READ THE TRANSCRIPT

BILL MOYERS: Welcome to our third episode about the powerful players in high places who rewrote the rules of American politics and the economy. You can read all about it in this book: Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class.

If you missed the first two programs, you can see them on our new website, BillMoyers.com. The first is with Winner-Take-All authors Jacob Hacker and Paul Pierson; the second with David Stockman and Gretchen Morgenson on “crony capitalism.”

In this edition, we’ll look at a seminal moment when Wall Street and Washington stacked the deck against the rest of us.

Remember, this is the political equivalent of a crime story, a mystery. How is it that our economy stopped working for the broad majority of Americans? How did our political and financial class shift the benefits of the economy to the very top, while saddling us with greater debt and tearing new holes in the safety net? In other words, how did politics create a winner-take-all economy?

Well it didn’t happen by accident. This was an inside job, politically engineered by Wall Street and Washington working hand-in-hand, sticky fingers with sticky fingers, to turn the legend of Robin Hood on its head: giving to the rich and taking from everybody else. It’s all on the record.

The richest of the rich was Citigroup, at one time the world’s largest financial institution. When the 2008 meltdown hit, the bank cut more than 50 thousand jobs, and taxpayers shelled out more than $45 billion to save it. So how are Citigroup executives doing these days?

Nicely, thank you. Last year, its CEO, Vikram Pandit, took home almost two million dollars in salary, almost four million dollars in deferred stock, stock options that may be worth as much as six and a half million dollars, and a $16 million retention bonus. And yet just a few days ago, Citigroup failed the latest stress test by the Federal Reserve. It may not the means, in order words, to survive another financial fiasco.

There’s no clearer example of the collusion between government and finance than the deal that created Citigroup in the first place.

At a standing room only press conference in April 1998, Sandy Weill, head of the investment bank and insurance company Travelers group, and John Reed, the longtime CEO of the commercial bank Citicorp, announced a gigantic, $140 billion merger.

Just one problem: the merger flew in the face of this law.

You’re looking at the Banking Act of 1933, also known as Glass-Steagall. Glass-Steagal was enacted during the Great Depression to prevent investment banks from ever again gambling with people’s life savings, as they had before the market crash of 1929. Glass-Steagall protected us against a repeat of that calamity for seventy years. It’s a little bitty thing -- just 37 pages -- for the big job it did for us.

Glass-Steagall was still in force when Travelers and Citicorp went ahead with their merger. So what made them think they could get away with it? They had friends in high places. That's how. Friends who helped them exploit a loophole giving them two years to get rid of the Glass-Steagall Act.

Among those friends, the laissez-faire, libertarian chairman of the Federal Reserve, Alan Greenspan; the right-wing Republican Senator from Texas, Phil Gramm, who once called Wall Street “a holy place,” and later would become a high priest at the global banking giant, UBS; and the democratic Secretary of the Treasury, Robert Rubin, former co-chair of Goldman Sachs and tireless advocate of taking down Glass-Steagall. In the weeks before its repeal Rubin left government to join, are you ready for this, Citigroup’s board, the very financial giant made possible by Glass-Steagall’s elimination.

And so it was – the fix was in, the path cleared all the way to the top.

JOHN REED: Sandy called his friend the President last night and invited me to join in on the conversation and we had a good talk. So the President was in fact told last evening about what was going to happen.

BILL MOYERS: You got that, I’m sure. Wall Street was telling the President of the United States what was going to happen.

Within two years, Glass-Steagall was deader than a doornail. With the stroke of a pen, President Bill Clinton signed legislation that eliminated its protections and gave Citigroup the green light.

John Reed retired from Citigroup a year later, after losing out in a power struggle with Sandy Weill. He went on to serve as interim CEO of the New York Stock Exchange and now chairs the board at MIT. As Wall Street collapsed in 2008, Reed watched in disbelief, and began to have second thoughts about it all including the wisdom of repealing Glass-Steagall.

You were a key player when Traveler’s and Citicorp merged. How big was this to you at that time?

JOHN REED: It was not that big. You know, it clearly was an important transaction from our point of view. And it was hopefully -- it turned incorrectly -- but it was hopefully going to transform sort of the opportunity space in which the bank operated from a business point of view.

Our customers were saying, "Hey, we don't want to come to you for loans. They're too expensive. We can sell our paper into the capital markets more cheaply. We can finance ourselves more cheaply."

BILL MOYERS: Your customers being?

JOHN REED: Being large companies. And these customers were saying, "We want you to intermediate the capital markets.” Now that is the traditional business of what we then called investment banks. And Glass-Steagall had separated out those who were principally engaged, which is a very important phrase, in the capital markets, which were then the investment banks and the brokers and so forth, from the commercial banks.

BILL MOYERS: Glass-Steagall was the act passed during the New Deal back in the 1930s that was designed to put a firewall between the investment firm and the traditional banking firm. So you couldn't take my deposits or grandma's deposit and take risk with it, right?

JOHN REED: Well, that and even more importantly, or equally importantly, since the FDIC came into existence at approximately a similar time where the government was guaranteeing deposits so that people didn't lose if a bank got into trouble-- people didn't lose their lifetime savings. My father lost his lifetime savings during the Depression. And it was quite a family event. And if he had ever known I worked in a bank he would have died yet again.

But not only did they want to keep the banks from the business for reasons of not risking the money. They didn't want them to use the guarantee that the government provided for those deposits to leverage their position. Because, you know, if you have a deposit base that's guaranteed by the government, it sure puts you at a great advantage in terms of going into the market and playing around.

BILL MOYERS: The government's going to pick up your losses, right?

JOHN REED: Yeah. And you don't have a funding problem.

BILL MOYERS: That was what the FDI--

JOHN REED: Because you have guaranteed deposits.

BILL MOYERS: That was Federal Deposit Insurance Corporation was designed to protect my --

JOHN REED: That's right.

BILL MOYERS: My deposit in your bank.

JOHN REED: That's right. And they wanted to make sure that it was used for that purpose and not as a basis for doing other things in the capital markets.

BILL MOYERS: So this is why the financial community wanted to repeal or eliminate the Glass-Steagall Act. They wanted to get rid of this firewall?

JOHN REED: Yes. And the reason was our customers increasingly said, "Look, we can't use you banks for finance because there are opportunities in the capital market that are much cheaper. And if you can't help us go there then we're going to go to the investment banks. And so all of a sudden we saw our customers migrating out towards the investment banking community to do the business that we would have preferred to have done. So from Citibank's point of view, our point of view, this merger gave us access to the capital markets. And so we were in a position to offer our customers the services that they wanted.

NEWS REPORT: They plan to attract new customers with one stop shopping: Stocks, bonds property and life insurance and banking. Federal Regulators must approve the deal. Most banks are now prohibited from selling stocks and insurance.

JOHN REED: When Sandy approached me on the merger I knew that it was right on the forefront of the legal thing. But there’s a technicality Citibank could not have bought Travelers because that was out and out illegal. Travelers on the other hand could buy Citi because they were buying a bank and they had two years in which to correct for the deviation from the law. And what we basically were told was, "If you all want to do this within the two years we'll get the law changed."

BILL MOYERS: Because if in that two-year period as I understand it, Glass-Steagall had not been changed, this merger -- which had already taken place -- would have been illegal.

JOHN REED: We would have to take it apart. And we took steps to make sure that was possible.

BILL MOYERS: But you got the blessing in this two-year period of President Clinton, of the Fed, of--

JOHN REED: We had that blessing prior to. In other words—

BILL MOYERS: What? They assured you that this—

JOHN REED: Yes.

BILL MOYERS: Glass-Steagall would be--

JOHN REED: Yes. In other words, I went with Sandy to call on Chairman Greenspan. We told him we were contemplating this merger. But that it would required that the Fed would be prepared to grant us permission. And we were assured that they would.

We went and saw the Chairman of the House Banking Committee, the Chairman of the Senate Banking Committee. And we said we're talking about this merger but it could not take place if we were not assured that it would be approved at the Congressional level. We talked to the Secretary of the Treasury, I don't recall--

BILL MOYERS: Robert Rubin? He was the Secretary of the Treasury at the time.

JOHN REED: Yeah, we would've spoken to him, I'm sure. And had Bob Rubin said, "No, the Treasury feels this is wrong," we would've been careful. Because obviously, the Treasury recommends to the President on an issue of this sort. And there was no argument. No one said, “We’ll have to think about it.” And so a consensus built up. I don’t think it started in the Fed. I would guess it started in the industry, it certainly got into the Congress.

SENATOR TIM JOHNSON: By eliminating the Glass-Steagall restrictions we free our financial services industry to maintain its place as the world leader…

SENATOR PHIL GRAMM: We dominate the world financial market, and we’ve done it with one hand tied behind us because we have the greatest economic system in the history of the world. But we can untie that hand that we have had tied behind us. And we do it in this bill by repealing Glass-Steagall.

JOHN REED: Lawmakers inevitably learn as lobbyists tell them things. It’s sort of like a doctor being sold new medicines, they can’t stay on the forefront of the pharmaceutical technology, they rely on being educated to some extent.

SENATOR CHARLES SCHUMER: This bill is vital for the future of our country. If we didn’t pass this bill, we could find London or Frankfurt or years down the road, Shanghai, becoming the financial capital of the world.

JOHN REED: There was no one in the press who said, “Oh no, that’s wrong.” There was a celebration. And the industry, including myself, didn't recognize the danger.

BILL MOYERS: The danger being?

JOHN REED: That we could make a mistake that would then be transmitted in a much more drastic way throughout the system.

BILL MOYERS: Which happened later.

JOHN REED: Which happened, yeah. I mean if you had asked me under oath, what probability I would have given that you would have gotten the whole group of Wall Street participants to get it wrong so to speak, I would have said zero.

SENATOR BYRON DORGAN: We are with this piece of legislation moving towards greater risk. We are almost certainly moving towards substantial new concentration and mergers in the financial services industry, that is almost certainly not in the interest of consumers, and we are deliberately…

BILL MOYERS: A handful of politicians who tried to sound the alarm. Among them was Senator Byron Dorgan of North Dakota.

SENATOR BYRON DORGAN: What does it mean if we have all this concentration and merger activity? Well, the bigger they are, the less likely this government can allow them to fail.

BILL MOYERS: Were you aware of the few senators who raised real concerns about removing Glass-Steagall, about what would happen?

JOHN REED: No one that I’m aware of it saw it clearly. You point out to some Senators and Congressmen who did, but somehow we described them as being peripheral. And I simply said, “They’re wrong.” Turned out they weren’t.

SENATOR BYRON DORGAN: I think we will in ten years’ time look back and say, “We should not have done that, because we forgot the lessons of the past.”

BILL MOYERS: Senator Dorgan predicted disaster. Disaster's what we got in 2008.

JOHN REED: Yeah, no, they -- and disaster-- it wasn't solely Glass-Steagall, because much of the disaster of 2008 would've occurred independently of it, I believe. But certainly the propagation of the problem throughout the economy was greatly aided by the absence of Glass-Steagall. You know, we would've hit the iceberg anyway, I believe.

But the ship would've had compartments which would've been flooded. And question is, would the whole ship have gone down? Because had it been compartmentalized, we still would’ve had a disaster. It still would've involved very important institutions. But it might not have spread throughout the whole ship. That's the real issue.

BILL MOYERS: What do you think they saw that Wall Street didn't see?

JOHN REED: They simply didn't participate in the exuberance. But I do think that, you know, this setting up the deck of cards so that we could produce what we currently are trying to withdraw from. Turns out to have been something that the word disaster is maybe not strong enough.

BILL MOYERS: Well, some people now say the deck was stacked, that the game was rigged against the broad interest of the public.

JOHN REED: No, I definitely agree. And, I mean, the proof is there. It doesn't take a genius to figure out that we'd been wrong.

BILL MOYERS: But it takes somebody principled to admit that, "I was wrong."

JOHN REED: No, no. It's not something you'd like to end your career with. That is for sure. No, look. We got carried away. It wasn't any small group, it was a consensus that reached the press, it reached the political world. It certainly had reached the intellectual world. I'm now, as you know, at MIT, and I say to some of my academic friends that the intellectual underpinnings of this was created at MIT and places like that, I mean—

BILL MOYERS: With the technology of the computers?

JOHN REED: Well, no. It's the mathematics. It's all of this mathematics of finance and the presumption in much of this mathematics that you can capture risk by looking at historical volatility and so forth and so on. As soon as you say something appears not to be risky, you get an over investment in it, because the capital requirements are less. And then if something does go wrong, the hurt is all the more because you don't have the capital to take the risks. And you know, if somebody says, "Walk across that sheet of ice, there's no danger whatsoever you're going to fall in," you know, you're fine. As long as you don't fall in.

BILL MOYERS: Are you saying, suggesting that -- the chairman of the board of MIT's suggesting --that human intelligence no longer runs our financial system?

JOHN REED: Well, it's a little wisdom balance that judgment wouldn't hurt.

BILL MOYERS: So how, when you look back on it, how did so many people, including yourself, get it wrong?

JOHN REED: We were carried away by the enthusiasm. And like everything else, you know, once you start you probably go a little further than you should have.

We started out lending mortgages to customers and putting them on our balance sheet. Then in the '90s, when the mortgage-backed securities came in to being, we found that you couldn't economically do that, so we would package our mortgages and we'd sell them to a Wall Street firm, who would then pass them on to their customers. Pretty soon, we were in the business ourselves, after the merger.

And so all of a sudden, these mortgage-backed securities could be distributed throughout our own company. And pretty soon people said, "Well, why only package the securities that your customers create? Why don't we go out to mortgage brokers and start buying some of their securities? And we'll package those and we'll sell them."

And then, I was retired at the time, but you read in the press and you may even have seen on television, no doc and low doc. Now, no doc/low doc means no documentation or low documentation. Low meaning less than the regulators would require of you.

BILL MOYERS: You didn't ask the person, the homeowner who was buying the house, "Show me proof of your wages. Show me proof of your savings."

JOHN REED: That's right. But can you imagine that you publicly acknowledge that you were creating products and selling them into the market that had no documentation or less than normal required documentation? And this was -- it's sort of like taking a product and putting a skull and crossbones on it and saying, "This might be poison," and putting it on the supermarket shelves.

BILL MOYERS: You know, I hear you talk. And I think, "Well, human beings certainly can go insane. So can systems, right?"

JOHN REED: Yeah, and so can groups of human beings. In the 90s, the investors took over. And they basically said to management, "We don't care what you do. We don't care how many private jets, houses, golf courses, swimming pools, whatever you have, as long as you keep the share price going up. If share price goes down, we're going to get rid of you even if you're good.”

