BlackRock CEO Fink: "Capitalism Went Way Too Far... I'm Guilty, We're All Guilty" (VIDEO)

CNBC assembled a crew of "the greatest minds in business" - former GE CEO Jack Welch, BlackRock CEO Larry Fink, PIMCO CEO Mohamed El Erian, Citi CEO Vikram Pandit, AQR Capital Management Founding Principal Clifford S. Asness, Ph.D., Ogilvy & Mather Worldwide Chairman Shelly Lazarus, and National Urban League CEO Mark Morial - to discuss the future of capitalism on Monday night.

Fink was exceptionally honest in his assessment of the financial crisis, taking blame for his part, and challenging Welch's attempt to point fingers at the government:

Fink: Capitalism went way too far and there was no one governing the tails, the excesses of capitalism and im blaming the investors too...

Welch: and government enjoyed it because they got a lot of revenues from it

Fink: But government accepted this, regulators accepted it, lets be honest Citi was reviewed every quarter by...but it was the investors too...I'm guilty, Mohammad, we're all guilty everybody here was guilty we accepted that model

Watch the video of Larry Fink:

Read further excerpts of the discussion:

FINK ON GOVERNANCE

Fink: The biggest issue we have, what I am frightened of going forward is we have told all the banks that they have to have 10-1 leverage or less. It can't be more leverage. We're telling all the shadow banks you can't be 40-1 leverage, you have to be 10-1. So we have changed the capitalist structure we are now changing the bankruptcy rules, rights of senior lenders versus junior lenders, of secured lenders versus unsecured lenders

Welch: Larry its no different than it has been

Fink: Let me finish, this is really important we as a nation whether we are 1.5, 1.7 trillion dollar deficit with lower leverage ratios we are going to be more dependent on the capital markets in the future then ever before.

***

PANDIT ON PAIN

Pandit: There has been a lot of pain. People have paid for it and are paying for it in a significant way we have reset the world we reset the world in a variety of different ways and what we really have to look to do right now is not the retribution but what can we do to drive growth going forward.

***

ASNESS ON ACCOUNTABILITY

Asness: You talk about trust I want to see someone in government someone who was telling us Freddie and Fannie were fine three weeks before they were incredibly not fine ever say anything sounding like a mea culpa. Jack called it a hair shirt, we're all...I apologized to my clients we are all walking around apologizing.

***

LAZARUS ON TAXES

Lazarus: If we could talk about tax policy within the context of growth within the context of we will have this tax policy because we think this direction is going to create jobs then all of a sudden you start to communicate with the people in a way that means something to them that they understand.

***

PANDIT ON GROWTH

Pandit: I think the solution is to refocus away from just stabilization wchih i think we have to continue for a period of time towards more of an ideology about whats going to drive growth and judge policies against those that drive the right kind of growth not the kind of growth that we had which was credit driven but the kind of growth that comes from services, exports, manufacturing, innovation.

***

WELCH ON RESILIENCE

Welch: One of things about being older is that you have been through it before and if you lived here in '81 '82 and you were running a corporation and I was and the Japanese were going to take over the world, unemployment was 13%, inflation was double digits, we were going to lose, we were gone, Japan owned everything they were buying downtown they were buying pebble beach, they were doing all this and we were done...we're not done, we've been through this before we will come back as long as we recognize giving opporunity and spirit to everybody and taking care of those who can't make it

***

WELCH AND FINK ON AUTOS

Fink: We've got to work on education, we've got to work on building new factories, you know there is a positive silver lining to what's going on in the auto industry we are going to have a competitive auto industry now
Welch: Come on Come on- you think bailing out Chrysler and GM is going to create a competive...and the government running...

***

PANDIT ON PAY

Pandit: I hear the president talking what America's feeling. They're feeling exactly what Mark said, a lot of things went wrong, a lot of people are involved, but the bankers and the banking systems was at the heart of this and there has to be some retribution and by the way there is a strong sense of belief that we didn't have the guardrails to control capitalism, therefore we didn't have the right governments and compensation was a big part of having the right governments in place. And if you want to shift to the right kind of compensation governance, the right kind of incentives, such as what Jack designed at GE. Sometimes you need shock therapy.

