Economist concludes Autumn Lecture Series
On Nov. 13, Michael Greenberger held a lecture in the Hancock Center to discuss the 2008 financial meltdown, President Obama's failures and the current economic state. Greenberger is a University of Maryland professor and a former director of the Division of Trading and Markets for the Commodity Futures Training Commission (CFTC), a government agency that regulates financial markets. Greenberger was the last speaker for this year's Autumn Lecture Series, which included Jeffrey Toobin, Dr. Jaap Jacobs, two of Henrietta Lacks' family members, and Yossi Klein Halevi.
Marist students, faculty members, and Poughkeepsie residents listened as Greenberger addressed the financial crisis. In order to understand the causes of the crash, there are two essential terms to know - mortgage-backed securities and subprime lending. Mortgage-backed securities are mortgages that banks sell to investors in order to receive more money to disperse. The problem was that the greed and riskiness of the banks led to what is called subprime lending. Subprime lending refers to banks that give loans to people, knowing that they cannot pay them off. Many of these loans defaulted, creating economic turmoil. After the banks were bailed out, President Obama disappointed many Americans, including Greenberger, by appointing many of the greedy bankers to serve under his administration.
Greenberger believes that instead of standing up to the banks and indicting them, Obama stayed low and did nothing due to his close ties to the banks and many financiers. Greenberger noted that it is rare to find any politician who is willing to fight the banks because they rely on them so much for campaign contributions. Therefore, it is difficult for Americans to learn the truth of what happened.
"Nobody wants you to understand it," Greenberger said, "because if the banks go south, [the government] wants you to pay for them. President Obama isn't talking about it and the Republican Party isn't talking about it."
Greenberger also addressed ongoing problems within the Obama administration.
"I describe myself as a progressive democrat who voted for Obama twice, but I'm very angry with the President."
Greenberger justified his anger by pointing to an increase in NSA surveillance, an undoubtedly abysmal healthcare.gov launch, and a lack of financial expertise.
"I don't think President Obama understands what happened during the meltdown. [He] is not curious enough to learn what happened," Greenberger continued.
Greenberger explained how Obama campaigned on the promise to help the people who became victims of the banks' risky behavior, but when he was elected, his policies favored the banks.
"Nothing was done to help people with mortgages that went underwater." Greenberger also argued a key reason for Obama's lackluster economic policies is his refusal "to talk to anyone from the outside." According to the professor, President Obama won't help and "the Republican party certainly won't help," but there is one politician who gives him hope.
"Elizabeth Warren has made it clear she's an enemy of the banks," Greenberger said. He has high praise for Warren, a Democratic senator from Massachusetts. He believes she has a chance to contend for the 2016 Democratic presidential nomination against the party's current favorite, Hillary Clinton. According to Greenberger, if Clinton continues to act as a puppet for the banks, then Warren will challenge her.
As far as what could have been done to fix the crisis, Greenberger noted that one solution would have been to temporarily federalize the banks so they could be handed over to competent people. He also said the top bankers responsible for the crash should have been charged with crimes.
"If Jamie Dimon had to go to jail, it would send a message around the world that there are consequences for what the banks did," Greenberger said.
Since no one was indicted, Greenberger believes this made the impression that "the banks are too big to jail, not too big to fail." In fact, Greenberger even believes there is a 50-50 chance a similar crisis could happen again, but this time it would make an even greater dent on the global economy.
"An economic crash now would be worse because we don't have the money to bail out the banks. We aren't in a recovery. We're in a very, very frightening mess."
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