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, it. 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 2,300 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.

GRETCHEN MORGENSON: 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.

We also didn't have a penalty, there were no penalties paid except by the innocent taxpayers. There were no penalties paid by the people who created the crisis.

BILL MOYERS: Yeah, I read in one of your columns not too long ago that if a CEO is indicted, the penalties he may have to pay or even the cost of his lawyer -- he doesn't pay.

GRETCHEN MORGENSON: The director's and officer's insurance often pays for these costs. The company many, many times pays for these costs. Angelo Mozilo is a perfect example, the former chief executive, co-founder of Countrywide, one of the most toxic lenders out there, really has created huge problems for especially minorities in this country.

He was charged with insider trading by the SEC, they settled the case. He didn't admit or deny guilt. All he paid was $22.5 million to civil penalties in the case. He sold stock worth more than $500 million over a period of years at the end of the boom. We are talking about a cost of doing business, something that he has no trouble paying. He happily wrote that check.

BILL MOYERS: What do you think about the SEC's, the Securities and Exchange Commission's, performance since the meltdown?

GRETCHEN MORGENSON: I think they have not been aggressive enough in going after compensation of these executives. I do think that they're understaffed, undermanned. They're always fighting for money.

They have gone after some very large insider trading cases, but again nothing to do with the crisis. There has been a resounding silence, Bill, from the prosecutorial function in this country to this crisis. There has been no one gone to jail from, that was really involved at a high level at one of these big mortgage companies.

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: Well, as you know the pushback is, well, they shouldn't have been encouraged to buy a home, but they should have had the common sense not to buy a home without knowing more about what they were getting into.

GRETCHEN MORGENSON: That's a good argument. But when you talk to people who English is their second language and when you talk to people who have never, you know, had an investment account, who really don't even maybe have a bank account and you've got some slick mortgage broker saying, "Oh, just sign here on the dotted line, everything's going to be fine," you can see how that goes awry. I mean, I’m a sophisticated person and, you know, I have to ask multiple questions if I’m looking at one of these mortgage documents.

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.

It's really interesting, that we're still archeologists. 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.

And there has been a tremendous, you know, attempt by the powers that be and I'm talking about the United States government, the Federal Reserve, the Treasury, banks, private institutions, as well, to prevent us from really learning the full extent of this. And so here we are, we're still uncovering things that we didn't know back in 2008, 2007. So no, I don't think anything significant has changed.

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.

Gretchen Morgenson on Corporate Clout in Washington

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.

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  • Anonymous

    Ms. Morgenson’s clarion call for the average American struggling to keep themselves and their families financially afloat needs to be published, disseminated, voiced for all to hear the distressing truth that our Government has been bought and sold to the highest bidders. The citizens of this great country must take a stand based on the facts, the truth and decisively act to force the pendulum now swinging in favor of the crony capitalists back to those of us in the mainstream who believe that free market capitalism is the cornerstone or our survival as a country.

  • FranG

    Everybody, please read her book, Reckless Endangerment, for more outrageous information. It’s phenomenal and gave me such insight into the big problem.

  • Scott Spinucci

    There is only one solution to taking money out of politics and it is found here:

    We continually treat the symptoms and not the when it comes to money and politics. None of the solutions on the table will solve “pay-for-play.” More to come as my documentary is unveiled. In short, we can’t coninue on with a political system whose currency is the 30-second ad.

  • Anonymous

    Also go back to Bill Moyers Journal Talkback blog where we commentators discussed Bill’s presentation  “Nationalizing the Banks”. The wisdom of the general public is surprising.

  • Anonymous

    Why did goofy apologist Stockman get double the time of Morgenson, who knows her facts?

  • Anonymous

    What’s your take on #5 FranG, the secret FED loans story? 
    This is much bigger money than the mortgage prick to the big balloon. Since real estate is down the next crisis must arise in larger abstract speculative transactions.

  • Keenan804

    Why isn’t anyone in Washington listening to Gretchen Morgenson? Are they all deaf to common sense?

  • Skopros

    this woman has been consistently reporting honest and searching journalism as she investigates the crookery in the financial sphere.  she is one of the best reporters at work in America today.  yet who really heeds her?  and how many people read the NY Times?  the problem is amplification and reaching a far wider audience than our white-glove media outlets can provide.  thank God for myers & co.  thanks Bill.

  • Jfmcom1

    Ms. Morgenson is right on!  The one-percent have all the lobbyists.  We have none and, therefore, we have no voice whatsoever in the halls of Congress; and the White House is serving as little more than a caretaker for the real powers that be.  So where is the “democracy” in our so-called system of “government”?  Indeed, where is it?  Our once-developing democracy has morphed into a greed-driven corporatist oligarchy that controls and rules over all!  Really no room for optimism anymore.