And managers started being scared of their stockholders and this idea of shareholder value came into being. I never heard the word "shareholder value" until the '90s. It was customers, customers, customers. How are the customers? Are we doing well? Are we losing place with the customers? But all of a sudden -- and Sandy was a total proponent.

BILL MOYERS: Sandy Weill?

JOHN REED: Sandy Weill. I mean, his whole life was to accumulate money. And he said, "John, we could be so rich." Being rich never crossed my mind as an objective value. I almost was embarrassed that somebody would say out loud. It might be happening but you wouldn't want to say it.

But you know, the biggest bonus I had ever received when I was at Citi was three million dollars. The first year I worked with Sandy it was 15. I said to the board, "I'm the same guy doing the same job, same company. There are two of us. The company's bigger but there're two of us. What's going on?" "Oh, you don't understand." And it was just totally different culture. And see, Wall Street developed that culture.

BILL MOYERS: That's what happened, isn't it, in the --

JOHN REED: Yeah. No, and it happened. It happened in Wall Street and there's a subset of the world, that self-selects, for whom money is an overriding value. And being personally rich somehow is something they aspire to. And you know, it's a minority of the population. Bill Gates certainly did not start Microsoft to become rich. Nor do I think Steve Jobs went back to Apple because he wanted to be rich.

These were byproducts. They became rich, but as a byproduct. But there is a subset of the population that self-selects and they go to Wall Street because that's where it's somewhat legitimate. You could do the same thing illegally. And there are people who do that. I mean, there is a drug cartel and so forth and so on. But the thing that has amazed me is, A, it's fairly large and, two, it's sort of been accepted.

BILL MOYERS: Is this an accurate thumbnail sketch of what happened over this period of time? Banks took too many risks, right?

JOHN REED: Yes, they did. But there are worse things, but they certainly did.

BILL MOYERS: What were the worse things?

JOHN REED: Well, they originated and sold into the marketplace things that should never have been originated.

BILL MOYERS: Derivatives, unregulated derivatives?

JOHN REED: Well, it was the excess mortgages, the no-doc, low-doc mortgages. And then the derivatives were a byproduct. Once you had those, then you could chop 'em up and so forth. And of course they had changed their mindset. They were in the business to make money, period.

BILL MOYERS: The exuberance, you said, took over. Isn't it, isn't democracy supposed to be a brake, B-R-A-K-E, on greed and power in the private sector? To keep the balance-- to keep the exuberance from going too far, as it did in this case?

JOHN REED: It should. But you're a better historian than I am. I don't know, but I would guess the democratic systems tend to go back and forth.

BILL MOYERS: Like a seesaw.

JOHN REED: Like a seesaw.

BILL MOYERS: But when you take the watchdog off the beat, as happened in the 1990s, when you lift Glass-Steagall and throw it on-- into the dustbin of history, you're removing any check in behalf of the public on the exuberance of the private sector.

JOHN REED: You're-- I mean, a consensus developed. The fact that we took it out was a byproduct of this mistaken belief in this modern financial system that was, quote, "more efficient," was very lucrative for the United States and the U.S. economy in global terms.

And which was supposed to handle risk better. In fact, it handled risk worse. I mean, this is what the facts are because there was a much greater concentration of risk created. And so we got it wrong.

But the restraint of the government and it's agencies disappeared in the enthusiasm.

And so it was this combination of the participants getting carried away, the normal checks and balances that should exist against participants.

And the thing that is astounding, frankly, and there's a lesson here that we probably haven't yet learned, is that the system can get it so wrong. It wasn't--

BILL MOYERS: So wrong?

JOHN REED: Wrong. It wasn't that there was one or two or institutions that, you know, got carried away and did stupid things. It was, we all did. And then the whole system came down. You know, it became illiquid, the government stepped in. Had the government not stepped in, it really would have come to an end.

BILL MOYERS: Should the government have spent billions of dollars of taxpayer money in bailing out the banks?

JOHN REED: I think they had no choice. I think they had to do it, yes.

BILL MOYERS: Why?

JOHN REED: The alternative was worse. Letting the banks all collapse, which would have spread across the world, because banks lend to banks. So the interconnections were such that they just couldn't allow a meltdown of that scale. And we see in the Lehman bankruptcy that we're -- I don't know how many years since but it must be three or four. And they're still unraveling the bits and pieces.

And had it been the whole system, it simply would have been a calamity that from a societal point of view would have been worse. So I think they had no choice. They did have to bail them out. And they did do it. And it did succeed.

BILL MOYERS: But they left in place the very people who had driven the ship into the iceberg.

JOHN REED: I'm quite surprised at that. It clearly has not been a clean sweep. In other words, those of us who made mistakes, and so forth and so on, are still floating around the system. And--

BILL MOYERS: Floating it? You're running it.

JOHN REED: Well, I am not, but --

BILL MOYERS: You're not running it, they're running it.

JOHN REED: But there are many who are. I wasn't involved, obviously. I had retired in the year 2000. We're now talking 2008. So I was a knowledgeable spectator, but certainly not a participant. I was quite surprised because, frankly, the worst thing that can happen to a businessman is to go bankrupt. That's the sign of ultimate failure. You ran a business and it was unable to succeed under the terms and conditions of private capital. Namely, you went bankrupt.

It's not a crime. But it certainly is a mistake. And these companies, even though they didn't have to file for bankruptcy, de facto went bankrupt. And so the managements and the boards and the regulators should have, in my mind stepped aside.

BILL MOYERS: How hard was it for you to go before Congress in 2010 and say, "I was wrong. I made a mistake." In fact, you said, "We created a monster."

JOHN REED: No, we -- look. You don't like saying this. The hard part probably preceded my testimony by two or three years, where I came to recognize and feel, and I still feel bad. And I feel bad for the people at CitiBank who lost jobs and so forth and so on. Not to mention our stockholders. But I am a realist. I try very hard to be honest with myself, and honest in what I, you know, say. And facts are facts. I've seen Sandy a couple times. Not --

BILL MOYERS: Sandy Weil.

JOHN REED: Yeah, Sandy Weil. And I sort of say, "Sandy, you know, we didn't do very well." And he's not comfortable with that conversation at all. I think he would still defend that it was a good merger, it just went off the tracks afterwards. I --

BILL MOYERS: When it went off the tracks, John, you know, millions of people lost their jobs. Millions of people lost their homes. Millions of people saw their savings --

JOHN REED: If you look at the lost product in the United States, in other words, the difference between our current economic trajectory and the potential economic trajectory, you're talking about trillions of dollars. And those dollars are jobs and output and so forth and on so. I mean we over leveraged. And that was because we were creating mortgages so as to sell them into the market. And we're creating them from customers who probably should not have been borrowing. They didn't know what they were originating, didn't know who was buying it, and they didn't care. They were getting paid commissions along the way.

And that's a fundamentally flawed system. If you say to a businessman, "What is your objective?" and he says, "My objective is to make money," there are no boundaries on that. I mean, it's only the law as to what you do in the middle. It would be better if you said, "I'm in business to serve my customers,” or “to create a product like an iPad or what have you." But something that has intrinsic value. And all of a sudden, we changed to, "Hey, I'm not totally sure what we're doing here. Maybe it's not right. But you know what, I'm getting paid my commission." And that mindset took over. And a lot of that money did flow into the political coffers. There's no question--

BILL MOYERS: What do you mean?

JOHN REED: Donations. You know, if you're rolling in money in a business, it's very easy for you to have a PAC and to contribute to campaigns and so forth and so on. And we went through a period of time when there was an immense amount of money. I don’t mean small. I mean, we took-- this is the biggest economy in the world. And we went from 15 to 25 percent of the economy.

BILL MOYERS: The financial community did?

JOHN REED: The financial--

BILL MOYERS: Industry.

JOHN REED: The financial sector, yeah. But the point is our government is designed fundamentally to be dumb but to listen. In other words, no one is elected to the government because of their personal expertise in the various issues that they're going to have to deal with. We have a system that is designed to listen.

BILL MOYERS: But if money gets you greater access--

JOHN REED: But unfortunately the talk of what you're listening to gets distorted by the money issue. They're not randomly listening to the population at large. They're listening to people who have a strong voice, because they're strong contributors and so forth and so on.

BILL MOYERS: I think you've taken us to a very fundamental issues that's roiling the country at the moment. And it is that this is an-- democracy is no longer a level playing field or even approximately a level playing field. The big institutions have so much money that they can flood into the system. There's one study I saw just the other day that reports the number of people lobbying today on behalf of the financial industry to try to weaken Dodd-Frank, the bill passed after the disaster, outnumbers consumer, union, and other groups by a ratio of 25 to one. The financial industry outspending everybody else 25 to one to try to weaken Dodd-Frank.

JOHN REED: I'm quite surprised that the political establishment would listen to groups that have been so discredited.

BILL MOYERS: You're saying despite what happened in 2008, Wall Street still has too much power?

JOHN REED: They have too much voice. They certainly are being listened to. I find it incredible. I would have guessed that society, at large, would have said, "Hey, we made a mistake. Let's get some rules." You know? I used to tell my kids, "Why do you think a car has brakes?" And they all would say, "To stop." And I'd say, "No, a car has brakes so that you can drive fast. If you got into a car that had no brakes and you knew it, how fast do you think you would drive? You wouldn't drive very fast at all." And that's the same reason we have rules. You want the private sector to be free to be creative and exuberant and whatever, within a framework.

BILL MOYERS: You testified in front of the Senate Banking Committee, you came out in support of what we call the Volcker Rule. For the layman, what is the Volcker Rule and why do you support it?

JOHN REED: The rule simply says, "If you have a customer who wants to issue a bond, you could help him. But you can't trade in the bond market for your own account."

And so what the rule does is it basically puts the banks back into the customer business and allows the Wall Street community to be in the pure trading and the business of speculation and hedge funds and so forth. And it separates those.

BILL MOYERS: Sounds to me like you're calling the Glass-Steagall Act back from the grave.

JOHN REED: I think I am.

BILL MOYERS: Because?

JOHN REED: I just think it’s better that we have that barrier than not. It makes sure that the FDIC guarantee doesn't provide a funding base for proprietary trading activities. Remember, the government guarantees your savings account and mine in the local bank. And, correctly, we don’t want the government's guarantee for those accounts to act as a funding base for somebody who's speculating in the market. And so it’s that kind of separation.

It's a prudent barrier. And I'm astounded that anybody would be against it. And mind you, I'm a private sector guy. I'm not suggesting over government intervention. But you need rules. I would never let you or a friend or my kids drive a car without brakes.

BILL MOYERS But when the financial community can buy the rules they want --

JOHN REED: Then you've got an unstable situation. That's an intolerable situation. I mean, obviously.

BILL MOYERS: So do you have any sympathy for Occupy Wall Street?

JOHN REED: Yeah, no, I definitely do. I mean, I think it's symptomatic of the disconnect that exists in our discourse now. Where you have a set of folks who seem not to understand fully what went on and the implications of it. And a political establishment that doesn't seem to respond very well. They know a lot about the concerns, but they seem not to be able to do anything about them.

And the folks in the financial system are not listening. They're not saying, you know what, there's some correctness in these views. And so I think these people are giving voice to a frustration. And I am quite understanding of it. I hope the political establishment has some ears. I understand the political divisions. But they've got to start understanding that at some point you have got to come together

BILL MOYERS: John, thank you very much.

JOHN REED: Thank you. I’ve enjoyed it.

John Reed on Big Banks’ Power and Influence

Bill Moyers talks with former Citigroup Chairman John Reed to explore a momentous instance: how the mid-90’s merger of Citicorp and Travelers Group – and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they put the watchdog to sleep.

There’s no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup. But even behemoths are vulnerable; when the meltdown hit, the bank cut more than 50,000 jobs, and the taxpayers shelled out more than $45 billion to save it.

Now, John Reed regrets his role in the affair, and says lifting the Glass Steagall protections was a mistake. Given the 2008 meltdown, he’s surprised Wall Street still has so much power over Washington lawmakers.

“I’m quite surprised the political establishment would listen to groups that have been so discredited,” Reed tells Moyers. “It wasn’t that there was one or two or institutions that, you know, got carried away and did stupid things. It was, we all did… And then the whole system came down.”

  • submit to reddit
  • jayhawk

    Fantastic interview!  Bill, glad to have you back!  Now, you have to look into leveraged buyouts and carried interest.

  • Khornbacher

    Please watch! Compelling series – and edited by my super wonderful and talented brother-in-law, Andrew Fredericks.

  • Vageiger

    Mr. Moyers, I love your shows, glad you are back.  I do have a problem.  It is not “banks” that we seek to regulate it is “bankers” real people, who should suffer real consequences when they are wrong.  The constant use of the institution, banks, Wall Street, for the actual people who made the decisions, leads to a diffusion of responsibility, no one knew, it was the “culture” etc…. and the individuals who made decisions to enrigh themselves at public expense get off.  I wish that you would subsitute banks with “bankers” in every title and discussion.  We need to focus on the people who did this, not the diffuse it to institutions.  Your interview with Reed supports this.  Would YOU (an individual) drive a car with no brakes?  How fast.  The brakes (regulations) are for the people who make the decisions, not some amorphous institution. 

  • Anonymous

    -Outstanding interview-
    This interview with Citigroup Chairman John Ree is essential viewing for anybody interested in gaining insight from a true insider of the corrupted, out of control financial sector and the disaster to the global economy it has wrought.
    Great job as usual Mr. Moyers.

  • alitza blough

    Outstanding!!! Thank you John Reed for your candor and your honesty. Thank you, Bill!!

  • GCR

    We have many, who should be behind bars, or at least stripped of their ill gotten gains.  
    I am shocked myself that banks could still buy favor in Congress after what they did to citizens.  People are upset with the bailouts, but not the Banks themselves?  But BIG MONEY trumps good sense doesn’t it?
    (All my Reps in Congress are rich, I see that as part of the problem.  And they are all mad at the poor.)

  • http://www.facebook.com/profile.php?id=1336461596 Ruthie Long

    This helps me understand why temptation for more and more money before groups of people is so very bad. The ‘no brakes’ on a fast car was a brilliant way to discribe the wreckless way they all caved into the temptation so easily. . . there were no brakes!

  • Bmaffucci

    Rescue was the only option but the U.S. should have taken a stake on behalf of the taxpayers and should have made more demands in terms of management, bonuses, and payback terms.

  • lyrita59

    Yet another outstanding interview, Mr. Moyers.

    While Mr. Reed may appear to have ‘turned the corner’ in his thinking, I am still not convinced of his contrition.  Perhaps a more convincing gesture on his part would be to return his (by his own admission) ’ill-gotten gains’ in some form that the general public would understand and accept.  It is one thing to verbally own up to ones’ errors; sadly, in this cynical age, it takes more than that to heal a wound.

    Politicians of all stripes:  Take note!

  • Just another broke….

