Burgess COMMENTARY

Peter Burgess

Intelligence Squared U.S. Debate Audience Blames Washington More Than Wall Street for Financial Crisis

On Tuesday this author participated in an Intelligence Squared debate on whether the Washington should be blamed more than Wall Street for the financial crisis. The author sided – together with Niall Ferguson and John Gordon Steele – with the view that Washington should be blamed more than Wall Street even if – as I agreed – many bankers and investors were greedy, incompetent and taking excessive risk. The audience of 700 sided with our side in a vote at the end of the debate. But maybe the fact that the debate took place in New York – with the audience having many financial market participants biased the results on our side; if the same debate had taken place in Washington probably a majority of that wonk city crowd would have blamed more Wall Street. And while I emphasized the flaws of poor regulation and supervision and easy money and credit policies I could have certainly argued for the other view as arrogance, excessive risk-taking and greed was widespread among the Masters of the Universe of Wall Street.

The full transcript of this debate is available online at this link; the debate will also be broadcast in a few days on National Public Radio. Here is below a press release on this debate and its main themes and results followed by a brief commentary on the debate by John Fund of the WSJ:

NEW YORK – (Business Wire) Intelligence Squared U.S., the Oxford-style debate series sponsored by The Rosenkranz Foundation, announced the results of its third debate of the Spring 2009 season, “Blame Washington more than Wall Street for the financial crisis.” Though both sides agreed that there was plenty of blame to go around, the sold-out crowd sided overwhelmingly with the proponents of the motion—a team led by “Dr. Doom,” economist Nouriel Roubini—voting 60% for the proposition, 31% against, with 9% remaining undecided.

The evening began with a pre-debate vote that found nearly a third of the audience at The Rockefeller University’s Caspary Auditorium open to persuasion, with 40% voting for, 30% against, and 28% undecided.

But not everyone was convinced by the outcome. Byron Wien, a former managing director at Morgan Stanley, explained the vote results to the Wall Street Journal this way: “I think Wall Street deserves by far the largest share of the blame, and I think this is a home-town crowd that’s unwilling to see that.”

Speaking for the motion were Niall Ferguson, professor of history at Harvard University; John Steele Gordon, author of An Empire of Wealth; and Nouriel Roubini, professor at New York University’s Stern School of Business and chairman of RGE Monitor.

Alex Berenson, investigative reporter for the New York Times; Jim Chanos, famed short seller and founder of Kynikos Associates; and Nell Minow, editor and co-founder of The Corporate Library spoke against the motion.

John Donvan, correspondent for ABC News Nightline, moderated.

A full transcript of this debate may be seen at:
http://www.intelligencesquaredus.org/images/debates/past/transcripts/Financial-Crisis-031709.pdf
Author: Nouriel Roubini ·
March 19th, 2009 ·