We sat there, the two of us, watching it on television, mostly in silence. Doing concerted, multilateral action of the type youre referring to is really only appropriate in the midst of a crisis. But Clinton did care quite a bit about it. Within a month, I remember vividly one day, I had seven radio shows. They just didnt do it. Well, when we actually re-did Putting People First, we went to Little Rock and worked on it for a few days. So Fiske came to the conclusion that nothing had happened, Starr came to the conclusion nothing had happened, and certainly, if he could have found anything, I think he would have been motivated to push it. Before we close, Id like to make one pitch though. Thats just the way history works. I was very involved in it but I was notspending probably two-thirds of my time on it. Carter had the famous $50 rebate, which became the object of much derision ultimately. I remember that very vividly, and I said, I want to do the honorable thing. I believe Greenspan went to Little Rock. Hundreds of meetings over many months, also similar to those original meetings, too many people, too long, too many people talking and so forth. So that, despite the extraordinary achievement it really was, I think may be seen by history as a small achievement. Well, that was, in retrospect, the Bill Clinton Show, and he demonstratedit was, I think, very clever in retrospect. Did you have to retestify when Starr took this over? Were you at all involved in the development of the side agreements on environmental issues and. He moved it to the center, made it the party of fiscal responsibilitywhoever would have believed that?and enabled the party to shed much of its old baggage. He knew how every member would vote. I did have the impression from the beginning that he was politically gifted and ambitious. So that resulted in my having, I suppose, a jack-of-all-trades job. I appreciate that and I think youve done us a big favor today by illuminating that. Its always a mistake to get in any kind of hassle with the Federal Reserve Board, always. So I didnt take him seriously except as in a sort of inner political context. I have to admit I didnt. and he said, No. Then, that sent the ball in motion so to speak, in terms of that being the focus of discussion, although the senior members of that group were pretty united on the fact that we should make a real effort on the deficit. David Gergen was brought, which I think was probably the fall of 93 and Panetta replaced Mackthat was an awfully big event, of course. We didnt spend a tremendous amount of time talking about, If we do this, Greenspan will do that. No, let me just correct the record. So we were not classmates, and we were not buddies in that sense, but we knew each other pretty well by standards of students who were not in the same year. That approach hasnt been able to capture a majority of the American public for 40 years and I dont think its going to capture the majority of the American public for another 40 years. Well, we were talking about lasting changes. So I think it was quite smart to be done then. Actually the bigger debate was over what came after NAFTA, welfare reform or healthcare. He just determined each time that what he had to do was get through this chapter and somehow live to fight for the next one and didnt take the longer view. But you ended up doing a lot of strange things. Very, I think, untoward behavior, myself. Thats a very important difference, because it addressed healthcare, various items on childrens policy, crime initiatives, urban policythe full span of domestic policy issues, of which economic policy was just one element. No, it never got to a vote. It was a very unusual evening, because there was a sense, as I say, we were interring the candidate. I worked in the White House another three or four months, worked on, for example, the bailout of Washington, D.C., and then the passage of the new control board type legislation and then my kids got out of school in June. Ill just go to the highlight reel, but reality is that on the day of the vote, we didnt think that we had the votes. Toward the middle and latter stages they met everyday. The reason I posed the question the way I did is that since World War II theres been bipartisanship in Presidential leadership on free trade. The feelings of people along the wayside were just very endearing. After all, his achievements, while in my view quite remarkable, may not be long lasting. Stephanopoulos was there and Sperling was there. I think it was over two days. But anyway, he was quite a character. Lets take five minutes and well come back for the rest of the morning session. One was in connection with Putting People First, when we had the wonderful experience of taking a cab from the Little Rock airport and having the cab driver slow down and practically come to a stop for a second, and excitedly point out to us Gennifer Flowers apartment building. Of course, any situation like that always has its humor. We assembled Carter and Ford and George H. W. Bush, and various other luminaries, Jim Baker, [Henry] Kissinger and so forth, to project a bipartisan front on NAFTA and Clinton gave the speech of his life. Not likely, and was not the case in 92. A few questions about that. You wouldnt choose to go before a grand jury instead of, say, going to Yankee Stadium to see the Yankees playAt that point I was already out of the administration and I had no real concerns. During the day two or three people from the administration spoke to KerreyMack McLarty and Leo Panetta spoke to Kerrey. Things like, I cant