  • Patrickm48

    Mr. Moyers,
    You need to do  a show on how your profession – journalists – missed the build up to the financial crisis.  LOTS of people knew that there were questionable practices that were creating inordinate risk.  And many of them were outspoken, but ignored by the press.  Why?  Ms. Morgenson is an admirable journalist but where were she and her colleagues when in 2005 and 2006 when then refinance boom had already inflated assets to unprecendented levels?  Where is the discussion about whay Fannie Mae and Freddie Mac have not been able to demand repurchase of bad loans from lenders, which they are entitled to do under their agreements with lenders? 
    I, for one, do not believe the press has fulfilled the role for which the founders intended.  Your show is an opportunity to have that discussion. What are journalists, after all, other than the folks who stand in our place to get the information we need to evaluate civic virtue, and make informed decisions.  We cannot make these decisions with good information if we are not provided it.

  • Jfmcom1

    Patrick, I agree with your suggestion wholeheartedly!  We no longer have an aggressive news media to keep watch on the galactic fraud and greed-driven criminal behavior that is like a cancer on our financial system.  Truth is the news media largely belongs to and controled by corporate America.  How About, Bill, why don’t you take the news media to task for its calas and careless behavior?

  • Marianna Y. Sullivan

    Thank you Bill Moyers, for being there to help shine a light on the dark side of  Washington, and for having Gretchen Morgenson on your show.  

  • Mhumt2189

    We are so lucky to have Bill Moyers return to television via Moyers & Company.  Bill, you continue to be one of the very few rays of truth, light, and hope in broadcast journalism.  Also, having just completed Ms. Morgenson’s book (very timely, indeed), I wholeheartedly recommend it to anyone interested in unravelling the truth surrounding this whole tragic nightmare.  It is a superior work.  Ms. Morgenson is absolutely correct:  if we can’t (or, more likely, choose not to) understand what precipitated this meltdown, we are destined to see things get worse before they improve.

  • an american

    Yes, they are deaf and so are we. We are so bogged down with the notion that “you can’t fight City Hall”. We The People…, more than ever, must take back our country. Unbridled corporate power  must be reigned in and the big financial institutions must be regulated along the lines of Glass-Steagall with the removal of onerous regulations on our small to medium size businesses and banks who are really the economic engine of our country, and yes, begin prosecuting the perpetrators of the 2008 meltdown. Today, our national and business leaders are making the power brokers of the Roman Empire look good. Sadly, our political process has become corrupted. The people need to put political pressure on our leaders to pass a constitutional amendment that prohibits big money being infused into political campaigns and prohibiting members of a presidential administration from going to work for lobbying firms. Presidential economic advisor roles should not have the power to exert or influence economic policy e.g. intimidating government officials who wanted to regulate derivatives. Are you listening Larry Sommers! These are the individuals who go back to academia and teach a new generation of corporate malfactors. i.e Larry back to Harvard’s Economic Department. We all have a stake in saving our nation and the time has come. Make your voice heard between now and Election Day 2012

  • where is justice

    TOMORROW, Jan. 23, 2012; The Sweetheart Deal





    I’m disturbed that after Reuters exposed Eric Holder’s and
    Lanny Breuer’s former employment with Washington’s law firm of Covington and
    Burling, there is the implication of the INJUSTICE about to be rendered on the
    American people.

    How can Holder be permitted to strike a deal for the people
    when such a conflict of interest is so apparent.

     This sweetheart deal
    , if agreed on (why wouldn’t these banks agree to it), will represent the
    largest miscarriage of justice in our nation’s history. The day after Cordray
    was appointed, the fed released a memo to Congress stating $7T in home equity
    is gone. $30B fine with immunity on future foreclosure crimes for $7T in
    losses. That’s not $1 for every $200 in losses plus IMMUNITY. Seems Holder and
    Breuer still represent the banks. They sure as hell aren’t representing the

    In Reuters article , released on Friday,1/20/12,( see
    Huffington post-1/20/12 also)

     they also discuss the
    number of fraudulent, forged mortgage notes used in countless court foreclosure
    proceedings. The article states fraud, obstruction of justice, forgery, perjury
    and I’ll add couterfeiting. Counterfeiting legal, financial documents that are fraudulent
    and forged. I believe that fits the description of counterfeiting. Let’s not
    forget  the countless settlements between
    SEC and these banks  dealing with securities


    Securities fraud, fraud, obstruction of justice and
    counterfeiting are federal crimes listed under the RICO ACT.

    If creating all of these plus job losses, homelessness,
    hunger, and generally destroying our society (financially and immorally), isn’t
    a display of a CORRUPT organization, please enlighten me.     

     This apparent injustice
    is about to be REALITY. Immunity equals no RICO ACT.

    Please make some noise. Create some outrage.

    Or is it too late.?


    Should the people demand a special, independent prosecutor
    for these crimes? At least this would present a chance for justice, more than
    we seen so far.

    If RICO charges were applied, would this create a national
    financial crisis? Depositors would move their money from these banks. Who would
    keep their money in crooked banks? No more TO BIG TO FAIL. Just smaller banks
    who would actually start loaning money with their new infusion of  money. Economic recovery starts to bloom!

