Spring 2019 meets with former White House Chief of Staff Josh Bolten
The 2008 financial crisis is perhaps the most important event of our current students’ lifetime. (Remember, this is the first year in SEGL’s history when nearly all our students were born after September 11, 2001.) Yet even basic financial knowledge–let alone terms like mortgage-backed securities and credit default swaps–is beyond the scope of most high school educations. Given this, how can we avoid such devastating events in the future, and if they do happen, how can we ensure the next generation knows how to respond? These twin questions guided our case study this week.
We began with a basic introduction to finance, with emphasis on the areas that most experts believe helped cause the 2008 crisis: What are banks? What is the Federal Reserve? What is inflation, and what are interest rates? What is a loan, what is mortgage, and what types of mortgage are there? We ended with the challenging concept of a mortgage-backed security, why so many had faith in them, and why they were riskier than most thought. The session was full of questions (a classic: “Why can’t the government just print more money?”), revelations (the compound interest danger of paying only one’s credit card minimum each month), and more.
Our first speaker was set to be Wendy Edelberg, Associate Director of Economic Analysis at the Congressional Budget Office. Edelberg was the Executive Director of the Financial Crisis Inquiry Commission, which Congress created to investigate the causes of the financial crisis. Before that she worked at the Federal Reserve and White House as an economist. Last-minute changes twice postponed our conversation, but we are set to speak with her later this month.
On Friday afternoon, we traveled to the Business Roundtable, and organization of the nation’s top CEOs, to meet with former White House Chief of Staff Josh Bolten. Bolten was Chief of Staff during the financial crisis and as such had a front-row seat at one of George W. Bush’s most momentous decisions as President: should he go against core Republication principles (and bipartisan opposition) and advocate sending $750 billion to Wall Street banks? His story was riveting, filled with descriptive details, and it generated fascinating and insightful questions from around the conference table. (Before he began, his previous meeting’s guest poked his head in and treated us to a few jokes…it was none other than George W. Bush’s famous–and sometimes controversial–Senior Advisor and Deputy Chief of Staff, Karl Rove!)
Our BRT visit ended with a unique view of the U.S. Capitol from the organization’s conference room. On the way down the elevators, more than one student called Bolten the best speaker of the semester…at least so far!