Eliot Spitzer- "Too Big To Fail Fails Us All"

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11:43 AM ET


Spitzer Q&A: 'Too big to fail' survives on Wall Street


While markets have recovered and many bailout loans have been repaid, the U.S. still hasn’t learned the key lessons from the crash of 2008, says Eliot Spitzer.

Spitzer, co-host of “Parker Spitzer” and the former governor and attorney general of New York, says regulators haven’t solved the problem of “too big to fail” institutions on Wall Street and warns that taxpayers could still be on the hook to bail them out if they make bad bets.

He is critical of the Obama administration’s handling of the aftermath of the financial crisis, saying, “Wall Street got bailed out and yet has been asked to give virtually nothing back.” Spitzer’s comments come as filmmakers and writers continue to delve into the origins of the crisis. In a new documentary “Inside Job,” director Charles Ferguson examines the mistakes made by Wall Street bankers and regulators.

CNN: As more books and films are released about the financial crisis, what are we learning about what really happened?

Eliot Spitzer: We are realizing that there was a massive failure on the part of our business leaders, our regulatory leadership, and the academics who were supposed to provide an intellectual framework for economic thinking. All fell into the thrall of a self-justifying ideology that put faith in the myth of "self-regulation" and permitted a libertarian approach that led to skyrocketing pay on Wall Street with limited real growth. The scheme collapsed when the leverage that led to sky-high bonuses simply couldn't be supported any more.

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http://parkerspitzer.blogs.cnn.com/2010/10/18/spitzer-qa-too-big-to-fail-survives-on-wall-street/?hpt=T2