Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

As the storm clouds gathered, holding China in place was the first priority of Paulson’s Treasury. And Paulson was willing to pay a high political price for doing so. Brad Setser’s quip was to the point: Fannie Mae and Freddie Mac were “too Chinese to fail.”18 Nationalizing them helped to prevent a simultaneous Atlantic and Chinese crisis with consequences too awful to contemplate. But Paulson’s financial diplomacy also highlights the fact that in 2008, managing Sino-American financial relations was still very much a matter of intergovernmental relations. By contrast, in 2015–2016 not only were the risks on the Chinese side but the people moving the money were private businesses and investors. In less than ten years, Chinese commercial and financial integration had come a staggeringly long way. Given the narrative unfolded in this book, this has daunting implications.