    The CEO’s, CFO’s, Boards of Directors, and guilty traders of
    the CORRUPT banks named in the RICO charges, would have all their assets seized
    by the government. Plus they would not be in control of their banks. Their
    shareholders will sell their shares or watch their price per share dwindle as
    these banks defend themselves. No more TO BIG TO FAIL.

    This creates a perfect time to re-install Glass-Steagal Act.
    Now you have consumer banks separated from investment banks. Only consumer
    banks get access to the Federal Reserve and depositors insurance from FDIC. Not
    investment banks. Investments come with an implied risk. New institutions can
    apply as investment banks, a clean new Wall ST.

    Now repeal the Commodities Future Modernization Act and make
    credit default swaps only an insurance for a currently owned investment, as
    originally designed. No more casinos on Wall ST.

    Now the public doesn’t have to worry about future bailouts.
    We could have a safe banking sector that we enjoyed for almost 70 years.

    PLUS we know JUSTICE can’t be bought.


    Thanks for your time,


    Jeffrey H. McCollim

  • Victoria M. Young

    I hope it wasn’t lost on people that the Glass-Steagall Act was only 35 pages long and served to protect us (we the common people) well. The Elementary and Secondary Education Act was also only 35 pages long in 1965. It is now the 1000 page No Child Left Behind debacle that has been so damaging to our country, to our future….only we have the legitimate authority to make things right again.

  • David F., N.A.

    Excellent show!  My favorite part of the Bill Moyers Journal was when Bill pointed out the revolving-door cronies.  So I’m really happy to see him back at education us.  This revolving door aspect, alone, should tell us that neither party can be trusted.  You don’t have to be an Ivy League graduate to see what’s happening.  These rodents don’t care about America because, with all the money they’re being paid, their priorities are to keep “business as usual.”

    When it comes to our economy, there are only a few people that will make me drop everything and pay attention, and both David Stockman and Gretchen Morgenson are in that group.  I’m glad Bill spent the entire hour with them.  Stockman drove the point home with his various examples of crony capitalism, and Morgenson’s description of how our poor were lured into the mortgage mess, with their hopes and dreams, was very disheartening.

    Let’s see, if I were to rank this show with all of the Moyers & Co. shows, I’d have to put it in the top 2.

  • Wayne_synergy

    Most likely there was not enough information for Morgenson to write about and she states in this interview that material is still being uncovered as to what went on and is still occurring.

  • Anonymous

    “These are the individuals who go back to academia and teach a new generation of corporate malfactors.” What does this suggest? Wolves and sheep?  It suggests institutionalized classism to me. There is a class of favored persons who concentrate on evading and manipulating law for purposes of economic class advantage. These are the wealthy and connected, their children, and their most trusted underlings.  Victoria above complains how the educational system is rigged to make drones of the majority of children. an american complains of collusion among a coterie of elite lawyers to make a sweet mortgage settlement deal for the biggest banks.
    Patrickm 48 below says journalists failed to report because they were awed by wealth and political power among coup plotters. Almost every major incidence of injustice tat concentrates  wealth and power in contemporary America boils down to conspiracy and collusion among the privileged class. There could be laws passed, even Constitutional Amendments, but as long as the People’s minds are colonized with worship of the wealthy the Founders’ most abominable  intent (ownership of the country by a few wealthy families: Plantationism) will continue to reign and intensify as the natural world that supports humanity declines.

  • Anonymous

    The news media was always dominated by the wealthy insiders. It just didn’t seem as blatant in times of general prosperity. Listen to any Noam Chomsky or Howard Zinn history lesson and you will hear how the public was kept in the dark and misinformed by journalistic outlets, always, as far back as news goes in the USA.

  • Anonymous

    How effective can a lobbyist be without bribe money and favors?

  • Anonymous

    Washington dictates the news. They don’t listen. 
    The New York Times has always been a leashed dog, and often a pampered one. (lapdogs of Capitalism old communists/socialists used to say)

  • Sergio

    Congressman Ron Paul has been speaking about this for over 20 years.

  • Michael Pettengill

    But Gretchen never points to the specific violation of the law committed by bankers.  

    When conservatives said we should not have regulation and started repealing the laws passed by Republicans and Democrats from the 1870s to 1970s, and starving the regulators of funding for staff and prosecutors, we end up with very harmful business activity being legal.

    The best example is all the pollution and toxic waste sites produced around the world before there were laws prohibiting this reckless pollution.  No one went to jail for polluting large regions of the earth because it was all legal.

    So, Wall Street with conservatives and Republicans claiming no laws will be wonderful because you can trust Wall Street because anything that is profitable is good for America.  Trust conservatives and Republicans!

    Ooops!  Hey, what we hear from conservatives and Republicans and the progressives is:

    Blame that gay guy Barney Frank! 

    Blame that radical leftist Kenyan anti-colonial socialist crony capitalist Obama!

    Well, blame the US Constitution: No Bill of Attainder or ex post facto Law shall be passed.

