I don't think that what they're doing is going to help us bring down the unemployment rate. I think that's the bottom-line problem: that there's no cause and effect there. Again, this whole idea that taking cheap loans and spending again, the public -- they don't want to do that. They shouldn't do that. They need to delever, they continue to need to delever, and it's not a sustainable model going forward, anyway. We need real economic growth. We need a tax code that makes sense. We need entitlement spending that makes sense. We need an immigration policy that makes sense. We need an infrastructure that will support our economic growth. We're not doing any of that. We're kind of treading water, and we're funding it with cheap money from the Fed. So the Fed can't do it.
You were appointed by the Bush administration. As you look at the Obama administration, have you seen much different from the way it has operated, on economic and fiscal policy from the way the Bush administration handled things?
We've had a lot of very complex rules that kind of changed things around the edges, but fundamental change, we really haven't seen.
That's a very difficult question to answer. I think the Bush administration continued the self-regulating market policies of the (former President Bill) Clinton years. And that was a mistake. We should have been raising capital requirements in the early 2000s. We should have had mortgage-lending standards. And the regulatory tools were there. This did not need to be done by statute. We should not have deregulated derivatives -- actually, Clinton did that. So the Bush (administration) did continue deregulatory polices, and that was a mistake. So this administration has tried to restore some equilibrium with more regulatory vigor. But just any regulation isn't necessarily good regulation. And so I think the weakness in execution with this administration has been on getting the regulations done and making them simple, effective and meaningful.
We've had a lot of very complex rules that kind of changed things around the edges, but fundamental change we really haven't seen. So I think that's one difference.
And if you've got big, bloated, inefficient financial institutions, the government shouldn't be propping them up.
We propped up a bloated financial sector. We didn't rip off the Band-Aid. We decided to prop 'em up and let 'em do it over time. So they're very slowly doing it over time. There (are) still a lot of bad assets on those big banks' books. I question whether all those big banks are really economically viable if it weren't for the perception of government support. They should have been restructured, frankly, in my view. I'm a rip-the-Band-Aid-off kind of person. So I like to think the Bush folks would have done more fundamental restructuring of the banking system. But I don't know if they would have or not.
I do think Republicans, for all the bashing that they get for being pro-big industry and all of that, there are some in our party who are too influenced by big financial institutions. But I also think they're supportive of the party that at its core is very market-oriented and understands that your first loss is your best loss. When the losses are there, you take them. And you get an economic correction faster and more robust when you do that. And if you've got big, bloated, inefficient financial institutions, the government shouldn't be propping them up. They should be breaking them up and letting the market deal with them. So I would have wished we would have followed those kinds of policies in 2009. We didn't.