BILL MOYERS: This week on Moyers and Company.

DAVID STOCKMAN: Money dominates politics. And as a result we have neither capitalism or democracy. We have some kind of -- we have crony capitalism.


GRETCHEN MORGENSON: The big powered, moneyed institutions are in control in Washington, there's no doubt about it. You and I don't have a lobbyist and so we are not represented.

BILL MOYERS: Welcome. This is the time of year when we keep reminding public television viewers, viewers like you, that you can’t find the kinds of programs you see right here anywhere else. Programs like this one: the second of our broadcasts investigating Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class.

Back in the first Gilded Age following the Civil War, with its huge concentration of wealth at the top and abject misery at the bottom, Boies Penrose was a United States Senator from Pennsylvania bought and paid for by the railroad tycoons and oil barons.

They could count on him to deliver the goods. “I believe in the division of labor,” he told his wealthy paymasters. “You send us to Congress; we pass laws under which you make money…and out of your profits you further contribute to our campaign fund to send us back again to pass more laws to enable you to make more money.”

Boies Penrose would be right at home in politics today. Crony capitalism – using government to deliver favors to your pals in the business world -- is alive and well. The rest of us pay for it. We pay for it at the grocery store because of sweetheart deals in Congress for the dairy industry and sugar lobby. We pay for it at drug store because politicians rented by giant pharmaceutical firms block competition. We pay for it in lowered returns on pension plans bailed out banks speculate with taxpayer money. We pay with the loss of jobs because of trade deals bought and paid for by multinational companies. We pay in tax rates higher than those of the billionaires who fund the SuperPacs. And we pay in the loss of political equality, because one person, one vote means very little when those we elect do the bidding of donors instead of voters.

We’re deep now into what will be the most expensive election in our history, much of it funded by crony capitalists. So let’s hear from two people who have closely watched how cozy ties between Wall Street and Washington are perverting capitalism and subverting democracy. First, David Stockman.

In the 1970s, he was a young Republican congressman from Michigan and an early proponent of supply-side economics -- some call it trickle down.

You know the theory; if you cut taxes on the wealthy, while cutting government, the economy will take off, money trickling down and creating millions of jobs.

It was the centerpiece of Ronald Reagan’s 1980 campaign for president.

RONALD REAGAN: There is enough fat in the government in Washington that if it was rendered and made into soap, it would wash the world.

BILL MOYERS: Once in the Oval Office, President Reagan made David Stockman his budget director.

DAVID STOCKMAN: When President Reagan gave me this job he pointed to that budget which is some thousands and thousands of pages long, and he said go through it from top to bottom with a fine tooth comb and unless you can find a persuasive demonstration why funds must be spent, cut those budgets.

BILL MOYERS: Stockman helped Reagan usher in the largest tax cut in U.S. history, a cut that mainly favored the rich. But things didn’t go exactly as they planned them. The economy sagged, and in 1982 and ’84, Reagan and Stockman agreed to tax increases.

In 1985 Stockman left government and wrote a book critical of his own years in power: The Triumph of Politics: The Inside Story of the Reagan Revolution. He then took his economic expertise to Wall Street and became an investment banker. Thirty years later, he’s writing a new book, with the working title The Triumph of Crony Capitalism.

I sat down with him to talk about how politics and high finance have turned our economy into a private club for members only.

What do you mean by crony capitalism?

DAVID STOCKMAN: Crony capitalism is about the aggressive and proactive use of political resources, lobbying, campaign contributions, influence-peddling of one type or another to gain something from the governmental process that wouldn't otherwise be achievable in the market. And as the time has progressed over the last two or three decades, I think it's gotten much worse. Money dominates politics.

And as a result, we have neither capitalism or democracy. We have some kind of --

BILL MOYERS: What do we have?

DAVID STOCKMAN: We have crony capitalism, which is the worst. It's not a free market. There isn't risk taking in the sense that if you succeed, you keep your rewards, if you fail, you accept the consequences. Look what the bailout was in 2008.

There was clearly reckless, speculative behavior going on for years on Wall Street. And then when the consequence finally came, the Treasury stepped in and the Fed stepped in. Everything was bailed out and the game was restarted. And I think that was a huge mistake.

BILL MOYERS: You write, quote, "During a few weeks in September and October 2008, American political democracy was fatally corrupted by a resounding display of expediency and raw power. Henceforth, the door would be wide open for the entire legion of Washington's K Street lobbies, reinforced by the campaign libations prodigiously dispensed by their affiliated political action committees, to relentlessly plunder the public purse." That's a pretty strong indictment.

DAVID STOCKMAN: Yeah and, but on the other hand, I think you would have to say it was fair. When you look at what came out of 2008, the only thing that came out of 2008 was a stabilization of these giant Wall Street banks. Nothing came out of 2008 that really helped Main Street. Nothing came out of 2008 that addressed our fundamental problems, that we've lost a huge swath of our middle class jobs. Nothing came out of 2008 that made financial discipline or fiscal discipline possible.

It was justified as sort of expediency. We need to do this. We need to stop the contagion. But it wasn't thought through as to what the long-term implications of this would be.

BILL MOYERS: How did you see it playing out?

DAVID STOCKMAN: I think there was a lot of panic going on in the Treasury Department. I call it "The Blackberry Panic." They were all looking at their Blackberries, and could see the price of Goldman Sachs or Morgan Stanley dropping by the hour. And somehow they thought that was thermostat telling them that the economy was coming unraveled.

I don’t believe that was right. I think what was going on was simply a huge correction that was overdue on Wall Street. The big leverage hedge funds on Wall Street that called themselves investment banks weren't really investment banks. They were just big trading operations using 30, 40 to one leverage. And it was that that was being corrected.

But they used the occasion of the Wall Street banking crisis to create the impression that this was the beginning of a kind of black hole the whole economy was going to drop into. I think that was wrong.

And it was that fear that led Congress to do anything they wanted. You know, the Congress gave them a blank check.

BILL MOYERS: Not at first, don’t you remember, Congress first refused to approve the bailout, right?

DAVID STOCKMAN: And then, the stock market dropped 600 points because all of the speculators on Wall Street all of a sudden began to think, 'Hey, they might let capitalism work. They might let the rules of the free market function.'

BILL MOYERS: You mean by letting them fail.


BILL MOYERS: If they let them fail?

DAVID STOCKMAN: I think if they let them fail it wouldn't have spread to the rest of the economy. There wouldn't have been another version of the Great Depression. There weren't going to be runs on the bank. We weren't going to have consumers lined up in St. Louis and Des Moines and elsewhere worried about their bank. That's why we have deposit insurance, the FDIC. But it would have been a big lesson to the speculators that you're not going to be propped up and bailed out,

You're not going to have the Fed as your friend. You're not going to have the Treasury with a lifeline. You're going to have to answer to the marketplace. And until we get that discipline back into our financial system, the banks are just going to continue to grow, continue to speculate and find new ways to make easy money at the expense of the system.

BILL MOYERS: President Bush, he was still in office then.


BILL MOYERS: He said, I have to suspend the rules of the free market in order to save the free market.

DAVID STOCKMAN: You can't save free enterprise by suspending the rules just at the hour they're needed. The rules are needed when it comes time to take losses. Gains are easy for people to realize. They're easy for people to capture. It's the rules of the game are most necessary when the losses have to occur because mistakes have been made, errors have been made, speculation has gone too far. The history has always been -- and this is why we had Glass-Steagall and a lot of the legislation in the 1930s.

BILL MOYERS: Glass-Steagall was the provision --

DAVID STOCKMAN: The division of banks between the commercial banking and investment banking and insurance and other --

BILL MOYERS: So that you, the banker, could not take my deposits and gamble with them, right?

DAVID STOCKMAN: That's exactly right. And we need not only a reinstitution of Glass-Steagall, but even a more serious limitation on banks. And what I mean by that is, that if we want to have a way for, you know, average Americans to save money without taking big risks and not be worried about the failure of their banking institution, then there can be some narrow banks who do nothing except take deposits, make long-term loans or short-term loans of a standard, business variety without trading anything, without getting into all of these exotic derivative instruments, without putting huge leverage on their balance sheet.

And we need to say simply, that if you're a bank and you want to have deposit insurance, which ultimately, you know, is backed up by the taxpayer -- if you're a bank and you want to have access to the so-called "discount window" of the Fed, the emergency lending, then you can't be in trading at all.

Now, on the other hand, if they want to be a hedge fund, then they’ve got to raise risk capital and they have to take the consequences of their risks, both to the good side and the bad side. And until we really approach that issue, and dismantle these giant, multi-trillion dollar balance sheet banks, and separate retail and deposit insured banking from just financial companies, we're going to have recurring bouts of what we had in 2008.

And they haven't even begun to address that, and it's so disappointing to see that the Obama administration, which in theory should've had more perspective on this than a Republican administration under Bush, to see that one, they appointed in the key positions the same people who brought the problem in: Geithner and Summers and all of those, and secondly, that Obama did nothing about it.

It could have easily -- they could have begun to dismantle a couple of these lame duck institutions, Citibank would have been a good place to start. But they did nothing. They passed Dodd-Frank, which said, now we're going to have everybody write regulations -- tens of thousands of pages that you know, it was a full employment act for accountants and lawyers and consultants and lobbyists. But they didn't go to the heart of the problem. If they're too big to fail, they're too big to exist. And let's start right with that proposition.

BILL MOYERS: You've described what other people have called the financialization of the American economy, the growth in the size and the power of the financial industry. What does that term mean to you, financialization? And why should we care that it's happened?

DAVID STOCKMAN: Because what it means is that a massive amount of resources are being devoted, being allocated or being channeled into pure financial speculation that has no gain to society as a whole, has no real economic contribution to the process by which GNP is created, GDP is created and growth occurs.

By 2007, 40 percent of all the profits in the American economy were coming from finance companies. 40 percent. Historically it was 15 percent.

So the financialization means that as we attracted more and more resources and capital, and we made speculation easier and easier, and we funded it with almost free overnight money, managed and manipulated by the Fed, that's how the economy got financialized. But that is a casino. Casinos -- they're, you know, places for people to go if they want to speculate and wager. But they're not part of a healthy, constructive economy.

BILL MOYERS: What do you mean by the free money that banks are using overnight?

DAVID STOCKMAN: Well, by that we mean when the Fed, the Federal Reserve sets the so-called federal funds rate at ten basis points, where it is today, that more or less guarantees banks can go into the Fed window, the discount window, and borrow at ten basis points.

