“Financial markets are like love affairs. No one can tell you how much it hurts. You have to make the mistakes yourself,” says George W Bush’s former economic adviser Pippa Malmgren who helped the White House deal with the Enron scandal and 9/11.
Speaking in an interview to be published in this week’s EG, Malmgren says: “You can’t go through the history books and say, ‘Oh look, that’s how a generation lost their savings. We won’t do that.’ You have to learn from experience and feel it for yourself. Then you can say ‘Oh, now I know’.”
Malmgren also said that misconceptions about George W Bush’s abilities as a US president were partially down to the fact that Europeans were “dreadful snobs about accents”, says his former economic adviser.
She said: “When the British hear a deep southern drawl they immediately think, ‘This guy is an idiot’. As an American I hear it and think in no way is this guy precluded from having a PhD from Harvard. It is a language barrier.”
She added that despite years of studying economic theory and working for some of the world’s biggest banks including UBS, nothing could have prepared her for the role at the White House. She says: “The president asks you to be his economic adviser and you think wow, this is fabulous. But then you get there and what you are actually confronted with are so practical that none of my training could ever had prepared me for it.
“I got a call at 5am one morning saying than Enron had just collapsed and I needed to brief the president as the press corps were already assembling on the lawn.”
Then came 9/11, which Malmgren says became a financial markets issue in a way she had never anticipated. “What do you do when three-quarters of all the US’s trading capability and the US bond market has just been destroyed? It became an issue for me to fix and there is no textbook from the London School of Economics that will tell you how to get a generator from Maryland into lower Manhattan.”
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