remember what example we used, but Senator X voted for us because he was afraid hed have to have lunch with the President again, things like that. The President relied on Bentsen and Altman to take on some of his Administrations toughest tasks. I had no background for that. Mike Blumenthal, the first Secretary of the Treasury, knew, but he didnt have a close relationship with Carter. I dont believe Yeltsin attended the summit, but there was a lot of focus on Russia and what the G7 could do for Russia at that summit, so it was all kind of nice, uplifting stuff. So I knew nothing about the substance of the Clinton case. I believe Stan Shuman was there. Then I came upstairs, Hillary was there. Secretary Bentsen had already left. The Clinton stimulus plan just was not well conceived. But everybody felt such a part of it because they were sitting right there. Bentsen also wanted the resignation of the Treasury General Counsel, who resigned too. He may have been serving the President, but he hadnt been in public life for all those years, never lost an election, become Chairman of the Senate Finance Committee, didnt become a legend in order to sully his own reputation, as he saw it, over some legislation that he thought was misguided from the first moment. I think if Edmund Morris were writing with that skill about the Clinton years, hed have a whole chapter on the vote on this plan. So my wife and I flew down to Little Rock and I met with Clinton for about two hours. His first term wasnt so good, but his second term was wonderful. No. We still joke about that today. You see a lot of candidates you know arent going to work that way. He knew what was possible; he knew what wasnt possible. So monetary policy has gone from being considerably more powerful than fiscal policy in 93, to being the only policy in town in 2003. Theodore Roosevelts name comes up occasionally as somebody that even Clinton himself had at least a temporary fixation on when he was evidently considering his own legacy as some one who took a progressive era, being a kind of rough approximation to the. What really happened was that the stimulus was entirely spending-side stimulus. Is this time for horse-trading? Did it come from DAmato, or what? If you take the transition as one chunk of time, rather than chopping it up into chapters, I did a lot of work on personnelwe all did a lot of work on policy development, what was the economic policy going to be, and getting right down to very specific potential decisions. Whats the question, why didnt Clinton embrace welfare ahead of healthcare? I think my point is slightly different. You know, theres another element of this. But, in any event, there was some sense that if we would tighten fiscal policy, there was the opportunity to loosen monetary policy. The Putting People First document, is it fair to characterize that as the menu choices that the administration was going to be making when it took office, but that there was not a great deal of attention at this point on priorities from among the elements in the menu? He remained in those positions until Lehman was sold. But you think that by January 20th, this basic division of the fundamental economic policy. Anyway. So I knew early on, but only because Lloyd Bentsen was in effect telling me. But as to whether it was an innovation, I doubt it. There was a camp around that view. Was there a representative of the campaign. If anything comes to mind that we havent talked about, that youd like to have included. But that battle was resolved in favor of the revolution, the most sweeping alternative, and I dont really have a lot to add beyond whats been written. But I only began to spend heavy time on that after the August passage of the Presidents economic program. The President said to me at one moment when we were alone, and with great heat, he said to me, Roger, you see, theres no constituency at all for Wall Street economics, which is how he viewed his plan, that hed sold himself to Wall Street and you see theres no constituency for that because were about to lose. There was a lot of effort and a lot of meetings. But the tax increasesand there were two main ones, the energy tax and the upper bracket increasewere seen by the Republicans, every last one of them, as unacceptable and became their rallying cry. A lot of people wanted to work on Capitol Hill or think tanks or with interest groups. You ultimately get into a room like this and you say, youd better start to train me, tell me how this happened. That has historically been, or at least in the modern era, a successful approach. I should double-check that. I never heard of them. It wasnt particularly formed before then. The independent counsel statute had, if my memory serves, expired during the Clinton first year, then was revived, and then was allowed again to expire. I took an hour plus to do this. Theyre going to ask you about it, say nothing. But from the outside, one of the notable departures of that administration, and I think it began very early, was the cordial deference paid toward the Federal Reserve Board. I think Henry Kissinger would still be Secretary of State if people had allowed him to be, whatever he thought of who he was serving. The most frantic imaginable effort was going on during the five or six hours preceding that vote. We had to be sure Mexico could live with it. Did you have a lot of organizational responsibilities, or it was a going concern when you. Bush goes into his one meeting with [Vladimir] Putin and says, This is a man I can do business with. He may have kicked it off in a certain