Fox News' Neil Cavuto Revisits Financial Crisis: 'There Were Many Dirtied Hands' (Q&A)
Sept. 15 marks the five-year anniversary of a devastating financial collapse that sent the price of stocks and houses plummeting and led to bailouts of banks and automakers. To mark the occasion, Fox Business Network has scheduled The Market Meltdown: 5 Years Later, an all-day block of programming on Monday. The Hollywood Reporter’s Paul Bond spoke about Meltdown to Neil Cavuto, the senior vp and managing editor of the Fox News Channel and Fox Business Network who also hosts shows on each.
Why, specifically, is Sep. 15 considered the anniversary of the meltdown?
It was the formal collapse of Lehman Bros., the one firm that was not rescued, and there was a calculation that went into that. Bear Stearns was rescued and Fannie Mae and Freddie Mac were nationalized, but they drew the line at Lehman.
Why did Lehman fail?
There was a general freeze on lending and buying of financial institutions amid a global panic about the safety of funds. There was very little faith in any institution. I vividly recall when their stock was swooning and it tightened up the amount of capital they had to lend, expand and conduct their operations. Stock was their currency to conduct business.
Michael Moore and Occupy Wall Street say the meltdown was the fault of capitalism run amok. Are they right?
We’re always looking for a villain, and there were many dirtied hands, back to the real estate meltdown. There was a time when banks were criticized for not lending enough to homeowners. So in the Clinton years there was something called the Community Reinvestment Act, where intentions were good, though it led to a shift from where owning a house was a goal, to now it was a birth right. When we dropped the standards to get people into homes it was just a matter of time before Wall Street would find a way to package that risk. I’d say to the Occupy Wall Street crowd that they should similarly be protesting outside the steps of the Capitol, under all administrations.
So whose the biggest villain?
There’s not a single villain, but government creates a mess sometimes when it tries to fix a mess, and the housing issue is indicative of that. There was a time when your home was your piggy bank and no matter how much debt you were in you could get a home-equity loan and pay it off. There was a collective naivete. Where I fault Occupy Wall Street is in blaming Wall Street, not that I'm an apologist for Wall Street. I’d blame Washington for encouraging a bubble; banks for packaging the bubble; and individual homeowners who used $30,000 to get $1 million home loans that they knew in their heart of hearts they couldn’t afford.
Did the media cover the meltdown correctly?
They tended to be like lemmings in a rush. Many said we had to rescue the banks with TARP, this $750 million monstrosity concocted under President Bush. I remember saying, ‘guys, go slow here.’ I got in arguments with the late great Jack Kemp and Jack Welch and Treasury Secretary Hank Paulson. They painted a negative, saying that if we don’t do this, then this will happen, though you never know what’s going to happen in the future. But I do know that many of these rescues needed follow-up rescues.
Economic growth is anemic and unemployment is high. So why does the stock market keep climbing?
The Federal Reserve has a lot to do with that. A lot of people bemoan this recovery, but I don’t. We’re not off to the races, but we are off the mat, which is an achievement if you look at where we were five years ago. If you know anything about housing prices and economies being decimated, you know that the comebacks are long in coming, and this one is particularly long because the meltdown was global.
What should the president do, or undo, to grow the economy?
I know this sounds trite, or libertarian, but government does best when it does nothing. When the government comes in the middle of a fire, and creates something to get us over the hump for the time being, it creates other humps down the road. The government’s role is to let those who screwed up see the tragedy of their ways and suffer accordingly. Unless we see that, institutions and bureaucracies feel the government has got their back, and it leads to risky behavior.
What’s the best programming you have for the five-year anniversary?
Monday is the first trading day after the anniversary, and we’ll be exploring what we learned and how vulnerable we still are. One thing we’ll touch on is that a lot of things have not changed.
Why is FBN secretive about its ratings?
I don’t think we are secretive. I can’t get ratings obsessed. We put out the best product and hope people watch. That serves us well. Is it perfect? Absolutely not. But I could have said the same thing five years into Fox News, where it was like I was in the witness protection program. It takes time, to be honest.
So if you’re not secretive, how many people watch?
I don’t have exact numbers. I go by which newsmakers we can get on our air. I know it might strike you as odd, but I don’t think in terms of what brings ratings. That would be like politicians changing in an instant because of polls. And if I get pathetic ratings, I won’t be here, nor should I be. We’re building it, people will respond to it and they’ll be inclined to stick with it.
Who is the big newsmaker you’d like to get right now?
Pope Francis, because he is shaking things up in the Catholic church. I always like leaders who take a different tack, so I’m a fan of people like Mark Cuban, because they are so odd and they change your view of the role of a good leader. I know how difficult it is to change an institution, and I find the way that the pope is going about it, with such a decent heart, that he’d be my pick of an interview.
Who was your most memorable interview?
Among them, a young Steve Jobs when he first came out with the Apple Lisa computer, which was such an unusual thing. He had such passion and was such a ball of energy. He struck me as the Thomas Edison of our times.
You’ve had cancer and now multiple sclerosis. How are you feeling?
Knock on whatever, I’m still here. If I have a bad day on air, I blame the disease. If I have a good day, I don’t want anyone to mention the disease. So I use it as I do at home to get out of projects -- but my wife won’t tolerate it.