By Jessica Holzer | Posted: 1/18/08 10:43 AM [ET] - 01/18/08 10:48 AM EST
A panel member, Kaptur was making her way through a four-part question driving at the culpability of Wall Street financiers in the sub-prime crisis when she zeroed in on the Fed chairman, “Seeing how you were the former CEO of Goldman Sachs —”
A roar erupted on the dais as members from both sides of the aisle tried to correct her at once. The audience gasped.
Not deciphering what they were saying, the 13-term congresswoman and former staffer in the Carter White House pressed on: “I got the wrong firm?”
“No, you’re confusing me with the Treasury secretary,” said Bernanke, a longtime academic whose very lack of private-sector experience stirred worries while he was a contender for the Fed job.
“Yes,” said Bernanke.
“Oh, OK. Where were you, sir?” Kaptur said, clinging to the idea that he had been a Wall Street titan.
“I was a CEO of the Princeton economics department,” Bernanke quipped, prompting laughter.
Kaptur apologized, admitting, “I got you confused with the other one.”
Undaunted, she pressed on with her questions. A hearing with such a prestigious witness is, after all, an opportunity for lawmakers to showcase their expertise and to gain high-profile support for their views.
Among other things, Kaptur asked which institutions were most responsible for spurring the shift toward “securitization,” or the repackaging of mortgage loans, and whether the bankers and financiers “who brought us this sub-prime debacle” ought to be required “to pay back their salaries and bonuses to the United States.”
Her blunder, however, may have tested the Fed chairman’s patience. “Congresswoman, that is quite a list of questions,” he admonished.
Then, after explaining Fannie Mae’s role in spreading the use of securitization, Bernanke said, “I’m not going to comment on the CEO question. I don’t think it’s really my — department.”