Ben Bernanke: More execs should have gone to jail for causing Great Recession

[cal04]

Source: USA Today

During the financial meltdown in 2008, the then-chairman of the Federal Reserve would buy a lemonade and head to his seats two rows back from the Washington Nationals dugout, a respite from crisis. But often he would find himself huddling in the quiet of the stadium's first-aid station or an empty stairwell for consultations on his BlackBerry about whatever economic catastrophe was looming.

"I think there was a reasonably good chance that, barring stabilization of the financial system, that we could have gone into a 1930s-style depression," he says now in an interview with USA TODAY. "The panic that hit us was enormous — I think the worst in U.S. history."

With publication of his memoir, The Courage to Act, on Tuesday by W.W. Norton & Co., Bernanke has some thoughts about what went right and what went wrong. For one thing, he says that more corporate executives should have gone to jail for their misdeeds. The Justice Department and other law-enforcement agencies focused on indicting or threatening to indict financial firms, he notes, "but it would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm."

He also offers a detailed rebuttal to critics who argue the government could and should have done more to rescue Lehman Brothers from bankruptcy in the worst weekend of a tumultuous time. "We were very, very determined not to let it collapse," he says. "But we were out of bullets at that point."

Read more: http://www.usatoday.com/story/news/politics/2015/10/04/ben-bernanke-execs-jail-great-recession-federal-reserve/72959402/

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video at link
On USA TODAY's Capital Download, former chairman of the Federal Reserve Ben Bernanke tells Susan Page that more corporate executives should have gone to jail for their misdeeds. USA TODAY

[Demeter]

1. Looked in the mirror lately, Uncle Ben?

Are you seeing stripes, or an orange haze?

[Guy Whitey Corngood]

2. AND THE SHOULD'VE LOCKED THEIR ASSES UP IN THE

FEDERAL RESERVE!!!!!!!

Ass clown.

[Duppers]

12. And their assets, like they do dealers! nt

[rhett o rick]

3. Now he wants to sell books. I want to know who specifically failed at their job in the

government. Who didn't prosecute when they should have? Who was complicit? The Atty Gen? The President? No fair saying that someone should have prosecuted. Who?

[onecaliberal]

4. More should have gone? considering none did. They all should have gone.

[rpannier]

33. That was my first thought

"More?"
As far as I knew the number was zero
How many is he talking about because 1 is more but completely insufficient

[onecaliberal]

35. Glad I'm not the only one who had that thought.

Any one of them would be better than none, but yeah, they all need to go.

[hatrack]

5. Here, Ben: "Some execs should have gone to jail". There, fixed it for you!

[SoapBox]

6. No shit Sherlock!

[Dont call me Shirley]

7. Starting with you.

[L0oniX]

24. +1

[valerief]

8. FFS. I must have missed his 2009 "Jail Financial Execs" Tour. nt

[JDPriestly]

9. Interesting.

"The numbers are so concrete," he says in a conversation in the Nats press box before a game against the Miami Marlins on a sunny afternoon last month. "In baseball, you've got all the data going back to the 1880s for all the players, and if you understand how to use numbers, it makes it come alive."

He watches the game with the same impassive manner and attention to detail that must have marked his tenure at Fed deliberations. Wearing jeans and a worn blue-gray Nats cap, he doesn't shout and rarely cheers, but he does politely clap when a Nats player gets a hit or the team leaves the field.

"He won't swing," Bernanke predicts as Yunel Escobar faces a 3-2 count. Escobar, who led the league in batting into double plays, has been excoriated in baseball blogs in recent days for doing just that even though star hitter Bryce Harper would have been up next. This time, as predicted, Escobar doesn't swing and gets a walk.

"It's time for Harper to get something," Bernanke says in the next inning as the right-fielder comes up to bat. Done: He hits a home run.

http://www.usatoday.com/story/news/politics/2015/10/04/ben-bernanke-execs-jail-great-recession-federal-reserve/72959402/


If Ben Bernanke could predict based on the numbers and the odds whether Escobar would swing that bat when he had the chance to walk if the next guy up could hit one, he should have been able to predict the housing crisis.

It was obvious to anyone who looked at the difference between the increases in housing prices and the stagnation in wages that the bubble had to burst. I just can't believe that a mathematician, an economist with his ability didn't see it coming. And I don't believe that many of the bankers and Wall Street leaders were that oblivious to the math of it either.

But aside from that, the article solved a mystery for me. I always wondered why my father loved baseball so much. Since his house was filled with women who were not baseball fans my father would sit in his car and listen to the games. My dad loved math, really, really loved math but his work had nothing to do with math. I had no idea that baseball had anything to do with math.

Still, Bernanke should have spotted the big flaw in the housing market several years before the crash, and he should have done something about the money that was going into that market. As it is, his failure to act enriched a very few and impoverished many.

He clearly had the ability to do more than he did. I hate to be so judgmental, but if I with my ignorance about economics saw it coming, surely he should have.

