Former N.C. Treasurer Richard Moore says America is asking the government to do “something that it’s not very good at” when it comes to the federal stimulus plan and job creation.
Moore spoke to students, faculty and staff of the Wake Forest University business and law schools at the Worrell Professional Center on Tuesday, Feb. 24.
As a member of the board of the New York Stock Exchange, Moore is tasked with trying to protect investors by enforcing federal securities laws and marketplace regulations. He addressed the current state of the markets and how we got to where we are today, the impact of the federal stimulus plan, investing in today’s economy, and the future of market regulations and CEO pay in his presentation.
Moore said that risky investment practices were the result of government regulators mismanaging the financial markets for the past 20 years, which led to the mortgage meltdown. At first, Moore said, he supported the belief that people should be able to get into homes with no money down. “But if someone is not disciplined enough to save 5 percent to put down on a house, how can we expect them to pay back the loan? How could we have forgotten such a basic thing? I hope this era of no regulation is over,” he said.
Moore said that lenders lost sight of two most important things that they need to know before loaning money: the value of the asset and “if you can pay it back. No one in California, Nevada or Florida did a pro forma on what would happen if housing values went down.”
Despite the fed chairman’s predictions that the economy could rebound this year if government actions work, Moore described the recession as unprecedented in the U.S. Faced with mounting home foreclosures and job losses, Moore said Congress approved the $787 billion stimulus plan because Americans want the government to create jobs. “We are at a dangerous place in society,” he said. “Our government is picking winners and losers in the marketplace.”
Moore showed a clip from the CNBC show “Squawk Box” in which he criticized the government for bailing out the automakers but not North Carolina-based Wachovia. Thousands of jobs were lost at Wachovia as the result of the government-forced merger of the banking giant and Wells-Fargo & Co., Moore said.
He added that the practice of investing money rather than saving for retirement is not sound. Moore encourages everyone to save as much of their earnings as possible rather than investing them. “This 401k thing is not working,” he said. “We need to figure out how to retire on a return equal to the inflation rate plus 3 to 5 percentage points.”
The School of Law, the Calloway and Babcock business schools and the Office of the President co-sponsored Moore’s lecture.
Moore, who began his political career as a federal prosecutor in 1989, ran as a Democratic candidate for N.C. governor in 2008. Though he lost in the primary to Gov. Beverly Perdue, Moore gained endorsements from more than a dozen state newspapers, including the Winston-Salem Journal and the News & Record of Greensboro.
In 1992, Moore was elected to the N. C. House of Representatives, where, for example, he sponsored bills to reform government and increase unemployment benefits. Moore was appointed Secretary of the Department of Crime Control and Public Safety in 1995 before completing two terms as state treasurer.
Moore grew state assets from $60 billion to $90 billion and was responsible for issuing billions of dollars in public debt while maintaining the state’s AAA rating status. Moore also served two terms as the only elected official on the executive board of the N.Y. Stock Exchange and currently serves on the NYSE Regulation board.
The Granville County native has been honored as a Top Public Official of the Year by Governing Magazine for his national leadership on corporate accountability and guidance of the state’s pension fund and has been profiled in US News, his bio said. In 2006, Moore received an Eisenhower Fellowship to study business and financial systems in China and India.
Moore graduated from the Wake Forest University Law School in 1986 with honors and from WFU in 1982 with a degree in history. He also holds a graduate degree in Accounting and Finance from the London School of Economics.