THE TREASURY SECRETARY

Her voice is hoarse. Not because she's sick, she tells me, but because she just came from a rowdy banquet dinner where she had to yell to make herself heard.

"It sucks, because it's not like the conversation was any good, anyway," she says. "The people who work in banking and finance are the least interesting, least competent people in the world. And these are the clowns who get to run the show during a financial crisis."

How much do you know about the policy response to the '07–'08 financial crisis?

I know about TARP, and "quantitative easing," and all that. But I've never really understood the details, to be honest.

Well, most people don't. But a little over a decade ago, all the leadership from those days started coming out of the woodwork and talking about what was actually happening behind the scenes back in 2007.

Hank Paulson was the Treasury Secretary at the time. Ben Bernanke, Chairman of the Federal Reserve. George W. Bush, President.

These clowns had more power over the global financial markets than any other humans in history. And they admitted in on camera interviews that they had no fucking clue what they were doing. Bush sat there and said, essentially, "I thought the whole system might go down, so I just approved whatever plan the Treasury guys put in front of me."

People who worked with Hank Paulson say he was puking in a trashcan at his desk as Freddie Mac and Fannie May collapsed. He was that scared.

Paulson says he isn't even the guy who came up with the plan for what to do with the TARP funds.

You can look this up, man. He admits it!

Who came up with the plan?

Warren Buffet. The richest man in the world, at least at that time.

He called up Hank Paulson in the middle of the night to tell him what he should do. See, the markets were collapsing, banks were running out of capital, and nobody could figure out how to "restore investor confidence."

If you tried to bail out individual banks as they got close to running out of cash, the markets would see that and take it as a sign that things were hopeless for that bank. Bad PR. And potentially devastating to your stock price. So nobody wanted to take the money, even the institutions who needed it. There was a real risk that we'd have a liquidity crisis that ran across the entire country, but

Buffet suggested the idea of forcibly injecting capital into all of the big banks. Just make them take money and sign a contract to repay the loan, with interest, in the future. That way they'd have healthy reserves when they most needed it, along with a sense of stability.

Hank did as he was told.

He took $250 billion that congress had approved through the TARP program and called the CEOs of all the big banks together. And he had them to sign this little one page document—a legally binding agreement that they'd each take billions in loans from the government.

The documents they signed are out there. You can look 'em up. They literally used a pen to write in the name of each institution and the amount of money they'd take. Goldman Sachs: $10 billion, Bank of America: $15 billion, Wells Fargo: $25 billion. The list goes on.

A lot of people remember that story—or the vague details of it that they could understand at the time—and think of it as just a big rip-off. Taxpayer money, funneled to these elite bankers. Bush's approval rating tanked even further than it already had.

It wasn't a popular move. But it was necessary. One hundred percent.

Now, I'm not gonna try to tell you that move solved the '07–'08 financial crisis by itself. It didn't. But it was the turning point in the war.

So, who was your Warren Buffet during the financial crisis of 2024?

Oh, we didn't have one. I called Buffet myself, to ask his advice. Admittedly, this was a longshot, given that the man was 96. He said to me, "Son, my entire life, I've only invested my money into businesses that I could understand. Commodities. Coffee beans. Or companies that make simple things that people need. Toilet paper. I don't do subprime mortgages. Or, uh, bitcoin."

He kinda got quiet for a few seconds, and then he told me what I already knew: "All the businesses that I thought I understood are now worthless, and there's not a goddamned thing you can do about it."

How'd you respond to that?

I thanked him for his time. Then he yelled, "Buy real estate!" And hung up on me.

How early in the crisis was this?

Oh, the very beginning. The same day Kobek went on TV.

Most people still didn't believe in reps, at that point. The idea was just too far-fetched.

But some people were clued in. The markets had only just started to dip, at this point, but real insiders had already been getting their money out for weeks.

Word had leaked out of the intelligence circles about the existence of the machines. I had already seen one in person myself, in a private meeting between the military brass and the President's top staff.

And a few wealthy people had been able to purchase one.

I suspect that Buffet already had his hands on a rep of his own at the time of our conversation, although he never admitted it.

He was there, but he couldn't help me. Nobody could.

Me, the President, the Chairman of the Fed… we were no better off than those fucking clowns back in the Bush Jr. days.

We were just making it up as we went along.

It was the most breakneck, buckwild, butt-fucking-nasty economic transition in history. There wasn't an economist on this green planet who'd thought seriously about the possibility of replicators. No white papers with charts or projections. No think tanks with policy rollout plans.

Back in those early days, there was only one type of person who really, truly understood what the reps were capable of. That was regular people who were watching these things spread, live, on the ground.

And what they were seeing was fucking terrifying.