Americans should direct their anger at Congress, not Wall Street, for the nation’s economic woes, a former government official told CNBC Friday.
“We should be angry at all the large firms, but we should be very upset with the people in government who really helped inflate this,” said Bill Isaac, the chairman of the Federal Deposit Insurance Corp. (FDIC) from 1981 to 1985.
Isaac attributes the anger to the Troubled Assets Relief Program (TARP) legislation of 2008, which provided $700 billion to the large Wall Street firms.
“I was adamantly opposed to TARP. It was not needed and it did more harm than good,” Isaac said.
The rocky relationship will eventually get fixed, Isaac said. “This will get repaired. We’ll get past this,” said Isaac. “But the damage will last a long time.”
The next blow to Wall Street could be the financial regulation legislation currently being addressed by the Senate.
“This is a bad bill and it’s getting worse by the day,” Isaac said. “Hopefully, they’ll load it up with so much, it can’t pass, and we take it up again after the (mid-term) election,” he added.