One of the first things I discovered as President of the United States was that no decision that landed on my desk had an easy, tidy answer. The black-and-white questions never made it to me — somebody else on my staff would have already answered them. And while few decisions in life are as complex as the ones you face in the Oval Office, I did walk away from my eight years as president with some thoughts on how to approach tough questions.
In March of 2009, just a couple of months into my presidency, the economy was in freefall. Unemployment was up to 8.5 percent, on its way to ten percent. 800,000 Americans lost their jobs that month, families across the country were losing their homes, a tanking stock market was depleting their 401ks, and a difficult credit market was making it hard for small business owners to take out the loans they needed. To turn around any of this required stabilizing the financial system, and to do that, I had settled on what was the least bad of three lousy options — subjecting the 19 largest banks to “stress tests” to see whether they had the capital to survive an even worse economy.
Nobody was happy about it — not the public, not Wall Street, not me. My own advisors disagreed about the path forward, with some calling for a sharper condemnation of the bankers whose recklessness had gotten us into the mess, and others saying that such gestures might stifle the very market confidence we needed.
To get everybody on the same page, I called a meeting with my economic team. We spent a long, exhausting day hearing from Treasury Secretary Tim Geithner about how the stress tests were going, hashing out various alternatives, and pushing every idea to its logical conclusion to see if it might work. By evening, I left the meeting to have dinner and get a haircut and told my team that I expected a consensus upon my return. But the truth was that, through that grueling process, I had already reached my decision to let the stress tests bear out. Within six months, the economy would start growing again. And by the next year, the biggest banks had paid back every dime of taxpayer money — plus interest.