The populist outrage against the financial services industry's excesses is apparently analogous to anti-Semitic rants from the 1930s — at least in the mind of one Federal Reserve Board official.Richard Fisher, the president and chief executive of the Federal Reserve Bank of Dallas, made the comparison in a speech to the Texas Bankers Association on contributing factors to the financial crisis.
"Who is to blame?" he asked. "Well, if you had been listening to the radio on Feb. 26, 1933, you would know the answer. You would have heard a crazed Father Charles Coughlin, pastor of the Shire of the Little Flower in Royal Oak, Mich., rail against 'the Morgans, the Kuhn-Loebs, the Rothschilds, the Dillon-Reads, the Federal Reserve banksters, the Mitchells and the rest of the undeserving group.' "
Coughlin used radio broadcasts to spew anti-Semitic vitriol during the Depression, but Fisher saw signs of that type of attitude in the response to the current crisis.
"Advance the tape 76 years," he said. "If you substitute Goldman Sachs for the Rothschilds, Lehman Brothers for Kuhn-Loeb, AIG for Dillon Read, Ken Lewis, Sandy Weill or John Thain for 'Sunshine Charlie' Mitchell and keep the text about the Federal Reserve 'banksters,' you will have captured the liturgy of invective heard from Father Coughlin's contemporary secular cousins."
House Financial Services Committee Chairman Barney Frank has never liked journalists very much, but he showed some sympathy for them last week during a speech to graduates of the American University School of Public Affairs."You know how [there's] someone you kind of didn't like, and then he dies, and you feel a little bit guilty?" he asked. "I am starting to feel that way a little bit about newspapers."
The Massachusetts Democrat acknowledged frustration with the coverage of the financial crisis.
"Really messy problems do not have clean solutions," he said. "There is a tendency for people to critique the solution while forgetting what the problem is. … When you are the subject of the media for many years, you tend not to like them very much."
But with alternative media forms, including Twitter and blogs, gaining ascendancy, Frank acknowledged he was afraid what the death of newspapers would mean.
"I would find it very hard to do my job in a world without newspapers," he said. "And [as] I am reaching the point of retirement some point in the foreseeable future, my fondest hope is that I do not outlast newspapers. I would find it very hard to do my job if it became required that I tweet."
Live from D.C. …
The Treasury Department released stress test results May 7, but not the results of Part II, the written exam."Saturday Night Live" leaked those results in its opening skit last week.
Mocking the department's attempt to put a positive light on the tests, Will Forte, playing Treasury Secretary Timothy Geithner, said it struggled with how to grade the tests. Originally the firms were to be graded on a scale of 1 to 100, but that was changed first to pass/fail and ultimately to pass/pass.
SNL revealed some of the questions and answers to the written exam. It had the most fun with Citigroup, which answered "Geithner sucks!" to all but one question. "I was deeply disappointed with Citigroup's attitude to this entire project, and frankly, if Citigroup weren't 'too big to fail,' I would have failed them. That's how disgusted I was," Forte said.
Participants also were asked to finish this sentence: "For every 10 million in loans outstanding, a bank should have …"
Geithner was looking for "10% cash on hand."
Instead, JPMorgan Chase wrote, "Knicks tickets." Wells Fargo wrote, "Gulfstream jet," and Citi wrote, "Geithner sucks!"
Another question: "If federal bank examiners determine your bank to be undercapitalized, the bank's board of directors should …" Goldman Sachs answered, "Flee the country." State Street replied, "Shred documents," and Capital One wrote, "Eliminate eyewitnesses."
Finally, the Treasury asked, "In the event of a nationwide run on the banks, how much in total cash assets does your bank have on hand to pay depositors?" Bank of America replied, "Not enough, that's for sure." Citi again replied, "Geithner sucks!"
GMAC's reply to all 50 questions was "Taxpayer bailout," according to the skit. That turned out to be the right answer to 30.