A former chief financial officer of Citigroup recently spoke at Utah State University about what led to the financial crisis of 2007, warning that if there aren’t changes made, the country will eventually be forced to live within its means.
Photo by Steve Eaton
Gary Crittenden came to Citigroup in 2007 and left in 2009. He is now a managing director of Huntsman Gay Global Capital, a private equity firm, although he made it clear he was not representing the company when he offered his insights at a Partners In Business Finance Seminar at Utah State University last year.
Mr. Crittenden said that during the financial crisis of 2007
and 2008 he witnessed the behind- the-scenes discussions
that went on as the government tried to stabilize the financial markets. He said it had become “increasingly clear that we were on the precipice of what could be a truly global financial meltdown.”
He said things could have gotten much worse if the government hadn’t intervened. For the banking system to be funded, obviously, the government had to step in, he said.
“And for that, I can tell you that I’m very, very appreciative,” he said. “I’m appreciative of how hard those individuals worked; how much they tried to do the right thing; how engaged they were at trying to come to a solution that was both good for taxpayers and enabled the financial system to operate.”
“We’ve just gotten a gigantic cortisone shot, and the result of that is that we are out running.”
- Gary Crittenden
However, Mr. Crittenden said the fixes are not long-term solutions to the problems the country faces. He said the country cannot continue to borrow more money overseas and consume at the levels it has been without eventual serious negative consequences.
“The best example I can think of is if you injure your back or injure your foot … and you go get a cortisone shot, you immediately feel like you are better,” he said. “You go back and you can run.”
He said the shot doesn’t really address the underlying problem.
“We’ve just gotten a gigantic cortisone shot, and the result of that is that we are out running,” Mr. Crittenden said. “The economy is getting better and things are going to feel better. But I would wager that every person here realizes that it’s not sustainable.”
He said eventually the global community will no longer see the dollar as the reserve currency of the world.