Michael Lewis on the Subprime Mortgage Meltdown

Michael Lewis on the Subprime Mortgage Meltdown Jack Otter: Can you play along with me here if I were to make you compensation czar and read off some names—would you tell me how much that they should be paid or maybe fined? Michael Lewis: You’re going to give me some names that I'm supposed to decide whether to pay them or fine them? Jack Otter: Exactly, and how much. Michael Lewis: And how much? Jack Otter: You’re a compensation czar and you’re going to set the pace. Michael Lewis: I’m not sure I know enough to do this job. I’d love the job but I need to study up, but go ahead. Let’s try it. Jack Otter: Alan Greenspan. Michael Lewis: Fined, dramatically. He was an irresponsible federal reserve chairman and the thing that bothers me most about him is he went through his whole tenure obscuring what he was doing. It really bothered me. I can never understand a word he said because the impulse should be the opposite. It should be to clarify what this institution does and why it’s doing it, and he made it also mysterious and complicated and none of us could understand it. He should be fined for that alone. Jack Otter: Moody's Subprime analysts from a couple of years ago. Michael Lewis: They should be fined. They are so subservient to the Wall Street firms that it’s almost hard to hold them responsible for their own actions. But they should be fined generally, yes. Jack Otter: Goldman CEO Lloyd Blankfein. Michael Lewis: From the point of view of the Goldman shareholder, he should be paying a lot of money. He’s done very well for his shareholders. But from the point of view of the rest of us, he should be fined because Goldman did not act in a way that was consistent with the public interest.