Yesterday, Sheila Bair wrote an unusual Op-Ed in the Washington Post in that it was penned just after departing a high-ranking government position and it was also highly critical of the government’s policy responses. In the US, because outgoing regulatory officials are very likely to move into cushy private industry jobs of the industries they regulated, they are loath to make these kinds of pro-regulatory remarks.
Sheila Bair did not name names. But her exit interview from just two days earlier with Joe Nocera does:
- “As Paulson, Geithner and the Federal Reserve chairman, Ben Bernanke, raced to bail out banks and companies like A.I.G., Bair resisted, fearing that they were being overly generous by putting the interests of bondholders over those of taxpayers.”
- “Yet only the F.D.I.C. seemed to take this possibility seriously — and to fear the consequences. Paulson and Bernanke, for their parts, maintained that the damage from the bursting of the subprime bubble would be “contained,” as they liked to put it.”
The obvious conclusion must be that Sheila Bair blames Geithner, Paulson and Bernanke for the credit crisis.
Below is a collection of video clips of Ben Bernanke in his own words demonstrating why.