And then you take that money and you buy a government bond that is yielding two percent or three percent. Or buy some corporate bonds that are yielding five percent. Or if you want to really get aggressive, buy some Australian dollars that have been going up. Or buy some cotton futures. And this is really what has been going on in our markets.

The cheap funding, which is guaranteed by the Fed, the investment of that cheap funding into speculative assets and then pocketing the spread. And you can make huge amounts of money as long as the music doesn't stop. And when the music stops then all of a sudden, the cheap, overnight money dries up. This is what's happening in Europe today. This is what happened in 2008.

And then people are stuck with all these risky assets, and they can't fund them. They owe cash to the people they borrowed overnight from or on a weekly basis. That's what creates the so-called contagion. That's what creates the downward spiral. Now, unless we let those burn out, it'll be done over and over. In other words, if, you know, if a lesson isn't learned, then the error will be repeated over and over.

BILL MOYERS: Stockman says the modern bailout culture took off under President Bill Clinton. It was engineered with the help of Federal Reserve Chairman Alan Greenspan and top economic advisors at the Treasury, Larry Summers and Robert Rubin.

BILL CLINTON: The American people either didn’t agree or didn’t understand what in the world I’m up to in Mexico.

DAVID STOCKMAN: I think it started with the bailout of the banks in 1994 during the Mexican Peso Crisis.

REPORTER: For investors it was a sight for sore eyes. Mexico’s stock market actually soaring instead of plummeting for the first time in weeks. All this, an immediate reaction to news of a major international aid package – nearly half of it from Washington.

DAVID STOCKMAN: That was allegedly designed to help Mexico. It was $20 billion with no approval from Congress that was used, I think inappropriately out of a Treasury fund. And why were we doing this? It's because the big banks were too exposed to some bad loans that they had written in Mexico and elsewhere.

BILL MOYERS: Wall Street banks. U.S. banks.

DAVID STOCKMAN: Wall Street banks. Wall Street banks. The banks of the day, Citibank, Bankers Trust, the others that existed at that time. And so the idea got started that Washington would be there with a prop, with a bailout, with a helping hand. And then the balls start rolling down the hill.

DAN RATHER: The Federal Reserve Bank of New York has taken highly unusual action to head off what could have been a severe blow to world economies.

BILL MOYERS: When the hedge fund Long Term Capital Management blew up in 1998, it was big news.

REPORTER: Dan, the Long Term Capital fund lost billions in the recent market turmoil and last night, stood on the brink of collapse.

DAVID STOCKMAN: Long Term Capital was an economic train wreck waiting to happen. It was leveraged 100 to one. It was in every kind of speculative investment known to man. In Russian equities, in Thailand bonds, and everything in between. And it was enabled by Wall Street.

REPORTER: An emergency meeting was organized by the Federal Reserve last night, here at its New York office. At the table, more than a dozen of Wall Street’s biggest bankers and brokers including David Komansky, Chairman of Merrill Lynch, Sandy Weill of Travelers and Sandy Warner of JP Morgan. One by one the firms each agreed to kick in more than $250 million to bail out Long Term Capital before its troubles sent shockwaves through the banking system.

DAVID STOCKMAN: Why did the Fed step in, organize all the Wall Street banks, and kind of sponsor this bailout? Because all of the Wall Street banks that enabled Long Term Capital to grow to this giant size, to have 100 to one leverage, by loaning them money. So when the Treasury and the Fed stepped in and bailed out, effectively, Long Term Capital and their lenders, their enablers, it was another big sign that the rules of the game had changed and that institutions were becoming too big to fail.

Fast forward. We go through one percent interest rates at the Fed in the early 2000s, we go through the housing bubble and collapse.

BILL MOYERS: Following the 2008 economic meltdown came the mother of all bailouts.

GEORGE W. BUSH: Good morning. Secretary Paulson, Chairman Bernanke and Chairman Cox have briefed leaders on Capitol Hill on the urgent need for Congress to pass legislation approving the Federal government’s purchase of illiquid assets such as troubled mortgages from banks and other financial institutions.

BILL MOYERS: The Bush administration leaped to the rescue of some of the county’s largest financial institutions, to the tune of 700 billion tax-payer dollars.

DAVID STOCKMAN: We elect a new government because the public said, you know, "We're scared. We want a change." And who did we get? We got Larry Summers. We got the same guy who had been one of the original architects of the policy in the 1990s, the financialization policy, the too big to fail policy.

Who else did we get? We got Geithner as Secretary of the Treasury. He had been at the Fed in New York in October 2008 bailing out everybody in sight. General Electric got bailed out. Morgan Stanley, Goldman Sachs, all of the banks got bailed out, and the architect of that bailout then becomes the Secretary of the Treasury. So it's another signal to the financial markets that nothing ever changes. The cronies of capitalism are in charge of policy.

BILL MOYERS: You name names in your writing. You identify several people as the embodiment of crony capitalism. Tell me about Jeffrey Immelt.

DAVID STOCKMAN: He is the poster boy for crony capitalism. Here is GE, one of the six triple-A companies left in the United Sates, a massive, half-trillion dollar company, massive market capitalization. I'm talking about the eve of the crisis now, in September, 2008.

Suddenly, when the commercial paper market starts to destabilize and short-term rates went up. He calls up the Treasury secretary with an S.O.S., "I'm in trouble here. I need a lifeline." He had recklessly funded a lot of assets at General Electric Capital in the overnight commercial paper market. And suddenly needed a bailout from the Treasury. Within days, that bailout was granted.

And therefore, General Electric was able to avoid the consequence of its foolish lend long and borrow short policy. What they should have been required to do when the commercial paper market dried up -- that was the excuse. They should've been required to offer equity, sell stock at a highly discounted rate, dilute their shareholders, and raise the cash they needed to pay off their commercial paper.

That would've been the capitalist way. That would've been the free market way of doing things. And in the future they would've been less likely to go back into this speculative mode of borrowing short and lending long. But when we get to the point where the one triple-A, a multi-hundred billion dollar company gets to call up the secretary, issue the S.O.S. sign and get $60 billion worth of guaranteed Federal Reserve and Treasury backup lines, then we are, you know, our system has been totally transformed. It is not a free market system. It is a system run by powerful, political and corporate forces.

BARACK OBAMA: Thank you. Thank you.

BILL MOYERS: So when you saw that President Obama had appointed Jeffrey Immelt, as the head of his Council on Jobs and Competitiveness, what went through your mind?

DAVID STOCKMAN: Well, I was in the middle of being very disgusted with what my own Republican Party had done and what Bush had done and the Paulson Treasury. And then when I saw this, I got the title for my book, “The Triumph of Crony Capitalism.”

BARACK OBAMA: And I am so proud and pleased that Jeff has agreed to chair this panel, my Council on Jobs and Competitiveness, because we think GE has something to teach businesses all across America.

DAVID STOCKMAN: If you have a former community organizer who was trained in the Saul Alinsky school of direct democracy, appointing the worst abuser, the worst abuser of crony capitalism, GE, who came in and begged for this bailout, to head his Jobs Council, when obviously GE's international corporation, they've been shifting jobs offshore for decades, then it becomes so obvious that we have a new kind of system, and that we have a real crisis.

BILL MOYERS: Where is the shame? Shouldn't these people have been at least a little ashamed of running the economy and the financial system into the ditch and then saying, "Come lift me out?"

DAVID STOCKMAN: Yes. You know, I think that's part of the problem. I started on Capitol Hill in 1970s. And as I can vividly recall, corporate leaders then at least were consistent. They might've complained about big government, or they might've complained about the tax system.

But there wasn't an entitlement expectation that if financial turmoil or upheaval came along, that the Treasury, or the Federal Reserve, or the FDIC or someone would be there to back them up. That would've been considered, you know, it would've been considered, as you say, shameful. And somehow, over the last 30 years, the corporate leadership of America has gotten so addicted to their stock price by the hour, by the day, by the week, that they're willing to support anything that might keep the game going and help the system in the short run avoid a hit to their stock price and to the value of their options. That's the real problem today. And as a result, there is no real political doctrine ideology left in the corporate community. They are simply pragmatists who will take anything they can find, and run with it.

BILL MOYERS: So this is what you mean, when you say free markets are not free. They've been bought and paid for by large financial institutions.

DAVID STOCKMAN: Right. I don't think it's entirely a corruption of human nature. People have always been inconsistent and greedy.

But I think it's been the evolution of the political culture in which there have been so many bailouts, there has been so much abuse and misuse of government power for private ends and private gains, that now we have an entitled class in this country that is far worse than you know, remember the welfare queens that Ronald Reagan used to talk about?

We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do what is ever necessary if it involves tax relief, tax incentives, tax cuts, loan guarantees, Federal Reserve market intervention and stabilization. Whatever it takes in order to keep the game going and their stock price moving upward. That's where they are.

BILL MOYERS: You were disaffected with the party of your youth, the Republican Party, because it has-- because it’s become dogmatic on so many of these issues and no longer listens to evidence and facts. I’m disaffected with the party of my youth because that Democratic Party served the interest of the working people in this country like Ruby and Henry Moyers. And so many people feel the same way. How do we overcome this pessimism about the American future? “The Wall Street Journal” had a headline on an op-ed piece that said, "The End of American Optimism." A recent survey said only 15 percent of the people were satisfied about the direction of the American people. I mean, this is a serious situation, is it not?

DAVID STOCKMAN: I think it is. And -- but we also have to recognize the pessimism that the public reflects in the surveys and polls is warranted. In other words the public isn't being unduly pessimistic. It's not been overcome with some kind of a false wave of emotion. No. I think the American public sees very clearly the current system isn't working, that the Federal Reserve is basically working on behalf of Wall Street, not Main Street.

The Congress is owned lock, stock and barrel by one after another, after another special interest. And they logically say how can we expect, you know, anything good to come out of this kind of process that seems to be getting worse. So how do we turn that around? I think it's going to take, unfortunately a real crisis before maybe the decks can be cleared.

BILL MOYERS: What would that look like?

DAVID STOCKMAN: It will take something even more traumatic than we had in September 2008.

BILL MOYERS: But on the basis of the record, the lessons of the past. The experience you have just recounted and are writing about. Do you see any early signs that we might turn the ship from the iceberg?

DAVID STOCKMAN: No. I think we've learned no lessons. We really have not restructured our financial system. The big banks that existed then that were too big to fail are even bigger now. The top six banks then had seven trillion of assets, now they have nine or ten trillion.

Rather than go to the fundamentals which have been totally neglected-- we've simply kind of papered over the current system and continued the game of having the Federal Reserve and the Treasury if necessary prop up all of this leverage and speculation, which isn't helping the economy.