    This was the clearest sketch I have seen about the ‘crash’ of 08, and it’s causes. Thanks to all who made this documentary possible.
    Lucky for me I was poor then, and I am poor now, so to me it is just an intellectual history lesson.

    What I wonder is, IF we had just let the system fail, wouldn’t that have been the ultimate ‘weed out’, for the current shenanigans and their perpetrators? Kind of like stopping all electrical activity in an erratically beating heart, so that the strongest, and steadiest signal can take over and restore order.

    The lack of punishment for almost all the wrong doers reminds me of  that quote, “Capitalism without bankruptcy is like Christianity without hell”.
    (Was that really Lee Iacocca who said that!?)

  • Bartley Braverman

    My wife and I have sat in stunned silence through 3 shows.  Everyone suspects, of course, that the game is fixed to benefit the powerful few, but would prefer to believe it isn’t so.  And now, to see it all laid out on the table like that – absolutely shocking.  You provide an extraordinary service to the community.  Thank you so much.

  • DP

    It is amazing that from local government, to the decisions in Washington (Iraq war for example), is all controlled by big business and money. It amazes me how the few that have the knowledge or foresight to stop damage to the people on Main St. get drowned by big money and Hatriot Radio. “Those few fools think they are right” these common folk say. ” when do so few dictate the course of so many”. The way these people (that can’t afford a cheap new car) protect the rich, gives me a better understanding of how Jim Jones got so many to drink the Kool-aid.

  • bob

    Thanks Bill to you and your staff.  Very clear and informative interviews. We need to keep a white hot spotlight on Wall St and the attempts to let everything blow over and go back to business as usual. 
     
    Over and over they keep repeating that they must do____to ”keep up with the European banks”. 
    Sorry boys, no running with scicors!

  • Dan O

    Wow – fantastic interview.  Very honest view and talk from John Reed really explains the scene in layman terms.  I’ve watched this twice and I’m stunned.  Not really surprised, but stunned to hear it for real.  Incredible.

  • Dennis Anderson

    Thank you John for posting this. I am repostin so that all my friends can watch this important video clip regarding why the playing field in NOT LEVEL!

  • Anonymous

    Truth and reconciliation?  Self-confession of crimes against humanity?  Bill Moyers as Desmond Tutu; Chairman Mao?  I think John Reed should surrender some of those $15million  bonuses to Occupy. This society is overdue for both re-education and for economic leveling. The solutions are far more radical than socialism. Being set in our ways is killing us. Electing the best poker faced liar will set us farther back. Either we restructure in record time or our civilization is over.

    The housing crisis was the first big bite of the globalist financial coup. Citizen’s United was the second bite. Sovereign debt obligations are shaping up as the third. 
    All the labor and natural resources in the world cannot maintain the income stream the worldwide 1% are demanding. Never forget how they gamble on outcomes in which they have no stake. 700 trillion outstanding in derivatives dwarfs current assessed value of all assets in the world (70 trillion). That’s why they call it “derived.” But what it amounts to is a black hole of debt sucking the life out of every person who works. That isn’t fair or just, nor is it sustainable. And yet the customs and laws are rigged to enforce it. Never was civil disobedience more called for than now.

    When you had the fly in the jar, Bill, why didn’t you make a citizen’s arrest?

  • Nealroche

    Mr Moyers & team,
    Thanks for this excellent series of programs.  

  • Bob Shapiro

    I was more than distressed viewing your interview with John Reed.  When he said the word “exuberance” what he really meant was GREED!  He indicated some concern when his own firm participated in loans with little or no borrower documentation of ability to repay.  How could he consider himself a competent  banker & agree.  He presented himself as a moral & ethical person & seemed  sorry about the loss of jobs at Citi but apparently none for the millions who lost their homes.  He himself didn’t seem to suffer.  Most distressingly, rather than being subject to the consequences of the role he played, he is now at MIT influencing other future bankers.  Shame on him!

  • Sheryl Voter Age 64

    I wish every person young and old could watch this story of what took place with the taking down of Glass-Steagall and the economic calamity that fallowed. I am afraid I already hear politicians calling for more deregulation. The American people need to know where the pitfalls lay on the road ahead.

  • Ma92037

    Fascinating interview.
    Remember this:
    A “60 Minutes” investigation of stock trading by members of Congress
    singled out House Speaker John Boehner and former Speaker Nancy Pelosi
    as having personally profited from investments into companies whose
    interests were before Congress. The investigation
    makes a strong case that members of Congress have the ability to profit
    in the market from non-public information, but in the cases of Boehner
    and Pelosi the claims made by “60 Minutes” fall short under scrutiny.

    Honest graft, as “60 Minutes” calls it,
    is a serious problem in Washington, with a massive industry called
    “political intelligence” devoted to digging up inside regulatory and
    congressional information so traders and companies can take advantage of
    it.

  • http://treegrower.org/ CalvinLeman

    Of the folks Bill has talked with so far, notice that the least concept development and the least principle development has occurred with John Reed.  Will Bill talk with other bankers?

  • http://profile.yahoo.com/X3G7WF2LOUGLQOAVOXHTU4U7SY HHH

    A coup of democracy happened, the wealthy decided to take over and turn the country into a plutocracy. Governments are nothing more than a middle man used to enforce their rules, their laws on the rest of us, whether through lies, persuasion or if need be force.

  • EveryMan

    John Reed is a straight guy – Sandy Weil was the fixer – who paid off the entire crew starting with clinton,  robert rubin and greenspan – the others like D’Amato / Schumer / Phil Gramm – were all beneficiaries in one form or another - current income or deferred income or contributions

    the culture was changed by Weil to banksters which the rest of the industry had to follow to stay competitive -

    this whole debacle is about payoffs at the highest level and then coopting the regulators as well which lead to the largets transfer of income and assets in world history without any criminal prosecutions

  • Anonymous

    When John was explaining that we have an “unacceptable” situation whereby the financial bosses are dictating to Congress the rules they want, by means of campaign funds, I couldn’t help but think, why is money so effective in buying elections?  We seem to expect Congressmen to do whatever the highest financier wants them to do.  It even seems we accept it.  It seems we see corruption in the act of buying, not in the act of voting in Congress in a way that harms society. 

    I’m well aware of the fact that money often correlates with how people vote, but now always.  Thus, is it worth for Bill to do a show on the voter, and on the issues campaign money raises by influencing the voter?  Perhaps I’m deceiving myself, or perhaps I’m exceptional, but I myself don’t feel significantly influenced by campaign ads.  Similarly, I don’t feel influenced by commercial ads, and I’ve been this way all my life.  When I was a child, I couldn’t believe that people would buy something out of influence from an advertisement.  I always expected myself to do my own research and understand just what I’m buying, and never to believe what an ad says.  I never trusted them. 

    I know this is counter to most all social theories, but I do think there’s a lot to discuss and uncover here.  For instance, do people fall into different categories, with some being less influenced by advertisements than others?  What other categories of people overlap with these ad-sensitive categories? 

    I must say, of course, the political resolution of this issue is to provide public funding for elections.  But Congress will never allow that.  They know how to milk the existing – and corrupted – system. 

  • EveryMan

    Mr Moyers – your series will be a classic for public service for generations – this story at the Reed level is about archeology of the decision process and the players at the table and their motivation –

    it shows we have a systemic disaster still in the making since the banks and the major players  control the politicians - not the people - which means worse things are yet to come

    the decision process is all about what is good for them – as individuals – not the longevity of the system  – yet they are making policy for the largest economy on the planet

  • FranG

    Watching Reed constantly couch his case in oh-so-polite and positive language made me physically ill. Bill, those of us who have watched your show for years find nothing surprising in these accounts. I’ve also read recent works by Robert Reich, Matt Taibbi and, of course, Gretchen Morgensen. All that’s left is to demand investigations, jail time and repayment of bonuses into a fund for families who lost their homes.

  • leftofcenter

    How come all of these greedy Wall Street types who “allegedly” committed massive fraud aren’t being prosecuted? Look at the current system.

    Corporations control the business MSM. The President (an attorney) says that this wasn’t “illegal”. It was “immoral” and possibly “unethical”. But not illegal. DOJ prosecutors work under a quota system. This means they have to get high profile convictions.

    Now, a legal question. How do you prosecute these cases in this environment? The MSM message I’m hearing is that these people deserve their bonuses. They’re a vital part of the community. Really? Pro atheletes say the same thing all the time. Does this mean that a rich and powerful banker is more vital to society than I am, merely because they are rich and powerful?

  • Barbarita

    I was reminded of the lead up to the Iraq war during this show when there was talk about exuberance.  The profiteers of war only needed to beat their drums and pay people off at the top for a couple years in order to have congress approve of the war.  Wall street and bankers watched how easily it could be done and replicated the actions.  Now we have a disaster of epic proportions.

  • Anonymous

    Were these two separate things, or one thing, a corporate coup, global not national? And was a “New Pearl Harbor” integral to initiating both pre-emptive (illegal and unjustified) war and the assertion that WE were broke, and that austerity is the only solution? Authority in it’s criminal audacity snickers at Occupy, and then it fears when Occupiers begin to master the rhetoric. Likewise they snickered at requests to re-investigate 9/11. Moyers seems to have come down on the benevolent side of Occupy, even as he and company cringed at any possible 9/11 truths. Now it is true that reactionary conspirators would like to use 9/11 revelations to justify a fascist overthrow of government, but that should not mean Moyers has to mimic the 3 monkeys. Science and speculation has continued even as controlled demolition videos have been excluded from TV. So what do you think? Is life a series of discrete events always independent and not connected, or are there inevitable conspiracies and collusions when most of the money, assets and power accrue into fewer and fewer hands until the owners can mingle in one motel banquet room. If ever there were any self-made citizens they spin in their crypts.

  • Anonymous

    Drop back one frame of reference: Is not the political economy of corporate capitalism by ethical and moral standards criminal, by it’s very structure and outcome? (see Richard Wolff- excellent noon Saturday show on WBAI New York, archived on site)

  • Anonymous

    It’s like Reagan with Alzheimer’s not recalling Iran Contra, or it’s like sex-obsessed Clinton signing the bill to annul Glass-Steagall. Can you prove how much John Reed knew and when he knew it?  He walked a razor’s edge with screech-owl Bill claiming he was bewildered by receiving a $15million bonus each year. So much of this defensive testimony amounts to the assertion moguls were only following orders; or only following the rules of capitalist destiny. I wonder now if you’ll be voting for the lesser evils in November after you have stood in the cold conversing with Occupiers. Sometimes idealism becomes the practical course when humanity requires a paradigm change for survival. Can you knit at a general assembly, or is there a hovering authority figure tangling your skeins? Some day soon I’ll call at your house, and you can bring up these subjects, because I’m too attuned to wealth etiquette to do so on your turf.

  • Anonymous

    If victors write history why do you assume this can be part of future archaeology?
    And if you project a winner, have you allied with that cause?

  • Anonymous

    So you are hesitant to be critical of frames of reference in which you comfortably and habitually exist? What kind of peanut butter do you prefer?

  • Anonymous

    What would be the purpose of more banker interviews when this was the most contrite and regretful one he could find who would talk?
    To demand more descriptions of turning away from the light is to demand Bill Moyers replicate Murdoch’s tabloidism. Satisfying our craving for the lurid and perverse solves nothing. I asked Bill last week how long he would continue preaching democracy’s funeral. I wonder. Only his actions will indicate.

  • Anonymous

    When you know where the wealth is buried and darkness falls you go to Home Depot and buy a new shovel. Congresspeople are weak like every other human. You have to provide a fence to keep your dog from chasing cars. Otherwise, either we quit keeping dogs or we outlaw cars. Clinton got it right when he confessed that he took advantage of Monica “because he could.” There have to be enforceable laws and regulations, or strong moral codes; or otherwise basic premises have to be restructured. Otherwise confidence is lost and the system disintegrates. Money is an agreement between people and not a necessary arrangement. There are many ways civilization can function but we have fixated on a maladaptive few. The fact that those we select for trust cannot resist putting themselves first illustrates that our customs are unworkable. The leaders themselves disrespect our ideals; no faith at all.

  • Anonymous

    Would the Volcker Rule have any effect on an implosion this advanced? I think the forces in play would compel financiers to evade it. This is the end game of capitalism.

  • Anonymous

    Nope, he meant exuberance and he was honest.
    The hubris that allows tragedy to befall optimistic criminals requires a sincere myopia. And it requires criminal conspiracies to collectively write a scenario where they come out heroes. They were drunk on power just like the cruise ship captain. The wreck was no less real because of their confidence. 

  • Anonymous

    But wouldn’t you still want your son or daughter to become a success like John Reed and get several $15million dollar bonuses? 

  • Anonymous

    No matter how poor you were then you’re poorer now. It may not be your fault, but it can be your solution if you’re willing to assume the risk. 

  • Anonymous

    So you accept Reed’s plea deal.

  • Anonymous

    Bill Moyers Journal discussed this in an interview with economist Robert Johnson in Feb. 2009 “To Nationalize or Not To Nationalize.” (available in archive) How short we’ve come in three years! Thus is demonstrated the power of Oligarchy over public organization. And NOW Obama begins his so-called investigation taskforce which is really a cover-up and an exoneration for banking cronies.

  • Adidashoes

    The problem is not Wall Street, it’s the government first and foremost. You can’t blame Wall Street when the government through the FDIC basically gives the banks free capital. Yes, if the FDIC is in place perpetually ready to bail out Wall Street, then you need regulations. But if government would just get out of the way, banks would have to better manage their money because depositors would demand a safe bank for their holdings. And for those who bring up bank runs, that is an issue of fractional reserve banking, which is perpetuated by the Federal Reserve. Government is at the root of the problem.   

  • Anonymous

    Ruthie: These guys drive like NASCAR, tearing out the transmission and frying the brakes, with one foot on each pedal…. just the way you were taught not to do in drivers’ ed. They got to the point they were drifting in the banks as they rounded Iceland and Singapore supersonic.

  • Anonymous

    It’d probably require a zealot like Castro to even the score. (Remember how he brought his own chickens to the UN so covert intelligence couldn’t drug his Colonel Sanders’?)

  • Anonymous

    John Reed:
    My birthday is April 1st. I’ll turn 56. I’ve been a good boy this year, ate all my broccoli and balanced my portfolio. It would be fitting I think if you sent a card congratulating me, including a small gratuity (reparation) for the job and returns your actions cost me (say $100,000). Remember me Uncle Johnny, and I’ll love you forever. 
                                                            Greedily Howard
    PS- Bill Moyers has been bad. Don’t give him nothing on June 5. He made you look guilty.

  • Anonymous

    Good morning, my little Barackie:
    Get up now. It’s time to invade Iran.
    Simon sez!

