Unpacking The U.S. Economy’s ‘Cockroach’ Problem

Consider This from NPR

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🗓️ 29 October 2025

⏱️ 15 minutes

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Summary

When companies need a loan, traditionally they turn to a bank.

But increasingly they’re turning to financial firms that are not really banks, but do have a lot of cash. This is called the “private credit” market. It has exploded in the past 15 years. It’s now valued at around $2 trillion.

Natasha Sarin, president of the Yale Budget Lab and former Biden administration official, argues that these private credit firms are making risky loans. So risky, that they’ve got her thinking about the 2008 financial crisis.

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Transcript

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0:00.0	In September 2008, chaos broke out on Wall Street.
0:05.0	The Dow tumbled more than 500 points after two-investment bank Lehman Brothers filed for bankruptcy this morning after failing to find a bio.
0:14.0	And financial markets from Asia to Europe are doing their utmost to prevent Monday from turning from dark to black.
0:26.8	Banks went belly up. The stock market crashed and global financial systems lurched to the brink of collapse. The U.S. government stepped in, bailed out the banks, averted a
0:32.3	full-on depression, and two years later, Congress passed the Dodd-Frank Act, sweeping legislation aimed at protecting American taxpayers and at preventing a repeat.
0:43.6	For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy.
0:55.2	That's then-President Barack Obama signing the legislation in 2010.
1:00.2	Unscrupulous lenders locked consumers into complex loans with hidden costs.
1:06.7	Firms like AIG placed massive, risky bets with borrowed money.
1:12.9	And while the rules left abuse and excess unchecked,
1:17.3	they also left taxpayers on the hook if a big bank or financial institution ever failed.
1:23.5	Consider this.
1:24.6	The Dodd-Frank Act increased oversight of financial institutions. But private credit firms are mostly exempt from these regulations. And one economist, Yale, argues the risky loans they offer could lead to another crash. Coming up, she'll explain why.
1:45.2	It's Consider This from NPR.
1:47.7	I'm Mary Louise Kelly.
1:51.7	This message comes from WISE, the app for using money around the globe.
1:56.4	When you manage your money with WISE, you'll always get the mid-market exchange rate with no hidden fees.
2:02.5	Join millions of customers and visit Wise.com. T's and C's Apply.
2:07.7	This message comes from the Financial Times. Lead poisoning is a hidden epidemic in the UK.
2:13.6	On the Untold podcast, hear from people who have been affected. Where is the national strategy to address this?
2:19.9	Listen to Untold, toxic legacy, wherever you get your podcasts.
2:29.8	It's considered this from NPR, when companies need a loan. Traditionally, they would turn to a bank,
	...

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