And when we talk about zero interest rates. That’s not helping Main Street. Our problem in this economy is not our interest rates are too high. The zero interest rates are just more fuel for leverage speculation for what’s called the carry trade and that is causing windfall benefits to the few but it’s leaving the fundamental problems of our economy in worse shape than they’ve ever been.

BILL MOYERS: No one I know has a better understanding of the see-saw tension in our history between democracy and capitalism.

Capitalism, you accumulate wealth and make it available. Democracy being a brake, B-R-A-K-E, on the unbridled greed of capitalists. It seems to me that democracy has lost and that capitalism is triumphant -- crony capitalism in this case.

DAVID STOCKMAN: And I think it's important to put the word crony capitalism on there. Because free-market capitalism is a different thing. True free-market capitalists never go to Washington with their hand out. True free-market capitalists running a bank do not expect that every time they make a foolish mistake or they get themselves too leveraged or they end up with too many risky assets that don't work out, they don't expect to go to the Federal Reserve and get some cheap or free money and go on as before.

They expect consequences, maybe even failure of their firm, certainly loss of their bonuses, maybe the loss of their jobs. So we don't have free-market capitalism left in this country anymore. We have everyone believing that if they can hire the right lobbyist, raise enough political action committee money, spend enough time prowling the halls of the Senate and the House and the office buildings, arguing for their parochial narrow interest -- that that is the way that will work out. And that is crony capitalism. It’s very dangerous and it seems to be becoming more embedded in our system.

BILL MOYERS: So many people say, “We've got to get money out of politics.” Or as you said, “Money dominates government today.”

DAVID STOCKMAN: Well look, I think the financial industry, over the two or three year run up to 2010 spent something like $600 million. Just the financial industry, the banks, the Wall Street houses and some hedge funds and others. Insurance companies. $600 million in campaign contributions or lobbying.

That is so disproportionate, because the average American today is struggling to make ends meet. Probably working extra hours in order, just to keep up with the cost of living, which is being driven up unfortunately by the Fed.

They don't have time to weigh into the political equation against the daily, hourly lobbying and pressuring and, you know, influencing of the process. So it's asymmetrical. And how do we solve that? I think we can only solve it by -- and it'll take a constitutional amendment, so I don't say this lightly. But I think we have to eliminate all contributions above $100 and get corporations out of politics entirely.

Ban corporations from campaign contributions or attempting to influence elections. Now, I know that runs into current free speech. So the only way around it is a constitutional amendment to cleanse our political system on a one-time basis from this enormously corrupting influence that has built up. And I think nothing is really going to change until we get money out of politics and do some radical things to change the way elections are financed and the way the process is influenced by organized money. If we don’t address that, then crony capitalism is here for the duration.

BILL MOYERS: David Stockman, thank you very much for sharing this time with us.

This is pledge time for public television, so some stations will be stepping away from us for a short while to ask for your support. For others, we’ll resume in just a few moments…

BILL MOYERS: One of journalism's premier business reporters is with me now. Gretchen Morgenson won the Pulitzer Prize for her fearless exposés of Wall Street's dirty secrets and reckless behavior. In her “Fair Game” column for “The New York Times” she digs into some of the most disturbing and complex scandals of our time. Her recent book with Joshua Rosner on crony capitalism at Fannie Mae is called Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon. Welcome.


BILL MOYERS: You just heard David Stockman say it could happen again. Do you think it could happen again?

GRETCHEN MORGENSON: It will happen again and the unfortunate fact is we did not fix the problem. The Dodd-Frank legislation which was supposed to be the fix-it for the enormous crisis that erupted in 2008 failed in so many ways to really address the major issues, the most important being too-big-to-fail, did virtually nothing to cut these big and impossible to manage banks down to size.

But there are other elements to the Dodd-Frank law that I think are also problematic. Now we have hundreds of rules being written by the regulators and although it might make sense that they know what they're doing a little bit more than maybe your, you know, average lawmaker, what it did was it gave the financial services industry two bites at the apple. They can lobby their lawmaker when Dodd-Frank is being written and now they are lobbying strenuously the regulators to make sure that the rules are written in a not too, you know, onerous fashion.

I mean, I think that you see this in the length of time, Bill, that it's taking to write these rules, tremendous jockeying back and forth by the financial services industry which of course has billions of dollars to spend on lobbyists to go and influence the outcome.

And so when you see, you know, the Commodity Futures Trading Commission trying to write rules about derivatives that would bring them into the open, that would make a failure like that almost brought AIG to its knees, make that a thing of the past you see a lot of the big Wall Street banks lobbying heavily to keep these things in the shadows.

BILL MOYERS: Listening to both David Stockman and you, after what we've been through since 2008, the millions of lost jobs, the millions of foreclosed homes, the people whose pensions have been shrunk, you both are saying not only can it happen again, but it will happen again. I mean, I have to tell you it boggles my mind.

GRETCHEN MORGENSON: When I was living through it, watching it in terror literally at my desk at “The New York Times” because it really was on the precipice, there we were, I thought to myself, 'We will address this because this is so frightening and so scary and so damaging to this country.' And I thought we will address it because this is the big one.

This is the big crisis that we've been leading up to. Long-Term Capital Management didn't really destabilize the system, the internet bubble didn't really destabilize the system, this was the big one. And yet the response was so lame and so ineffectual that it absolutely will happen again.

BILL MOYERS: What's the answer? Why don't we have the reform we want?

GRETCHEN MORGENSON: Well, a big part of it is the money problem, that money -- the big powered, moneyed institutions are in control in Washington, there's no doubt about it. You and I don't have a lobbyist and so we are not represented in this melee, call it what you will, that happens, you know, when laws are created.

There is no balance here. There's a drastic imbalance between the people who created the problem and the people who had to pay the problem and it has not been addressed.

What David Stockman pointed out which is extremely important to remember in this whole thing is the rise of the financial institutions as a percentage of GDP in this country, as a percentage of as he said the resources that are put into this business. They have become all powerful.

These people have gotten themselves in such a position of power because they are financial intermediaries, because they are -- they affect every American with their business, they are able to, much more than say the steel industry or the coal industry or the car industry, manipulate the dialog. They can persuade the treasury secretary that, if you don't bail me out Armageddon is going to happen and everyday people will lose access to their money and the world will come to an end.

BILL MOYERS: Right now we're hearing a lot about how Dodd-Frank is actually costing the banking industry. I think losing about $3 billion in the third quarter. Was Dodd-Frank responsible for that?

GRETCHEN MORGENSON: I think that the small banks might have a point in that, in making that argument. The small banks that, by the way, did not create the problem, they're being penalized just like the Main Street people are because they have to now step up and do these new regulations that are quite costly for a small to midsize institution.

The big banks really don't have increased costs to that degree because they already have a huge compliance effort. They have a huge regulatory effort already. So it might be additional cost, but for them it's not as large as it would be for a small institution.

Again, this is the same imbalance, the same unfairness where a small institution that did nothing wrong now has to pay the price just like the taxpayers who did nothing wrong now have to pay the price while the big boys, you know, can complain about it, hire their lobbyists to do try to do something about it. I really discount a lot of the talk about how expensive Dodd-Frank is, particularly from these big institutions because they should really sit down and shut up.

BILL MOYERS: Yes, I don't think they're going to but I think that's good advice. You do think as I do that Dodd-Frank is just too complex for effective enforcement, right?

GRETCHEN MORGENSON: Yes, you know that Glass-Steagall was 34 pages long.

BILL MOYERS: 34 pages?

GRETCHEN MORGENSON: The act that protected Americans from rapacious bankers for almost 70 years was about 34 pages long.

BILL MOYERS: And Dodd-Frank is 2300 pages --

GRETCHEN MORGENSON: Way too complicated, all kinds of loopholes, right? You know, the more complex a law is the more you can probably finagle around it.

BILL MOYERS: Why should middle class people on Main Street care about how banks are regulated? What difference does it make to them?

GRETCHEN MORGENSON: It makes a tremendous difference, Bill, because it affects every part of their lives. When they have to pay higher fees to get access to their money that's a cost they can ill afford. When banks are luring them into loans that are poisonous and toxic, that are designed to make the bank money and designed not to help the borrower, that is a real concern.

It could not be more important to rein these institutions in because they affect every piece of your life. They affect your retirement, they affect your everyday expenses, whether you can put food on the table for your family.

They permeate your life, and so the degree to which they are making it more onerous to borrow is a huge -- has huge consequences.

BILL MOYERS: Since you've been covering capitalism, business and finance what's been the biggest change you've seen?

GRETCHEN MORGENSON: Previously I believed that bankers that presided over this kind of a train wreck would have wandered away from the scene, tail between their legs, ashamed, or the regulators would have cleaned house, fired the management, clawed back their compensation.

We've seen none of that in 2008. Did the U.S. government replace any of these managements? No. Did the U.S. government claw back any of the money that these people made when the boom was going on which we now all know was a phony boom and so therefore that was phony money that they earned during those years.

BILL MOYERS: What did you learn about crony capitalism in doing “Reckless Endangerment” based upon the mortgage industry business?

GRETCHEN MORGENSON: What I learned was going back in time and examining Fannie Mae and as you know that's the company that doesn't make mortgages, but it buys mortgages and it guarantees them. So it is a huge player in this business.

That was really the quintessential crony capitalism, that company. They learned how to manipulate their regulator, to neutralize their regulator, to manipulate Congress, throw money around. They really told, almost showed Wall Street how to do it, they gave them a playbook. And what they did was they wrapped themselves in the American flag of home ownership so that they were impervious for many critics.

Fannie Mae, who used its implicit government guarantee for its own purposes, it was able to borrow money at a far cheaper rate than in any other financial company. And that subsidy, it took one third of that, billions of dollars every year, for itself.

So it really taught Wall Street how to be the quintessential, you know, crony capitalist. How to use your influence, how to use your money to buy protection for yourself on Capitol Hill and to manipulate the dialog so that there were no critics, no criticism of what you do, this whole idea of this financial services industry having to be protected.

Now, of course we know that Fannie and Freddie are into the taxpayer for $150 billion and no end in sight. So we know how that movie ends. And yet that is the practice and it continues.

BILL MOYERS: The question is to me why don't we put those toxic twins, as you call them, out of business, close them down?

GRETCHEN MORGENSON: Well, because they're the only game in town right now for people who need to get a mortgage. And people need to get mortgages. They move, they get a new job. There does need to be the opportunity for movement in mortgage world and that’s -- they're the only game in town because banks are loathe to lend.

