Barry Ritholtz on Bailouts, the Fed, and the Crisis

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4.7 • 4.3K Ratings

🗓️ 1 March 2010

⏱️ 74 minutes

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Summary

Barry Ritholtz, author of Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy, talks with EconTalk host Russ Roberts about the history of bailouts in recent times, beginning with Lockheed and Chrysler in the 1970s and continuing through the current financial crisis. In addition to the government role in aiding ailing companies, Ritholtz also looks at the role of the Fed in discouraging prudence through its efforts to keep asset prices and the stock market at high levels. The conversation closes with a discussion of what Ritholtz has learned from the crisis.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	another information related to today's conversation. Our email address is mailadicontalk.org. We'd
0:33.6	love to hear from you.
0:36.7	Today is February 19, 2010, and my guest is Barry Rittholz, CEO and Director of Equity Research
0:45.2	at Fusion IQ, an online quantitative research firm. He's the host of the investment website,
0:50.8	the big picture, an author of bailout nation. Barry, welcome to econtalk.
0:55.1	Thanks for having me.
0:56.8	The title of your book is bailout nation. Why did you call your book that, and how does
1:01.4	it relate to the crisis?
1:03.2	Well, the title was actually coined by Bill Fleckenstein who did the forward to the book
1:08.3	and had previously been the author of Greenspan's Bubble. And the concept of it was just simply,
1:15.9	we had turned from, at least the mythology of a nation, that very much was independent
1:22.8	minded and picked yourself up by your bootstraps, a land where anybody, if they are clever
1:28.8	and work hard and apply themselves, can make something on themselves. And we went from
1:33.4	that to a group of coddled and overpaid bankers that are rescued from their own folly
1:40.7	by the government. It seemed to be the perfect fit for what was taking place.
1:47.4	We're not a nation that studies a lot of history, unfortunately, I believe. What are things
1:52.6	I liked a lot about the book is your tracing of this phenomenon. I think a lot of people
1:57.9	think it started in March of 2008, maybe when we rescued Bear Stearns. But as you point
2:03.9	out, it goes back a lot longer. Well, in your narrative, where does it start?
	...

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