Lloyd Blankfein

The first reaction, an early reaction, was the economy should never have these risks again.

And so regulation was stiffened.

Capital requirements for financial institutions were stiffened.

What's the consequence of that?

It means that some of the financial institutions can't do their job as well because they can't lend as much.

They have to husband capital instead of lending it out and supply it.

And over time,

there was such an antipathy towards what some of the regulators did at the time, again, with the benefit of hindsight, that they curtailed some of the powers of the people, of the regulators, some of the powers that they exercised to make judgments about who to save, how to give money, how to distribute money into the economy and the financial institutions.

And by the way, all of this is quite understandable that the reaction would be this way.

But the effect of it is to make it

possibly harder the next time there's a problem.

Now, one would say, why would there be a problem the next time if you've put in all these instruments?

Because over time, the stark discipline starts to erode.

Also, you don't want to turn

the country into the returns of a treasury bill.

You want animal spirits.

You want people to take risk.

So if you prepare the world or the country to avoid the crisis of the century or the crisis that you have 80 years, you'll lose 79 years of growth in between.

Sometimes there just is going to be

There's a cycle to these things and that will happen and we could talk about the current environment of what the cycle is.