    Thanks to determined work by conservatives and Republicans, crony capitalism has been legalized as is lying to investor to get their money immorally.  But after all. conservatives have taught us that the only responsibility a business has is to maximize profits no matter who or what the harm.

  • Michael Pettengill

    Before Reagan,  people supported government and worked to conform to the letter and spirit of the law.  Since Reagan, people hate government and want it eliminated and use every part of their being to do what the law prohibits.

  • Michael Pettengill

    To say that money is the cause of the problems with our democracy is just the argument the corrupt want Moyers to spread because that will make voters give up because Moyers is saying the voters are powerless and might as well just give up and not vote.

    Why isn’t the SEC better staffed?  Simple, way too many Republicans in Congress.  Throw out every Republican and then every Republican and Democrat will be driven to serve individuals no matter what the corporations and their lobbyists say.

    For every issue, the problem is too many Republicans in office.

    Obama has done as much as he can to compromise with Republicans because every law has required at least two votes in Congress from people who campaigned against him: Sen Lieberman, Sen Specter, plus Sen Snowe, Sen Collins, and others for critical and minor bills and appointments.  Sen Specter was forced to switch parties because the Republican caucus was going to strip him of his committee assignments as a traitor for supporting Obama’s bills for the good of the nation.

    The Republicans in Congress have been desperately trying to prevent any reversal of anything of the last three decades which have only made the rich richer and threaten to make the middle class the working poor.

    But hey, We the People elected the Congress which is doing so much harm to us and doing so little to correct the mistakes of the past.

  • Ron Shook

    Bill,  You found a great one in Gretchen Morgenson.  She is so incredibly and smoothly articulate.  I’d like to hear from her more down the line.

  • Victoriayoung

    Too many people do not understand and “no law or ordinance is mightier than understanding.” Plus we have forgotten why our Constitution exists. The Articles of the Confederation failed. It is proper and necessary to have a strong central government…that understands its role. There’s that darn “understanding” thing again. Can you see why I view education as our best greatest hope? 

  • Kore

    Yes, I agree also.  One thing that makes me so mad about this is people speaking out now saying they are so surprised, or so shocked when so many people knew this was happening.  In 2001 I attended a conference where the president of the National Coalition for the Homeless spoke passionately about the buying and selling of people’s mortgages on Wall St.

      Another little pottery shard for Ms. Morgenson is that the Bush II administration cut housing subsidies and raised the income requirements for low income home ownership programs so that the poor and very poor were FORCED OUT into the home ownership market.  It was the only way out of paying more than 30% of their income on rent.  So, they created the customers by creating a housing crisis that led to the mortgage crisis. 

    The press only uses a small segment of our society for their sources, even with the Internet.  They don’t pay attention to what anyone else is saying because it does not jibe with the status quo.  When things don’t jibe they need to be explained and proved and journalists today do not have the time, interests, resources? to do the work needed to really inform the public.  Thank you Bill Moyers!

    We need a whole TV station devoted to covering what we know and we know a lot.  There are 1,000’s of NGO’s in America dedicated to economic policy, environment, social justice, election reform, you name it.  They all do research, are dedicated to educating the public and are willing to talk to the press.

    Occupy the Media!

  • Kent

    Money in Politics is the problem; THROW THE BUMS OUT-ALL OF THEM. Show them we own this dam place and we decide who represents us, not billionaires

  • Petebartelt

    David Stockman’s suggestion of a constitutional ammendment to cleanse our political system by getting the money out of politics is a great idea, but will never happen in time to save this country. The american electorate will have to wake up to this reality of crony capitalism and respond by NEVER EVER voting for an incumbent politician and NEVER EVER vote for a candidate for any office that has assets over 500k. We have to get career multi-millionaire politicians who have sold out to big money out and keep them out.

  • Eclectic Obsvr

    While I agree with much of what was said, there was alot of items in Reckless Endangerment that were misleading and she continues on that course.

    There are many reasons why Glass Steagall and Dodd Frank are different.  While I might have wanted a stronger Dodd Frank, Glass Steagall didn’t recognize finance as fundamentally different as consumer credit was substantially a different problem set back when that was enacted and the FTC and other regulators just didn’t do enough.  That is not say that the lobbyists from industry didn’t add complexity but that is less about that law than our political election process which allows obscene amounts of money to have undue influence.

    Furthermore, it’s just also true that while the industry is more concentrated than it was, that concentration took place largely as a result of trying to ameliorate the crisis under the Paulson. 

    You can find lots of reporters and columnists who can write and speak with  much more insight and illumination than she. 

    I’m disappointed in how this part was done.  Finance and Economics is a difficult subject unless you have some training and it is often dry.  Still, your mandate should be to do a better job than what goes for debate and information in the general media and in this respect you have not measured up.  Sorry, but it’s true.

