Before talking about economics, I want to say something about democracy. In July, I was in Spain, talking to the “indignados” there, the protesters. There, I could use a bullhorn. I didn’t have to go through this echo chamber. I realize the pedagogy of having you repeat what I say is very valuable, but it makes the whole process much longer. The fact that you are not allowed to use a megaphone on a Sunday is outrageous! We have too many regulations stopping democracy and not enough regulations stopping Wall Street from misbehaving. You should have the right peacefully and demonstrate your views and not be arrested and not be sprayed with pepper spray.

So now I want to talk a little bit about what I said in Spain, and then about the banks. The protests there are called the “indignados,” and I said, “You are right to be indignant.” The fact is, the system is not working right. It is not right that we have so many people without jobs when we have so many needs that we have to fulfill. It’s not right that we are throwing people out of their houses when we have so many homeless people.

Our financial markets have an important role to play. They’re supposed to allocate capital and manage risk, but they’ve misallocated capital and created risk. We are bearing the cost of their misdeeds. There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism! That’s not a market economy. That’s a distorted economy, and if we continue with that, we won’t succeed in growing, and we won’t succeed in creating a just society.