Hank Greenberg, the man who built AIG into the world's largest insurer, doesn't have a whole lot of good things to say about what's happening in the U.S. financial scene.
The rushed reforms that politicians are trying to push through in the wake of the financial crisis are misguided, he says. There's too much focus on writing new rules instead of strengthening the regulators charged with enforcing them. The best he can say about the U.S. economy is "it's somewhat better than it was." And banks such as Goldman Sachs Group Inc. aren't being completely open about what happened - to mildly paraphrase his views on the subject.
Yet at 84, Mr. Greenberg is still in the game, now running a private insurer and finance company in New York. So he must see some hope for U.S.-style capitalism.
"We're resilient; we change when have to change," he said in an interview Thursday in Toronto. "Sometimes it takes longer than you'd like. But on the other hand that's what America is. It is a culture that is such that when we have to confront a major problem, we'll do it. It makes no difference if you're left, right or centre. We'll get it done. I haven't lost faith in America. There's been times I questioned whether or not we knew what the hell we were doing."
The response to the crisis was ad hoc, which gets under his skin; the government should have been better prepared.
The irascible executive, who whisked into Toronto on a private jet Thursday just long enough to give a speech at Toronto's Grano restaurant as part of the Salon Speakers series, falls back on an idea perhaps grounded in his military training.
He fought in the Second World War and in the Korean War, rising to captain and winning a Bronze Star.
"Treasury and the Fed - they could take a lesson from what war planners do - they have a plan for virtually any type of incident that might occur and how they might respond to it," he argued. "Now, obviously, you're not going to think of every bit of problem, but you could have had a plan to deal with various issues.
"It was not impossible to forecast that the housing market was going to collapse. There were sufficient numbers of people who had been saying so. There were a sufficient number of investment banks that acted on that."
This, of course, is a reference to the idea that banks such as Goldman Sachs Group Inc. were betting against the market at the same time as they were selling clients investments backed by mortgages. It's something Goldman Sachs took pains to deny in a letter to shareholders this week. "If you believe that, you believe in the tooth fairy," Mr. Greenberg said.
Of course, he said, there will be those who say: Why should we listen to you? You're the guy who ran AIG.
He said he would never have allowed the company to take so much risk. Many of the troubled credit default swaps AIG sold were deals done after he left the company, and the risk was compounded by the fact that AIG lost its triple-A credit rating amid the accounting questions that contributed to Mr. Greenberg's ouster by the company's board. Without the triple-A rating, AIG had to put up more collateral, which caused the liquidity crisis that forced the company to its knees.
Mr. Greenberg argued that the management team that took over after he left in 2005 was imprudent to sell so many credit default swaps, and regulators should never have let it happen.
In his view, the regulators are the crux of the problem: They just aren't good enough at their jobs. "It's not that there were no regulations. There were plenty of regulations. Where were the regulators?"
But the fix he proposes may not be what Americans want to hear, amid the turmoil over Wall Street bonuses and with unemployment stuck at high levels and wages stagnant for so many people.
"Get better people. How do you get better people? You have got to pay more." What about the politics of that? "It's a hell of a lot cheaper than what we have now."
The most important thing, he said, is for politicians to take the time to check all the facts before forging ahead with any big changes. "It's a mistake to try to propose legislation before you know what the hell happened."
It's up to Congress and the media to get to the bottom of the mess. And if they can't, there's always the courtroom, with lawsuits that force evidence to come to light through discovery and depositions, Mr. Greenberg said.
"We're in a period of time where we're trying to find out what happened," he said. "It has to happen. There's a constituency - the U.S. public - that wants to know what the hell happened."