Robert Reich, Bill Clinton’s Secretary of Labor from 1993-1997, argues that Wall Street and Detroit have no intention of fundamentally altering their business strategies because they view the economic crisis as the low point in a cyclical downturn, not a result of structural weakness. He writes, “Both Wall Street and Detroit earned big bucks from their old strategies, before the bottom fell out of the economy. So it’s natural they’d view the bailouts as ways to hold on until the economy rebounds…Wall Street and Detroit are willing to say whatever they need to say to keep the taxpayer money coming. But when the economy begins turning up, my betting is that their Washington lobbyists will push back hard against any major restructurings the government wants to impose on them…Washington will not only have to set strict standards now and in the months ahead when the economy begins to revive.”

 

The Debate to Come over Wall Street, Autos, and Everything Else: Cyclical or Structural (by Robert Reich, Robert Reich’s Blog)