The radio show host discusses her husband's illness and their often fraught marriage.
Sunday marks the fifth anniversary of the day Lehman Brothers collapsed, sending financial markets into a tailspin and setting off the global financial crisis.
Many commentators are pointing out that not a single Wall Street CEO is in jail. And some experts are warning that another financial crisis is looming.
Neil Barofsky is the former inspector general of the Troubled Asset Relief Program (TARP).
He told Here & Now there is a “deep frustration that those perhaps most responsible for the crisis not only weren’t punished, they were rewarded for their conduct.”
Here we are five years later, and the biggest banks are 30 percent larger than they were in 2008.
However, Barofsky thinks prosecuting the leaders of these banks wouldn’t have been wise.
“In 2009 it would have probably been a bad idea to indict one of these companies and face undoing all the hard work that was done to save them in the first place,” Barofsky said. “It’s not just, it’s not fair, but it’s the reality.”
Barofsky finds it distressing that the rules and regulations that resulted from the financial meltdown do not address the fundamental problems that brought it about in the first place.
“It leaves intact these giant financial institutions that are still too big to fail,” Barofsky said. “Here we are five years later, and the biggest banks are 30 percent larger than they were in 2008. Even when all the rules are done, it doesn’t get to the core of the problem.”
Barofsky also says Congress was too generous to the companies it bailed out, because it didn’t understand the mechanisms of the financial industry. He says a bailout was necessary, but not on such generous terms, using AIG as an example.
“They could have saved AIG, they probably needed to save AIG, but they didn’t have to do it in such a way that was such a giveaway and that really increased the moral hazard,” Barofsky said. “No lessons were learned from the counterparties, other than, if you do business with a giant, too-big-to-fail institution, you don’t need to worry about it because Uncle Sam is going to sit there and backstop all of your bad bets.”
Counterparties are the big banks to which AIG owed money, Barofsky explained.
Barofsky predicts that the next financial meltdown is around the corner.
“We’re headed toward another financial crisis, I believe, because we didn’t fix the fundamental problems and the perverse incentives and the too-big-to-fail problem that was present in the last one.”
Throughout the week, Here & Now is looking at the impact a raise in the minimum wage would have on states, the federal government and workers.