in her book that the country had grown tired of “Hank Paulson, George Bush and most all of us Republicans.”
But to the end of his tenure, Paulson continued to work hard and Carlson continued to write. “Hank’s last speech on Jan. 7, 2009, laid out possible treatments for ailing mortgage giants Fannie Mae and Freddie Mac, treatments we wouldn’t be around to administer.”
With the change in administration, Carlson turned out the lights in her Treasury office for the last time in January 2009, turned in her security badge and returned to her Alexandria, Va., home to restart her freelance writing business.
The concluding pages of her book capture the mood. She recalled a reporter asked Paulson how he thought history would treat his tenure. Paulson responded that history will have to figure that out. All he knew was that he did his best.
“That included sweeping government intervention to avoid a complete financial collapse, which opened the door to bailouts and blame,” Carlson wrote. “Politics played a part in the final weeks, but not in the way you’d expect. President Bush said he felt ‘a sense of obligation to my successor…we’re in a crisis now…but I don’t want to make it even worse.’”
Carlson concluded, “We were well-intentioned and fallible. The country had sped down the economic highway with the windows down and the radio on, and ran into an inevitable wreck. As we survey the damage and its causes, I hope we learn the right lessons.”
This article by Dianne Hardisty appeared first in The Bakersfield Californian on March 21, 2010.