We had TARP watchdog Elizabeth Warren on TechTicker this morning. She’s superb: A great combo of completely-charming-and-disarming plus opinions that land like a knockout punch.
Aaron Task: Taxpayer funded bailouts have “fundamentally changed” the game on Wall Street but “it’s taking a while for those CEOs to figure it out,” says Elizabeth Warren, chair of the Congressional Oversight Panel and Harvard Law professor.
Warren is appalled at Wall Street’s continued practice of handing out oversized bonuses, as evinced by the latest revelations about AIG’s 2008 pool or recent increases in bonuses across the industry.
The idea that firms need to pay up to retain top talent “carries zero” weight with the Harvard Law professor and bailout monitor, who also disagrees with the criticism the Obama administration is overreaching in its dealings with Wall Street.
“We’re going from a world in which folks at the top only talked to each other, and maybe their regulators on occasion,” Warren says. “It was a very private conversation involving billions of dollars. Once you take taxpayer money it’s a three-way conversation.”
In that light, Warren believes there will be more public “conversations” like the AIG hearing and supports the idea of a modern version of the Pecora Commission, which investigated the banking industry after the 1929 crash, although she didn’t seem too eager to lead it, as some have proposed.