© 2024 WFAE

Mailing Address:
WFAE 90.7
P.O. Box 896890
Charlotte, NC 28289-6890
Tax ID: 56-1803808
90.7 Charlotte 93.7 Southern Pines 90.3 Hickory 106.1 Laurinburg
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Was 'Adult Supervision' Needed On Wall Street?

Michael Greenberger formerly directed a division at the U.S. Commodity Futures Trading Commission
Mark Wilson
Getty Images
Michael Greenberger formerly directed a division at the U.S. Commodity Futures Trading Commission

The bankruptcy of financial services giant Lehman Brothers and the 500-point drop in the stock market on Sept. 15 have sent shock waves through the financial community. Michael Greenberger, a former director at the U.S. Commodity Futures Trading Commission, tells Terry Gross that the government's decision to bail out AIG is a sign that the economy is "teetering on the brink."

"The Fed and the Treasury are very, very worried about the stability of the economy," Greenberger says. "They're worried about what this means to Main Street, about what it means to you and me. ... In the absence of this rather dramatic move I think they believe that we would enter something much deeper, possibly, than a recession."

If AIG had failed, Greenberger says, the average citizen's savings accounts and checking accounts could have been in jeopardy. But he warns that the bailout is a "50-50 proposition" and that other banks might follow.

Greenberger insists he is not a pessimist about the economy; he says that "intelligent leaders" — coupled with government aid, transparency and regulation — can enable the American economy to transcend its current troubles. But he has harsh words for the companies that were engaging in questionable practices — and for the government that turned a blind eye to the potential consequences.

Greenberger asserts that the fact that there was "no adult supervision" of Wall Street will cost the American public in the long run.

"The $85 billion will come out of the United States Treasury. And either we're going to fund that from China or you and I are going to have to pay for it through taxes," he says. "[As] a lot of people are saying now: We privatize profits; we socialize losses."

Copyright 2023 Fresh Air. To see more, visit Fresh Air.

Fresh Air