BILL MOYERS: Without -- they’re loathe to lend our money back to us, right?

GRETCHEN MORGENSON: Correct. Absolutely.

BILL MOYERS: Yeah, we bailed them out and they won’t put capital where it should go, to small businesses, to individuals who need it.

GRETCHEN MORGENSON: Absolutely, that's again here we are back at the same question. These people who drove us into the ditch, got our money to save themselves are now not lending to the degree that they ought to.

BILL MOYERS: Which brings me to what you described in your column at the end of last year, the ugliest paradox of the financial crisis which you say became clear in 2011.

GRETCHEN MORGENSON: Well, as you know, Bill, we're only really starting to learn the full extent of what went on during the mortgage boom. But one element of it that I find especially troubling is the degree to which minority borrowers, first time borrowers, first time homeowners, immigrants, the least sophisticated people in this country, the very people that the government said they wanted to help become homeowners, to get their piece of the American dream -- those people were targeted by these banks because they knew they were unsophisticated.

They were targeted with the most expensive, the most punitive and the most toxic loans bar none. And to me that is such a failure of this country. If we are going to encourage home ownership, let's not do it on the backs of the very people that we are supposedly trying to help, the most vulnerable people in this country have been hurt the worst by this crisis, families wrecked, homes lost. They were abused in this entire mania and people profited from that abuse and I think that's wrong.

BILL MOYERS: What makes you angry about this?

GRETCHEN MORGENSON: Well, it makes me angry because there has been no penalty. There has been no price for the people who created the mess. I thought there would be some sort of solution, some addressing of the problem, some punishment, penalty. Whatever you want to call it.

Now with the benefit of hindsight, you know, three, four years later nothing was done and so I am angry that nothing was done because that was one hell of a crisis and that was big enough for me, thank you very much, to learn the lesson of what we must do going forward to prevent another such thing.

And yet we didn't and that makes me angry because I have a son and he is going to live through this and he is going to pay the price for this. Not to mention, you know, everyday people who are going to live through it maybe within ten years. I don't think it's so far off that we're going to have another crisis.

I'm a journalist but I feel like I'm an archeologist digging in this crisis and still coming up with shards of pottery that I dust off and then I can fit into the puzzle. Because nobody wanted anyone to understand what really happened.

BILL MOYERS: Is there anything you see that makes you a little optimistic?

GRETCHEN MORGENSON: What makes me optimistic is that people are understanding this now, that Main Street gets it, you know, the thing that I found compelling about the Occupy Wall Street movement was that it seemed to be tapping into this anger. Previous to that there was just this kind of silence, you know, people were maybe too flabbergasted by what had gone on.

This is a very complex crisis that was built over a long period of time. You have to connect the dots to understand it. And so we're writing history and helping people to understand what happened to them.

But we still don't know it all and until we do we can't really protect ourselves going forward. But I do get a sense that there is anger, that there is rage and that maybe, maybe, just maybe somebody in Washington might pay attention to that.

BILL MOYERS: The book is Reckless Endangerment, Gretchen Morgenson with her colleague, Joshua Rosner. Thank you, Gretchen, for being with us.

GRETCHEN MORGENSON: It is my pleasure, Bill.

BILL MOYERS: We keep returning to this subject because the stakes are so high. Here’s what I mean: Suppose this spring you’re walking into the stadium for the opening of baseball season. And there in the shadows beneath the stands you spy the owner of one team handing the umpire a wad of hundred dollar bills. You would call that a bribe, right? And you would scream bloody murder. But when the rich and powerful – say, Wall Street bankers -- lavish money on politicians and get favorable rulings from government, what do we call that? A campaign contribution. Legalized bribery corrupts democracy just as paying off the umpire corrupts baseball. Yes, I know, the Supreme Court has smiled on this disgrace as a constitutional right. But once upon a time the Supreme Court said it was okay for one human being to own another. We finally got rid of slavery. Now let’s set democracy free. I'm Bill Moyers.

Watch By Segment

  • David Stockman on Crony Capitalism

    David Stockman explains how the cozy relationship between Washington and Wall Street has perverted capitalism and subverted democracy.

    Air Date: March 9, 2012
    Photo Credit: Andrew Fredericks
    David Stockman on Crony Capitalism
  • Gretchen Morgenson on Corporate Clout in Washington

    David Stockman explains how the cozy relationship between Washington and Wall Street has perverted capitalism and subverted democracy.

    Air Date: March 9, 2012
    Gretchen Morgenson on Corporate Clout in Washington

Encore: Crony Capitalism

March 9, 2012

A version of this program originally aired January 20, 2012.

For years, high-ranking administration officials have spun through the revolving door between the White House and American big business. But how have they influenced the regulation and reform of industries from which they came, and American democracy as a result? This weekend, in an encore broadcast, Moyers & Company explores the tight connection between Wall Street and the White House with David Stockman, former budget director for President Reagan.

Now a businessman who says he was “taken to the woodshed” for telling the truth about the administration’s tax policies, Stockman speaks candidly with Bill Moyers about how money dominates politics, distorting free markets and endangering democracy.  “As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.”

“We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” Stockman tells Moyers.

Also on the show, Moyers talks with Pulitzer Prize-winning New York Times reporter and columnist Gretchen Morgenson on how money and political clout enable industries to escape regulation and ensure high compensation for executives at the top.

  • submit to reddit
  • Anonymous

    Crony Capitalism; an expose’ in sickening obscenity. Wall street, congress, the courts and the presidency are simply junkies feeding on one and other that we keep enabling with our patience, forgiveness, niavety, hope and tax dollars. Time for some serious tough love. The sooner we send them to the bottom of their barrel the better. Some how in their intoxication they deluded the idea that it is the American Peoples who are beholding to them when in fact, no matter how far they drag this nation in to fascist totality, this land, this nation, is our land and as long as one heart beats with the God given spirit of liberty, this land will always be our land, the American Peoples’ land.

  • GradyLeeHoward

    Visiting a retiree in the hospital this week I was alerted to how our poor die. The man’s daughter Marilyn asked us point blank for $1500. It was not for his care which is covered under Medicare and Medicaid. It was for the residential care facility who takes nearly all his social security check plus Medicare and Medicaid funds. He’s been there nearly 4 years. It seems he will lose his raggedy hospital bed in a tawdry semi-private cement block room if his daughter cannot pay a $3000 bed hold fee for the period of his hospitalization for an infection he contracted in the same rest home. Already his little bureau, his wheelchair and his wall-mounted TV are in an outbuilding with most of his clothes and personal effects. Actually another party is in his narrow hand cranked bed. But the facility is still due the money because they are holding a theoretical vacancy for him in nursing care. If he can’t get back in he may have no place to go. At best he could end up in a dog kennel equivalent with a dismal record. And it is not certain the current facility will release his meager property. His daughter lives in an efficiency and barely gets by, and there are no other close relatives left. I could hardly believe she is ready to surrender her emergency money for her father. He’s in heart and respiratory failure, non-ambulatory, and on oxygen.
    In short, someone must change his diapers. When they call him “honey” and “sweety” that makes me angry. This man was one of the greatest theater scenery fabricators who ever lived. Gladdie went by the rest home and gave the bastards $3000 bucks, but what will happen next time Ralph goes to the hospital?

    All of this is the result of the profit motive in medicine. It doesn’t make sense to let corporations extort from those who suffer and their loved ones. It doesn’t make sense to let corporations write our laws and Medicare rules to maximize profits.
    The first step in solving this and many other problems of crony capitalism is to cap wealth and income with a maximum wage law, taxation, strict regulation and social engineering. Humanity has reached a level of sophistication where we can escape such barbarism. If you live you’ll get old. If you get old you’ll need medical care. And if you receive medical care under current rules you’ll go broke and be the helpless victim of merciless profit motive. The people who turn the patients, change the diapers and administer IVs are getting very little of the money. This will happen to most of us no matter who we are. But we can stop it now by capping wealth and income. People will find better purposes once wealth worship is overt. I have a great deal of faith we will. Pay heed you rugged individualists and success addicts, because you’ll be old, and when you get there it’ll seem like minutes.

  • Crizzo314308MI

    David Stockman makes me sick. Out of one side of his mouth he was slurping on Ronald Reagan and out of the other side of his mouth he was saying ketchup was a vegetable.

  • Pcopen38

    How can we educate people/voters — wake them up — so that their outrage can  turn to action?

    I know that the emperor has no clothes, but when will we make it a requirement — a law — to prevent the naked abuse of the public?

  • Christina Marlowe

    Here are a few prescient quotes:

    “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
    ~ Abraham Lincoln, Nov. 21, 1864 
    ‘I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered..'”  
    ~ Thomas Jefferson, 1802

    “There are plenty of ugly things about wealth and its possessors in the present age, and I suppose there have been in all ages. There are many rich people who so utterly lack patriotism, or show such sordid and selfish traits of character, or lead such mean and vacuous lives, that all right-minded men must look upon them with angry contempt…”

    ~ Theodore Roosevelt, 1910

    And, for good measure, 

    “When fascism comes to America, it will be wrapped in the flag and carrying a cross.”   ~  Sinclair Lewis


    Very insightful and sincere presentations by Stockman and Morgensen.  Glenn Davis, St. Thomas, U.S.V.I.

  • RustyLH

    Great show, and I have to agree that corporations need to be gotten out of politics, and lobbying with money attached needs to go away.  I also agree with the constitutional amendment with one addition…unions.  You can’t get corporations out of campaign contributions without also getting unions out.  Limit it to $200 per person but make campaigns give full disclosure.  No more hidden donors.  Also, as part of a network’s license they must set aside a small part of their airtime for political ads.  For this, they are paid market value for that airtime.  If a candidate gets enough signatures, they get a small amount of airtime for the primaries.  If they win, they are given more airtime.

  • GradyLeeHoward

    Excellent selection of wisdom, but what does it instruct us to try next?

  • GradyLeeHoward

    We must let citizens caucus consensus plan of workable actions to be immediately undertaken. This needs to happen in advance of  our Empire’s demise so we will have an orderly replacement.
    On Bill Moyer’s Journal blog we decided: “No one can easily become or remain extremely wealthy or extremely poor in a fair and just society. ”
    It decided in the spirit of Martin Luther King, and Bill Moyers concurred. See “To Nationalize (the TBTF banks) or Not to Nationalize” at that archive.

  • GradyLeeHoward

    How can he be so greedy as to go schlocking another book? He owes the American People; we don’t owe him. He has nothing new to say, just old confessions.

