First, he says he should have been more aggressive with his public relations to explain to the public why massive bailouts of the companies that caused the crisis were necessary. Secondly, he says many more Wall Street executives should be serving prison sentences right now for the role they played in triggering the Great Recession.
With regard to the later, he says in his new memoir, The Courage to Act: A Memoir of a Crisis and Its Aftermath, that the Justice Department and other law enforcement agencies were more focused on indictment or threats against large financial firms. Very little of the investigations focused on individual executives. And after all, he noted, wrongful and illegal acts that precipitated the economic crisis were not carried out by abstract firm. Rather, these were actions taken for the benefit of individuals.
However, he stopped short of naming any singular individual whom he thought evaded accountability. He also noted the Federal Reserve isn’t a law enforcement agency and could not have made arrests or prosecutions. That would have been up to federal law enforcement officials.
The new book is 600 pages, which he started to write soon after exiting his position at the Fed in 2014. It details his perspective on the crisis, during which millions lost their homes to foreclosure and the federal government overtook mortgage giants Freddie Mac and Fannie Mae and shelled out billions of dollars in aid to the largest financial companies in the U.S.
Bernanke said the bailout of Wall Street wasn’t because Wall Street deserved it. “I was certainly not eager” to do it, Bernanke would later say. However, he insisted that without taking that step, the collapse of the financial system would mean the collapse of the U.S. economy, which would have spiraled us into a Great Depression.
But he is bothered that the American public didn’t see that. He revealed that each time he saw a bumper sticker asking, “Where’s My Bailout,” he would feel a pang of regret. He believes it was his failure to explain why the move was necessary.
When he first became chairman – appointed by George W. Bush in succession to Alan Greenspan in 2005, and again re-appointed by President Barack Obama in 2010 – he said very few realized America was on the road to financial calamity. However, he said his organization identified problems early into his term. He said a big part of his early work was in planning for that crisis and figuring out how to address the inevitable panic that would follow.
In piecing together the details of that time, Bernanke collected and reviewed all of his emails during that span – sometimes up to 150 every day. He said in looking at those archives, it’s revealed how complex and chaotic the “warfare” was – and how many things when terribly wrong. However in the end, he believes the agency succeeded in helping stabilize the U.S. economy, which is now growing.
Still, he says he would have favored more accountability.
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Ben Bernanke: More execs should have gone to jail for causing the Great Recession, Oct. 5, 2015, By Susan Page, USA Today