***

FINK ON PAY

Fink: The issue is how to we get our country back on its feet. How do we rebuild capitalism. There's way too much focus on compensation. We need to focus on what is the best model on balance between government and business. We need to creat tax policies that encourage long-term investing. We have created tax policies to encourage short-term investing. We need to really re-think this balance between government and business.

***

FINK ON THE ECONOMY

Fink: The economy is in much better shape today than on May 15th or 14th or wherever we are today versus where it was in February. We've moved the dial. No one saying we have armageddon here, I don't believe. I think people think armageddon is behind us, but if we had this session three months ago, we'd be questioning that option.

***

MOHAMED EL ERIAN ON RULE OF LAW

El Erian: The most important thing for capitalism is trust. And the trust has to go both ways... the government has to trust that the private sector will behave according to a certain rule of laws, ethics and morality. And the private sector has to trust that the rule of law, property rights, contracts and the capital structure.

***

WELCH ON BIG GOVERNMENT

Welch: So the questions going to be, with almost 50 percent of the people not paying federal income taxes. Now I know about payroll taxes and other things. Why are they gonna want anything but big government? How are we, is this gonna be a hundred years of democrats?

Comments

[Lilith33]

04:56 PM on 05/20/2009

Why arent some of these guys in jail? and people are still listening to them? what kind of alternate reality is this anyway!

[Portnoy]

09:32 AM on 05/20/2009

Capitalism = FAIL

..and not a moment too soon. Once we completely do away with this failed economic system that only benefits 1% of Americans, we will be able to move forward and install some REAL change in this country.

The past 100 + days have been glorious. Seeing the Banks, investment firms, Car Companies and soon the credit card and health companies start totpay for their greed has made me smile every day.

Well done, Mr. President. Well done.

[RandVictims]

08:15 AM on 05/20/2009

If as many Americans read Das Kapital as watch American Idol, the masses would demand the immediate end of Capitalism­.

[jonmonbuckeye]

10:43 PM on 05/19/2009

Capitalism as we know it is dead. It is a failed model because it does not account for the aged old problem that led to the fall of Soviet style communism- greed. Until you can control that basic human instinct, all economic platforms are doomed to fail.

[tippydog11]

09:48 PM on 05/19/2009

I Who creates more socialism and root cause? I ask corrupted capitalism­?

[sixchair]

09:38 PM on 05/19/2009

Who wouldn't accept a model of 40 - 1, backed up by the finest algorithms money could buy? Hey math genius, give me a formula that says everything­'s gonna be O-Tay! What a cluster f&*^k.

[sixchair]

09:32 PM on 05/19/2009

Crocodile tears from the oligarchs. Why is Pandit still around?

[20090120]

09:29 PM on 05/19/2009

Sound familiar..­..criminal­s always claim after their caught robbing the bank or murdering someone...­'If I'm guilty for robbing that bank, then I was made to do it by everyone else'. Always a 'victim' but never a criminal. What a load of...

[LiberalForever]

06:14 PM on 05/19/2009

These are the very people who have almost murdered the country, sitting around all fat and wealthy and spewing forth their evil garbage...­and they truly ARE evil.

Their wealth bought the death of regulation­. Simple.

Once and for all, get it right, these people deserve zero respect, either for their opinions or their lives lived. We are statistics to them, not living, breathing people.

Radical? Yes indeed. Radical times need radical solutions. Jail them.

And close down their off shore tax shelters.

[lily31]

03:54 PM on 05/19/2009

Had the two women who received the Kennedy awards yesterday plus a couple of the legislator­s who saw it coming replaced half of this panel, the discussion would have been far different! And far more helpful.

This was one sick joke!

[coldfall]

11:54 PM on 05/27/2009

I agree Lily31. Maria Bartoroma is not a talented reporter, not the one to lead a discussion about capitalism­. She seems incapable of asking meaningful questions or challengin­g top executives as a reporter. What is the word for people like her, who are good at kissing hand, but not good at defining what capitalism actually is - not good at asking hard questions like an authentic news reporter would do? She seems just as compromise­d personally­, as they are. Really is sad to watch.

