Monday, 16 March 2009

Bernanke Speaks in a 'Rare TV Interview:´ Warns Wall Street Bankers Their Days of Lavishness Are Over

Ay! I screwed up!

Ha! Ben Bernanke, the U.S. Federal Reserve Governor and, as the WSJ puts it, ''the self-professed 'Main Street´ guy who once worked construction and waited tables in a poncho´´ sent a dart to some on Wall Street, saying "the era of this high living, this is over now.´´ Click here for the link to the WSJ story. Well, Great Ben: every time there is a Wall Street-triggered crisis, politicians love blaming bankers for national disgrace. The Gecko character in that old Michael Douglas film was created so he would symbolise the hateful side of Wall Street. But everyone wants to be like those bankers (and earn what they earn.) So there must be something wrong in the American way of life, and the way citizens see their bankers -- people love their lifestyle. They all wanna be as rich as a Wall Street banker. The funniest thing is, once the crisis was a problem in the savings and loans sector, the other was excess leverage, the other time was the dotcoms, now the problem was that another market innovation led to excesses. The only way to stop these bankers from making money and derailing equilibrium in the system is paring innovation in credit markets. Is it affordable Ben? No. Neither is a problem of more regulation and scrutiny over bankers' pay nor it would be solved through strict self-regulation. The problem is quite complex, more complex than we ever imagined -- the system is going through a serious problem of confidence -- but confidence can't be restored by making bankers the occasional scapegoat. The government is badly responsible for all this mess too.

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