One year ago this week, Wall Street was coming down, and taking the American economy with it. AIG, Merrill Lynch in free fall. Giant banks wobbling. Lehman Brothers, allowed to collapse.
Americans lost jobs and dreams and years of savings. Everyone swore the system had to change.
One year later, Wall Street’s survivors are very much back in business. Big pay, big risks — and surprisingly little change in regulation and oversight.
Could it all happen again? Yes, says my guest today, and it could be worse.
This hour, On Point: Simon Johnson on Wall Street, one year after the meltdown.
Joining us from New York is Matthew Bishop, American business editor and New York bureau chief for The Economist. His forthcoming book is called “The Road From Ruin: How to Renew Capitalism and Get America Back On Top.”
And from Washington, D.C., we’re joined by Simon Johnson, professor at MIT’s Sloan School of Management and former chief economist at the International Monetary Fund. He is co-founder of the widely-cited website The Baseline Scenario, where he blogs regularly, and senior fellow at the Peterson Institute for International Economics. His article on the cover of the September 23 issue of The New Republic, co-authored with Peter Boone, is titled “The Next Financial Crisis: It’s coming–and we just made it worse.”
President Obama goes to Wall Street today to deliver a big speech on financial regulation, as the Treasury Department releases a 53-page report titled “The Next Phase of Government Financial Stabilization and Rehabilitation Policies” (full text).