Speaker blames feds for economy

The federal government has transformed a bad cold into pneumonia, according to Ronald Rosenfeld. Rosenfeld, who is the U.S. Treasury's deputy assistant secretary for corporate finance and a Wharton graduate, spoke to an audience of 30 students last night about the workings of Washington. Rosenfeld said Congressional pressure weakened an already poor economy until it is "the worst in 50 years." According to Rosenfeld, who spoke as part of the Musser- Schoemaker Leadership Lecture Series, Congress has started a "credit crunch" which is now stopping potential borrowers from securing loans. This is keeping the economy in a slump, he said. "You can't make character loans anymore. All bankers care about is collateral," said Rosenfeld. "There is almost a reign of terror that runs from Congress to regulators to individual banks." This reign of terror, said Rosenfeld, is a paranoia that sprang from the Savings and Loans crisis. In order to prevent another breakdown, Congress is pressuring regulators to be tough on banks wishing to make new loans, he said. "Congress has gone much too far to micromanage the extension of credit," Rosenfeld said. "Congress put the fear of god into regulators." Rosenfeld served as a political appointee under Jack Kemp at the Department of Housing and Urban Development, and was later moved to the Treasury Department. He said he learned more than he wanted to about politics in the Reagan administration. "The Reagan administration was inept and very political in the worst sense of the word," Rosenfeld said. "If you were a well-connected real estate developer, you could make a call and have a certain decision changed." The atmosphere at HUD changed under Kemp, according to Rosenfeld. But there was still a stifling presence of bureaucracy, he said. "Bureaucracy begins to win the fight," Rosenfeld said. "After a while you begin to learn what you just can't do." Rosenfeld said he did feel proud about serving his country. "It's a spectacular experience," he said. "There's nothing like sitting at that desk with the flag behind you, representing the U.S. government." Cecile Reid, a Wharton senior from Barabados, said Rosenfeld's speech confirmed her desire to work for the government in her home country. "Everyone at Wharton is concerned with their G.P.As and making money," Reid said. " He proves that there are people who graduated who want to work for their country, to help everyone." Wharton freshman Dan Debicella said the speech also moved him to act. "It's men like this who make you feel that you can do something in government," Debicella said.