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THE
WHITE HOUSE
Office
of the
Press Secretary
MAY
2 2
2003
National
Commission
on
Internal
Transcript
May 8
INTERVIEW
OF
ASSISTANT
TO THE
PRESIDENT
FOR
ECONOMIC POLICY
AND
DIRECTOR, NATIONAL ECONOMIC COUNCIL LARRY LINDSEY
BY
STEVEN BRILL
Dr.
Lindsay's
Office
Q And
there
are two
areas
of
interest
I
want
to go over.(Inaudible.)
One is just the immediate day of
9/11,
theimmediate days thereafter,
how we got the
markets back
up.(Inaudible.)DR.
LINDSEY:
Right.Q My understanding is
that
you -- (inaudible.)DR.
LINDSEY:
Yes."
I
don't
knowif thewordis
"frustrated."
I mean -- the President
laid
down, I thought, avery important (inaudible),
that
hewantedthecountryto getback to
normal.
(Inaudible.) And to show you -- I have arelated story to
that.
I was
scheduled
to
address
the
Bond Club
of New
York
on
9/13.
This
is --
they're
not
spot traders, it's sort
of --
(inaudible) --financial
groups.
They calledon9/12.Isaid--(inaudible).
I
said,
I'm
coming.
I
couldn't quite figure
outhow I was
going
to get -- (laughter.)
(Inaudible)
--
couldn't
fly.
Probably I could have gone on the train.
We
ended
up not
doing
it
because
as
9/12
wore
on, you
know,
the
realization of just how big the losses were for
that
community
and all the
rest
--
anyway.
So I
think
the
word
"frustrated"
-- you
know,
it was
more,yes, we had a clear objective, but we also had a very, very toughsituation. And Marc Sumerlin, my deputy, got a -- and ElectricBob got a generator up to open one of the
exchanges.
Marccommandeered a tugboat at one
point.
(Inaudible.)
We had to get
a
clean air waiver to run the generator.
There
were all these,
you
know,
little
things
that
had to --
Q
Which exchange?DR. LINDSEY: I think it was
mere,
the (inaudible) --smaller
exchanges.
(Inaudible) -- wide load permits, because we
000231
 
had
to get it up 95. I
mean, just
all -- I
went
home
and
told
my
wife,
at one
point
in the
next week, because
a lot of
these
little
things
(inaudible).
It was
like
(inaudible),
because
youhad
to
get,
you
know,
(inaudible), or
whatever
the
problem was.
And it was all
these little
-- and
thank
God we
have
a
marketeconomy that does
it
most
of the
time.
So it was -- it was not -- you
know,
I
didn't
have
any --there
weren't
any
textbooks about what
to do.
(Inaudible.)
No,I
think what
we did was
face
the
challenges that
all
develop(inaudible)
situations.
We had the
(inaudible)
problem
with
theauto
factories.
I
mean,
it was -- it was --
(inaudible).Q (Inaudible.)
DR.
LINDSEY:
Yes.
I
called
--
that
was
actually
the
first
set
of
calls
I got
from
(inaudible).
And the
auto industry
--
(inaudible).
I
think
it was
from
GM and -- it may
have been
-- I
don't
remember
(inaudible).
It was a lot
happening.
But,anyway,
the
problem
was
there
was 11
hours
(inaudible).
That
was
how
they operate now, because
it's
called
(inaudible).
And, yes,
you
know, it's nice theory, nice buzz word.
But 11
hours
is 11
hours.The
problem
was
that
our
guys,
our
customs agents werelooking
out (inaudible). (Inaudible) was
very,
very
long.
The
police
in
Windsor. (Inaudible)
out of the
city,
because theyneeded traffic
to
flow
in
downtown Windsor.
It
actually
was an18-mile
backup
of
trucks waiting
to
come across
the
border.
And the
first
thing
we had to do was the
classic
fog of warproblem,
where
all
people were saying
on the
ground, there
is no
problem.
(Laughter.) The
Michigan people.
The
(inaudible)
issueis
yes, there
is a
problem,
and we had to
resolve
that
one.
But,
you
know,
it
worked
out
very quick.
I
think everyone pulled
together.
By the
next Monday
the
auto plants were back
to
normal
--
given that
you had to
make
up for a -- it was
quite
a -- but
everybody worked together.
•I
think
the
same thing
is
true with
the
exchange
(inaudible).
I
know Peter
was on the
ground
in New York.
Q
(Inaudible.)
DR.
LINDSEY: Well, there
was a
question about
--
I'm
sure
he
told
you -- you
know,
a
certainty issue,
as
well.
We
didn'tknow what
the
volume
was
going
to
be.
And
there
was a
pointwhere
we
could have reopened them
a
little earlier,
but if the
volume
went
to a
certain level
-- and we had to
make
a
decisionwhether
it was
worth opening with
a
chance
of
having
to
shut
down,
which
we all
agreed
was the
worse thing
to
have happen,
or
whetherwe
wanted
a
little
certainty
that
we'd
make
it.
000232
 
And we did not even have 100 percent certainty, I
don'tthink,
the day we
opened.But, fortunately, (inaudible).
But wemade
it.
Q
What about
the
issue
of --
DR.
LINDSEY:
(Inaudible)
--
back
to the
other (inaudible).(Inaudible.)
If I had one big
(inaudible)
-- is you
know
why we
won the Cold War. When you have decisions having to be made in aroom like this, or
wherever
it is, it
maybe
works
for a week, itmaybe works
for 10
days
-- it
doesn't
work very longer than that.So thank goodness we have a market economy.
That's
wheredecision making is decentralized. It's the only way any kind ofmodern (inaudible).
(Inaudible)
toomuch persuasion aboutit, but itreallypersonalized
-- I
mean, there
you
were seeing
at
least
a
taste
ofthe
alternative. Because
the
uncertainty
-- in an
uncertainsituation people pull back
and
they tend
to
look
for
direction
and
things like that.
Q
(Inaudible.)DR.
LINDSEY:
Well,
they
don't
know; wedidn'tknow. We
didn't
know what
was
going
to
happen.
Q
(Inaudible)
--
insurance.
There
are two
things going
on
(inaudible).
First
of
all,
the
President
and the
Secretary
ofState--
(inaudible).
(Inaudible.)DR. LINDSEY: I think the insurance industry (inaudible),
and
they made
it
really without prompting,
the
right decision,
which was to
make good
on
their promises.
Q The
first
one out of the box was
(inaudible).
Did you
know that
was
going
to
happen? (Inaudible.)
DR.
LINDSEY:
I'm trying
to
think.
I
knew
we
were
gettinggoodnews.
I
think
it may
have been
the
insurance industry
--
(inaudible).
(Inaudible)
--
just said,
we
understand
the
problem
or
something
(inaudible). (Inaudible.)
Q
You had a meeting, I guess, the week after theinsurance executives.
(Inaudible.)
MS. BUCHAN: (Inaudible.)DR. LINDSEY: Yes,
that
was confirming what hadalready
--
Q
They
had
already done
it. And my
understanding
was --(inaudible).
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