  • Anonymous

    Wall Street would prefer a softer diffuse pink halo for their close-up. Didn’t the make-up look weird in the Dorgan piece! I guess they were in Byron’s office. Mixed lights are always challenging.

  • Free Market Socialist

    Mr.Moyers I have been a huge fan of yours for years.  I am delighted to have you back on TV and in what may be your best show yet.  You provide some of the best journalism out there and, frankly, one of the few things left on TV worth watching.

  • Anonymous

    I do enjoy Bill Moyers’ extraordinary discipline in suspending his disbelief as he allows conspirators to indict  themselves and their co-colluders. “Screech owl snuggling up to a hen” indeed (see Colbert Repor). When that guy got up he probably had motor oil all over the seat of his pants, and only his drycleaner ever knew.

  • Free Market Socialist

    Were you not paying attention for the past 12 years?   Government has been getting out of the way.  Out of the way gave us Liar Loans, Credit Default Swaps traded in blackpools, too big to fail conglomerates and mortgage back securities rated AAA that were garbage.  
    Another fun aspect of government getting out of the way means from time to time some banks fail, maybe yours.  (“But the people demand a safe place”, oops!)
    Do you like stuffing your money in your mattress?  That’s the only place your money would be (modestly) safe if government got entirely out of the way.  (oh, since government got out of the way and there is no FDIC for mattress money, good luck if your house is robbed or your toaster starts a house fire cuz insurance companies will take your word for it that you had your life savings in a coffee can)

  • Julieeking

    No

  • Bruce Kline

    What a waste of half and hour … I really have to say this guy (John Reed) sitting there with his eyebrowsed raised quizically talking 15 million dollar bonus at about a second grade level and had really nothing new to say at all telling us all about the whole cover story justifying it – too bad we made a mistake.  I was really wondering what a softball show this is that he was such a terrible withholding guest and what is his point as the Citigroup Chairman … what the hell was he doing, it was not sitting around talking with his fellow corporate officers about why a car has brakes … or how discredited the have been …. really not a useful interview.

  • Catzpjz

    Felt a huge amount of insincerity and self-congratulation from Mr. Reed. I’m very suspect of people who made their financial killing and then, from an extremely comfortable distance, point out how their gains were wreckless, immoral and fueled by greed. Reed still doesn’t “get” that real peole were on the receiving end of his choices. And the fact he’s grooming new players at MIT isn’t encouraging. At all.

    On the other hand: love, love, love the prescience and conscience of Byron Dorgan.

    Have enjoyed the shows overall, but tire of men talking with men, referencing men about the problems men have created. Please, more women like Gretchen Morgenson to provide insight and balance…

  • Leonard Lucenti

    People….

    Watch Mr. Reed explain it all, then understand how an economy works.  It’s fascinating. 

    I can go back several hundred years of the Industrial revolution to bring out examples, but condense it to the following..

    The economy works like the automobile mechanic placing a tire on a rim.  Ever watch that going on?  The mechanic inflates it until a big bang sound shakes you out of your socks. 

    I expected a big bang happening in 2008 upon the failure of Lehman Brothers, so I saved my finances.

    Others let it ride out, only to find a 201k where a 401k was. 

    Nobody likes half a loaf. 

  • Anonymous

    I don’t understand your conclusion about me.  Can you please explain further.  My favorite peanut butter is the one that I get fresh ground, from the Whole Earth Center, perhaps the best food store on the planet, in Princeton, NJ.  I dump in the peanuts, and it comes out from the machine, warm and fresh, and inexpensive. 

  • Anonymous

    Bill, I do appreciate your interviewing style, but I was disappointed after Reed answered one of your questions, claiming that the government needed to bail out the bankers.  I wish you would’ve questioned him further and asked him for the likely scenarios that he dreaded if the government didn’t bail them out. 

    Without having much to go by, I myself can’t believe the necessity for the bail outs, considering the immensely complicated evolutionary processes at work behind economies as complicated as ours, within a larger world.  I haven’t come across any serious attempt to understand what would’ve happened if there was no bail out.  It seems the question is asked, a simple minded answer is given, and we move on.  So if it’s simple minded answers we only care about, I ask, without the bailouts, wouldn’t smaller banks have filled in the void?  After all, no real wealth was changed, just paper, and wouldn’t different paper pushers simply have filled in the vacuum left by the giants?  We see this in nature.  A T. Rex dies and all sorts of creatures feed off its remains, much to their benefit, within the complicated web of life.

  • Anonymous

    I mean that you’re in denial, because no one is above or outside the pervasive indoctrination of corporate dominated society. It’s funny you think peanut butter is good because you work the grinder. Ever wonder when that hopper was last cleaned? And where did those peanuts originate, and how were they produced, and who did the work?  I’m standing  in the same sewerage as you are. You seem not to want out as badly as I do. Maybe you can’t smell it. (I mean no personal affront or oneupmanship but am sincerely wondering. Tell me about the spider on my back and I’ll tell you about the one on yours.) Congratulations for living in one of our more civilized communities. Realize most people don’t share your advantages. I eat plenty of Peter Pan crunchy. I used to work for Beatrice Foods doing commercials. It is what I was raised on and what I’m used to. I think Starbucks coffee tastes burnt.

  • Anonymous

    Ah, but what percentage of parents would want that? Julie, I assume you do have children. Can you briefly explain in general terms the alternative you wish for them and how we will get it.

  • Anonymous

    Bill estimates that his viewership is not ready for reasonable prescriptions yet. They cling to their little wealth and fear if they dissent the Big Man will take it away. We do live in precarious times. Bill is patient.

  • Anonymous

    Leonard illustrates the phenomena I described in reply to Bugger above.

  • Jim

    A great presentation that could be considered as a prerequisite for “democracy and capitaliam 101″
    Jim

  • Anonymous

    I guessed that you might be bringing in a little too much baggage into your interpretation of what I said.  I do agree with you that none of us are outside of the pervasive indoctrination, and perhaps that’s all that really needs to be said here.  And there are some ads that appeal to me; notably, those that give me technical information, which is harder to propagandize, and yes, I have emotional handles.  But I still regard myself as far, far from the mainstream, and I’m sure, if you knew me,  you’d agree, and you’d probably understand my points with greater subtlety.  You’re probably far from the mainstream yourself.  Your comments about the peanut butter machine are a bit silly, and they indicate that you’ll reveal too much of your private analyses, just to prove you’re right.  (That bug is inside your head.)  I know I’m lucky, and so are you.  We both could be eating peanut butter out of a broken jar on top of a landfill somewhere in Brazil.  I also think Starbucks coffee tastes burnt, because it is, at least half way.

  • El Viejo

    Generally, your topics are very good, but your lack of emotion on this corruption in banking and politics topic is sickening. The woman had it right about your omission of the 780 million penalty. It smacks of a bias. If you just want to report the news, fine, but Edward R. Murrah would side with me when I say you are just a scribe. Where is your outrage sir??

  • Danaj33

    No, Grady.  Unfortunately, however, the media helps to feed the “someday I’ll be rich like that” mindset of young and old alike which is why all of my very poor senior family members STILL vote Republican.  It’s mind-boggling.  Rich means having too much=greed. A healthy middle class means having plenty and keeping to a solid moral compass.

  • Marybullington

    Thanks so much for airing this series of interviews–it’s high time for the truth about what caused the crash in 2008 that hurt and continues to hurt most Americans came out. 

  • Newjerseydoc

    The reason so many bankers “got it wrong” is because they were making so much money.  Investors took over, greed became good,” and legal”, this leads to a paradigm shift, which leads to mass hysteria.  Cut the money out and they wouldn’t all get it wrong

  • http://www.facebook.com/people/William-Kelleher/100000158583767 William Kelleher

    Internet voting is coming to the USA. Its already in use in Estonia, Norway, Switzerland, France, Canada, Mexico City, India, and West Virginia – just to name a few places. People who care about the problem of Big Money controlling American politics don’t realize what an opportunity for reform this new voting technology contains within itself. The main reason for this is a baseless fear of hackers and manipulators. All those places I named have had no security breaches.  It can be done securely.
     
    How about sponsoring a debate/discussion of Internet voting – its potential for democratic reform and the security concerns?
     
    In June, Americans Elect will have an Internet voting primary.  The topic will be in the air. Your viewers deserve to know that there is more than one side to this issue.
     
    Lets talk!
     
    William J. Kelleher, Ph.D.
    Political Scientist, author, speaker,
    CEO for The Internet Voting Research and Education Fund, a CA Nonprofit Foundation
    Email: Internetvoting@gmail.com 
    Blog: http://tinyurl.com/IV4All 
    Twitter: wjkno1
     
    Author of Internet Voting Now! 
    Kindle edition: http://tinyurl.com/IntV-Now 
    In paper: http://tinyurl.com/IVNow2011

  • justintime

    John Reed took the left door he is as guilty as the rest

  • N. Spangaro

    Those of us who worked with John, and came to know him, he is very sincere, sometimes may even sound naive but he is transparent. Not many people recognized the mistakes as John does.. He is probably one of the most honest man in Wall Street…Up to some extend, in the consumer banking business, he was the “Steve Job’s” of the Industry. Great program.. very real. Life is that simple, and John makes the point to what generated the problems.. 

  • Adidashoes

    You are only hearing what you want to hear, you’re not actually reading my post. Yes, regulations are needed if you have the government propping up the big banks with FDIC protection and an implicit bailout guarantee. But the only reason these banks are TBTF in the first place is because of the government and the FDIC. These banks get free funding from the government and are allowed to gamble with it. If you remove government, these banks would immediately be shrunk down to size because depositors would not put there money in risky institutions. And no, you would not stuff your money in a mattress in a truly free market, there would still be banks. But you have to realize there are no free lunches. You can’t expect to put your money into a bank and due to FDIC insurance expect to have a 100% safe investment that yields interest. That is not how a free market works. You would either pay a bank to warehouse your money, or you would be a creditor to the bank, take in a yield, but at the same time risking principal. You are blinded by government’s unintended consequences, they create the moral hazard. Wall Street just benefits. People always complain about how Wall Street lobbies the government for certain regulations, if we remove the power of government to regulate, then banks power to lobby goes to zero. Government is the problem, not Wall Street. Wall Street is just the symptom. The fact that the rich keep getting richer does not happen in a vacuum, it happens through force. Force=Government.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    @gradyleehoward:disqus 

    Grady, you have a good vocabulary, the ability to construct intelligent sentences and appear to be current on the truth of what is happening.

    HOWEVER…

    It appears you have appointed YOURSELF at the CHIEF ANALYZER OF ALL COMMENTS on this website.

    If you had REAL INTELLIGENCE, you would know that commenting on almost every post waters down the effectiveness of your comments.

    It also irritates most of us to be critiqued so prolifically by a fellow poster, much like the ‘know-it-all’ in any group.

    Perhaps you would do better to start YOUR OWN BLOG, as I have done.

    You can find mine at:

    http://goldtradercommentsaugust2010.blogspot.com/2012/01/india-to-buy-iran-oil-in-gold-not.html

  • JoNohio

    The failure of the banks is a further indictment of a media that doesn’t question power and is not serving the interests of the populace.

  • nancy crawford

    I’m curious – after watching Mr Moyers interview, how much money Mr Reed declined or gave back?  He sees the error of his ways and blames it on “group think”.  What has he done about since his mind has cleared?

  • nancy crawford

    Don’t blame it on the media.  We are not victims. We have brains and can use them despite this kind of BS.  Blaming is the easy way out.

  • MeanJoeGreene

    An outstanding commentary / expose:  shld b required reading 4 every american taxpayer.  The killing part is, the crime continues unabated & w complete impunity.  None of the ringleaders hv been indicted, or even arrested.  

  • http://www.facebook.com/people/Victor-Panzica/1426281712 Victor Panzica

    This is always presented as a political or economic problem but I think this is really a sociological problem.  Whenever the country has a huge influx of foreigners i.e at the turn of the 20th century and 1929 when you had the huge european settlements in NYC and Boston, the upper classes had free reign with the financial system.  Likewise with the late 20th century legal and illegal influx of immigrants the upper classes took control of the financial system via the political system.  During both eras the working class immigrants had no real understanding of the financial system while the non-immigrant population sought identity with the upper classes and turned a blind eye and deaf ear.

    It’s telling that during Bill O’Reilly’s town hall with Cornel West, Bill asked him what laws did Wall Street break?  Well of course we know who wrote those laws. 

    Our politicians gave the fox the key to the chicken coop and then repaired the chicken coop for them.

  • Tim

    Wow.  That was incredible.  The man actually stated he played with millions of peoples savings….gambled on them….lost…and well, it was all legal, so I’m not responsible for any of it….but, if I had a chance to do it over, I would do it different.  All the while he was collecting pittance $3m bonuses every year.  Not to mention salary and stock options.  I’d like to have a three million bonus one time.  I’d be fine.  I don’t even know how to describe how jaw dropping this would be if the rest of the Lame Stream Media would put this out there.  Occupy Wall Street is an embarassement.  Competant citizens and Tea Party constitutional republic folks need to take this ball and run in an orderly fashion to change things.  The first thing is to get rid of the democratic and republican establishment.  Amazing, Newt Gingrich has the popularity, but, the establishment has drawn all the guns and fired.  Wonder why?  This now makes more sense than ever.

  • Guillotine

    Mr Moyers, Again, I cannot understate that yours is the only real informative program on the entire network.  I do not know how you got this John Reed to talk in length about his rampant past conspiracies to literally defraud the rest of us.  I think that he is disingenuous about politicians who would question Wall Street money as coming from someone who should be thrown in jail after their disaster.  Of course they will take the money as our government is the best that can be bought.  However, I still see Reed’s disconnect with the results of his malfeasance (a.k.a. crimes), the wrecked lives that you actually alluded to.  This man is one of the new American Aristocrats who doesn’t realize that this attitude of “let them eat cake” is why we would like to hang them all from trees!  I will not be satisfied until they lose all their money and live in a cardboard box.  

  • Guillotine

    Mr Moyers,   A suggestion for a new show.  We now appear to have two sets of laws.  One for the 99%, and no laws for the 1%.  This would be an interesting problem to look at.  Look at how the financial “masters of the universe” have got away Scott Free!  There is no interest in even looking at prosecuting these people for the damage that they did to millions of Americans and people all over the world (think Greece).  This to me is like living in the Middle Ages where laws only apply to the little guy.

  • EveryMan

    i completely agree Mr Reed was a straight shooter – one of the few patrican old line ethical bankers -doesnt exist anymore  – a dead species

    his contrition is heartfelt – and reminds me of MacNamara Sec D0D after the Vietnam war who said – he made a mistake

    Sany Weil is incapable of honesty or ethics on any level   

  • EveryMan

    you must be asleep –

    the BANKS committed FRAUD – what does that mean to you ? did the government tell them to commit fraud?

    free capital has nothing to do with that act – people lost their life savings in their home  – not because they made a mistake but because they didnt know the BANKS were commiting systemic fraud from sea to shinning sea – if they knew 80% would never have bought a house for the last ten years

    stop speaking FOX speak! 