  • Bigbill188

    This is a great interview. Ms. Morgenson is one of the very few brave journalists and commentators telling us both what really happened in the run up to this financial crisis and how the public policy response so far has failed to assure any meaningful reform. Thank you Bill Moyers for providing her with this platform to deliver her very important message about what needs to be done to prevent a repeat of this, the worst  economic collapse in America and around the world since the Depression. 

  • Kris Jones

    like Gretchen’s comment that the new dod/frank regulatory bill drives up the
    costs for small banks. The small banks that did not cause the problem are being
    penalized just as the large banks that did cause the problem and are paying the
    expensive costs of adopting the new regulations into their system-a rather huge
    problem for a small or midsize bank.

    is my take on it. Bring back glass/Stiegel and separate consumer banking from
    investment banking. The large institutions were responsible for gambling via
    derivatives and speculations in the market. Glass/Stiegel would have kept
    consumers safe from such investment gambling. An alternative to this I think is to
    focus legislature on creating regulations the specifically focus on the large
    corporations that control “X” billions in assets. Any small/midsize
    bank that increases its assets value to the threshold of a large bank will then
    have to adopt the regulatory rules governing them.

    is one alternative solution to the problem. What do you think?

    is my take on it. Bring back glass/Stiegel and separate consumer banking from
    investment banking. The large institutions were responsible for gambling via
    derivatives and speculations in the market. Glass/Stiegel would have kept
    consumers safe from such investment gambling. An alternative to this I think is to
    focus legislature on creating regulations the specifically focus on the large
    corporations that control “X” billions in assets. Any small/midsize
    bank that increases its assets value to the threshold of a large bank will then
    have to adopt the regulatory rules governing them.

    is one alternative solution to the problem. What do you think?

  • Anonymous

    While Gretchen Morgensons interview presented some
    illuminating insight, what still offends me is the total lack of accountability
    and responsiveness of Congress to investigate, and hold personally and
    financially accountable the bankers and regulators that were instrumental for
    allowing this meltdown to occur. There has been no prosecution (criminal)
    against any bank or lending officer by either the  SEC, Treasury Department or Attorneys’
    General offices for their conduct and complicity in this “scheme” to
    defraud the American people.



         I do believe that
    a major reason for this is the governments’ own complicity in the financial
    meltdown. Many of our elected officials have, and will continue to curry favor
    to their future employers. How many of our formerly elected officials have
    retired from office, with a lifetime pension and healthcare benefits package
    (taxpayers expense), only to all of a sudden wind up sitting on a board of one
    of the major institutions that were (are) involved in this decimation of the public
    trust and ethics’ that we entrusted them with?



         Sadly, the
    members of congress (generally) have decided that it is personally safer and
    financially more sound to bed down with corporate entities and their
    influential lobbyists, then to uphold the privilege and honor of the offices
    that they were and are entrusted to protect.

  • Phillip Van Garrick

    Don’t forget about former Congressmen.  There was a popular Democratic Congressman in Pueblo, CO, who would occasionally hang at the former Irish Pub & Grill years ago.  I overheard a conversation at the bar, when he was asked what he was doing.  “I’m a lobbyist now” he said.  His questioner said “You know where the money is”, and the former Congressman  laughed and nodded in affirmation.  That moment sticks out in my mind because it was so disappointing, particularly considering that he had been a Liberal Democrat, a seeming champion for the working class when he was in Congress.  Web research shows that the causes he lobbied for were good, but man, does he rake in the taxpayer’s cash.  
    And no, it was not the Olympian Native American who later turned Republican.  

  • Ebrooks3

     it seems to me that the Republican party was highjacked by a small % of fanatics religious who manipulated and push the system to its worth in order to bring chaos, hoping to be able to seize power. The corporations and financials seeking for endless growing and profit are of course using all what the system is allowing them.  This small % of fanatic operates in the very same way the Muslim fanatic does.  if you denounce them it means you are not a Real Republican/American or Muslim (I’m neither of them but it is obvious to me). It is a way to use our need of identity and fear to lose it. Very manipulative and sneaky but it seems to work!! 
    The big mistake we are doing and that this very little fanatics % wants us to do is to put every body in the same bag and to lose “faith” in the secular Democracy,  with a party with conservatives tendencies and a party with progressives tendencies and the protection of a respectful dialogue between them.
    Most of the People elected are trying to do their best and do not have fanatical ideas but they might not be as strong as what the situation requires. We need to all engages and support actively in some way the people we believe in and elect in the causes they claimed that they will fight for.
    and really the Republican party should identify this little fringe which seem to have taken power over all the party.  I would even go further and say that i’m not against extremist, in the contrary, they play an important role too in both camp  but they should never, never be allowed to take power and one should anticipate extreme method from extreme people.

