Financial History Issue 124 (Winter 2018) | Page 11
MUSEUM NEWS
build consensus. You had to understand
the perspectives of others. Your influence
was mostly a function of the credibility
you could earn and by the quality of your
ideas. It wasn’t enough to believe you were
right.
This ability to attract talented people
willing to do these jobs is not something
you could take for granted. It’s a fragile
thing. Idealism about public service is
vulnerable to the extreme tribalism of our
politics and the systematic demeaning
of the integrity and competence of pub-
lic servants. When the experienced and
the idealistic leave and the new ones are
deterred from coming, you risk long-term
damage to the effectiveness of govern-
ment, at a time when most of the hard
things we face can’t be solved only by the
innovations of the market, but require
better policy and more effective execution.
As impressive to me as the people I
got to work with at Treasury and the Fed
was the approach to policymaking, and
decision-making, that I experienced. Bob
Rubin ran an exacting and thrilling process
of decision-making, and this was true for
the President with whom I worked most
closely, as well. This approach to choices,
to policymaking, to decision-making, was
characterized by a relentless search for
the best of the bad options, skepticism of
the easy or politically expedient choice,
a rich debate among a group of people
with very diverse skills and experiences,
no tolerance for internal politicking, and
the encouraging of challenge and dissent.
It was safe to admit uncertainty. In fact,
humility in the face of what we could not
be sure of was the price for a seat at the
table. It was a competition for ideas, but
without people being paralyzed, frozen,
afraid to act.
At the New York Fed, I found a ter-
rifically capable group of people, and of
course I had the exceptional fortune of
working with Hank Paulson and Ben
Bernanke through the most harrowing
parts of the financial crisis. We trusted
each other. We debated everything. We
worked together, not against each other.
We approached these choices by honor-
ing the tradition Bob used to call — or
still calls — probabilistic decision-making,
which involves examining the relative
chances of the full range of policy out-
comes, including the most forbidding;
trying to choose the best policy option,
that had the highest expected value, the
option that, if you were wrong, still left
you with some freedom to change course.
His lessons in preserving optionality are
legenda