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Sen. CLINTON: I would open that up. You know, I have a proposal for an American Retirement Account, which is an universal account, like a 401(k) and you can use it for much broader range of purposes without penalty because what we want to do is incentivize savings and when people save, especially if it's tax-free savings, we want to give them a chance to make what are reasonable, you know, decisions, like buying a home, sending a kid to college. So let's be smart again about how we try to get Americans moving back toward wealth creation. And if we lock it up and we say you can't spend it without a penalty, I think that works against an individual. It also works against the larger economy.

CRAMER: OK. You mentioned Bear Stearns. Would you have let Bear Stearns go? They were a bad actor. They were highly overleveraged. This was an organization that is considered to be, I think, the hazard of the system. Would you have just let them disappear?

Sen. CLINTON: You know, I'm not going to second-guess the Fed because I, obviously, don't have privy to all the information, and my understanding is it was more about the ripple effect, the cascade of, you know, disaster that would've flown from that. And so, you know, action probably did have to be taken. But I think it's fair to say that we're still just looking at one end of this problem. We're not looking at the deeper problems, the failure of oversight, the, you know, the real dismissal of warnings like the ones I made a year ago.

CRAMER: Right.

Sen. CLINTON: That, you know, that we were heading toward a lot of trouble. So there's enough blame to go around. Everybody has contributed to this. Let's not compound it. Let's start to take some action, both by the regulatory authorities, the administration and the Congress. Let's show that we're a grown-up country and we can take care of business again. That's what I think people are looking for.

CRAMER: Right. Senator...

Sen. CLINTON: Instead of this, you know, downward drift.

CRAMER: How can you reconcile the diminution of the SEC under Treasury Secretary Paulson's new regulatory scheme and the ascension of the Federal Reserve's role in regulation given the fact that the stated purpose of the SEC is to regulate, and Fed Chairman Bernanke has no desire to regulate?

Sen. CLINTON: Well, bingo. I am with you all the way. I think if we're going to begin to cope with the new challenges to a regulatory framework in this new global economy and it goes beyond Bear Stearns.

CRAMER: Right.

Sen. CLINTON: It even goes beyond this housing crisis. I mean, we just have to figure out that we've got to regulate our economy and try to figure out a global framework and we need institutions like the SEC to be strengthened, not weakened. We've got to look to empower and give teeth to enforcement mechanisms, and we've got to give terms of office and real suport for professionals who are put into those positions so they're not subject to the political winds and whims.

CRAMER: Oh, OK.

Sen. CLINTON: I think the Fed does need some additional regulatory authority. If they're going to open the discount window to noncommercial banks, which they have done, then they're going to have to provide more oversight.

CRAMER: Good point.

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