  • Ebrooks3

     correction from the previous post. sorry for the confused language.
    it seems to me that the
    Republican party was highjacked by a small % of religious fanatics
    manipulated and pushed the system to its worst in order to bring chaos,
    hoping to be able to seize power. The corporations and financial
    institutions seeking endless growth and maximum profit are of course
    using all what the system allows them. This small % of fanatics
    operates in the very same way the Muslim fanatics do. if you denounce
    them it means you are not a Real Republican/American or Muslim (I’m
    neither of them but it is obvious to me). It is a way to use our need of
    identity and our fear of losing it . Very manipulative and sneaky but it
    seems to work!!
    The big mistake we are making, and what this small
    band of fanatics wants, is for us to put every body in the same bag
    and to lose “faith” in the secular Democracy, with a party with
    conservatives tendencies and a party with progressives tendencies and
    the protection of a respectful dialogue between them.
    Most of the
    People elected probably are trying to do their best and do not have fanatical
    ideas but they might not be as strong as what the situation requires.
    need to all engages and support actively in some way the people we
    believe in and elect,assisting them in the causes they claimed that they
    will fight for.
    And really the Republican party should identify
    this little fringe which seems to have taken power over all the party. I
    would even go further and say that i’m not against extremists; on the
    contrary, they  have a role to play in both camps but they should
    never, never be allowed to take power and one should always anticipate
    extreme methods from extreme people.

  • Anonymous

    Hoorah, great insight into the scam of the century and highlighting the root cause of it all, CAMPAIGN FINANCE corruption.

    When will our citizens put an end to this buying of political influence in our government process. When will we stop big money from using our government as an instrument for them to gain more wealth.

  • GradyLeeHoward

    This week the gynecological wing of the P-tardy has us forgetting even the 4 upper middleclass myths:
    1.Campaign Finance Reform is all that is needed to reform elections.
    2.Affordable Educational Access will result in plentiful living waged  jobs.
    3.The EPA can save the environment and stabilize climate.
    4.Single Payer will be enough to ensure access to good health care.

    What I mean to say is that these are all half-truths until we  act to cap wealth and income using taxation, regulation and social engineering. If  federal law can set a minimum wage it can also set a maximum wage, because it has equal authority over the wealthy (in theory) as over the poor and working people. The wage and wealth gap are our enemy. They result in intense wage slavery and hopeless debt peonage. Right now most American households have no net worth, and never will under current conditions. How can we have 13 million homeless families and 32 million empty houses ruining? What we have is a suicidal game of wealth worship, and the best things we had are going, going, gone. Yep, all of us deserve contraceptive coverage in the insurance we pay for….. but capping excessive income and wealth are the first step in social justice and economic democracy. Martin Luther King died saying this 44 years ago. We didn’t forget without help. Truths have been flushed down the memory hole on Oligarch orders. And I worry and marvel: How can you explain the Orwellian to a populace indoctrinated to disbelieve the Dickensian?

  • Anonymous

    Lets start with Campaign Finance reformation and have a real ethics committee in Congress to outlaw the swinging door, perks, insider trading and excessive lobbying activities.

    Restore our Democracy and protect against the capitalistic takeover of our government that results  in a plutocracy or oligarchy transformation.

  • GradyLeeHoward

    You  didn’t read carefully or completely   

  • Jesse L. stewart

    Congressman Ron Paul: The US Dollar and the World Economy, September 6, 2001 – “The Fed never admits it, and the Congress disregards it out of
    ignorance, but the serious harm done by artificially low interest
    rates–leading to mal-investment, overcapacity, excessive debt and
    speculation causes the distortions that always guarantee the next

    “Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market… Like all artificially-created bubbles, the boom in housing prices
    cannot last forever. When housing prices fall, homeowners will
    experience difficulty as their equity is wiped out. Furthermore, the
    holders of the mortgage debt will also have a loss. These losses will
    be greater than they would have otherwise been had government policy
    not actively encouraged over-investment in housing.”

  • Jimbo1672

    Ms. Morgenson’s makes a number of great, really inarguable, points, but her book’s assertion that Fannie & Freddie (the GSEs) are the prime culprits in the Meltdown is unconvincing.

    I think Jeff Madrick and Frank Partnoy do a pretty good job of demolishing the Fannie/Freddie theory in their review of the book in the NYRB:

    Madrick and Partnoy remind us that “The GSEs did generate large losses, but their bad investments in housing
    loans followed rather than led the crisis; most of those investments
    involved purchases or guarantees made well after the subprime and
    housing bubbles had been expanded by private loans and were almost about
    to burst.”

    I wonder if Morgenson focuses on the GSEs because, as quasi-governmental entities, they are a more comfortable target, less likely to bring the wrath of Wall Street down on the NYT?

  • GradyLeeHoward

    Morgenson was assigned by her conformist editors  to unravel Fannie and Freddie. Even so, she never claims these guarantors were the primary culprits in selling and bundling shaky mortgages. She only observes that they were a model for those who sold worthless securities and used revenue to corrupt regulators. Their executives also collected  astronomical  compensation, which was never clawed back. They were neither the worst nor the largest, but simply typical and overly cooperative within a much larger industry. Another thing missing from Morgenson’s journalism is an understanding of secretive exotic derivatives and Credit Default Swaps. World wide these wagers are ten times the value of total global assets. (600 trillion plus, as opposed to 65 trillion) Global capitalism unregulated has grown into a surrealistic house of cards, a magical illusion raining money on the wealthiest. So money value has now undermined its professed purposes  and revealed itself as a rootless fiction. So that now only labor and hard assets can be relied upon. Even gold is proving largely a fetish and an abstraction. A reckoning must result.

