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The CEOs-Say-the-Darndest-Things File: BB&T Corp. Chairman John Allison
In an interview with the Charlotte Business Journal, BB&T Corp. Chairman John Allison was asked what he thought of the Federal Reserve’s market actions to stem the credit crisis. He sure let the Fed have it.
Q: It’s no secret that you’re a major proponent for free markets. But do you see any actions taken by federal regulators that are having a positive impact?
A: That’s a complicated question because government policy in my opinion is the summary cause of this whole problem. We’ve had really bad mistakes by the Federal Reserve. We’ve had really big mistakes in housing policy because Freddie Mac and Fannie Mae made the housing bubble happen. Given that they’ve made a huge mess, have some of the things the government has done made it better? Probably.
But to me, giving positive feedback to the Fed is like going to a fireman who started a fire but kept it from spreading through the whole neighborhood and telling him he did a great job. Well, yeah, given you started the fire, I’m glad it only burned down 10 houses and not 20. That’s the context I view it.
Here’s the harder thing to know: Even the things they’ve done to help in the short term, if they can’t undo all of them, it might be much more detrimental in the long term than to just let the market correct. I think first of all they started it. But if they’d have taken less action we may have had a sharper correction, but I guarantee you right now we’d be recovering.
You read that right, “guarantee”!
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