TEXT OF INTERVIEW

Lisa Napoli: So maybe Wall Street fared well after the news from the Fed. But commentator Allan Sloan says everything else out there is still gloomy.

Allan Sloan: Well, let’s assume you actually have a net worth — which I’m sure you do because, you know, you work for public radio and you’re a prudent person. The dollar has fallen out of bed relative to currencies. The price of oil and gold and various other what they call hard assets has risen, which means some day, there’ll be a price to pay for this. And finally, the fact that long-term interest rates have risen I think as a result of this Fed short-term cut.

Napoli: So you’re saying basically that the Fed rate cut amounts to a de facto bail-out. Why does the Fed do it?

Sloan: Because nobody wants to preside over what’s called in the trade a systemic failure. They’re afraid of a credit crunch of institutions failing.

Napoli: But isn’t it bad if one big financial institution fails? Wouldn’t that have a cascading effect on me as a little guy? Isn’t the Fed acting honestly in doing this?

Sloan: If you ever sat down with any of these people off the record and poured a few beers into them, they’ll tell you that their job is to protect the financial system. Their job is not to protect Lisa Napoli and Allan Sloan, no matter how wonderful we are and worthy. And when push comes to shove, the Fed is going to blink. And again, they solve the short-term problem, but the long-term problem of crazy financial things going on and speculation, it doesn’t stop, because it gets rewarded.

Napoli: Meanwhile, Allan, everybody keeps asking me, “What’s happening in the economy right now? A human, every day, working in the United States right now, do I need to be worried about what I’m hearing us talk about on Marketplace and reading what you write about?”

Sloan: I hate to sound like some crazed socialist, because I’m really a capitalist at heart, but every statistic you look at about what has happened to the average employed person over the past few years, either the average employed person has stagnated or done badly. And that’s, I think, the obvious reason why the stock market has done well. And the Fed is not gonna let the economy fail, OK. But every time they save the economy, they kick more and more problems down the road, and they come back and bite us bigger and bigger.

Napoli: Allan Sloan is senior editor at large at Fortune magazine. In Los Angeles, I’m Lisa Napoli. Enjoy your day.