  • GradyLeeHoward

    Paul recognized some symptoms of disease but was repeatedly mistaken in his diagnosis and prescriptions. In fact, he often diagnoses non-existent conditions and pushes his own patent medicines. He’s a quack. Austerity: He starves fevers, colds, vascular syndromes and cancers;  every frackin’  thing. If elected President he’d be impeached for malpractice. 

  • GradyLeeHoward

    Penrose Syndrome!

  • GradyLeeHoward

    Yeah. Bill was down at the mall buying wingtips and she came up and tried to sell him a newspaper subscription. Fetchin’ Gretchen  was such a vivacious youngster he invited her on his show. The world is so simple, like Fred Rogers’ neighborhood. 

    Nope. Morgenson is a professional colleague who extended a courtesy by extending an interview. Moyers is no talent scout (unlike the late Arthur Godfrey).

    Morgenson is continually reporting, so you will “hear from her.”

  • GradyLeeHoward

    Moral: Neither a Democrat nor a Republican be.

  • GradyLeeHoward

    I agree with your demand for sound  scientific instruction. Lately it seems like “Science Friday” is the last dependable outlet for scientific education. Hey, did the border collie help with your school book?  You are one of the tiny minority who know the history of the Articles of Confederation and the elite implementation of our Constitution. Maybe that’s your next book? I look forward to more of your informing comments.

  • GradyLeeHoward

    Yep, they (TBTF)  got off for chump change.

  • Anonymous

    Good point on derivatives.  It truly is scary how that market has been allowed to metastasize.

    On the GSEs, how can they have provided the model for the banks and the other lenders when they were so late to the game?

  • GradyLeeHoward

     Late to marketing bundled mortgages, but early to bribing Congress and regulators, mostly to reap big executive bucks. They learned from the banks and the banks learned from them. Personnel were revolving back and forth.

  • Robert Drew

    Mandatory viewing on YouTube for all Americams and Brits

    Come on you guys in the USA help put your house in order, Obama, what are you waiting for? If you do not do it the Chinese will do it for you.

    Robert Drew – Australia 

  • Jshaw2100

    Oh, please, banks have been bribing Congress and regulators forever, and writing our legislation to their own benefit.  Witness the Federal Reserve Act of 1913.

    The Fannie/Freddie theory is nonsense.

  • Sam Stubbs

    I would like to see both Gretchen Morgenson and Barney Frank appear together to discuss Glass/Stegall vs Frank/Dodd. Preferably with some facts and figures to back up their relative claims.

  • GradyLeeHoward

    Did we have quasi-governmental agencies guaranteeing the majority of mortgages in 1913?

    I think not. Jimbo, check your temperature. You may have Obama fever.

  • Anonymous

     You can’t blame a crisis on those that followed in its wake.  Moreover, Fannie/Freddie mortgages had a much lower default rate than the average.  What I meant about the FRA is that banks have always had extraordinary sway over our gov’t.  And I don’t have much use for Obama, so don’t try to pigeonhole me in that way.  I just don’t think Morgenson’s focus on the GSEs is warranted, and you haven’t made a convincing case to change my mind.

  • D.L.

    The financial crisis was described as having targeted those least sophisticated and least able to bear the brunt of it. As far back as the 1980’s I saw the types of mortgages that seemed almost unbelievable coming into the market place and I’m not an economist.  It’s looked like greed and lack of morals, short term gain over ethics has been the driving force of so much of what has happened. The call for campaign funding reform is something that must be done as far as I can see, and I agree that it is only going to be possible to get the government back to the business of protecting citizens when business gets it’s lobbyists out of government.

