Attali Slams Washington as a Do-Nothing ‘Annex of Wall Street’
Interview by Farah Nayeri
Feb. 12 (Bloomberg) -- Jacques Attali has a tip for people who detect “green shoots” of recovery: Forget it.
The financial crisis is far from over, the French economist says. Banks remain at risk, and U.S. lawmakers are doing nothing to prevent another global meltdown, he says, because Washington has become an “annex of Wall Street.”
That brutal assessment sums up “Survivre aux Crises” (“Surviving Crises”), the latest book from Attali, 66, the policy maker who advised French President Francois Mitterrand in the 1980s and later became the first head of the European Bank for Reconstruction and Development.
“Survivre aux Crises” is framed as an economic survival guide. The crisis isn’t going away, Attali says, and individuals, companies and nations must be humble, nimble and creative if they want to endure. In a telephone interview, we discussed the state of the economy and whether Barack Obama is doing enough to fix it.
Nayeri: In your book, you say the crisis is far from over. What makes you say that?
Attali: I don’t understand why people are even thinking of saying that the crisis is over. I don’t see the slightest reason why it is over. GDP is growing, but growing from a basis which is low because of the depression.
We have avoided catastrophe by transferring debts from the banking sector to the public sector. And even by doing that at a huge amount -- don’t forget that the amount is 50 times the amount of the Marshall Plan -- the banks are not safe, far from it.
Obama’s Old Guard
Nayeri: The Obama administration’s economic team retains the old guard, including Ben Bernanke, Timothy Geithner and Lawrence Summers. How do you feel about that?
Attali: I am among the people who believe that Washington is just an annex of Wall Street. Any important decision is taken in the interests of Wall Street. With a slight change: Chicago markets are also having a role.
Nayeri: What about President Obama’s proposal to ban proprietary trading at U.S. banks?
Attali: Mr. Obama is not Washington, D.C., as a whole. Washington, D.C., is made up of lobbies. I don’t know if Mr. Obama will be in a position to enforce what he’s saying.
Nayeri: What would you like the U.S. Treasury to do?
Attali: There are a lot of things to be done: international governance, new regulations on banking, new regulations on insurance.
Democratic ‘Tyranny’
Nayeri: Are you disappointed with Obama?
Attali: He has not achieved what he was supposed to achieve and what he wished to achieve.
He’s very lucid and knows exactly where he wants to go. My main analysis is that he’s not really in charge. Congress is much more powerful than him.
At the moment -- with a market economy moving very fast and China taking decisions in minutes -- the democracies in Europe and the U.S. are agonizing. Decision-making is very slow.
Washington as a whole, not Obama, is a disappointment. When we speak about democracy, we often think of the tyranny of the people. The tyranny of the people is not always good for the people. There is a need for speed.
Nayeri: Don’t you think the U.S. stimulus package was a colossal effort at rescuing America and the global economy?
Attali: It’s an irresponsible effort. It’s 50 times the Marshall Plan, without any way of financing it. It’s easy to spend without financing. You just say, “I have problems; my grandchildren will solve them.”
Nayeri: In your book, you talk about global chaos and a financial “avalanche.” Why are you so grim?
Attali: I am not grim. If you don’t see the risks, you cannot avoid them. If you don’t see the rocks, the boat is shipwrecked.
“Survivre aux crises” is from Fayard (292 pages, 14.90 euros).
To contact the reporter on the story: Farah Nayeri in London at farahn@bloomberg.net.
Last Updated: February 11, 2010 19:00 EST
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