[Enthusiast]

10. Bernanke was blinded by irrational exuberance.

[KeepItReal]

13. Well played...well played.

LOL!!!

[JDPriestly]

15. Right.

And so was Bill Clinton when he appointed Greenspan to the Fed.

What goes up too high is going tumble.

A two-year-old will tell you that.

[whereisjustice]

11. Love how the very people who caused the crisis are publishing books about their heroism

[hedgehog]

14. If I understood what Michael Lewis said in "Liar's Poker"

(and I'm not going to say I'm positive I understood), it wasn't (only?) a problem of banks that were too big to fail, but that there were an unknown number of "side-bets" involving bands based on sub-prime mortgages. If I understood correctly, for a relatively small amount of cash, people could place a bet on the future value of a bond without actually purchasing the bond. The bets were covered by insurance companies. The fear was that if the banks defaulted on the bonds, people holding this insurance would bankrupt insurance companies and start a real cascade across the economy.

If I tried to purchase fire insurance on a building I didn't own, I think I'd get arrested.

[PoliticAverse]

26. I don't think that was "Liar's Poker", I think it was in one of his more recent books.

Perhaps in "The Big Short: Inside the Doomsday Machine" (2010) or
"Panic: The Story of Modern Financial Insanity" (2009).

"If I tried to purchase fire insurance on a building I didn't own, I think I'd get arrested."

There is the concept of "insurable interest", limiting the purchasing of insurance to someone or some company
that has a direct interest in the person or place being insured. Sadly that idea seems to have been ignored in
the financial industry.

https://en.wikipedia.org/wiki/Insurable_interest

[appalachiablue]

38. Investment and financial schemes go as low as they get, like preying on and swindling

the terminally ill for insurance and financial securities products.



In 2013, Joseph Caramadre, a Rhode Island financial planner and lawyer was sentenced to 6 years in prison for his role in an investment scheme that recruited terminally ill people to sign over death benefits to passive investors.

A devout Catholic, Caramadre also placed ads in the newspaper of the Roman Catholic Archdiocese of Providence, R.I. in an attempt to find terminally ill patients.

Propublica,'Caramadre Gets Six Years for Investment Scheme Involving Terminally Ill', Dec. 16. 2013.
http://www.propublica.org/article/caramadre-gets-six-years-for-investment-scheme-involving-terminally-ill

[Rosa Luxemburg]

16. not too late!

[sulphurdunn]

17. Just to put things in perspective.

Wall street is the get rich quick stop for half the graduates of major Ivy League colleges. Most of the people who run the country politically and economically are graduates of the same institutions, including Mr. Bernanke. Get the picture?

[patsimp]

18. These morons always tell the truth years after the fact

powell and many others come to mind.

[tabasco]

22. Excellent observation. n/t

[patsimp]

23. Thanks - i think its their way to deny later on

[shadowmayor]

19. More like courage to lie

And to keep on lying. To make more money by lying. To lie, lie, lie. He is simply, a liar.

[Skittles]

20. ya THINK?

[47of74]

21. This is like closing the barn doors...

....after the horses have all exited the barn and are in orbit above the star V762 Cas.

[JackRiddler]

25. More than zero, he means.

[fredamae]

27. I'm amazed he has the Brass

to say that when He should have been, imo--one of the First to go!
May I Please have a Moment to SCREAM my Frustration?

[jtuck004]

28. What is the charge for lining the mice up so someone can pick them up by the tail and suspending

them just above the simmering broth? Not enough to kill them immediately, but low enough to to flavor the juices of the stew. For years.

(He puts me in mind of the North Korean merchants of death - who sell dogs for food - where some believe the dog is tastier if it is terrified before it is cooked, a cultural re-definition of whole foods.)

[restorefreedom]

29. i agree

you first, ben

[Eric J in MN]

30. I wish he were more specific about

...which wrongdoing he thinks should have been punished with prison.

[NotHardly]

31. Its Never Too Late.... statute of limitations...

I'm betting time is still available and if we had a Justice Department then we'd have some prosecutions... if we had a Justice Department that is.

[McKim]

32. So, Mr. Bernacke, Why Didn't You Speak Up When it Would Have Mattered?

So why didn't he speak up when it mattered. This reminds me of Vietnam and the Sect'y of State Robert MacNamara. He was so sorry later that he didn't speak up at the time, but wanted to make a lot of money as he talked all over the country about his new book and his phony remorse. I did not attend his book talk as my brother in law died in Vietnam in '67 for MacNamara's lies. I was too angry. So suffered so many who lost jobs, livelihoods, good lives, homes and futures. Mr. Bernacke deserves our scorn and our ire. This one I might show up for when he comes to my city. So DUers, show up for Bernacke and give him a piece of your minds.

[midnight]

34. It's never to late.

[czarjak]

36. Call it what it actually is...

The Bush Recession.

[Phlem]

37. From the office of "No fucking shit."

He should be behind bars with the rest.

[snort]

39. Sooo

one?