QuestionerI'm curious about your thoughts on financial reform that Congress is currently working on. Charlie, it's 1,550 pages, so you take the first 1,500, I'll take the last 50 pages.
WarrenWell, I don't think anybody in America right now, including the people in Congress, know what's going to happen. And my guess is that most of them have not read the bill either. So I think we're all in the doubt as to what's going to happen. To me, one thing is perfectly clear. And that is that our governmental system, which regulates the big investment banks, was so permissive and the investment banking culture had a nature that together helped a range that under stress every big investment bank, except Goldman Sachs, was going to go bluey. A system that likely to go bluey that is so important to the country should be. be changed so it's less permissive in what allows the banks and the investment banks to do. And people are thinking about that right now.
QuestionerBased on what you know about the bill, and I know you haven't read all 1550 pages, but would you vote for it today or not?
CharlieI simply don't know enough about it. I know what I would do if I were the benevolent despot of America, and I would make Paul Volker look like a sissy.
QuestionerYou want to get more specific than that? That's quite a word picture, but yeah. Want to get more specific, Julie?
CharlieWell, I would reduce the activities that are permitted. If you're de facto using the government's credit to help your business run, you shouldn't have a balance, a bunch of financial statements than the trillions, which you can't really understand even if you're a partner in the business. This is crazy. The complexity that has come into the system is quite counterproductive. And of course, the people have proven they can't really control it. So I think what we need is a new version of Glass Stegel that drastically limits what both commercial banks and investment banks are allowed to do. they should have a much simpler and safer mode of business. When we owned the Savings and Loan Association, it had a very restricted repertoire that it could use. And of course, it had government credit for its deposits. And by and large, as long as the repertoire was quite limited, the savings and loan stayed out of trouble. But you give human beings a flexibility to do any damn thing they please, with absolutely unlimited credit under the repo system and other systems. And they will go plumb crazy. And of course they did.