Turning the Tables on Sam Donaldson
Patton, Carol, Independent Banker
IB INTERVIEWS BROADCASTER SAM DONALDSON, AN ICBA CONVENTION SPEAKER
For nearly 40 years, millions of people watched him on ABC's evening newscasts, Primetime Live or This Week with David Brinkley, conducting interviews with congressional and White House officials and other newsmakers.
ICBA members will have the opportunity to meet Sam Donaldson and learn more about his White House reporting experiences during his keynote address at ICBA's National Convention and Techworld in Phoenix from March 18-22. In the meantime, ICBA Independent Banker turned the tables on Donaldson, interviewing him about his career, the economy and the media.
IB As a respected journalist who has covered Capitol Hill and the White House for a long time, can you offer any insights into how Washington or its policymaking process works that may not be common knowledge?
Donaldson Washington is a city where compromise is the way to a good life. The idea is you fight hard, you win a little bit, you get as many concessions from the majority as you can, then you go ahead and pass the bill. That used to be the case.
Ronald Reagan, contrary to his public image at the time, was a great compromiser. Not on his principles, but on getting things he wanted. He'd take half a loaf today, come back tomorrow for another slice of bread, the day after that for two more slices. Now, no one wants to move the process forward unless it has the Super Bowl trophy with it.
So the way Washington works is that everyone scratches around, tries to get something for their constituents and their point of view and their ideology. In the end, though, I hope we return to the day where the process moves forward.
IB Based on what you've heard or read, what do you think are the primary causes of the financial markets crisis?
Donaldson I subscribe to the wisdom that the prime mover is the housing market. In 1999 and 2000, we relaxed regulations that had a restraining factor. Loans were given to people who could not afford them, whom before these restraints were lifted, would not have been given a loan because they didn't qualify.
IB Do you believe Washington's bailout of the financial markets was appropriate? Will it work?
Donaldson Yes, I supported the idea that Washington needed to pour money into this economy and needed to stabilize the financial system. The Fed's tool, lowering the main interest rates, didn't work. But now people like me are made to look like fools because [former Treasury Secretary] Hank Paulson decided that won't work, that's no good. We'll do it another way.
The floundering around leads to further feeling in the country that Washington doesn't know what it's doing. This medicine we're using to try to kill the tapeworm is bad medicine. But the first thing we need to do is kill the tapeworm, then worry about whether we get rid of the residue of effects of the medicine.
IB Restructuring the financial regulatory system will be at the top of Congress's agenda this year. In your view, what should be done to reform it considering the financial markets crisis?
Donaldson We have to re-regulate it. But the danger is the pendulum very seldom swings from one side to the middle. It goes and swings the other way. I am not for a total regulation for the financial system. I believe in capitalism. [But] we can't police ourselves in any sector. I believe government has to step in as little as possible, but clearly at the moment it needs to step in.
IB Are there any giant financial institutions that have become so dangerously huge that they could jeopar-dize the stability of our country's overall financial system if they failed?
Donaldson I began to learn a little about AIG [after] meeting [AIG's former chairman and CEO] Hank Greenberg. Not only is it too big to fail, but its tentacles are so pervasive that it probably, even in good times, shouldn't have gotten into all of those businesses. …