By Lynn Adams Smith 

lan S. Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University, now on leave as a Visiting Fellow at the Brookings Institution. He served as the vice chairman of the Federal Reserve’s Board of Governors from 1994 to 1996, was a member of President Clinton’s Council of Economic Advisors, and is an informal policy adviser to the Hillary Clinton campaign. Dr. Blinder is a regular columnist for the Wall Street Journal and appears on PBS, CNBC, CNN, Bloomberg, and elsewhere.

Wells Fargo was recently fined $185 million for opening accounts without customer’s knowledge, going back to at least 2011. Are some banks simply too big to regulate? And are smaller community banks overwhelmed by regulations, resulting in an increased number of consolidations?

I don’t think any bank is too big to regulate, though no one should expect regulators to see everything—especially if the bank is not forthcoming.

We may well have gone too far with regulating smaller banks. Ironically, they have been the victim of Washington’s extreme obstructionism. Both parties agree, I think, that the regulatory burden on community banks could and should be lightened. I have some hope that something might be done after the election.

Please comment on the recent agreement between Governor Chris Christie and Democratic leaders to raise the gas tax 23 cents to fund the transportation program. The deal includes eliminating the estate tax, a slight reduction in sales tax, and increasing the income tax credit for low income workers. 

As a citizen, my reaction is: “it’s about time.” No one likes higher taxes, but the money has to come from somewhere. It’s too bad the estate tax had to be part of the ransom.

Hackers were found to have targeted election systems during the Presidential campaign. Is our financial system at all vulnerable to hackers? 

I think everyone knows by now that our financial system, like all of our IT systems, is vulnerable. Indeed, we have seen several major banks successfully hacked, despite prodigious efforts on cybersecurity.

Your book about the history of the 2008 financial crisis; After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead was a New York Times bestseller and has been praised for making complicated economic issues understandable to the lay reader.

In the book, you wrote about “The Ten Commandments for the Future of Finance.”

1. Thou Shalt Remember That People Forget.

2. Thou Shalt Not Rely on Self-Regulation.

3. Thou Shalt Honor Thy Shareholders.

4. Thou Shalt Elevate the Importance of Risk Management.

5. Thou Shalt Use Less Leverage.

6. Thou Shalt Keep It Simple, Stupid.

7. Thou Shalt Standardize Derivatives and Trade Them on Organized Exchanges.

8. Thou Shalt Keep Things on the Balance Sheet.

9. Thou Shalt Fix Perverse Compensation Systems.

10. Thou Shalt Watch Out for Ordinary Consumer-Citizens.

Today, have we fully recovered from that crisis and are we doing a good job at living by those ten commandments?

We have almost fully recovered financially and economically—but not psychologically. But I’d say we’ve done only a so-so job, at best, of adhering to these commandments. For example, we have a long way to go on regulating derivatives; rating agencies continue to get paid by the companies that issue the rated securities; and some banks continue to do outrageous things. Yet Republicans still want to repeal Dodd-Frank.

Could you explain why real wages have been flat and do you see that improving in 2017?

I can’t, entirely. Neither can anyone else. A little bit is statistical illusion, but the plain fact is that real wages on average have done poorly and real wages on the bottom rungs of the ladder have done dreadfully. A bit of it is due to import competition, though that is frequently exaggerated. Another bit is due to the decline of unions. A third bit can be traced directly to government decisions, such as not raising the minimum wage. But I think the main story is that technology has worked to the benefit of top earners and against low-skilled workers. This is not easily reversed, but—and this is very good news—real wages have been climbing lately as labor markets have tightened. So we don’t have to wait for 2017 to see improvement. It’s happening already.

What should be the number one economic priority for the next President?

It would be a sharpening of your previous question on wages. The truth is that the wages of the lower 99 percent have been doing poorly. The economy is delivering for the top 1 percent, but that’s not nearly enough. Governments should take numerous steps to help the lower 99 percent, including raising the minimum wage, making the Earned Income Tax Credit more generous, creating more apprenticeship programs, and making high-quality pre-K education a reality for all. That’s just a few things; more are needed.