[iamwatching]

03:52 PM on 05/19/2009

It is the emotional need for greed from the people who make up the workforce in the financial markets , not capitalism by definition that has created this mess.
It is your bankrupt values not the system that 'balanced' adults find amazing. A sociopath can be very successful in the financial industry, but they do a lot of damage as well. Just as a corporatio­n that operates in a sociopathi­c manner and calls its actions acceptable because it is about 'profit' and has no other responsibi­lity to society or the nations of man.
This illogical and a flawed way of thinking. It is aberrant behavior and fits neatly into the syndromes of abnormal psychologi­cal behavior that plagues our societies. I would say this behavior is as violent toward society as any individual assailant could be. It should be treated accordingl­y and not celebrated­.

[sposton]

04:01 PM on 05/19/2009

A system with a critical mass of sociopaths in charge of a financial system is failed system. You can't blame this just on individual­s; this is a culture of corruption and run away greed. Let's suppose these sociopaths worked for police department or fire department­. Would you still just single out these sociopaths and leave the system intact as if the system was alright with just a few bad apples in it? This is a true crisis of capitalism as we practice it in this country.

[The Meek]

04:16 PM on 05/20/2009

Would the mental health profession­als PLEASE give the American People some tools for identifyin­g sociopaths­. It's a personalit­y disorder and those that have it should not be allowed in positions of power. They are sick.

Yes, I know, the mental health profession is packed full of sociopaths­, but I had to vent.

[RandVictims]

08:05 AM on 05/20/2009

Capitalism is an opiat for those without morals or ideals, as if the past 30 years of national decline and near collapse isn't a strong enough statement.

[dadw5boys]

03:39 PM on 05/19/2009

WE WANT A SEPERATION FROM YOUR TYPE OF CAPITALISM !!!!!!

You have treated the American People just like the World Bank treated 3rd World Countires when robbing them of their natural resources and corrupting their government­.

You setup your CRONIE CAPITALIST STATE and after driving most of the people deep into debt and gaining control of the natural resources you want to separate yourself into the we have and you don"ts !!!!!!

No you had you chance we supported your cronie capitalism even taking on great debt to help you succeed but your greed killed even that. We gave you access to the very retirement and insurance fund that kept the street from being littered with sick and the elderly.

You will never have enough you will only devour everything you ever touch. So before, you go with all your great abilities out on your own. Drop what you stole at the door and don"t let it hit you where the good lord split ya on the way out. !

Enjoy the separation­; we will that is for sure.

[sposton]

04:13 PM on 05/19/2009

Jack Welch thought that all factories ought to be on barges that can be dragged to the cheapest source of labor. F^&k American people! I say let us put these cretins on these same barges and let them off the coast of Somalia. When they scream for help send in the global Navy, Army and the Marines. Surely they were paying for those global armed forces by taxes from all that wealth stashed in tax havens around the world.

They don't believe in America and they don't believe in American people. They have done their utmost to ruin this nation but we still let them rule over us. What's wrong here?

[TJCole]

03:38 PM on 05/19/2009

Capitalism went to far and still hasn't been properly reeled in and modified so it serves the people and what's best for our nation...

Our nation shouldn't exist to serve capitalism­, capitalism should be serving our nation, which is it's people..!

[AcitizenNJ]

03:37 PM on 05/19/2009

Gotta love jack, a capitalist till death.....

it's easy to blame government­, you guy's bought them

[sposton]

03:43 PM on 05/19/2009

A hypocrite all the way.

[tbonehead]

03:30 PM on 05/19/2009

jack welch is still being held down by his ego; he thinks this a war of haves and have nots; so what if the rich pay a great deal of the taxes; how many rich dads' sons are fighting the wars and paying the ultimate sacrifice for capitalism­. would you trade a family members life for taxes. Let's become more productive­, healthy, and educate our children and you will see a new USA. The idea is to pay off debt with productivi­ty gains.

[sposton]

03:52 PM on 05/19/2009

It is very hard to become more productive without the capital. Plutocrats have fought hard for the current global hypermobil­ity of capital for a reason. They invest wherever they wish and nowadays that is more likely to be in China than America. Then as China is becomes a greater power we have another sets of plutocrats telling us we need to increase our military spending to defend ourselves from the emerging Chinese threat. If one is dropped on Earth from another planet this kind nonsense would be immediatel­y obvious, but American earthling seem to be utterly incapable of seeing our kleptocrac­y in action. Oh, most everyone seems to know that something is wrong but most are incapable of pointing in the right direction. Some blame, unions, some government­, some gays,..., but very few blame the plutocrati­c classes which have so utterly failed in their management of American economy while completely subverting whatever democracy we did have.