GUY RAZ, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.

At midnight tonight, the Troubled Asset Relief Program expires. It's better known by the acronym TARP. And in the minds of many, many Americans, well...

Senator JUDD GREGG (Republican, New Hampshire): It's a four-letter word, by definition, TARP.

RAZ: That's New Hampshire Senator Judd Gregg, a Republican. Shortly after Lehman Brothers collapsed on September 14, 2008, the White House called him with an urgent request. Treasury Secretary Henry Paulson wanted to see Gregg and a small group of influential members of Congress. And when the doors closed, Paulson stood up to address the members, and according to Gregg said:

Sen. GREGG: We were on the verge of a cataclysmic event.

President GEORGE W. BUSH: Given the precarious state of today's financial markets and their vital importance to the daily lives of the American people, government intervention is not only warranted, it is essential.

RAZ: The Bush White House was asking Congress for money, lots of money, $700 billion to keep America's financial system from collapsing. And Judd Gregg could barely believe his ears, in part because he's an old school Yankee Republican.

Sen. GREGG: It was inherently inconsistent with conservative thought that the government would step into a situation like this. So I had to convince myself first.

(Soundbite of laughter)

RAZ: Eventually, more than 700 banks would receive federal money.

Mr. FRED CANNON (Keefe, Bruyette & Woods): Citibank, Bank of America, JPMorgan, Goldman Sachs.

RAZ: That's Fred Cannon. He's reading the names of some of those banks. He works for a finance firm called Keefe, Bruyette & Woods. And he puts out a regular report called TARP Tracker.

Mr. CANNON: Farmers Capital Bank Corp. in Kentucky, Eagle Bank Corp., Umpqua Holding Corporation up in Oregon.

RAZ: Now the thing about TARP is that the government expected taxpayers to lose money on it, to lose as much as $700 billion. But in the end, it cost about 50 billion. And it's quite possible that if the government gets all the money back with interest, there could be a profit, which is why Judd Gregg can't understand why the program has become so unpopular.

Sen. GREGG: The actual caricature of the term TARP has come to represent something that the actual program didn't do and wasn't supposed to do.

RAZ: It wasn't a stimulus, as some people...

Sen. GREGG: It was neither stimulus, nor was it a expenditure of tax dollars for the purposes of helping the fat cats on Wall Street. It was an expenditure of tax dollars, all of which to the extent they went to large financial institutions, and even middle-sized financial institutions, have been returned. Those dollars have been returned to the taxpayers with interest.

So this is one of the few programs in the history of this country where the taxpayers made an investment. It did what it was supposed to do, which was stabilize the financial industry, and they got their money back with interest.

Professor JOHN COCHRANE (Finance, University of Chicago Booth School of Business): I think TARP was basically ineffectual.

RAZ: That's John Cochrane. He is a professor of finance at the University of Chicago's Booth Business School. And he believes TARP was a dangerous risk.

Prof. COCHRANE: The biggest downside of it is now we have the expectation that the government will always bail out all banks. That's something that's going to plague us for a while in the future, though it didn't particularly make a big difference right then in the heat of the crisis.

RAZ: Now most economists, like Alan Blinder, the former Fed vice chair, and Mark Zandi from Moody's, disagree. They didn't necessarily like TARP, but they say it was necessary.

And that's how Neel Kashkari felt. In 2006, a few years before the crisis, he was a mid-level employee at Goldman Sachs when Hank Paulson, the chairman of Goldman at the time, was tapped to become the next Treasury secretary.

Mr. NEEL KASHKARI (Former Interim Assistant Secretary, Financial Stability, Department of the Treasury): Since I was a little kid, I'd always had an interest in government. And when President Bush selected Henry Paulson to be Treasury secretary, I basically called him up and said, look, I want to come with you and be helpful to you in any way that I can. I don't care what job you give me. I just want to come there and learn about government and make a contribution.

RAZ: What did you do? You just, like, looked in the company directory and looked up Paulson, who happened to be the chairman, and he picked up the phone?

Mr. KASHKARI: I left him a voicemail, actually.

(Soundbite of laughter)

Mr. KASHKARI: He was a prolific user of voicemails. And so I left him a voicemail, explained who I was. He returned the voicemail the next morning. And a day later, I was interviewing with him when he was then sitting in the executive office building next to the White House before he was confirmed to be secretary of the Treasury.

RAZ: For two years, Neel Kashkari worked in relative obscurity as an assistant Treasury secretary. And then, in the fall of 2008, panic.

Mr. KASHKARI: It was just after Lehman had failed. Lehman failed on Monday, September 14. We'd been working for months and months, trying to put out the fire, seven days a week, all hours of the day.

And at that point, we realized that our worst fears were potentially coming true - the potential for a global financial collapse that could literally plunge our country into a repeat of the Great Depression.

And at those moments, I just kept reminding myself that being scared or panicking is not going to help us. All we can do is try to do our very best, do our job and pray and hope that we will be able to stabilize the financial system. Those are the days we decided to go to Congress and ask for this unprecedented TARP authority.

RAZ: But you were scared.