  • GradyLeeHoward

    Yes, but were you entertained? 
    That’s what matters.

  • GradyLeeHoward

    Personhood and open ended charters need to be taken from corporations. There is no doubt.

  • RustyLH

     Agreed…if you are not a person, you shouldn’t be seen as a person.  Corporations, Unions, etc… all should not be seen as a person, and only individual persons should be able to participate in politics, monetarily.

  • RustyLH

    How many have recognized that Carbon Credits are nothing more than Crony Capitalism?   Take a look at how the major banking institutions of the world are licking their chops at cashing in on this.  This market looks to be worth twice or more what the global oil market is.  It will happen too, simply because the wealthiest people in the world want it to.  But they want you to willingly go along with it.  It gives them loads of money and more power.

  • RustyLH

     Pcopen38…simple answer…you can’t.  People won’t listen to what’s really going on.  They are too comfortable in their gilded cage, and too worried about believing their party is right and the other party is wrong.  Haven’t you ever wondered why we have so many “Hot Button” issues and they NEVER go away.  You can’t even get people to agree that vouchers for school are the right way to go, or any of the other many issues that come up, and you want people to suddenly wake up and notice the real government behind the puppet government?

    It’s simply not going to happen.  For one, the people don’t even realize what is really going on and this interview only lightly touched on it but didn’t actually get into the real meat of what is going on and who is actually running things.

  • agelbert

    I recently commented on an article by William K. Black (hero of the savings & loan crooked officer prosecutions). He advocates that the application of a ‘tailored for elite criminals’  “Broken Windows” policy would stop all the Wall Street shenanigans and hooliganism.

    I repost them here because they are germain to this discussion.  

    What If the “Broken Windows” Theory Were Applied to Wall Street?
    James Q. Wilson’s famous “broken windows” theory led to strict policing of working class behavior. What if his ideas were applied to Wall Street?

    You have no messagesDashboardEdit ProfileLogoutAbout DisqusSharing this page …
    Thanks! Close0 new comment was just posted. ShowWilson and his ilk suffered from a psychological dysfunction called projective identification.According to the theory of projective identification, individuals who possess a thought about themselves which they consider to be intolerable will project it onto another person.In recent years, the projection theory and how it relates to groups of people has been extensively researched. Specifically, studies have been conducted to examine how the emotionally contagious nature of such projective identification influences shared phenomena like the BANDWAGON EFFECT  and GROUPTHINK.  Within such phenomena, anonymity is thrust forward and the individual withdraws among the masses. THE LACK OF DIVERSITY FOSTERS A COMFORTABLE COHESION in which all parties are able to FUNCTION WITH MINIMAL CONFRONTATION, INDIVIDUAL ACCOUNTABILITY, or SELF-REFLECTION (typical bigoted mindset). This in turn fosters a willfull denial of the deleterious effect on society that “their people” (the white collar criminals) have while increasingly blaming the social degradation caused by these scum on the reactionary victims of these crimes (the blue collar criminals). So you get a group of koolaid drinkers led by some real sick psycho people in business and government with absolutely no values at all who are touted as being “basically good people” while every negative, predatory, calloused, psychopathic, criminally insane type of behavior these elite criminals live by is ascribed to the blue collar criminals. Meanwhile the elite criminals destroy the overall economy parasitically. Stockman is right that the root cause of this massive corruption is financialization.  financialization is what has destroyed empires in the past and, according Kevin P. Phillips, is well on the way to destroying the U.S.A. (Yes Virginia, we ARE an empire).Kevin P. Phillips predicted what would happen to the US Empire and why. He is a historian that has written various books about our American ‘royalty’ and how they have gamed the system (from even before the revolution) to profit from slavery, wars, smuggling, selective law enforcement, racism and gamed taxed codes at the espense of everyone else to produce an ossified emperialistic, financialized parasitic economy that destroys a country. He details how it happened to the Hapsberg, Dutch and Spanish empires. He follows American opportunists that became rich and proves that ‘clogs to clogs in three generations’ is a convenient myth pushed by our propaganda rags to make us believe the rich dynasties in the US do not exist. They do and they have preserved their wealth come hell or high water. He documents how a group of influential families in empire after empire bring their countries down with the parasitic process of switching to a financialized economy. When he began writing his books in the 80s, he saw the move to financialization getting legs and predicted that we would go the way of the Hapsburg Empire and others if we made the same mistake of allowing financialization to overwhelm the rest of the economy.He was, and is, right.…The 1% are destroying our country. The greedy, stupid intelli-morons can’t help themselves. The idea that too big to fail is too big to jail is total BS because one must always discern between the organization and the criminal parasites nested inside it. These must be weeded out, stripped of assets and given life in prison. I would start with Alan Greenspan. THAT application  of the Broken Windows Theory to the chief enabler of the elite greedosphere in the US will produce some  some rapid behavior modification the other predators. Some writers go even farther than the concept of financialization and address our husltler mindset as the root culprit  (“Why the American Empire Was Destined to Collapse” by Morris Berman). I don’t know about the root cause. I do know that a LOT of Wall Street criminals (and the politicians they own) should be jailed for consistent and continued grand larceny and treason. Otherwise, as Gretchen Morgenson and David Stockman said, it’s going to GET WORSE!

  • agelbert

    Without jail sentences and asset stripping along with claw back for impacted victims, nothing will change.

    As to the $200 limit on political contributions, the crooks and liars than run our politics figured that one out decades ago. Have you heard of the famous “ranchers” or the “pioneers” that Bush had? Well, they get a rich goon that coerces people (privately, of course) to send their $100 to $200 to the latest empty suit fronting for corporations that love war and hate democracy. It’s called bunching the group! Yeah, that used to be illegal. It may become illegal again but then you’ve got to catch them at it, don’t you?

    Your fear of the unions is unwarranted because, even though they can be as corrupt as any corporation, the stats show they don’t amount to a hill of beans in the USA any more. Fear of unions is just a right wing talking point to keep the koolaid drinkers from focusing on massive corporate corruption (for the left wing koolaid drinkers they have different mendacious claptrap).

    Corporate crooks will, if any law is passed to limit this or that,  just change the name, invent a new innocent sounding buzzword for their corruption and criminality and keep on keepin’ on. And it doesn’t matter whether you are coke or pepsi (republican or democrat); the corporations are the foxes that own them. You need to put the criminals that pollute those corporations in jail and then (and ONLY then) will things improve.

    Grand larceny, fraud, conspiracy to commit fraud and treason are still criminal offences in the USA. Trying to control the predators at Wall Street, Congress and the White House  by some law that alledgedly limits campaign contributions is a joke when you don’t address the larger crimes.

  • Don

    Could my comment actually show up I ask myself but here goes anyway. I like the program and all but the editing of it makes it seem so phoney. But that’s television today I suppose.


    Don W.

  • agelbert

    It isn’t mentioned often that the bible actually says that our leaders are the lowest common denominator (the more corrupt a society, the more corrupt the leaders) by our ‘leaders’ (for obvious reasons), but it’s there and it’s still true.

  • agelbert

    It’s all part of a mad scramble to save the ‘hallowed and holy’ name of Stockman’s religion (Capitalism), not to mention his reputation. See my comment on projective identification. I think Stockman suffers from it.

  • agelbert

    I agree with everything you say. I would add that we need to deinstitutionalize the concept of health care so people can help each other without having to jump through some corporate medical health hoop requiring a degree of some kind to change bed pans or administer such ‘sophisticated medical care’  like meals, room cleaning and providing patient monitoring and company. All these rules and regulations that don’t allow ‘just anyone’ (according to the health mafia) to have a hospice or an old folks home or a convalescent facility needing only occasional medical attention is deliberate in order to increase corporate health care profits.

    We are humans and 90% of health care is non-medical anyway. The 10% for blood pressure reading, IV administration and drug therapy does not warrant the strangle hold on health care that boosts costs to the moon. And to say that people would die of respiratory failure, organ failure or heart attacks from lack of medical care in these facilities is ridiculous in the light of the fact that hospital deaths from these very causes are routine. Response times with modern communications no longer warrant this huge medical institutionalized approach. 

    As long as someone understands that they cannot sue caregivers in a convalescent home, the government should stay out of private health care. You do not need to be a doctor or a nurse in order to have the horse sense to call a doctor or contract a nurse on a limited basis. We need to give control of health care back to the people. As it stands now, the AMA, the government or some health insurance corporation will try to put you in jail for providing reasonable health care by huffing and puffing about “practicing medicine without a license” if you try to set up a community convalescent home that only calls in nurses or doctors when needed..

  • Christina Marlowe

    Here’s something that I wrote a while back, to your point:

    How to Rule:

    1. Keep the overwhelming majority of the population focused on carefully-crafted delusions;

    2. feed the population, constantly and consistently, outright lies and complete fabrications, all whilst totally convincing population, through any form of trickery, convince population to believe things that are simply NOT TRUE; LIES.

    3. Use so-called buzz words (such as “God,” “Guns”), while simultaneously using fear tactics (“communism,” “fascism”) in order to prop up or legitimize all conspired-confabulations;

    4. No matter what, ADAMANTLY DENY ANY AND ALL FACTS; CONVINCE people that each of their now-strenuously-held “beliefs” (which actually, in reality, are delusions) convince them that their beliefs are TRUE, RIGHT, RATIONAL and WORTH FIGHTING FOR;

    5. Blatantly pit separate groups of people against each other, heavily using all media, in order to keep each group insanely confused and belligerent with increasingly irrational fear, as they become more and more preoccupied with their delusions and self-righteousness;

    6. Feed the fire: instill hugely inflated sense of rightness (self-righteousness) through wholly-manufactured “evidence;” this particularly useful form of trickery, by the way, is often found disguised as religion in which any one will do;

    7. Merely repeat the words “GOD” and “GUNS.”

    And, with that, the robber barons have their whole voting base: an utterly deluded and totally brainwashed population, busily fighting tooth and nail directly against themselves and against their own self-interests, liberally fed with deliberate and outright lies and wildly inflammatory rhetoric.