  • Spiritjazzed

    GRETCHEN!!!!!!!, I have been interviewed twice by NYT associate business editor
    editor Jim Nimiento, I havent even told him the developments of the last 8 months he wanted me to contact YOU!!!!! and floyd, the reporters re: my case –and  I decided to not contact them at the time–however the TIME IS NOW!!!  
    I am in pro per status for near 3 years in the court of santa barbara I have actives cause s of action for fraud, breach of fid duty, theft by conversion
    a company i helped start IN MY HOME LEASED IN MY NAME:  18 years ago, one of the first  “B 2 B” internet companies, I had a very small % of the ca partnership, I did accounting work, setting up books, financials, payroll, sba loan apps, the main thing i did , thru my grad work in organizational communications, was to help set up the initial “Template” or layout of the company–my fiance at the time was the main partner, one of two and it literally started in my home, leased in my name, for the first near 3 years.  I also brought in some of the board members in exchange for a %
    fast forward to 2000 a “Vulture” attorney, hedge fund owner (Yeah that part is dELICIOUS) and BILLIONAIRE comes in at the 6-7 year mark, company was already doing 2-3 MILLION annual revenues, we had APPLE AND HEWLETT PACKARD AS CLIENTS in the FIRST YEAR—this occurred under my roof when they were brought on board!!
      Anyways, the Vulture comes in and dilutes everyone a third for one million cash–because he came in as a minority holder–he didn’t want to be “ousted” so he demanded the california partnership be converted to a DELAWARE CORPORATION..and here is the CLINCHER OF THE GREED:
    He writes up a Stockholder Agreement,  that HAD ABSOLUTELY NO DRAG ALONG PROVISION!!! Yep, he WAS MAKING SURE HE WAS NOT outed by way of a vote!!!
    Fast forward 7 years,,,I am out of this completely as far as operations(as well as my ex fiance and his partner–they left years earlier) but had ALWAYS deemed it as my retirement because I helped set it up and had a GREAT FEELING about its
    direction–I never took out loans against my holdings or stockholder loans, never got a penny of dividends, just put it away for my retirement–AT CHRISTMAS in 2006/2007 they send me hundreds of pages of documents and tell me on the phone that “there had been a vote”  (which doesn’t matter as there was no “DRAG ALONG PROVISION” in the stockholder agreement)
     a VOTE HAD OCCURRED TO EFFECT a “Reverse triangular Merger”, I freak out , write, demand, inquire, was told that I would have to pay 30-50K to properly “Value” the company and then pay attorney fees to fight it in court!!!  I had NOTHING TO FIGHT WITH–then the ILLUSTRIOUS MANAGER tells me that they had cash flow problems etc, but OH! they were getting “pretty busy” that month!!
    LONG SORDID STORY SHORT–they were tied at the hip to APPLE, it was the inception of the mobile industry, they hid the revenues by way of a “folder” they kept on the floor near the desk where they kept the contracts off the books, the key manager/s demanded of the Vulture higher percentages in the company–which they all got and they are all now multi millionaires
    brought suit when I found out he lied to me on the phone about the company operations,,,then I started researching the laws on “Reverse Triangular mergers”
    THEY DIDNT DO THE REVERSE MERGER!!  they “abandoned it” because they didnt want to pay taxes!!  days after they stole, they conveniently refused to contact me and offer back my % position in the company and the DISTRICT ATTORNEY WHO QUESTIONED THEM HAS ACCEPTED THEIR ANSWER; That they get to make a BUSINESS DECISION FOR TAXES AND ABSCOND MY SHARES!!!! 
    oh, except that one little nasty fact where in the merger documents they shoved on me, over SEVEN TIMES THE MERGER DOCUMENTS state that the “reverse triangular merger” will be a
    so, they not only got away with fraud because everyone refuses me access to the courts, not one discovery request complied with in full, not one subpoena complied with, not one of them EVER SHOWING UP IN COURT
    they sold the company to Publicis Groupe last year and got their 160 million for the company!!!  Publicis which has come into the USA markets for Advertising under the radar of the SEC, the SEC started questioning Publicis in 2006 re: their revenue recognition accounting practices, and they quickly backtracked, now they have come into the USA via Rosetta a privately held firm that was funded by Lindsay Goldberg Equity group in 2006/2007 to buy privately held business, such as what I had stock in, and then Publicis went national and opened up across the country offices all over the USA–THESE ARE THE PEOPLE WHO LIKE TO PLAY WITH OUR PERSONAL INFORMATION AND TURN IT INTO A RE SELLABLE ADVERTISEMENT!!!!!
    1)  governmental eminent domain proceedings and
    2)  asset forfeitures of criminal activity!!!!!!! I CANNOT BELEIVE WHAT IS HAPPENING TO ME!!!!!!!
    , I have had two eminent professors, Stu Karlinsky and Ed Schnee tell me that they cannot do a Reverse Merger unless 80% of the stockholders end up in the resultant company, and in THIS  case that in no way occurred!!!!
    , but the real reality
     is THEY DID NOT DO A REVERSE TRIANGULAR MERGER AND THE COURT IS THROWING ME OUT ON A MSJ IN MAY OF THIS YEAR, I fully expect this, I have a new Judge, straight out of the Insurance Industry and she has already ruled and denied me six times
    The United States is being destroyed

  • 19battlehill

    You know, the American people are to blame, they need to wake up and do something. They sit there complacent and stupid. Come on, I am tired of hearing about big money, use your common sense and see through the kabuki theater that is our political system. Divide and conquer is so old and over done it is pathetic that in this day and age it still works. And it works because people allow it to. It is simple are you better or worse off and that is it, both political parties are against you – stupidity is what is the problem. Yes, glass stegall was 32 pages long and it worked for 70 years and dodd frank is 2300 pages long and they are no safer, figure it out. I am so frustrated by the middle class that part of me wants them to lose. They deserve to lose because of their complacency.