Mr. KASHKARI: We were terrified. We were terrified. I mean, I had a mortgage, and I was terrified that, you know, if the money markets collapsed, and they were showing real signs of stress, I wouldn't be able to get my own money out to pay my own mortgage. And I often thought about maybe I should move money out of the money markets.

But then I didn't do that because I thought it would have been unethical for me to do that because I had an information edge over the American people. And so if the financial system had collapsed, all Americans would suffer.

RAZ: The day Paulson went to Congress to ask for the $700 billion, he called up Kashkari, who at the time was just 35 years old. And he asked him if he'd be willing to create and then run what would become TARP. And overnight, the obscure Neel Kashkari was thrust into the national spotlight.

Mr. KASHKARI: One of the things that makes our country great is our cultural beliefs in fairness. And that if you take risks, you should reap the rewards. But if you take risks and you fail, you should bear the consequences.

And so we had to turn that on its head to bail out the financial system. And so this elicited deep, deep anger in people across the country, and that was reflected in members of Congress. And so when I went to testify, I was now one of the faces of this program.

I had to do my best to explain what we were doing and why we were doing it, but I also had to represent us and show us that I understood the American people's anger, I understood how deeply unfair this crisis is, but we had to stabilize the financial system, because if we failed, it would be the American people who would bear the consequences of that.

RAZ: But you also had to sort of become a punching bag, right?

Mr. KASHKARI: I did. I mean, it was an opportunity for members of Congress to vent the anger that they were hearing from their constituents. And because I was a young man at 35 years old, I think they felt it was appropriate for them to take it out on me, which is fine.

I sat up there, I think, in total for about 25 hours of testimony, most of which was exceedingly hostile.

Representative ELIJAH CUMMINGS (Democrat, Maryland): Mr. Kashkari, in the neighborhood I grew up in, in the inner city of Baltimore, one of the things that...

Mr. KASHKARI: I remember when Congressman Cummings from Maryland asked me if I was a chump.

Rep. CUMMINGS: And I'm just wondering how you feel about an AIG giving $503 million worth of bonuses out of one hand, and accepting 154 billion from hard-working taxpayers. All these other people who are lined up, they say, well, is Kashkari a chump?

Mr. KASHKARI: And I remember just scratching my head, thinking to myself, did he really just call me a chump? Am I - or did I just imagine that?

RAZ: So, wait. So these - a lot of these members of Congress would grill you, and then what would happen after the testimony?

Mr. KASHKARI: Oftentimes afterwards, when the cameras were off, they would take you into a back room and tell you that they really appreciate how hard I was working or our team was working and that they support us and our programs, and let us know if they can be helpful.

It was a 180-degree change from what they were showing in front of the camera. That obviously surprised me, but eventually, I got used to it.

RAZ: Describe your kind of state of mind and your state of health at the height of running TARP. I mean, you gained weight. You were eating terrible food. What was you weren't sleeping. Describe what your life was like.

Mr. KASHKARI: We were working seven days a week, 18 to 20 hours a day, week after week, month after month, and, you know, no time for exercise, eating whatever fast food I could get my hands on. And it wasn't just me.

You know, one of my deputies, a wonderful man named Don Hammond, who works at the Federal Reserve, he literally had a heart attack on the job after working 40 days straight.

And so the wonderful news for all of us is that he - we were able to get him to the hospital, and he survived, and he made it, and he's healthy, and he's doing well today, which is great.

But it took an enormous burden not just on me, but all of the many, many, many civil servants who just wanted to do everything that they could to serve their country.

RAZ: You eventually had to just get out of Washington when it was over.

Mr. KASHKARI: I did.

RAZ: And you didn't just get out. I mean, you went to a pretty remote place for a while. Why did you feel like you had to do that?

Mr. KASHKARI: Well, after three years in Washington, it was a tough three years even before the crisis, but certainly the two years of the crisis. I needed to take about six or seven months off with my wife and live in the mountains of Northern California and just what I call detox, get Washington out of my system, get back in shape. It was just - it was necessary therapy for me after what we all had gone through.

RAZ: I've read about your sort of youthful obsession with government from a young age, right, watching the Iran-Contra hearings and just being fascinated and riveted by all of it. Are you kind of cynical about it now, do you think?

Mr. KASHKARI: I'm of two minds. On one hand, day to day, I am cynical of Washington and the politics, and people more focused on maintaining their popularity or getting re-elected than they are doing the people's work.

At the same time, in the depth of a national crisis, in September 2008, I saw Washington at its finest. I saw, and I was part of, Democrats and Republican leaders coming together to do something deeply unpopular, but yet absolutely necessary for the sake of our country and for the sake of the American people.

So on one hand, I'm skeptical and disheartened by the day-to-day politics of Washington. On the other hand, I've seen Washington work, and I know that it can work at least in times of crisis. I hope we can make it work in other times as well.

RAZ: That's Neel Kashkari. He created and then ran TARP from October 2008 to May 2009. He now lives in Newport Beach, California and is an executive at the financial services firm PIMCO.

Neel Kashkari, thank you so much for telling us your story.

Mr. KASHKARI: Thank you for having me. It's been a pleasure.

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