    Christina Marlowe

  • AngieM

    In response to Crony Capitalism –
    Well, we can sit by and let this country go to the dogs or we can stand up and let the ones who are supposed to be our leaders either get it right or leave; and get rid of the ones that have already done irreparable damage!
    I listened to your program and it was a real eye-opener.  Your guest, David Stockman, author of “Crony Capitalism”, did not miss a beat.  Government no longer works for the people, the ones that put them in office.  I challenge everyone to listen to this program and join in the American way to do their part and stop the inevitable.
    We must change what is going on now.  It seems the people that have caused most of this grief are the ones that have been appointed by our current President to get us out of this grief.  How does that make sense?  I don’t have a degree in finance or business, but I know I would not hire people again to solve the same problem and have proven to be failures.  That is not leadership.
    Has the American dream now become “see who you can take advantage of?” who you can backstab? Who you can benefit from?  Is this a “proud to be an American way?”  I am so disgusted with those considered educated people to be the ones cause of  this country’s demise.  
    I don’t believe in letting someone dictate the future through greed and disregard of others. I regret the fact this President is pretending everything is going to get better; when, in fact, electing those responsible for the catastrophe and/or those who have previously failed will only repeat mistakes and bring this country to an irreparable state.    
    Our next generation deserves a free, stable democracy that can and should again be a land of opportunity — Our Constitution should have protected this country from influenced corruption of any kind and those responsible should be held accountable.
    How do we get the laws changed now before anymore damage is done? 

  • Judyr808

    Okay, just like everyone else who has talked about this, there was no solution offered, and I ask again.” What can we the people do to change this”. The only people who can aford to run for any office has to have so much money, either their own or “campaign contributers” who buy them, that we are not really ever represented. We had better learn to survive on our own…
    Sad American,

  • Johncf

     Mr. Stockman never said a word about ketchup.   The USDA included the assessment that ketchup and relish could be considered as vegetables in school lunches in one of its directives.

  • liuklp

    We need to have a non-violent human protest, to our governments (state and federal) and to big business.  Those of us without much, far out number the ones with a lot.  It takes balls and what I have found is, few people have any.

  • RustyLH

     Hogwash.  Don’t try to sell me on some lame idea that the fear of unions is unwarranted because they “aren’t as bad.”  They are corrupt and in bed with the politicians.  They are part of the problem plain and simple.  The average working guy in a union, no they aren’t a problem, but the power structure in the unions is no different than the power structure in the corporations.  They are both riddled with corrupt crooks.

  • RustyLH

     I have little to no use for any politician Corporate Party D or Corporate party R.  I have little to no use for any Union leader.  I have little to no use for an management of a corporation.  The people I respect the most are simple small businessmen who have to go up against the big corporations and the government alike, both seem to have it in for the small businessman and unions aren’t their friends either. 

    I know, my mom was a small businesswoman and she had to scrape and claw to achieve her dream, and it was destroyed by the workers who worked for her.  Disgruntled people who weren’t happy with their lot in life.  People with a “got to get what you can get” mentality.

    The key part of your post is that it acknowledges that society in general is corrupt.  This can only end in tears.  Unless people in general can find real morality and learn to apply that to their daily lives, this society is doomed.  A society can’t survive when not only do people only care about themselves, but are willing to do almost anything, and sacrifice morality in the pursuit of pleasure. 

    That is something else in the “good book,” since you mentioned it.  It says that in the end times, people will pursue pleasure over righteousness, and even approve of and take delight in the sins of others.  I see that all day long these days, and that is NOT hat it was like for our grandparents.

  • RustyLH

     There is nothing wrong with Capitalism.  It is corruption that is the problem.  But corruption is not limited to Capitalism.  Corruption originates with greed and greed is a dark side of human nature.  In small amounts, tempered if you will, greed can be good.  It motivates a talented person to work hard.  The harder he works, the more he can have.  The problem comes in when having what you earned is not enough.  When greed gets out of control and drives the person to do evil things.

    This is one reason Communism failed.  First, the leaders were corrupt.  2nd, communism requires that everyone simply work as hard as possible with no payoff for working harder than the next guy.  This is another side of human nature.  I’m not going to work harder than you if we get the same pay, and I am not going to work as hard as you if I get less pay.  This is in fact what is behind the drive for equal pay for women.

    My economics professor was from a communist nation, and he said that what communism did was turn everyone into criminals because human nature drives you to want to get ahead, but the only way to do so was to break the law.

    I can fill many posts on the horror stories he told us of what out of control socialism, which is what communism is, does to an economy and how it destroys the very people it seeks to help.

    There’s a reason that socialist economies failed, and it wasn’t because of Reagan.  They were doomed from the beginning because they ignored human nature.

  • RustyLH

     This is the most sane thing you have said.  We do need universal health care but it needs to be done through vouchers, which allows the written in stone laws of an efficient economy to still work.  Why do you think so many corporations, unions, etc.. fight so hard against vouchers of any kind?  Because it puts the power into the people’s hands.  It’s not even debatable.  Want to improve our schools?  Vouchers.  Want to improve healthcare?  Vouchers.

    Vouchers should also apply to employer contributions.  The best way to bring low cost and efficiency to anything is to put the power of the purchase into the individual consumer’s hands.  To get your voucher, they need your approval.  If it is a single payer, it isn’t your approval they need, it is the single person/board that determines ho gets the contract.  This is handled easier through things such as “campaign contributions than trying to keep all of those they service, happy.

  • RustyLH

     And how do you propose to make the government care about what you think or want?  A protest?  Not going to change anything.  Voting straight Corporate Party Democrat or Corporate Party Republican?  Not going to change anything.  In fact, that is a trap that they have cleverly set.  get you all worked up over gay marriage, abortion, big government, small government, gun rights, etc… and scare you into not voting for the one that says they represent you on this.  It has trapped you into not considering a third party.  You fear doing so.  You are thus trapped in their scheme.  Neither party has done a single thing for the American people for many decades.  The people haven’t woken up to that fact because they are fooled by the finger pointing blame game…it’s them across the aisle, not us.

  • RustyLH

     The only thing you can do is vote for a third party candidate.  even if you don’t like everything they stand for.  So what.  I don’t agree with everything any politician stands for.  If Ron Paul runs as an independent/Libertarian, vote for him.  You have a choice to unhook from the matrix, or continue to live with an illusion.  Corporate Parties D and R aren’t going to change anything.  This system is working for them.

    I feel confident in saying that neither you nor the majority of others will choose to unhook from the martix.  And so nothing is going to change.  Insanity, as defined by Albert Einstein is doing the same thing repeatedly and expecting different results.  And yet the American people continue with their insanity.  It’s because they are fooled by the illusion into actually doing the one thing that might cause real change.

  • Deanneusa

    Very sobering revelation of the dangerous plight of our government.  I want everyone I know to see this program and get the book by Mr Stockman.   I know that many people think Obama is a good President and know nothing about what he is  not doing regarding the economy and what Wall Street’s doing.

  • Pauline

     I’m sending this link to all my family and friends.  Gretchen Morgenson has done her homework for most of us by following the dots and sharing the puzzle with all of us.  Thank you.
    David Stockman’s statement, “we have neither capitalism nor democracy”  really hit home.   I just ordered his book from my local independent bookstore.  It is refreshing to hear him say he is not happy with the Republican party anymore,  as I am not happy with the Democratic  party.  Neither party care for WE the people.

    When the Bush administration began bailing out all the big banks, I closed out all my accounts and now pay cash for everything or buy a money order from the post office when I need one.  I have also paid off all my credit cards and have not used one since January 2009.  I buy only from local family owned businesses and restaurants in my county.

    I quit my job of  4 years in September, 2010, since I was working for a boss who totally supports this new “crony mentality.”  I was able to find two part-time jobs in marketing/business development for two family owned businesses within a month.

  • Jules Guidry

    This has taken sense the Ronald Reagan’s President Years. Crony Capitalism, has drained the economy, and lost American jobs. 

  • Jules Guidry

    This has taken place sense the REAGAN days in office. 

  • Anonymous

    I was heartened to see this fundamental issue, Crony Capitalism, discussed so well.  It is indeed destroying our country.  It seems to me a basic flaw in human nature that causes such power to coalesce and eventually self destruct (we see many examples from history!).

    I wish to take this discussion to the next level: why is wealth and consequently power) inevitably concentrated?  I suggest it is rooted in greed and considering “labor” to be a commodity as opposed to an important part of a common effort to accomplish something.  As long as the rules of the game are “anyone who will do the job for a dollar less gets the work,” those who control the purse will remain invincible.

    Consider 2 simple rules that might change everything:

    For any enterprise with more than (say) 20 employees

    1. The ratio of the highest salary to the lowest salary may not exceed 400:1

    2. There must be cost sharing of profits across the entire set of employees so that if more is produced everyones earn more.

    What would our world look like if those 2 rules were in force?

  • RustyLH

     amaniod, I liked your comment, but take issue with its fatal flaw.  Your distaste for capitalism.  Or better stated, a free market.  A free market is not the problem, it is the solution.  The problem we have at this point in time is not a free market but the absence of one.  That is what Crony capitalism is all about.  The fact that it has corrupted what is good.  The fact that someone will do a job for a dollar cheaper is a good thing in a free market.  Again, the problem we have now is that we don’t have a free market. 

    And realize this, businesses can’t stay in business unless they are willing to pay talented people what they are worth.  Why?   Because so long as there isn’t a monopoly, other businesses are competing with them and they WILL pay for the talent.  That’s one way they get ahead.  My professor taught Keynesian (liberal) economics and yet it is far more conservative than what many people on the left suggest we do. 

    What you don’t realize, because it seems clear you’ve never taken economics, is that there are major hits to an economy when you apply rigid price ceilings or bottoms like that.  Believe it or not, those penalties can actually be measured withing a reasonable margin of error.  If you have taken economics, it appears you have forgotten some of the basic principles.

    Bottom line is that our problem is corruption and that corruption exists equally on both sides of the aisle.

    You know, for all of the hate Sarah Palin gets, some here should take note of why she is not the Governor of Alaska any longer.  Do some fact checking if you will.  But the fact is, she ran on a campaign against corruption, on both sides of the aisle.  One Republican woman in the state Senate admitted that because she in effect accused even the Republicans of being corrupt, she had no friends on either side of the aisle.

    After getting into office, she side a law allowing anyone to make an accusation against any state official.  Part of her pledge to root out corruption.  As a result of the hate and vitriol, the insane desire by some to destroy her, baseless accusation after baseless accusation was leveled at her…by people that didn’t even live in the state.

    Corrupt politicians on both sides of the aisle were more than happy to sit by and not throw her a lifeline.  Eventually it became a distraction for the state as they had to investigate every single accusation.  And the simple truth is, with so many laws, you can be breaking a law and not even know it.  So throw enough against the wall and eventually you might get lucky and something will stick to it.  So for her, the choice was clear.  Look out for her family.  She could leave the job to the next guy in line and the business of the state could get back on track.  And she would be able to make plenty of money to support her family.