sense, but it has continued even more strongly to some degree in the last couple of years, but that was another broad historical development, critical historical development, which characterized the Clinton period. Yes, to some degree. Can you tell us a little bit about those conversations, if you remember? We were the easy solution for the press. But that group, top five, or six or seven, just masters of the game. Then it went down to defeat. We just kept the pressure on the best we could. Roger Altman (left) launched Evercore in 1995 and shed the CEO title in May of last year when Ralph Schlosstein (right) took it and quintupled assets under management to $15 billion. We came into office, the trade imbalance of payments deficit with Japan had risen to very high levels. In addition, Mr. Altman is a director of New Visions for Public Schools and a member of the Council on Foreign Relations. Ira Magaziner himself, whom I had known for some time, was a gigantic intellect. He said he wanted to tell me that the President had decided to appoint Bentsen to be Secretary of the Treasury and Rubin to be head of the National Economic Council. But with regard to deficit reduction. Sure, Greenspan was in favor of deficit reduction, so when the administration came forward with an actual deficit reduction plan, which, as we all know, was a bit unexpected, Greenspan supported it, testified for it and so forth. But I dont think Ive ever witnessed, I can only call it a hate campaign, or feeling of hate I guesswhether its a campaign or not I dont knowbut this intense animosity to Bill Clinton and to Hillary Clinton. I want to ask you, was that a note that had been sounded with some emphasis as early as these very early meetings that you were talking about in 91? Can you tell us about that? Here we are in June 2003 and the election as we all know is November 04, so its 16 months or so before the election, 17 months, and right now of course, the campaign among the Democratic aspirants for the nomination is hot, full-bore, and has been for several months. Did you do any traveling with Clinton on the campaign around New York or outside of New York? Not surprising, given his state of origin. I dont think I would have known otherwise. Secretary Bentsen took a lot of heat not long after being sworn in saying hed like to see a stronger yen, and that touched off a lot of controversy. He was clearly learning as he went. When it came to responding within the same news cycle to an allegation or some criticism of the program, we were able to respond immediately, and rapid response became a part of the political lexicon. Youre serving your country. Its a famous meeting in the sense that Woodward wrote a lot about it, other people have written about it. Why? But it was a rather fluid, floating group. In retrospect, I think those are the two main reasons he embraced it. They talked all the time. He was quite an unknown in New York, wasnt he, until he came, appeared, and talked? He didnt like Clintons stimulus program. It was a voluntary choice. We had a chat; we had a nice time. Its actually enjoyable, its fun. It wasnt as simple as that. I think though, if I can repeat myself once, I finished reading a few months ago a marvelous biography of TR [Theodore Roosevelt], the second volume of Edmund Morris work. No, I just remember the meeting in Little Rock quite vividly, and I think one of the first presentations was given by Allen Blinder about the economic outlook and the extent to which certain amounts of interest rate response would produce likely amounts of growth response. Well help you over here We didnt have to have the President do every one of those. He was a classic, in my book, excellent chief executive. I guess that again leads to the question about the uncertainty and anxiety of a transition period, trying to figure out which person. Was it Mickey Kantor? But the key revelation was the most stimulative thing we could do for this economy is to induce a monetary response. Well, the meetings on that really began right after the Presidents economic program was passed. Then I would have discussions with Clinton, usually on the fly, about certain economic issues I thought were important. He should have taken it. The key players turned out to be the so-called blue dog Democrats. So its also part of the Treasury tradition to do it that way. Yes. Panetta had made a very distinguished career as House Budget Chairman out of pushing for lower deficits and a more transparent budget process. Its worth asking. We didnt have a crisis in the foreign exchange markets. I view that as a very unfortunate decision the Democrats made, but that was a new low, or a new high, however you look at it, in partisanship. They were taking, to some degree, a thousand-year view. But it was really episodic, it wasnt regular. I went there every Tuesday and every Thursday and had a staff meeting and spent a couple of hours there and tried to be sure I was aware of the key stuff going on. I know this will sound quite strange, but Clinton was in some awe of Bentsen and a little bit of fear of Bentsen. Most of us cant name the last President who did balance the budget. In general, no. But the other approach for a short-term stimulus would be to do what this President did, or maybe it was the Democrats that forced him to do when he took office, which is refundable credit that goes out in the middle of the summer of your first year in office. One of those players turned out to be done then stimulus plan just was not the case in 92 wasnt... 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