  • EveryMan

    completely insane – the reason for the fraud was a lack of regulations not because of too much regulations – FDIC worked well for 80 years to stem panics – Glass Stegall was taken out after 70 years and the system disintegrated – free markets are no solution only more chaos

  • Stephen Feher

    It was chilling to hear John Reed speak in such impersonal terms what he described as “mistakes” and enthusiasm actions that can only properly be described as being motivated by greed.  He says he wasn’t in the business to become rich, though he did, and greed can be for power, status, and not just money.  He seems to have conveniently failed to see the personal cost to millions, though he acknowledges the cost to the economy in the trillions.  If John Reed really accepted responsibility for what he did, and it doesn’t matter that many others were also guilty, I don’t know how he can sleep at night, unless he goes to sleep counting his millions.  

    It seems that in retrospect many of the wrongdoers admit some errors, and even are willing to write books and come on your program and talk about their errors, but they are all smart, and could have known ahead of time what they were doing.  Their contrition seems inauthentic to me.  This comment is not only about John Reed, but David Stockman, as well as others who are now profiting by writing books about their wrongdoings and are willing to give advice on what they should have and could have known if they were simply willing to look at facts, not be blinded by arrogance, greed, status, and a host of ills that can be seen; but one has to look, and more importantly, to see.

  • http://twitter.com/aurora43 C. Tackett

    My husband and I like hearing the truth about Washington and Wall Street.  However, I feel angry, helpless, and mute in response to these truths.  What can we, as part of the ninety-nine percent of citizens, do to halt the elimination of the middle class?   Does the Occupy Wall Street movement make any impact on the one percent?  How can we constructively (without violence) affect change in the system?

  • Ramesh

    Mr. Moyers: While we can dissect and try to figure out what went wrong, WHAT you should really focus on are: What are the new “schemes” that Wall Street smart guys are currently cooking which can lead to the same downfall  as we witnessed in p? How can you “expose” such trends – be a whistleblower? 
    Looking back is fine, but, going forward, go after Wall Street deal makers, see what new “short term” oriented programs they are pushing which benefit them, but not the 99%.
    That’s what I am looking for in your programs.

  • http://www.billmoyers.com/ AnneLBS

    Dear C. Tackett,
    You might find the latest ASK BILL segment helpful. We’ll look forward to your feedback. Good luck, and thanks for watching.

  • http://www.billmoyers.com/ AnneLBS

    Dear C. Tackett,
    You might find the latest ASK BILL segment helpful: http://billmoyers.com/ask-bill/how-can-ordinary-people-help-to-overturn-or-nullify-the-citizens-united-decision/.

    We’ll look forward to your feedback. Good luck, and thanks for watching.

  • Toddfboyle

    John Reed is on the road, but like most real professionals he will probably never see the real truth about his profession– that it is *fundamentally* unhelpful and harmful to society.    For example he feels worst about the effect of his actions on his comrades at Citi, and maybe for his stockholders.   An even bigger red flag was his statement that the 2008 bailouts were necessary and the lesser harm than large scale bankruptcies.  This view, he did not substantiate. Nor did Moyers investigate his reasons further.  The truth is, the world would have been a better place.

  • Nsquirt

      John Reed demonstrates some class, unusual for someone in his line of work.

  • Anonymous

    I found the interview with John Reed somewhat disgusting when he said that he felt bad about taxpayers having to bail out the banks due to their corruption and greed, but he did not offer to pay back the taxpayers for the $15+ million in bonuses he received.

  • Piksnilderf

    Umm…. Yep.

    If those with wealth can influence politicians into such things as repealing Glass Steagall, they are essentially making their own laws for personal enrichment at the expense of everyone else.

    Average folks have a vote.
    Rich and powerful banks obviously can buy political favor.

  • kjohnson

    If The Great Depression and single minded intolerance, aka Nazi thinking lead to WWII.  My question is when will WWIII start?  Glass-Steagall kept the country safe for 70 years financially; it seems the internet*, allows the world to shout at the “enemy” in an echo vacuum of self affirming garbage.  This is called the filter bubble.   I say we are one U.S. riot away from WWIII.  Where have all the moderates gone; I need to get a plane ticket there?
    *additionally cable news

    Thanks for the hard work Bill. 

  • kjohnson

    You are nuts!  Banks from the beginning or our country were in a never ending cycle of boom and bust from the days prior to the civil war up to FDR.     Tell us honestly, when was the last time you read a CC contract from start to finish, …or insurance, car loan?   Life is to short, we cannot live in a Laissez-faire world we have to be able to trust and get on with life.

  • Eden’s son

    Why has no one gone to Jail? Lots of excuses that because we all drove the train off the ledge so no one is really responsible. Where is the accountability, where are the senate hearings? Who is watching out for the tax payer? It still continues and America sleeps. 

  • Artlady

    Agree – except that it’s Gretchen Mortensen.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    John Reed made a very astute observation,” Our government is designed fundamenta­lly
    to be dumb but to listen. In other words, no one is elected to the
    government because of their personal expertise in the various issues
    that they’re going to have to deal with. We have a system that is
    designed to listen”.

    The voices Obama is listening to;

    Obama’s new Chief of Staff… Jack Lew from Citigroup
    Obama’s previous Chief of Staff… Bill Daley from JP Morgan
    Obama’s 1st Chief of Staff…. Rahm Emanuel worked with Inv Bank Wasserstei­­n Co….. Paid 18.5M over 3 years.
    Obama’s previous Office of Mgmt & Budget Director..­­. Peter Orzag who is now a Vice Chairman with Citigroup
    Obama’s new man in his inner circle… Robert Wolf of USB Bank. He is raising money for Obama’s campaign. Wolf is responsibl­­e for the branch of USB Bank that helps rich Americans evade US taxes.Not to mention Geithner, Summers and Jeff Immelt GE CEO head of the Jobs Council.

    The Largest Banks are now bigger than they were before Obama took
    office. And in the last 2.5 years they have made higher profits then in
    the 8 combined years under Bush.Mmmm…. doesn’t seem much has CHANGED!

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    You watch the interview and that is all you can come up with!? Comments like that is the reason why the Left is laughed at.  Let’s go down the list of who should give money back.  Including, Clinton and Obama who is currently in bed with Wall Street.

    Reed left Citibank in 2000, long before the eventual crash.  If it makes you feel any better, after he left Citi he went to work at the NYSE taking a salary of $1 in the aftermath of the Grasso fiasco. 

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    John Reed made a very astute observation,” Our government is
    designed fundamenta­lly to be dumb but to listen. In other words, no one
    is elected to the government because of their personal expertise in the
    various issues that they’re going to have to deal with. We have a system that is designed to listen”. The voices Obama is listening to;Obama’s new Chief of Staff… Jack Lew from CitigroupObama’s previous Chief of Staff… Bill Daley from JP MorganObama’s 1st Chief of Staff…. Rahm Emanuel worked with Inv Bank Wasserstei­­n Co….. Paid 18.5M over 3 years.Obama’s previous Office of Mgmt & Budget Director..­­. Peter Orzag who is now a Vice Chairman with CitigroupObama’s
    new man in his inner circle… Robert Wolf of USB Bank. He is raising
    money for Obama’s campaign. Wolf is responsibl­­e for the branch of USB
    Bank that helps rich Americans evade US taxes.Not to mention Geithner,
    Summers and Jeff Immelt GE CEO head of the Jobs Council.The
    Largest Banks are now bigger than they were before Obama took office.
    And in the last 2.5 years they have made higher profits then in the 8
    combined years under Bush.Mmmm…. doesn’t seem much has CHANGED!Crony Capitalism is alive and well!

  • Adidashoes

    You think FDIC has stopped previous crises? What was the 70s? Late 80s? Tech bubble? End the FDIC…you can’t be against bailouts for one group (Wall Street) and for them for another (Depositors).

  • Adidashoes

    Umm we don’t have a Laissez-faire system in this country and haven’t in more than 100+ years. No market with a central bank is a free market. The government gave power to the Fed in 1913, look what that did for the business cycle and the cycle of boom/bust: https://www.historyshots.com/FinancialCrisis/index.cfm. Also, what do you call Fannie/Freddie which we the taxpayer had to bailout? Laiissez Faire?? LOL try central planning aka socialism.

  • Adidashoes

    I hate Fox News, open your mind past the Left-Right paradigm because both sides are wrong. Yes, rampant fraud was committed, but it is the Obama justice dept that has failed to bring any of these cases to trial, not the free market.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    Good Stuff. I would also suggest checking out CNBC’s House of Cards. They did a very good job of describing all that was involved.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    Interesting enough it’s the guys at MIT or similar to them  that opened
    up a whole new world of trading.  Derivatives traders depend on the
    Black-Scholes Model, allowing them to buy and sell risk as if it were commodity. 

    Before Black Scholes valuation was a gut feeling…  it ended the guessing game, and launched the quantitative revolution.

  • http://www.facebook.com/people/Jerry-Odell/667854319 Jerry O’dell

    John Reed ex Citigroup CEO made a very astute observation,” Our government is
    designed fundamenta­lly to be dumb but to listen. In other words, no one
    is elected to the government because of their personal expertise in the
    various issues that they’re going to have to deal with. We have a system that is designed to listen”.

    The problem is that they are listening to powerful lobbyist groups , as well as questionable people they surround themselves. 

    Some of the voices Obama is listening to;

    Obama’s new Chief of Staff… Jack Lew from Citigroup (oversaw a hedge fund that bet on the collaspe of the housing market)

    Obama’s previous Chief of Staff… Bill Daley from JP Morgan

    Obama’s 1st Chief of Staff…. Rahm Emanuel worked with Inv Bank Wasserstei­­n Co….. Paid 18.5M over 3 years.

    Obama’s previous Office of Mgmt & Budget Director..­­. Peter Orzag who is now a Vice Chairman with Citigroup

    Obama’s
    new man in his inner circle… Robert Wolf of USB Bank. He is raising
    money for Obama’s campaign. Wolf is responsibl­­e for the branch of USB
    Bank that helps rich Americans evade US taxes.

    Not to mention Geithner, Larry 
    Summers and Jeffery Immelt GE CEO and appointed the Head of the Jobs Council.

    The
    Largest Banks are now bigger than they were before Obama took office.
    And in the last 2.5 years they have made greater profits then in the 8
    combined years under Bush.

    Mmmm…. doesn’t seem much has CHANGED!

    I
    understand why voters will vote for Obama, but it would be nice to see the
    Democratic Base demand more from their own… and I don’t see that
    happening.

  • http://www.facebook.com/people/Jerry-Odell/667854319 Jerry O’dell

    Maybe the editorial staff can let me know why they keep taking this post down.  Not sure why they deem it inappropriate.

    John Reed made a very astute observation,” Our government is designed fundamenta­lly to be dumb but to listen. In other words, no one
    is elected to the government because of their personal expertise in the
    various issues that they’re going to have to deal with. We have a system that is designed to listen”.

    The problem is that they are listening to powerful lobbyist groups , as well as questionable people they surround themselves. 

    Some of the voices Obama is “listening” to;

    Obama’s new Chief of Staff… Jack Lew from Citigroup (oversaw a hedge fund that bet on the housing market collapse)
    Obama’s previous Chief of Staff… Bill Daley from JP Morgan
    Obama’s 1st Chief of Staff…. Rahm Emanuel worked with Investment Bank Wasserstei­­n Co….. Paid 18.5M over 3 years.
    Obama’s previous Office of Mgmt & Budget Director..­­. Peter Orzag who is now a Vice Chairman with Citigroup
    Obama’s new man in his inner circle… Robert Wolf of USB Bank. He is raising
    money for Obama’s campaign. Wolf is responsibl­­e for the branch of USB
    Bank that helps rich Americans escape US taxes.
    Not to mention Geithner, Larry Summers and Jeffery Immelt GE CEO and appointed the Head of the Jobs Council.

    The Largest Banks are now bigger than they were before Obama took office.
    And in the last 2.5 years they have made higher profits then in the 8
    combined years under Bush.

    Mmmm…. doesn’t seem much has CHANGED!

    I understand why many will vote for Obama, but it would be nice to see the
    Democratic Base demand more from their own… and I don’t see that
    happening.

  • http://www.facebook.com/people/Jerry-Odell/667854319 Jerry O’dell

    The Banking system in it’s current state deserves a lot of criticism, and that is what the interview was really about.   But like all things, there is a lot of positives that society has gained from the financial markets.  If you don’t think that access to capital is important then I suggest try buying property in South Korea, or opening a small business in Latin America.  We take a lot of things for granted in the US, and many of these things are due to the free flow of money. 

    Some serious changes need to be made, but to claim that it’s fundamentally unhelpful and harmful in society is a ridiculous statement. 

  • http://www.facebook.com/people/Jerry-Odell/667854319 Jerry O’dell

    Settle Down.  Reed was gone in 2000.  Most of what he was talking about (besides the Glass Steagall Act being taken down) happened after he had left.  The no doc loans etc. didn’t start until 2003.  The guy comes forward and gives an accurate account of what went down, but all you come up with is your naive commentary. 

    How about Clinton… he signed the dissolution of Glass Steagall.  How about the Dem’s in Congress who kept pushing for more “no doc loans” (the paper for Wall Street), even when McCain was in Congress saying that this needs to stop.

    What you should be taking from this series is the degree of Crony Capitalism that we are in the midst of, how our politicians are in bed with the power brokers.

    Look at Obama’s last 3 Chiefs of Staffs… they all have ties to Wall St. Firms. 

    See the Forest for the Trees!

  • http://www.facebook.com/people/Jerry-Odell/667854319 Jerry O’dell

    Don’t blame the problems in Greece on US Banks.  Totally a separate issue.   Greece lived a leveraged lifestyle, and had massive tax evasion across the country.  Once they switched to the Euro Public wages shot up, and they have a cushy Public Employee Retirement Program.  Bottom line their Gov’t was broke, so they went to the European Banks (especially France & Germany) and got bailed out.  Now they can’t meet their debt obligations. 

  • madmike

    The Big Meltdown explained in one neat, tidy little package. Well done Bill Moyers! And thank you John Reed for your candor, insight, and portrait of banking’s’ rape of America. 

    The bankers and their bought politicians risked you, me, our way of life, our people, our future, America, EVERYTHING we cherish and hold dear for their own selfish greed. Their monomaniacal focus – TO GET RICHER! No one beyond their lap dogs benefit from their existence. They provide no product nor service. They make NO contribution! They suck wealth and leave waste. They are the ultimate parasites. 

