PITTSBURGH -- Pittsburgh native Paul O'Neill said a bigger danger in the current financial crisis could come in the form of significant job losses and businesses going under.

O'Neill called the current financial crisis unprecedented and the future is still unclear.

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The man who has run corporations and served as U.S. Treasury Secretary during President George W. Bush's first term remarked on the Wall Street crisis Tuesday night at Heinz Hall, where he introduced New York Times columnist Thomas Friedman at an event named "Pittsburgh and the Changing Global Economy."

WTAE Channel 4 Action News reporter Shannon Perrine asked O'Neill about the bankruptcy of the investment bank Lehman Brothers and the major losses at insurer AIG.

O'Neill said those who want to point fingers should blame the subprime lending crisis on abandoned sound loan practices.

"It's really necessary to have a down payment of 15 or 20 percent when you get a home mortgage instead of not being able to make the first payment, and the consequence of no documents and no down payment loans on the scale that they were done have led to this mess we're in now," O'Neill said.

"This is not just about a financial calamity. This is about putting our whole way of life at risk." - Paul O'Neill Former Treasury Secretary

When the financial sector of the American economy collapses, it's different than when technology or manufacturing struggles, O'Neill said.

"This is not just about a financial calamity. This is about putting our whole way of life at risk," O'Neill said.

O'Neill said the world economy is generally strong, which bodes well for America.

"What we have to hope now is that we can get through this financial crisis to the other side with some stability so that the world can go on," O'Neill said.

He said conditions could worsen if Americans stop spending money.

"If this financial disaster turns into the beginning of reduction of demand levels for physical goods and services, then we could have really terrible job losses and business failures," O'Neill said.

The federal government agreed Tuesday to provide an $85 million emergency loan to rescue AIG, which has insured mortgage-backed securities and other risky debt against default.

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