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Ben Bernanke: More execs should have gone to jail for causing Great Recession Susan Page, USA TODAY 6:59 a.m. EDT October 5, 2015 On USA TODAY's Capital Download, former chairman of the Federal Reserve Ben Bernanke tells Susan Page that more corporate executives should have gone to jail for their misdeeds. USA TODAY Ben Bernanke at a Nationals baseball game in Washington.(Photo: Brad Mills for USA TODAY) WASHINGTON — This season, Ben Bernanke was able to sit through an entire Nationals game. During the financial meltdown in 2008, the then-chairman of the Federal Reserve would buy a lemonade and head to his seats two rows back from the Washington Nationals dugout, a respite from crisis. But often he would find himself huddling in the quiet of the stadium's first-aid station or an empty stairwell for consultations on his BlackBerry about whatever economic catastrophe was looming. "I think there was a reasonably good chance that, barring stabilization of the financial system, that we could have gone into a 1930s-style depression," he says now in an interview with USA TODAY. "The panic that hit us was enormous — I think the worst in U.S. history." With publication of his memoir, The Courage to Act, on Tuesday by W.W. Norton & Co., Bernanke has some thoughts about what went right and what went wrong. For one thing, he says that more corporate executives should have gone to jail for their misdeeds. The Justice Department and other law-enforcement agencies focused on indicting or threatening to indict financial firms, he notes, "but it would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm." He also offers a detailed rebuttal to critics who argue the government could and should have done more to rescue Lehman Brothers from bankruptcy in the worst weekend of a tumultuous time. "We were very, very determined not to let it collapse," he says. "But we were out of bullets at that point." Still, he does acknowledge some missteps by the Fed. Analysts were slow to realize just how serious the economic downturn would become, and he faults himself for not doing more to explain to Americans why it was in their interests to rescue the financial firms that had helped cause it. "Every time I saw a bumper sticker which said, 'Where's my bailout?' it hurt," he told Capital Download. That is a rare admission of emotion. Former Treasury Secretary Tim Geithner once described Bernanke as the Buddha of central banking, his demeanor impassive even during disaster. In the 2011 HBO movie Too Big To Fail, actor Paul Giamatti won a Screen Actors Guild award for his portrayal of the Fed chairman as restrained in all things, from his soft-spoken speech to his choice of oatmeal for breakfast. In comparison, Treasury Secretary Hank Paulson seemed almost volcanic. Not that Bernanke, who retired from the Fed last year, would know about that. He hasn't seen the movie. "I read the book, but I like to say I saw the original, so it wasn't necessary to see the movie," he says. Will he ever watch it? "If there's nothing else on," he shrugs, "maybe so." Federal Reserve Chairman Ben Bernanke arrives to testify before the Joint Economic Committee on Capitol Hill on May 5, 2009. (Photo: Susan Walsh, AP) The Paradox of Shoes Bernanke has been interested in the Great Depression since his grandmother told him stories about it from her front porch in Charlotte, N.C., during quiet summer evenings. Her family had been living in Norwich, Conn., where some children went to school in worn-out shoes or even barefoot because their fathers lost their jobs when the shoe factories closed. That meant their families didn't have enough money to buy shoes — which presumably would have kept the factories in business and their fathers employed. "Even a small boy could see the paradox," he says. He grew up in tiny Dillon, S.C., a farming town on the Little Pee Dee river. His mother taught school. His father was a pharmacist in the drugstore his grandfather had opened after moving there from New York City in the wake of the stock-market crash of 1929. Bernanke went to Harvard, earned his doctorate at MIT, taught at Stanford and ended up heading the economics department at Princeton. President George W. Bush named Bernanke to be a governor on the Fed in 2002, then appointed him to head the White House Council of Economic Advisers in 2005. The next year, Bernanke was back at the Fed, succeeding Alan Greenspan as chairman. President Obama appointed him to a second four-year term as chairman in 2010. Balding and with a neatly trimmed beard, Bernanke has never lost his professorial air and modest mien. He still lives on Capitol Hill with his wife, Anna, who founded the non-profit Chance Academy to help city kids who are being home-schooled. He walks the dog, does crossword puzzles and reads three or four books a week on his Kindle — books of all sorts. In the previous week or so, that included a new annotated edition of Alice in Wonderland; Beyond Words, on the social lives of animals; and the latest Lee Child thriller, Make Me. http://www.usatoday.com/story/news/politics/2015/10/04/ben-bernanke-execs-jail-great-recession-federal-reserve/72959402/