    But wait, the story isn’t over …the victim is recovering – while the greedy bastards wait poised for their next assault. What’s it going to be America? Will you, yet again, abet your own rape and ultimate demise while screaming FREEDOM! – JOBS! – DEREGULATE!  …or take your country back and strip the evil bastards of their power over you? Your weapons are your activism, your vote and your government. Join together and use them wisely.

  • Exwser

    No offense to Mr. Reed, but I am not buying the ‘we didnt’t know. You really didn’t know that a much bigger capital base by way of consumer deposits would increase risk and end in disaster? Seriously?

    You knew, and we’re salivating at the thought of multifold business, profits, and bonuses.

  • MRusso1995

    No. I want my kid to be successful indeed, that means liking what he does, living honestly. Above all not  stepping on anybody’s head or achieving his goals in detriment of others. Greed is not in my set of values for my kid. After all how many boats, planes, mansions do you need in a lifetime? 
    gradyleehoward, yours is the kind of mentality that perpetrate the likes of Reed to multiply

  • MRusso1995

    What Mr Reed did was despicable and the most he can come up with is a little “oops”, “we were wrong”, “our exuberance”? 
    Tell it like it is Mr Reed, you and your group are greedy, negligent, careless, thoughtless businessmen who can only see your immediate gain no matter whom you are going to hurt. 
    After all, honesty, character, social consciousness, are values for some little people of the middle class and the poor to whom those values are important. 
    You and your friends buy a clean conscience with the millions you made. You killed and left the scene promptly going to work for $1 (awww!), then bought your way to the board of a respected institution, so you can sleep tight in your mansion, foreign to the people  you helped to destitute.

  • Guest

    Wall street did ruin Main Street and banks moved away from serving the community into trying to get into the high flying world of Wall Street, homely bankers and insurance executive were ashamed to admit they really didn’t understand what was going on and they were taken to the cleaners by the sharks on Wall Street.

  • AnitaC1040

    Another great show, Bill. I found John Reed’s comments strange, since he is excusing himself from bringing down the entire world’s economy. He commented about his father warning him about banks because of the Depression. My father warned me as well. Well, most of the country saw through their shenanagans, and it was GREED, pure and simple that walked all of us over the cliff. And still no one is in jail. Reed did something illegal at the time, confident that the insiders of Washington would get it changed. But for the time that it took to change the Glass Steagal Act, he and Sandy Wilde should have been arrested. You know, all of the big players landed with tons of money in their pockets, but for the rest of us, we have to bail them out (w/ taxpayer dollars that they don’t even want to pay), lose our jobs, lose our homes. And yet they make fun of us, pardying the Wall Street Occupiers as dirty and in need of a bath. Isn’t that what they do all the time to the 99%, when we are protesting Wall Street greed, the Vietnam War or in Union camps being fired on by mercenaries and hired guns, like the Pinkertons. I am disgusted. We need an FDR and a Congress with some b*lls.

  • Macpet49

    It’s a shame Wall St and the bankers inc. Reed don’t have their own personal viral disease that will kill them slowly!

  • Anonymous

    It was very enlightening to hear John Reed’s insider account, and I do appreciate it.  I also respect Bill Moyer’s approach.  We would have learned far less had he sharply confronted or rebuked the man.  Still, there’s a lot that bothered me about Mr. Reed’s presentation and tone. 

    According to him, a need was sensed (business opportunities were being lost under the old rules), so people said in effect, “Hey, let’s get rid of Glass-Steagall and associated regs.  It will make the economy even more dynamic.”  Just what seemed like a great idea, that’s all. 

    High ups in Washington were contacted, no one had a second thought, and everything sailed through  Everyone acted in good faith, from the best of motives, believed it would produce great wealth and common good, and that it would entail no substantial risk.  They just happened to be wrong, and the economy just happened to nose dive.  But they meant well.

    It’s as if everything happened almost by itself, with nary a predatory thought, let alone lobbyist or payment.  Even that last phenomenon is presented almost as an afterthought.  They had all this cash lying around, so why not use it to ensure a strong hearing for good ideas that would help all of us?

    And, Reed maintains, up until that point the 1%’s culture was to provide a good, honest service or product.  Doing well financially was at most a byproduct.  Only later, he claims, was there some sort of culture shift in a darker direction.  He is “surprised” that in the wake of the debacle someone or something hasn’t pulled things back to where they ought to be.   

    I’m sorry, but I find all this to be a story of massive, deliberate fraud, oiled by other corruption, and perpetrated by the sociopaths of the 1%.  And it sure seems to me they already pretty much owned and perverted the government to their own uses well before this catastrophe. 

    Notwithstanding whatever new, uglier mutations may have occurred circa 2000, or perhaps beginning with Reagan, I seem to recall a whole lot of politician buying, warmongering, and systemic financial ripping off throughout my life and well before.  None of that just happened either.  An ocean of planning, money, and effort went into rolling back the many gains and quieting the many democratic voices of the early and mid-20th century.

    The biggest difference between now and 1950-1980 seems to be that they are really croaking the middle class, their erstwhile bulwark against discontent.

    I don’t buy Mr. Reed’s explanation of a new generation/new culture among the 1% as the problem here.  I don’t agree that all this is merely an aberration – a historical blip – that will be fixed by nice, regretful, supposedly highly ethical, and relatively financially disinterested  figures like Mr. Reed purports to be.  His assurances notwithstanding, I think the critical mass of these guys knew exactly what they were doing, could not care less about the 99%, and are not about to voluntarily give up anything.

          

  • http://www.facebook.com/people/Kath-Surbaugh/100001409236861 Kath Surbaugh

    Here’s a point:  Had the Fed simply paid off all the outstanding “toxic” mortgages (instead of bailing the banks,) then all of the bonds & derivatives would have been GOOD.  Thus no “default swaps” would have been payable, as a result.  Sure, some of the people with “no doc” loans would have wasted the $ (up to 1/3 of them) but RE wouldn’t have crashed & lost value.  Only the speculators would have been out.  Check this out with someone outside the Wall St/Washington bubble, please.  This was the simple solution that would have saved all but the speculators.  It’s been buried like Mr Dorman’s views –not “mistakes,” Bill.  Criminal fraud, then & now, by the .1%

  • http://www.facebook.com/people/Kath-Surbaugh/100001409236861 Kath Surbaugh

    He should be in jail.  So should all of his cronies.  please see my comment, above.

  • leftofcenter

    If bankers say we deserve huge salaries/bonuses because we “drive the economy”, think again. I can name several other key industries that if they go on strike, this would have serious ramifications.

    Part of the problem is the number of millionaires in Congress. Silly question: if you a millionaire and see some new law as a threat to your wealth, are you seriously going to pass it? Many times I’ve heard various Congresspeople say, do you know how busy I am? I don’t have time to read every single law that could be passed. That’s why I depend on lobbyists to do it for me.

    Now in the real world, if one of Bill Moyer’s producers followed that logic, they’d be out of a job. Why is it that 535 people who make an average salary of over $100,000 a year can’t be bothered to do their job?

  • http://www.facebook.com/people/Kath-Surbaugh/100001409236861 Kath Surbaugh

    There was an alternative scenario that wasn’t explored, Just.  Was surpressed, in fact, and remains so.  Please see my comment of 1/30 (above.)

  • Anonymous

    “Jealous”, sez Rickie Gervais.

    Even now with all this bloviating there is an ideological vacuum that can never be filled here at billmoyers.com. Cyberspace is theoretically limitless so posting as much as one might be inclined does no harm. And if you dislike what I write don’t read it. I think my stimulation has begun to pay off in more frequent posting by others.

    I followed the same method at Bill Moyers Journal Talkback blog (in archives) and had very good results. I made some real friends and advanced my 
    understanding of anthropological theory and philosophy. One learns best by doing.

    Good luck on your writing Cedric. 

  • Mehilo

    No, I would not. Making money for money’s sake is empty and when you do it on somebody elses back it is criminal. We supposedly put people in jail for that.

  • Anonymous

    very informative history but with no lesson learned what’s the point in the end. the doer’s are still doing what caused this mess and it seems the only concern is making money.

  • Virginia_woods

    It’s embarressing to watch someone who held a position of power and association excuse and pretend that the banking failures were a , wink, wink, mistake. Mr. Reed looks like a very wealthy man who has benefitted from his participation prior to retirement and is a  little too contrite in his sympathy for the common person. We’re suppose to believe the fall-out and subsequent bail-out were a big surprise. Would any of these bankers and investment brokers feel the same if their income and savings were gone due to a” unforseeable mistake in judgemnt?”  It may be bold, but I think what they did is just as treasonous as selling top secret information. Bringing a nation to it’s financial knees is greed beyond a reasonable measure of  fair play.

  • Wisconsin thug

    no.

  • jdsumm14

    As with any discussion of
    Wall Street and the financial crisis, the subject of regulation is at the
    center. Unfortunately, we have been so trained to assume a degree of government
    intervention that we are blind to the root of the problem.  I believe Mr. Reed touched on this
    when, regarding the inception of Glass-Steagall in 1933, he said:

     

    “… equally importantly, since
    the FDIC came into existence at approximately a similar time, the government
    was guaranteeing deposits so that people didn’t lose if a bank got into
    trouble…”

     

    “They didn’t want them to use
    the guarantee that the government provided for those deposits to leverage their
    position. Because, you know, if you have a deposit base that’s guaranteed by
    the government, it sure puts you at a great advantage in terms of going into
    the market and playing around.”

     

    He recited this fact about
    the FDIC, without ever questioning its validity as a government
    institution.  Guaranteeing the
    deposits of ordinary citizens has become part of a seemingly endless list of
    functions that “only government can perform”.

     

    In a related comment, he
    said: “…a car has brakes so that you can drive fast.”  In reality, cars have brakes because no one would buy a car
    without them.  In other words, the
    market demands brakes just as depositors demand insured deposits ever since the
    bank runs of the 1930’s.

     

    So if the impetus for
    Glass-Steagall type legislation is to protect the taxpayer and restrain what
    Greenspan might call “irrational exuberance” on the part of investment bankers,
    then why involve the taxpayer in the first place?  Allowing (or requiring) banks to purchase private insurance
    would accomplish both of these objectives.  The “sports car” banks that make riskier loans would
    certainly pay higher premiums. 
    Likewise, the “mini vans”, with their cheaper insurance costs, could pay
    higher interest rates and attract more depositors.

     

    In a world nearly ruined by a
    small group of bankers, calling for more regulation such as Dodd-Frank is an
    easy sell for bureaucrats and politicians alike.  But has there been a regulation in modern history that was
    not written by, or strongly influenced by the industry it was supposed to control?

     

    Unlike politicians and
    bureaucrats, the free market cannot be bought, bribed or coerced by market
    players.  If the Occupy movement
    thinks they can achieve fairness through regulation, they will be deeply disappointed.
    Regulation, by its very nature, is the enabler of crony capitalism….. but
    that’s a whole other interview.

  • Abby Gilmore

    !!!!!   !!!!!

  • Don Q. Public

    Listening to Bill Moyers letting John Reed hedge his entire performance was simply infuriating for me to watch. This is just another example, for me, why mainstream media — yes, including PBS’ Moyers & Company — is completely irrelevant. I wish Bill Moyers would retire for good, because this is truly embarrassing — and disheartening — to watch.

  • outraged citizen

    I’m with you.  I thought Reed’s coldly analytical responses to Moyers’ questions totally missed the point.  People broke the law, and if they didn’t break the law it’s only because the law was changed in their favor.

    While a good piece, I thought Mr. Moyers could have come back a little harder on a couple of occasions.  Mr. Reed didn’t even seem to get that many people have lost jobs and homes, and some even lost their lives.  All due to predatory greed.

  • Zolicles

    Can you say massive criminal conspiracy to loot government social insurance programs? What we need is a courageous politician ( oxymoron ) to use the RICO and forfeiture laws to break up this criminal conspiracy and confiscate all this politician buying and war mongering wealth!

  • Zolicles

    Can you say massive criminal conspiracy to loot government social insurance programs? What we need is a courageous politician ( oxymoron ) to use the RICO and forfeiture laws to break up this criminal conspiracy and confiscate all this politician buying and war mongering wealth!

  • Zolicles

    “How do you prosecute these cases in this environment?”

    You deploy the RICO and forfeiture laws against criminal conspiracy, against both the bankers and politicians who passed laws for personal profit and against the general good, just like they do against the drug cartels.

  • Don Q. Public

    I’d tune into this PBS show again if it was hosted by someone like Chris Hedges or Amy Goodman, and if it managed to include guests (analysts and commentators) like: Satyajit Das, Matt Taibbi, Glenn Greenwald, Yves Smith, Michael Hudson, Steve Keen, Ha-Joon Chang, William K. Black, Max Keiser, and Matt Stoller.

    But, I’d be willing to bet that future M&Co. guests will include a list of the usual suspects like DC and NYC political and economic drones along with drop-in public radio experts (public broadcasting “partners”) like the 
    clones and dolts from Marketplace or Planet Money.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    It’s not up to Mr. Reed to bring charges against anyone.  We have the SEC for that. I thought he was incredibably forthcoming, considering he was under no obligation to talk with Bill.  And honestly, I have never heard a Big Bank Leader let his guard down like he did.   Guarantee Sandy Weil will never admit to any level of culpability. 

    Reed had left Citi by 2000, well before the craziness was going on.  It was really the last 2 years of real estate sales that were the disaster.  At that point everyone that hadn’t bought a house felt like they needed to.  These people didn’t have the income to afford the ridiculous price levels of housing, and also had bad credit.  But the loan originators pushed the loans, because the Wall St. Boys were pushing for Paper…. and everyone believed as long as housing kept going up, then all would be good.  But many were beginning to realize that what was being pushed through was bad news.   I was working on a derivatives trading floor at the time, and we were amazed at the complete irrational behavior going on in the mortgage markets. I remember walking down the street and heard a 30th something old women talking about flipping a home.  I just laughed and said, “if this isn’t the top then i don’t know what is”.  It’s easy to point fingers at the Wall St. Guys, but irrational exuberance was everywhere.

     Bottom line everything of value has to be tied to some kind of “income”.  In this case it was wages.  In the SF Bay Area the median home required $150k in income at the to of the market…. an affordable amount for many in the Bay Area… but the large majority that were buying the last 2 years were not making anything like that.  In relative terms that was going on throughout the US.  Also what was going on was rampant speculation by RE investors buying multiple homes in rising markets. 

    Keep in mind this doesn’t happen without Fannie Mae/ Freddie Mac, the Credit Rating Firms, and the Federal Gov’t.  In 2005 John McCain tried to bring attention to the upcoming disaster, he was behind the Regulatory Reform Act, but the committee he submitted it to turned their back on it.  The committee was a mixture of Democrats and Republicans.  In the just released FED Notes of 2006, they were completely clueless of the writing on the wall.   They saw the downturn coming, but felt like it would be a soft landing. 

