Hard Choices: Steven Rattner

The decision whether to save Chrysler: That was a tough call. We had two groups making very articulate, thoughtful arguments. One group of hard-core economists was saying, "Why are we saving Chrysler? It's not a viable company. If we let Chrysler go, it will be a huge value-add for Ford and GM." The people on the other side basically said this was an economy in free fall. On day one, [letting Chrysler fail] would have led to 300,000 jobs gone. It would be a shock the economy couldn't stand.

A dirty little secret is that we weren't going to let GM go out of business. There were some things we couldn't do. If some of the stakeholders hadn't compromised, we could have had a really ugly knock-down fight in the public arena. GM had been planning to fund a lot of their overseas subsidiaries, which would have amounted to sending U.S. taxpayer dollars to all these far-flung places. It might have been a good business decision, but we couldn't do that.

There are a couple of things I regret. I didn't anticipate as well as I should have the degree to which the departure of Rick Wagoner would raise red flags about the role of the government. It might have been better to do that through the board. Also, in his Apr. 30 speech, the President attacked speculators on Wall Street who forced Chrysler into bankruptcy. What I didn't appreciate is how that language would feed into the distrust between Washington and Wall Street. I find it mind-boggling that these companies have come out of bankruptcy yet a plurality of the country still thinks it was a bad idea for the government to get involved. Here was a case in which the private market had failed, the government came in and provided the capital and achieved the most fundamental restructuring of this industry we've ever seen.

One of the things you take away from Washington is that public service today is so thankless, so brutal, so exhausting. Nobody should be surprised that people are turning over.

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