    Like it or not, we actually need somebody, anybody similar to Sarah Palin.  Why?  Simple fact is, the president doesn’t have to be an expert on anything.  They don’t.  They simply provide a direction for the government.  Her direction would have been as it was in Alaska, to root out corruption.  Which is exactly why corporate one media such as CNN, CBS, NBC, US Weekly, etc… all were directed to destroy her.  Washington D.C. wants no part of an ideologue whose ideology is one of anti-corruption.   Like it or not, this is why she as destroyed.  Take note that they learned not to assassinate a sitting president or VP.  Why do that when they can use the media to eliminate them.

    Is she a Harvard professor?  No.  So what.  A president or VP doesn’t have to be.  They simply have to surround themselves with smart people.  Every president does that, and none of them have been brilliant.  What makes or breaks them is the course they choose and the quality of the people they surround themselves with.  Could she see Russia from her house?  Who cares…it’s her Secretary of State that would have needed to know intricate details of foreign policy.  Who the heck cars what she reads for her world view…and uhm, what did Obama say he read for his world view?  Oh, that’s right, he was never asked that.  Wouldn’t matter anyway because as the President, their world view comes from their advisers who read intelligence reports, not op eds in the NY Times.

    This is why we will never escape this.  People are lead one way or the other and go along very willingly because they like the flavor of the poison being fed them.  Want change…real change this time?  Don’t vote Corporate party D or R.

  • RustyLH

     It’s been going on a lot longer than that.  There’s a reason, when asked, that Ben Franklin told the lady that he and the Congress had given them a Constitutional Republic…If They Could Keep It.

    He understood that from day one, it would be under attack by those who seek to serve their own selfish desires at the cost of the Republic.

  • RustyLH

     Pauline, be careful about saying, “the Bush administration began bailing out all the big banks,” as this was Bush and the Democrats in Congress for the most part.  Remember that no Republicans in Congress were supporting it until Nancy Pelosie went out there in front of the microphones and said that they were un-American for not supporting it.  Then and only then did some cross the aisle.  Even still, it was primarily a democrat supported bill.

    That aside, i don’t trust any of them.  I think they put on great theater for our benefit, but in the end, they are all equally bad and I am done with all of them.

  • RustyLH

    Yeah, they are quaking in their boots at the thought of yet another “peaceful protest.”  What are we up to now?  Peaceful protest # 13,759?

  • Anonymous

    RustyLH, I think you misunderstood what I was trying to say. I do not suggest price controls and I do believe in competition. Any enterprise should be able to pay anyone whatever it can afford. What I am not comfortable with is the unethical distribution of the rewards from commercial endeavors.
    I believe that unethical distribution results from considering employees as a simple commodity instead of human beings. Are we partners in an enterprise or cogs in an enterprise machine?
    If “what they are worth” is based on how little they will accept, I think that is a problem. It’s clear that some people have more to offer in a group enterprise than others (value of contribution). It is also clear that there are more people who can dig ditches than do brain surgery (value of scarcity). But what’s the incentive for me to work harder if I get a $10 gift certificate and the CEO gets to buy a new yacht?
    I believe the “free market,” if it really is free, is the best way to determine how people want to use resources. The problem I see is when people are seen as resources in the same ethical mold as coal or lumber. People are more than that but that “more” isn’t recognized in the pure free market model. That’s why I suggest a few basic rules to do so.
    As a thought experiment, what would the economy look like if most wage earners had at least a modest amount of income above basic living expenses? Would they sock it away or would they present a greater market for goods and services? If they see it as a one time “wind fall” probably the former. If it is seen as a long term state, … Might life become better for everyone?

  • RustyLH

    I responded above.  If we keep going in this section, it will get to the point that the sentences are vertical.

  • meche1

    Greed is something everyone has, so greed is not how power is concentrated.  Power is concentrated because people want it to be.  Power is responsibility, and too many people want someone higher up to take responsibility for them.  In a general sense, the concentration of power goes hand in hand with socialism.  And America is a very socialist country.

  • meche1

    This problem goes back long before Bush.  The roots go back to FDR.

  • meche1

    At best Obama is an empty suit.  He really does not have a clue.  Of course the same can be said for every president we have had for some time.  Ron Paul gets it.

  • meche1

    Protesting is for slaves, and slave masters love it.

  • meche1

    The first thing we can do is stop asking Congress for money to solve our every problem.  Second, demand the same for everyone else.

  • meche1

    Rusty, you got.  We are the enemy.  We want to be enslaved by government and then we complain about the results.

  • meche1

    Rusty, gets it again.  Unions have to be treated the same as corporations.  Behind the scenes, unions and corporations often times work together, BTW.

  • meche1

    What you are describing is illegal.  The Clintons had some problems with this.

  • meche1

    Try taking responsibility for yourself, and don’t ask government to take responsibility for you.  That is where to start.  Next, demand government stop taking responsibility for everyone else.  Remember, responsibility is power.

  • meche1

    The alternative to free market capitalism is socialism.  Crony capitalism is an outgrowth of socialism.  So if one likes socialism, well don’t complain about crony capitalism.

  • meche1

    Grady, you are describing the source to the problem.  It is the idea that the government is supposed to take care of us.

  • meche1

    As long as government is taking responsibility for healthcare, government will decide the hoops you will jump through.  It is the way it is.

  • meche1

    The key is personal responsibility.  Stop demanding Congress and government take care of us.  As long as citizens demand to be slaves of government, citizens will get what slaves get, the short end of the stick.

  • Janetmercurio

    Bill – Are you advocating a Constitutional Amendment to limit campaign donations – or not? Your comment at the end of the show on “Crony Capitalism” with David Stockman seemed as if you were agreeing with him on this point but you didn’t come right out and say so. Please do, if you are in favor of this. Please! I know you were against it 20 years ago because I asked you about it after your speech in Sacramento. You said amendments should be reserved for the most vital issues that can’t be solved any other way. Have we exhausted all other attempts yet? I thought we had long ago. Please state your opinion on this on your show – loud and clear if you are on the bandwagon for an amendment to “cleanse” the system once and for all, as Stockman advocates – in order to reclaim our democracy.
          Thank you very much. – Janet Mercurio, Winters, California

  • Ccampana

    Fabulous interview.

  • Arrdubyazee

    Any chance that you will provide show transcripts in the future?

  • Arrdubyazee

    A Proposal For Campaign Finance ReformI. All monies used for the purpose of running a campaign for United States (US) Federal office must come from a Federal Campaign Fund (hereafter, the Fund).
    II. The Congress of the United States shall appropriate monies to be deposited in the Fund out of the Federal budget, to a maximum amount set by law.
    III. Any entity (individual, lobbying group, political action committee (PAC), corporation, foreign national, etc.) may contribute without limit to the Fund.
    IV. No person shall use any monies from any source other than the Fund to finance a campaign for Federal office, including, but not limited to, personal funds.
    V. The Fund shall be administered by the Government Accountability Office (GAO).
    VI. Monies from the Fund shall be distributed equally among all candidates for a seat in the United States House of Representatives, for a seat in the United States Senate, and for President of the United States, in accordance with the following paragraph.
    VII. The share of total monies allocated for campaigns for each office shall be set by law, according to the scope of the office: the share allocated to campaigns for the House of Representatives being the least; the share for the US Senate being next most; and the share for President of the United States being the most.
    VIII. Every candidate shall be required by law to keep accurate and timely records of receipts and expenditures, to be filed with the GAO within ninety (90) days following the election; failure to do so shall be punishable by fine or imprisonment,or both, as set forth by law.
    IX. Every candidate shall be required by law to return to the Fund, within one‑hundred and eighty (180) days following the election, all monies unspent during the campaign; failure to do so shall be punishable by fine or imprisonment,or both, as set forth by law.
    X. Candidates for each office shall qualify for a position on State ballots according to the laws as set forth in each State.
    XI. No State shall structure the qualifications for a position on that State’s ballot in such a way as to discriminate against any candidate or group of candidates.
    XII. All laws governing the administration and financing of the Fund shall be created in the manner usual and customary for the laws of the United States, as set forth in the Constitution of the United States.

  • Anonymous

    There has never been a solution for dealing with campaign financing.  A government solution means government controls the purse strings.  It is naive to think, government will lookout for the interest of voters, government never has in history.

    The best I see we can do, is to require full disclosure.  Unions, corporations, monied people buying influence, and foreign countries tend  to want to hide the fact they are donating money.  What can happen is the large donation can become the news, that is the last thing a large donor wants to see.  It is also important to fund the regulatory agencies that scrutinize campaign funding.  It is interesting how both parties unite to de-fund these agencies.

    But a bigger and more important aspect is to stop giving more responsibility to the federal government. In fact give the federal government less.  Responsibility is power, and power will abused.  There is more accountability in having local governments doing what they can, and not shifting responsibility to a far off government.

  • AnneLBS

    Hi Arrdubyazee;

    Try clicking on the icon labeled called FULL TRANSCRIPT directly under the video. Thank you for watching.

  • Linda

    And yet, Repubs are campaigning on a premise that includes the notion that monied interests/wealthy Americans are currently underrepresented. As long as we continue to have large swaths of citizens who are poorly informed or outright misinformed on this critical topic (and others), we will continue down this path. Don’t bet that this issue will be taken up by Washington. Any public official who takes this up will be outspent by political action groups like the Koch brothers/Koch industries, and will not have a seat at the crony capitalism altar on Capitol Hill. I’m no longer optimistic, sadly.

  • Anonymous

    As David Stockman points out, crony capitalism is solidly bipartisan.  In fact it depends on partisanship, like your own, to exist.  The last thing crony capitalism needs is for one party or the other, or both, to actually be against it. The Cato Institute has been an outspoken critic of crony capitalism, and has come out in support of Ron Paul, the only presidential candidate including the current incumbent, that understands the nature of the problem.  Koch, incase you have not noticed, has a major interest in Cato.

  • Dnadanyi

    I think crony capitalism is an outgrowth of faschism not socialism.

  • Dnadanyi

    Be careful what you wish for.

  • Dnadanyi

    And what if the insurance companies don’t want “no stinkin voucher” cuz your sick.

  • Dnadanyi

    I am so sorry for your friend. I understand each state has a % profit that they allow hospitals to earn.  Our health care system is a disgrace.  All health care should be non-profit. Health care is like oxygen.  If we do not have it we go bankrupt and die.

  • RustyLH

     Well then, I expect you will also be willing to work for free?  Or how about this, you take a 50% paycut, asking that the other 50% be directed toward the poor.  Sorry but nobody does anything for free.  And if you want to see what not for profit looks like, look no further than the VA.  You really want to know what is going to happen when your plan gets executed?  The best and brightest doctors are leaving the country.  That plan was already set up in 2009.  Places like Costa Rica are where the rich planned to set up shop.