    And then the 2nd shoe to drop was how it brought the stock market down with it.  Which personally pissed me off, because we were not directly involved in this stupidity but suffered because of bad risk management across the board.  The whole country was living a leveraged lifestyle; and it all began with the Fed Reserve attempt to straighten the curve.

    If I can suggest a great recap on the whole crisis…… it’s does a very good job in explaining the roles of the players involved in layman term.  It came out in 2009…. and is worth viewing. 

    CNBC  “House of Cards”

    http://video.cnbc.com/gallery/?video=1145392808

  • tg

    Bill – this was a dynomite presentation.  It’s amazing to me  the number of people who were so willing to drink the cool-aid and dismiss the rules that had worked to protect the economy & this country for so long….and for what……greed, ego, and the god all mighty buck.  What I find to be most distasteful is the extent of collusion which resulted in a legitimate threat to the security and prosperity of the United States.  The dictionary defines collusion as “a secret agreement for fraudulent or treacherous purposes.  Another word for treacherous purposes is treason.   Every person who was involved in both the “run-up” and the eventual collapse of this country’s economy should be held accountable.  To hear John Reed suggest what they participated in was excusable because “we got caught up in the excitment” is – well – insulting.  There is a concept of law which refers to ill gotten gains that allows for the seizure of all assets gained by use of ill gotten gains.  Every one of these mucks should loose anything and everything they have gained because of their neglegance and participation in what can only be called a conspiracy of stupidity.  Let Reed, Greenspan and all the rest feel some monitary pain. 

    tg

  • Davideros

    Oh my. Where to start? First, Chris Hedges, Amy Goodman, Matt Taibbi and Glenn Greenwald — all have been on Moyers’ programs. And in the case of Wm. K. Black, Moyers’ was the first show he ever appeared on and he has appeared more than once; in fact, he was in a segment in the very first show three weeks ago. As for your other comments, am I to assume you only watched the John Reed segment, as this is where your comments appear, and did not watch the rest of the program, including the interview with Senator Dorgan? If that’s not the case, you’re operating from some negative space that has nothing to do with reality but, rather, some sort of bitterness which clouds your perspective. You owe Moyers and his team an apology. As the saying goes,you’re entitled to your own opinion but not your own facts.

  • Gillies David1

    Tonight, it was as if, my late father, Jack Gillies, was once again with me watching TV, as we did so many years ago (enjoying conversations with Joseph Campbell and other fascinating thinkers). And, tonight, I once again, felt the quiet joy of thought, of learning, understanding and finding, in this election year, my political view informed by a historical,  fact-based perspective.  Thank you Mr. Moyer. Thank you PBS! I look forward to your next program. 

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

     It’s nice to see the interest in these Bill Moyer’s interviews.

    IIf I can suggest a great accompaniment piece…. CNBC “House of Cards”.  It came out in 2009, and does a really good job on explaining all the players involved.   You don’t have to a finance person to follow it.  It came out in 2009, and is worth viewing. 
     

    http://video.cnbc.com/gallery/?video=1145392808

  • Krisjs1767

    John Reed is like commandant of Auschwitz saying “Things got a little carried away.”

  • Ames Nelson

    Bill — I’ve been a fan of yours for decades, but you really let us down with your John Reed interview. His answers were invariably glib and you did not press him on his easy outs.  

    For instance: he essentially took the position of “not on my watch” with the 2008 meltdown, but you did not query him on his position while still heading Citi on G-S.  No doubt, he was in the front row of the chorus on repeal.  He laments he got a $15M bonus for the same work he did with a $3M bonus … but did he turn it down or become a philanthropist [haven't heard his name in that regard].  Finally, he laid blame on the no-doc/lo-doc mortgage loans … how does he defend that abuse of banking standards … much less repacking those toxic loans to dupe others? How about getting Sandy Weill [or any other 'former' banking heads] on the show and drilling him with the hard questions? Please make the Fourth Estate heard on our behalf.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    Many seem to be missing the point of this segment.  It was about the removal of Glass-Steagall, and how that allowed Retail Banks to get involved in riskier investments.    John Reed left Citi in 2000.  The Subrime Loan Era that drove this mess didn’t begin until 2004.  When he speaks about things carried away, he is talking as an observer that understands the business. 

    Everyone seems to be fingering him, and upset about his attitude. He wasn’t really a part of it.  Yes, he was involved in Glass Steagal removal,  but it’s a stretch to say the crisis wouldn’t have happened if Glass Steagall was intact.  Goldman, JP Morgan, Bear Stearns, Lehman etc. were never under Glass Steagall and they were major players in the crisis.   (I say this as a proponent of Glass-Steagall).

    Freddie Mac & Fannie Mae  is where the whole problem began.  That would of still taken place.  The only question is if Glass Steagall was intact, would of that prevented the overwhelming demand for paper that drove the subprimes. 

  • Don Q. Public

    Oh my! Where to reply? After having worked in public broadcasting for nearly a decade myself, I am quite familiar with Moyers’ guests, his shows and when these particular guests appeared.

    As for your additional comments, you can assume anything you please. But a conversation broached with a question, rather than an exclamation and a list of assumptions will never net the answers to that you’d just prefer to assume.
    As for the free psychoanalysis, well you are entitled to you diagnosis — as the saying goes.

    As for the future, please continue to watch Moyers & Company to see what guests they choose to include. Most of these episodes, I predict, will not include alternative voices who possess up-to-date information about anything of real substance.

    This show’s value as a history lesson — for which Moyers & Company deserve credit — much more than it is investigative journalism or ingenious analysis. It’s methodical, polite pap which allows dissemblers from across the spectrum to pander points of view in long-form style.

    I am fine with embracing terms like “negative” and “bitter” so long as you are fine with accepting my evaluation of your posture as “sanctimonious” and “preachy?”

    Do we have a deal, Davideros?

    DQP

  • Davideros

    We have a deal. Your answer says it all. 

  • MR1995

    Really, Patrick!!!! You’re blaming the puppet?! The puppeteer, poor guy, was only…. moving the threads around to make people believe it was easy to make the same big money flipping houses as Wall Street does with paper. 
    Don’t try to make excuses for the inexcusable. The economy is like when you try to steer or stop a transatlantic, what is being done now will take a long time before it is effective. Reed and Weil gave us free tickets to the Titanic and waved us goodbye.

  • veracity&valor

    @font-face {
    font-family: “Times New Roman”;
    }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: “Times New Roman”; }table.MsoNormalTable { font-size: 10pt; font-family: “Times New Roman”; }div.Section1 { page: Section1; }

    @font-face {
    font-family: “Times New Roman”;
    }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: “Times New Roman”; }table.MsoNormalTable { font-size: 10pt; font-family: “Times New Roman”; }div.Section1 { page: Section1; }

    I watched Bill Moyers show
    last night for the first time and thankfully we have REAL JOURNALISM left in
    this country, with Bill Moyers. As much as I dislike Reed and Co. I respect
    that he talked about the problem and admitted to mistakes. Yes, Moyers the only
    journalist reporting, and Reed the only person talking from the inside, I can
    see how you view the irrelevance of this topic, as oppose to kardasians
    divorce. When
    more insiders like Reed acknowledge their wrong doings, maybe
    Washington will listen to them and reinstate the 1933 act, because they are not
    listening to the people. 

  • http://www.facebook.com/people/Gene-Stone/755175728 Gene Stone

    Mr Moyers our family is very happy you are back. Your voices makes us stronger.

  • LeonZitzer

    Great show and thanks for returning.  But I don’t know why people are surprised at the results of unrestrained capitalism. In 1898, Alfred Wallace, co-discoverer of evolution, published “The Wonderful Century”. The last few chapters deal with the  failures of the 19th century. One is “The Demon of Greed”. The Appendix is “The Remedy for Want in the Midst of Wealth”. Equally interesting is an 1870 letter he wrote to the editor of a journal. He was protesting a proposal in Parliament to fund the sciences, which he could have benefitted from. This would be legislation by special interest:  “if we once admit the right of the Government to support institutions for the benefit of any class … however large and respectable, we adopt a principle which will enable us to offer but a feeble resistance to the claims of less and less extensive interests …” The American writer Edward Bellamy was an influence on Wallace’s ideas about capitalism.

  • Robert

    Former Senator Byron Dorgan is my hero in Bill Moyer’s episode on bank corruption, it’s his prescient speech on the senate floor ten years ago, unassuming in presentation, full
    of patriotism and couarge, fighting a corruption of unprecented greed, that exemplifies what we should strive to seek in America- a honest American hero, to lead, by the lessons of history , the glory of living without shame, having the honorable satisfaction of being a hero,  seeking only the welfare of all.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    I see that my first comment every posted here has disappeared with no reason stated as to why it was removed.

    This is unacceptable on the part of the moderators of the comments to the articles displayed on this website.

    Today I posted a response to GRADYLEEHOWARD’S reply to the comment I posted a few days ago about his MANY comments to almost every other comment posted.

    When I posted my reply today, the warning came up that my comment had to be APPROVED by a moderator before it would appear.

    I can’t imagine what they objected to in my original post other than I requested Mr. Moyers to seek for his original integrity before he dies, which seems to be a reasonable request as he seems to give people like Mr. Reed a platform to voice their  lame reasons for their criminal actions which have destroyed the economic system of the World.

    I stated that the only way this interview with Mr. Reed would have ANY CREDIBILITY was if it was done from a prison interrogation room at a bare table with Mr. Reed in a prison uniform and handcuffs.

    Apparently that, and my reference to Mr. Moyers no longer having the integrity to thoroughly probe criminals like Mr. Reed and many of the other sociopaths that he has interviewed is too harsh for the sensibilities of the persons who moderate our comments here.

    They would probably find more fulfillment working for some government agency policing the new ‘free speech’ policies of the current administration in its goal of increasing ‘transparency’ of the workings of our great leaders.

    Let’s hope they have the courage to allow this comment to be posted.

  • Anonymous

    I’d caution Robert and all of us to be careful who we annoint as heros off of one speech.  I would first examine this or any other official’s full record.  Yes, Sen. Dorgan did nail in advance the risk (to us 99%, not to themselves) that the banksters (and the government that is so completely and probably irrevocably their creature) were taking.  But his words leave ample room to drive through a caravan of other decisions, policies and legislation I’m pretty sure you would find repulsive.   

    Liberal or conservative, that just about invariably turns out to be the case.  It is just amazing how abstract political speech can  seem to take our interests into account without actually contradicting or precluding a host of votes and actions that decisively favor at the very least the long term, if not the short term, interest of the Reeds and Weils of the world – and to our considerable detriment.  I mean, think of all the flowery “pro-middle class” speeches we’ve heard over the last 30 years. 

    “The devil is in the details”, and “Always pay attention to what they do, not what they say.”    

  • Anonymous

    I can’t speak for Julie. But I want my daughter to be an ethical person and to do soemthing useful with her life. Messing over others to make millions does not qualify.

  • Patrick Moore

    Excellent, and a fine choice for a critical look back.  Bring Back Glass Steagall!!!

  • Mike

    This interview by Bill Moyers with John Reed is the best interview I have ever seen on any topic.   It is now clear and tragically sad, we have a government of the money, by the money and for the money.  A fact is unchanged even after the disaster, there seems to be no hope in sight to rectify and fix our government or our financial system.

    I GREATLY appreciate and have enormous resepct for John’s honesty and ownership.  John, you have done a great service in this interview.  Bill M, THANK YOU for this series of interviews and for so skillfully and eloquently putting togethre the puzzle of the financial meltdown.  

  • http://johnmesserly.wordpress.com/ John J. Messerly

    Re: “Press gave no warning” according to Reed- Not so.
    Citigroup Chairman John Reed stated in Bill Moyer’s interview:There was no one in the press who said, “Oh no, that’s wrong.” There was a celebration. And the industry, including myself, didn’t recognize the danger.Even a brief search of news stories from 1998 and 1999 reveal this is not true.  Paul Volcker was interviewed by the New York times where he stated: “Congress is under pressure to weaken our traditional barrier to combinations of commerce and banking, precisely the practice in Asian and elsewhere that we rail against as a major source of institutional weakness”.  This quote appears in Molly Ivins’ 4/1998 syndicated op/ed appearing in many newspapers country wide entitled “Mergers set new Stupidity Record”  (source)  Other stories critical of the repeal of Glass Steagal:- Wayne O’Leary’s op ed points out that Congress is ignoring painful historical lessons learned. Bangor Daily News, 10/22/1999 (link)
    - Christina Lewis in Harvard Crimson 11/1999 additionally draws attention to the shift in power to the wealthy despite the growing to income inequality.  (link)
    -There are many more such press stories appearing well before the bill was passed. 

    As importantly, there were published warnings about other critical aspects that caused the crisis.  Troubling concerns were expressed about Credit default swaps (Frontline- The Warning covered how regulator Brooksley Born was silenced).  Also well known were the weaknesses of the mathematical tools that stated the risks were far less than what they were. Edward Lorenz described the profound errors in prediction of such mathematical models of dynamic systems in papers published in 1963 and 1969. By 2000, he was well known and respected in the field, yet the warnings were ignored.
    I have no reason to doubt Reed sincerely believed there was unanimity in the Press regarding repeal of Glass-Steagal.  I have little doubt those engineering the default swaps and naked default swaps similarly marginalized the well known warnings of Brooksley Born.  The same for those constructing the risk assessment computer models.   Even in today’s world with a profound fragmentation of news sources that citizens may choose from based on their conformance to preconceived views, we as consumers of information are remarkably unsophisticated regarding epistemic traps.  Without honest self critique, our cognitive styles can easily slip into narcissistic patterns where we avoid or marginalize sources that could introduce cognitively dissonant information into our thinking.I know there is a reluctance journalists have about entering into a cognitive analysis of issues, but both Moyers and Reed said it themselves.  Not just one individual, but an entire system seemed to go insane.  Researchers such as Manuel Castells (Communication Power), George Lackoff (Political Mind) and António Damásio (Self comes to Mind) examine how the mind uses communication, frames and narratives to create self reinforcing patterns that can have profound blind spots.On another subject, those interested in Reed’s remarks about the failure of the mathematical models used would be interested in an expert in Wall Street risk assessment quantitative models, Nassim Nicholas Taleb, whose book about  ”Black Swan” theory gives a lay explanation of the philosophical and mathematical fallacies at play in the models at the heart of the 2008 meltdown.  Interestingly, Taleb also points to lack of a crucial lack of sophisticated understanding of our epistemic limitations.  

