What Were They Thinking? An Interview With Sophie Gherardi

On Thursday April 1, 2010, Truthout’s Leslie Thatcher interviewed La Tribune editor and author of “Capital Sins” Sophie Gherardi over Skype. This February, Ms. Gherardi was awarded the French prize for best financial article for the series on which her book was based. She talks about the genesis of the project and the form it ultimately took.

Truthout: What surprised you the most about the financial collapse itself?

Sophie Gherardi: The interesting thing is that I was not a financial journalist myself; I was more a journalist of the international and general economy. I could have told you a great deal about China’s growth rate, but the financial markets are very particular and very special and were not then familiar to me. So I can admit that the financial crisis was in itself very surprising to me.

For the first part of the crisis, I was still at Le Monde and I moved to La Tribune in July 2008. When the Lehman meltdown happened, I was most surprised by the fact Henry Paulson decided to handle that issue the way he did.

Then events began to happen so precipitously, there came a point when it was impossible to keep track of everything. After the Lehman meltdown, everything began to deteriorate everywhere on the planet simultaneously. After nearly a year, we had the feeling that we could not reflect because everything had been and was continuing to happen so quickly. It was then that my boss [La Tribune Editorial Director Erik Izraelewicz] said, “I think it would be a good idea during the summer to tell the whole story more like a novel.”

You have to understand that La Tribune’s readers are not just top bankers and industrialists, but also the local pharmacist, a 19-year-old trying to understand the world around her, retired tradespeople. Our goal for the series was to make the financial crisis intelligible to anyone.

My primary degree was in contemporary history, then I went on to become a business/economics journalist. For the first time in my life, I felt I had lived through one of those great defining periods of history. It was so exciting to be at the same time a historian and a journalist and then to have an opportunity to write what I think you would call “instant history.” For years, people said the worst thing that could happen was a systemic crisis and then we realized, “we’re living in it. This is it. This is a systemic crisis.” And politicians were not taking the stage to say, “We are here. We are acting.” It was incredible.

Truthout: And was that what surprised you the most about the ensuing response?

Sophie Gherardi: The initial absence of politicians was the worst. But in the end, the response by our elected leaders was positive. It was interesting, for example, to watch the development of the TARP: Paulson was a banker, not a politician, but even he became a politician in the noblest sense. He didn’t act that well at first, but at some point he thought getting the TARP agreement would be more moral than not. And when he realized what he had done by letting Lehman Brothers go bankrupt, he reacted very quickly. Of course, he reacted as a Republican, that is, a person not very conscious of poor or middle class Americans.

I think the TARP is fascinating. One interesting thing is why $700 billion? Why not $2 trillion? Why was it so very important that that figure be entered and that a vote be obtained for that specific amount? The role and importance of politics was very fascinating for me.

That’s why I suggested you choose the Concert of Europe chapter to translate – because Sarkozy had a great feel for what was necessary from a head of state under the circumstances, while Merkel initially did not.

Truthout: Does your book – or the larger narrative of the crisis – have any particular heroes for you?

Sophie Gherardi: Well, at some point everyone can be either a hero or an anti-hero. For example, I wouldn’t ever call Ben Bernanke a villain, but at some point he’s a person who became influenced by his peers, fellow academics and central bankers. He knew it could be a catastrophe, but he allowed himself to be influenced. At some point, he did not anticipate the effects, even though he was an expert on the Great Depression. For the most part, the story is not about bad people, but about people not doing their job in a serious way.

Truthout: Is there an arch-villain?

Sophie Gherardi:The crooks are villains. Bernie Madoff is a villain. Someone said, “You can doubt God, but you cannot doubt Bernie.” He betrayed everyone’s trust. Dick Fuld has a fantastic face for a villain and he had the perfect part for a villain. Was he truly more of a villain than the others? I think he just looked so much the part.

Jerôme Kerviel looked like an angel, but he would do anything to make more money, not necessarily for himself, but he wanted to be a star. There is a sociology of traders. Many are self-made and have invented themselves. Jerôme Kerviel had to climb up the ladder and had no scruples about how he did so. He may have lost more money than any others, but he is not unique. He is merely the posterboy for the many people in the industry without scruples – who respect no limits, no boundaries.

Truthout: Is there any one cardinal/capital sin you would identify as “most responsible” for the financial and ensuing economic crisis?

Sophie Gherardi: I think that’s an easy question to answer: it’s greed and la gourmandise [such a pretty word for gluttony!]. The idea that you should grab as much as you can as fast as you can. Pride also played its part: there was a competition to get the most …

Truthout: Is there anything else you’d like to mention?

Sophie Gherardi: [In an earlier conversation] You were telling me how from an American point of view, you were surprised how I could use such a free form for the book, but the truth is that if you have to go with the very strict rules of journalism, there are lots of things you simply cannot explain. It’s completely impossible to go into Ben Bernanke’s mind when he had, at some point, to have thought, “Oh my God what I have I done?” Or to investigate Dick Fuld’s state of mind.

And these are the questions we are all still asking ourselves, “What were they thinking?”

At some points, I went very very far, as, for example, when I created the Chinese conversation in the chapter about the G20 between the former Chinese president and a young aide. I was laughing as I wrote.

But then it occurs to me that perhaps the persons who have read my book actually grasp what happened better from this form than from some very serious, some very technical article they may have read.

Of course, the liberties I took imagining what key figures felt and thought make me none too eager to be translated …

Yet I confess what surprised and delighted me was that the most positive feedback I got was from bankers. When you told me you were once a banker, I smiled. When I was writing, there were moments I felt I was very presumptuous and was afraid “they” would probably smoke me out, yet most of the congratulations I have since received have been from bankers.