    Why don’t you educate yourself as to what your kind of initiatives does to industries.  It’s not identical in every way but home building is similar in that the best and brightest skilled labor no longer sees it as an option.  Why?  Illegals drove down what you can make to the point that it just isn’t worth it.  I know, I did it.  What you have no are unskilled Mexicans, and low to no skilled Americans, most of who use drugs.  In fact, i can’t name on guy I worked with that didn’t do drugs.  Several got caught doing it while on lunch.  They get fired and go to another company.  Result is that when i got recruited to work a home warranty company, every home i went into had major problems and every home owner was threatening to sue.

    Bottom line is you get what you pay for.  And there are no guarantees.  And furthermore, why is everyone entitled?  Not everyone contributes.  The world is full of willing people.  Some willing to work hard, and others willing to let them.

    While it may be an inconvenient truth for you…life is not a right.  Think not?  Ask the aborted babies if their right to life was looked out for.  Ask the death row inmates if their right to life was looked out for.  Bottom line is you have to earn your right to live.  You don’t have a right to live off the backs of other people.

    Why is socialism a good idea on paper?  because the idea is that everyone contirbutes to the best of their abilities and thus there is plenty for all to share in.

    Why does socialism fail in practice?  Because it ignores human nature.  People only work so hard if they are not getting what they feel is their due for their hard work.  People don’t go to school for 10 years, making little to no money in the process, so they can get out there and make little money, but do good.  The do it so that one day, they will make a lot of money, live in the big house in the nice community, etc…

    So the bottom line is socialism fails because it does not reward hard work, and does reward people who do not work hard.  More correctly, it does not properly compensate productivity.

  • Anonymous

    Makes sense.  But food should be done as non-profit, and housing, and clothing as well.  Let’s not forget schooling. All basic stuff for survival.  Should the people inside these economic sectors make a profit, or should they do their work at cost? There are quite a few “non-profits” I am acquainted with that have people on their staffs that make outrageous amounts of money, so how would we figure the cost of those working in the non-profit?

  • Lincoln

    Even Dylan Ratigan gave up on us today on his MSMBC program today..The whole Nation knows its been defrauded by the “Big Banks” yet no one is stepping forward to bring them to Justice. All we have left as citizens to negotiate with is our ability and agreement to pay our debts to these greedy sociopaths.
    So, “Rank and File” pick a day, a day in the very near future to brake your promise the way they have broken their promise to us. Stop paying your Mortgage payments. Stop paying your Tuition payments. Stop paying your Credit Card payments. Stop paying your Car payments. If we all withheld payments in protest at the same time I truly believe we will get their attention. And not return to our promise to pay until they again keep their promises with us, WE THE PEOPLE! 

    Okay Bill, pick a day and announce the 99% and watch us exact justice on the one percent!

  • Anonymous

    Fascism is a form of socialism.  FA Hayek points out, the type of socialism makes no difference.  To argue in support one form of socialism and against another, is the argument of a fool.  Well unless you happen to be one of those in charge.

  • GradyLeeHoward

    So, let ’em die, right?

  • RustyLH

     Lincoln, a one day protest does NOTHING.  For your idea to work, it has to be widespread, as in millions of people doing it, and it has to be indefinite until change happens.  Just withholding payment for a day does nothing.  Even Oil Companies laugh at the one day protests.  Do they really care of you wait a day to fill your tank?  In a word, no.  This is the diet vs lifestyle change argument.  Dieting for a single day has no effect on your life.  Even just eliminating sugar from your diet for a few months isn’t going to alter things, not for long.  Lifestyle change is the only way to bring about permanent change.  This is why things will never change…people like their present lifestyle.  They aren’t going to change.   They simply want more.

  • RustyLH

     Oh please, we don’t even do that now.  Good grief.  Go to a hospital if you have something wrong with you.  They can’t turn you away because you can’t pay.  Do you have any more red herrings to sell?

  • Anonymous

    Babies that lay on their backs, scream, and kick their feet will often get their way; if they do it long enough.

  • Dnkomos1

    Mr. Stockman’s asessment of our current dilemma was the best explanation that i ever heard articulated to date. Thanks for having him on your program. Don -Detroit

  • Anonymous

    I have actually heard it said.  But you know what?  People who are free, make adjustments and survive.  It is those who are enslaved that parish.  And socialism is slavery.  Slaves die quietly though, as they wait for the slave master to come through.

  • William Borchert

    David Stockman identifies some of the serious rot afflicting the roots of our democratic/capitalist
    system, laments our failure, so far, to address the problem with meaningful action, and warns of brutal consequences that await us.  As with climate change, the problem is incredibly complex, and can seem intractable.  Dealing with it in a meaningful way would be disruptive of deeply embedded social and economic institutions, and threatening to the belief systems and perceived self-interest of many.  Denial can be a tempting, even seemingly pragmatic, response.  But if we have an interest in the welfare of our progeny, and of our planet, it is profoundly irresponsible.

  • Anonymous

    Humans have always been very good at adapting to climate change.  In fact it might very well be why we are so successful in this protracted period of dynamic climate.

  • Taambrosefw

    Not mentioned is the size of the coming crisis, the failure of the derivative funds.  From two sources, I heard the fund’s total  300+ trillion USD, 50 times the entire wealth of the planet…
    Yes, our economy is only a ‘paper moon’… not backed by silver nor gold…only paper…  The derivative ‘bubble’ will bust like all bubbles, but at what cost and we may pay for it again…again…and again.

  • Taambrosefw

    Not mentioned is the size of the coming crisis, the failure of the derivative funds.  From two sources, I heard the fund’s total  300+ trillion USD, 50 times the entire wealth of the planet…
    Yes, our economy is only a ‘paper moon’… not backed by silver nor gold…only paper…  The derivative ‘bubble’ will bust like all bubbles, but at what cost and we may pay for it again…again…and again.

  • Anonymous

    The way I  see it, crony capitalism was the impetus behind the American Revolution. And, throughout our ensuing years as a nation, various presidents have been called on to fight its rearing its ugly head again. The problem, the dire problem would be if all of government were co-opted into the crony system, then we would have corporatism, not much different from King George and the East India Company.

  • Lincoln

    There you have it.. Now what? Occupy?

  • Anonymous

    Not much different in deed.  Look to Mussolini for the best example of modern day corporatism.  And how often have you heard of the advantages of public-private partnerships?  Or when government “regulates” business by taking these businesses over; like has been done with big banks, public utilities, and is happening with health insurance companies?  It is the basis for too big to fail.  Complaints of government control from these businesses is hard to take seriously, since they know, with government take over, they can never go out of business. The boards of directors and management can collect huge salaries, with no need to worry about competition.  Of course government controlled monopolies are created.  Good for everyone but the consumer.

  • Anonymous

    And what does Occupy do?  Occupy is expressing that someone else needs to solve the problem.  I am going to be a baby that yells and screams until I get what I want.  Well having someone else, the government, solve the problem is what got us in this mess in the first place.  Look at the Tea Party solution.  Get government to stop giving handouts, and stop playing favorites.

  • Richard Altman

    it has it’s place, it’s just not done with grace, like many thing any more and it’s not moral sentimentality, it’s becoming a requirement for the artfulness to reposition itself, it’s the art of being cool, not hot, in the McLuhan context.

  • Anonymous

    Corporatism is not the government taking over business. Corporatism is  business taking over government, which is what we are experiencing today. The power by corporations to rule and write laws is what exists. What you describe is communism.

  • RustyLH

     Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups,
    such as agricultural, business, ethnic, labor, military, patronage, or
    scientific affiliations, on the basis of common interests.  Corporatism is theoretically based upon the interpretation of a community as an organic body.  The term corporatism is based on the Latin root “corp” meaning “body”.

    In short, you are mistaken.  In the real world, even Unions, political parties, and even the Association of American Universities, are part of corporatism.  It means nothing more than people grouping together based on common economic goals.  It does not even require this group to be political, or attempt to influence governmental action.  While it is a foreign concept to some, you can affect your culture, economic situation, and environment around you without involving the government.

  • Santiamman

     You are correct. The term for this is fascism. Not used much, because of the atrocities of the fascist Third Reich, but those had nothing to do with fascism, which describes the form of government, not what that government does.

  • Santiamman

     Sadly, this is very likely true. No one – NO
     ONE – is even talking about the estimated $65 trillion (with a T) in credit default swaps that are still out there, without any financial backing whatever. And nothing changes. CDSs are still unregulated, unreported, and still not treated as the insurance policies (with reserve backing required of such), which they clearly are. No changes in Banking rules/laws of any significance. No new laws/regulations of significance for Wall Street investment houses. Banks allowed to continue showing worthless loans at full
    (not market) value to fraudulently strengthen their apparent financial strength. And still allowed to package and sell off their toxic investment products to whoever will but them. No prosecution of any of the many laws broken by many of these institutions. Not even an in-depth objective government analysis of what caused the collapse (as the US did after the start of the Great Depression, resulting in a series of well-thought out laws that functioned well, until repealed in the 90’s and 00’s. Corporate America WANTS to continue business as usual, with no changes. They do not want to prevent another collapse. Why? Just look at who not only survived the collapse, but profited handsomely from it – and is not doing any jail time for it. The utterly corrupt system that brought us here is firmly institutionalized. God help us.

  • Santiamman

     You may have noticed the literal demonstration of the truth of what you wrote during the hearings on the Health Care bill in Congress last year. Despite the fact that 71% of Americans favored a single-payer plan, the enormous pressure, lobbying, and – dare I say it? – money from the health insurance industry resulted in no representative or advocate for single payer gaining a seat at the table, or the right to even testify and present the case to the committee. Single payer was not even considered. No seat at the altar? This was a perfect example!

  • Anonymous

    When the two join together, it can be hard to tell who has taken over who.

  • Anonymous

     Perhaps I am wrong, it’s not unheard of. I was referring to the concept espoused by Hitler and Mussolini, primarily Mussolini.

    So, what is the term you would use to describe usurpation of authority from a democratic society  by the few. Oligarchy? Plutocracy? Certainly not autocracy, that would be tyranny and we definitely don’t want that.

  • Anonymous

    In general, socialism in all it’s forms usurps authority from a democratic society.  This was the main point of FA Hayek’s “Road to Serfdom.”  The power of the state becomes insulated from elections.  We see this increasingly in the US today.