Former Chairman of the Federal Reserve, current fellow at the Brookings Institute and hedge fund adviser Ben Bernanke noted in an interview that there would have been more criminal prosecutions in the aftermath of the 2008-2009 financial crisis if he had been in charge of the Department of Justice. Bernanke was interviewed over the weekend by USA Today as part of a PR tour promoting his new memoir The Courage to Act: A Memoir of a Crisis and Its Aftermath.
In an obvious effort at spin that just might include a modicum of real regret, Bernanke said that in retrospect he wishes he had done more to explain to Americans why it was in their best interests to bail out the financial firms on Wall Street that had caused the disaster and stolen their jobs and retirements.
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In a play for sympathy that rings hollow to this writer, Helicopter Ben even claims: “Every time I saw a bumper sticker which said, ‘Where’s my bailout?’ it hurt.”
Financial crisis was worst panic in U.S. history
According to the ex-Fed chair, he believes the recent financial crisis was even worse than the Great Depression. “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 claimed. “The panic that hit us was enormous — I think the worst in U.S. history.”
Should have been more criminal prosecutions
In his memoir and in the interview, Bernanke says that more financial sector execs should have gone to jail for their crimes. He points out the Justice Department focused on indicting or threatening to indict financial firms, “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.”
In an apparent effort to whitewash his role in the “government pardon” for banking execs involved in the financial crisis, Bernanke also emphasizes that the decision regarding whether to prosecute individuals wasn’t up to him. “The Fed is not a law-enforcement agency,” he notes. “The Department of Justice and others are responsible for that, and a lot of their efforts have been to indict or threaten to indict financial firms. Now a financial firm is of course a legal fiction; it’s not a person. You can’t put a financial firm in jail.”
That said, if he had his druthers, there would have been more individual accountability all around. “While you want to do everything you can to fix corporations that have bad cultures and encourage bad behavior — and the Fed was very much engaged in doing that — obviously illegal acts ultimately are done by individuals, not by legal fictions.”
Bernanke ever watched HBO movie Too Big to Fail
When asked if he had seen the 2011 HBO movie Too Big To Fail, for which Paul Giamatti won a Screen Actors Guild award for his portrayal of Bernanke as a man of great restraint in all things at almost all times.
That said, Bernanke, who resigned from the Fed in 2014 to pursue a career as an academic and a high-paid hedge fund consultant, hasn’t seen the movie. “I read the book, but I like to say I saw the original, so it wasn’t necessary to see the movie,” he commented dryly in the interview.
Pressed on whether he ever planned to watch the film, he shrugged, “If there’s nothing else on,” he replied with a serious expression, “maybe so.”