As President Bush–our only MBA president from Harvard Business School, no less–was quoted as saying, “There’s no question about it, Wall Street got drunk, that’s one of the reasons I asked you to turn off the TV cameras. It got drunk and now it’s got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments.”
Former Fed Chairman Martin once said the job of his office is to “take away the punchbowl just as the party gets going.” Unfortunately, the Greenspan and Bush administration did everything they could to keep the punchbowl full, refusing to regulate “fancy financial instruments” or restraining excessive leverage leading to issues like Freddie and Fannie.