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    Where are the excuses?!  How am I blaming the puppet.  What are you talking about! 
    Is the puppet the front line mortgage guys?  Is the puppet the credit agencies? The guying multiple homes just to make money?  Because they were part of this.

    My point is that this financial crisis had many levels, and one of them was taking down Glass-Steagall.  That opened the door for some of the shenanigans, but that in itself didn’t cause this, it was a piece of the equation.

    Some seem to appointing Reed as the cause of this… when in fact he was a player, and there were many more that trumped him when it comes to blame. 

  • Bob O’Brien

    John
    Reed is most candid in his assessment of the current economic situation
    and what went wrong and remains wrong. The big issue for Citibank and
    the economy is how to back up from this disastrous path and clean house
    before additional financial crises occur. I believe those who have responsibility for the current economic system and
    followed us who built it are up to it but they better act quickly.

  • gina

    I agree that Mr. Reed has not suffered from his “exuberance” that left the rest of us paying the bill.
    However, the most disconcerting thing for me is Mr. Reed telling us that lobbyists and politicians are trying to reverse Dodd-Frank and then what is left to guard against future “exuberance” from bankers and lobbyists and politicians??????

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    The whole problem with your line of thinking, is that it is the same thinking that got us in the problem in the first place.  The Housing Market was over bought… it was at ridiculous and unsustainable levels.  It needed to crash.  Houses that were $400k are now $225…. that’s where they should be.   This whole idea of subsidizing bad deals is ridiculous.  Plus you underestimate the logistics of such an undertaking.  By the time you had a clue on what was going on, the ship already had a huge hole in it.   

    The problem with our economy, and why so many of us got killed in the stock market, or people lost jobs is that it was a leveraged economy centered around real estate.  Our Gov’t and the Feds realized our dependency on Real Estate, and did everything possible to keep the insanity going.  Interest Rates remained at all time lows, they allowed the mortgage industry to introduce new exotic loans.  Countrywide was offering pick your price… how ridiculous is that!  Yet, our Politicians pushed for this.   Because they fear any type of recession, they did everything to avoid one.  There were a huge amount of jobs connected to the real estate boom, plus you had people using their equity to buy things.  These two things were driving the economy… a false economy.  You take them away… and this is what you get. 

    I think the point that so many here miss… is that Real Estate was over bought!  The economy was over heated.  The Big Banks and Politicians were responsible for keeping the real estate market at full steam longer than it should of been, but it was due for a correction.  The correction was greater because no one put the brakes on the market. But it was due for a correction!    Let’s say the correction was  a soft lanfing.  The jobs would of still been gone… construction, realtors, landscaping etc.  Plus the equity that everyone was using to live their daily lives on would of still been gone.  It wouldn’t have been this overnight jolt, but the outcome would still be the same.  You have to get back on a level ground, with a proper economy.  Your plan would have done nothing, but kick the can down the road. 

    In 2006 the real estate market was already crashing, that is what made the paper drop in value.  Real Estate peaked in 2006…  the game was over at that point.  Speculation had already dried up.  The problem, was those last 2 years of loans (2004-2006) were at Real Estate Highs, to individuals that were placed into ridiculous terms. they were dependent upon housing rising.   It didn’t… because it was at the top.  Not the first time that housing had topped out, so a correction was due.  Everyone in the industry, including the Federal Reserve and our politicians felt the market would correct normally…. a “soft landing”.   The problem arose as prices dropped swiftly, and these short term interest only loans came due— the individuals that bought the last 2 years were the ones with less money, the worst credit, and a home purchase at the top of the market… not a good combination. 

    The problem was no one saw the complete picture.  The Banks knew they had portfolio issues, but they didn’t know what paper their competitors were holding.  The Credit Agencies are in the back pocket of the banks  And the regulators are not the smart guy in the room.  There were guys that seemed to see where all of this was heading… some of them spoke in front of Congress in the post hearings.  They worked with Countrywide, Citi etc., and were given the ax when they initially spoke up.  John McCain tried to get a Reform Bill out of committee in 2006… but it got zero traction.  Democrats & Republicans crushed it.  Congress did push AIG into the market because they began to see the issues…. AIG gladly wrote the insurance, feeling it was easy money.  They had no clue what they were getting involved in. 

    So no more kicking the can down the road. 

  • Greaymeri

    no!  not that way!!!

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    I thought a post of mine had disappeared, but realized it was because I had the posts sorted by “best rated”,  instead of chronological time.

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    What… consumer deposits ?  Consumer deposits have nothing to do with the equation.  They were retail banks, they already had them.      Glass-Steagall and the Financial Crisis had nothing to do with consumer deposits. 

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    Senate hearings already happened… maybe if more people paid attention something would of been done.

  • Fredlinskip

    Like your optimism, but there certainly seems to be a lot of mass hypnosis that occurs in America today…

    And not NEAR enough factual expos’e journalism like that which Moyers provides.

  • Piksnilderf

    Even if the “too big to fail crowd” had not been bailed out and had gone the way of Lehman, the real perpetrators would STILL have walked away with their mega- millions.

    Economies all over the world were looted by this crowd and now this same crowd promotes “austerity” as the answer for these failing economies.
    The irony is unbelievable.

  • Johnq789

    Money for money’s sake is not empty when you are $200,000 in debt.  Lawyers of the world, unite!

  • Phillip Vernon Bittle, Sr

    I commend Bill Moyers for his  interview with John Reed, both for his insight and remarkable ability to  suppress what must have been an overwhelming need to regurgitate.  I was sickened by John Reed’s transparently disingenuous attempt to explain away the Glass-Steagall
    debacle as some sort of spontaneous mass historic amnesia while claiming “the system made me do it …”  I don’t buy that for a minute!  Since I judge intent by result, it is clear that this was organized, willful criminal activity on the part of all concerned;  nobody with an IQ over room temperature could possibly have thought this was anything less than the planning and execution of the greatest bank robbery in the universe.  I find the idea of Mr. Reed now being with MIT, in any capacity, frightening to say the least.

  • David F., N.A.

    Excellent, excellent, excellent show!  Well it looks like you’ve outdone yourself this time, Moyers.  I’ve watched several shows that had briefly mentioned Glass-Steagall, but yours was packed with details that I’d had not heard before  (two year transition period…).  Plus, your presentation made it easy to understand what actually happened and who was involved.

    So what’s next, Chapter 2: CFMA…Chapter 3: Fannie/Freddie/Bush/Congress?  Whatever it is, I’m sure we’ll all enjoy it and learn something new.

  • Warren Ross

    I wonder how much John Reed made out of his Glass-Steegal overturn.  Did it help to keep that share price up as he discussed.  Everything is just a mistake. No, there was design here and people in the know became even wealthier.

  • Robert

    Thanks for the reminder, one speech should not make my hero, doing my job as a thoughtful citizen,
    I should be cautious, studying the whole man, his beliefs and actions; if history tells us anything, making today’s heroes, in haste, without investigation, can lead to disaster   

  • Margaretjcortez

    I am concerned about the role of money in politics like many other Americans, but what concerns me more is the changing role of people in politics from being public servants to being rich business people. When I hear the Romney camp talk about how he knows how business works and he can turn the economy around, well, that’s great; but, does he have a background in public service that works for all the people? OK, so he was a one-term governor, went on missions for the Mormon Church — those activities demonstrate some public service experience. Even so I don’t want a businessman in the White House — I want a public servant in the presidential role. This show reminded me that the loss of public service in the public sector is damaging our democracy. When Mr. Reed and his partner talked to the regulators about their idea to combine financial roles so that they could be a full-service, one-stop-shop on all matters financial for their customers, why did they not meet a wall of resistance starting with Alan Greenspan? Instead of having a public service mentality, Mr. Greenspan and the Fed and the Treasury lost the opportunity to stand up for the public or to even research the impact this move might have on the public. The President of the United States — at least in my view — is not required to know all the facts about everything in the world — that is why he has advisors and a cabinet and regulators. People who work in the government sector need to demonstrate a balance between war and peace, the monied class and the middle class, the rich and the poor. But they don’t and that’s a problem.
    Thank God for Byron Dorgan!

  • Anonymous

    The middle class is suffering the consequences of the  enormous gains in wealth that individuals in the upper rungs of  financial industry are enjoying.  I don’t believe that Reed and his cronies in gov’t  and on Wall Street were unaware that this would happen.  They make decision based on sophisticated mathematical models, so answers to all the what-ifs are available.  In their view, “Let ‘em eat cake.”  This is not the first time that derivatives blasted a big hole in the economy. Washington and Wall Street swore we learned from the mistake. But in truth, government conspired in masking the risk, thus making the gamble more attractive to those inclined to cautious honest investing.   They turned the world economy into a high stakes poker game — literally betting the mortgage money (other people’s of course) on what they knew was worthless collateral.  It’s like covering a bet with a  ”$10,000 Rolex” that you know is a knock-off you got on Canal Street.   Reed’s interest is not “reform” or repairing the damage that he caused.  He’s trying to give the appearance of contrition. (Notice that in true sleazeball fashion he shifts the GREED motive to Sanford Weill.)  Reed’s sincerity is questionable even when he expresses surprise that the present administration is still taking advice from  greedy Wall Streeters who got us into this jam. Reed is just  spraying political stink on Obama to  advantage  GOP contenders.   I continue to be shocked that Bill Clinton (grinning as he signed the repeal legislation) was such a willing accomplice in this caper. It’s been  devastating to middle class folks on a global scale, destroying their financial security and slitting big holes in the social safety net of the poorest among us. 

  • Anonymous

    Would you suggest we not rid ourselves of Davis-Bacon?

  • http://pulse.yahoo.com/_V7DYEQD4ULMVFAQ2AS44NWBEBY Patrick

    I don’t disagree with your premise, but Clinton’s actions were more in the lines of public service, and he is as much culpable as the Big Banks.   I hope Bill goes into more detail on the relationship of the Democratic mindset of allowing more people to share in the American Dream… Home Ownership.

     The Big Banks were on one side of this fiasco…. Glass Steagall being gone allowed them to be part of it…. but someone was pushing the train.  Once the Fannie Mae/Freddie Mac involvement is explained, maybe all those that seem to think Reed is the Bogeyman will realize there are many others involved.  They were not alone in this.   The Democrats pushed for 70% home ownership…. and changed the rules for it to happen.  The jump from 60% to 70% is the surge that has crushed us all.

     The whole economy was a false, leveraged economy based upon unsustainable home levels.   Gov’ts were enjoying the increased tax revenue, individuals were enjoying what their increased equity could buy, homebuilding was ramped up to keep up with this new demand, companies were enjoying increased sales because everyone was spending, and the banks were making a mint off moving the loans. 

    So now in the aftermath, Gov’ts have to figure out how to offer services with less tax revenue, individuals no longer have their equity to support their lifestyle and many realized they got in over their head, their is a glut of homes on the market… driving prices down, business have suffered because of less spending, and the Big Banks seemed to come out unscathed.  Under Obama Big Bank Profits greater in the first 2.5 years than the 8 combined years of Bush.  (Mainly due to the free money of QE1 & QE2).  The 3 Chief of Staffs that Obama has had, all tied to the Investment Banking Industry. 

    Nothing has changed.

    The Big Banks mindset was to make money, and maybe the mindset of Clinton, Rubin, Cisneros, Frank, etc. was for a public good…. but their actions share an equal amount of the blame.

    What is most disturbing in the comments, is that people seem to be focusing on this segment as the reason it all happened.  This is 1 piece of the puzzle.  Reed sat there in the interview and was very forthright…. a fascinating interview.  The honesty was amazing.  He gave so much information…. yet everyone seems concerned that he was not contrite enough.   Seriously $15M is not a big number in the business…. not to mention the subprime loans didn’t start until 2004. He was gone in 2000. Yes, Citi wanted to be a player, and he helped them get there… and I am not defending him…. but let’s keep a little perspective here. Use this interview to get some knowledge on a subject that very few seem to have a grasp on…. but realize that it is only a sliver of the story.

  • Outsider

    Totally agree. We always refer to the institutions when we should be naming the individuals taking decisions, and this happens all over the globe. 

  • heathrose

    At 27:15, John Reed says management, board and regulators should have stepped aside.  In the piece as aired, you are then shown asking a question veering immediately from the cardinal questions of culpability and punishment, including removal.   Why?   Are they on tap for a future discussion?

  • Anonymous

    John, you are a truth-seeker and a well informed commentator. You pose many useful questions for the rest of us to examine. Thank you for the effort you’ve shared. Yours is an uncommon generosity these days. Please continue schooling us.

  • Anonymous

    Dorgan is working as a lobbyist on K Street now. No joke, and his spouse is a career lobbyist.

  • Anonymous

    Disqus can be confusing as we switch the button for various que preferences, but, even though moderator Ms. Riley told me once that nothing except violating posts would be censored here, there are inexplicable anomalies  which suggest trigger happy moderators are at work. I do not mind so much my silly comments disappearing for that saves me embarrassment, but when ideological outliers are disappeared it distorts the tone of our discourse. It is true that when one controls speech of individuals that one can steer the conversation. Moyers&Company owns this site, and we do the commentary work. In a way they employ us as volunteers. I’m sure that many well-meaning people here have been asked to leave by charity outfits when we did not advance their agenda.  What administrators often fail to realize is that it is we volunteers who should set the agenda, and that we are perfectly capable of ignoring those who displease us or harm our mission consensus. 

  • Anonymous

    I’m sorry there are no mirrors in your home. Maybe you could go out an peer into a puddle.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    You put it very well Phillip.
    Those who have commented on Reed’s ramblings as being commendable should do some personal investigation into the degree that they are ‘brain-washed’ lumps. Either that, or merely stupid lumps.

    Scroll on back to see my post which from 3 days ago that agreed with you with different words.

    I’m truly sick of how these criminals are afforded a platform to spew their self-serving LIES by so-called ‘journalist’s who are nothing more than self-serving stenographers who are too afraid of losing their incomes if they were to dig in and expose the frauds these people are, including all their bought and paid for people in Congress and other seats of power.

    TRUTH and truly free speech comes with risk that only the truly COURAGEOUS have in them either innately, or discover in themselves through the experience of living.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    David…

    What is next is TOTAL ECONOMIC COLLAPSE both here and around the World with starvation, violence and death until all the debt is realized and eliminated in one form or another.

    There is NO FIXING this without paying for it in one form or another, either financially or physically.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    Patrick…

    The exorbitant bonuses, stock options and other forms of executive compensation are nothing less than BRIBES the boards of directors pay the stooges they hire to ‘run’ their companies to keep their mouths shut and not expose the fraud.

  • http://profile.yahoo.com/NKX3DIU3ENLMAAKZN2YBJBVWJM Cedric Ward

    heathrose…

    Very observant of you.

  • Robert

    Really!!!!!!!!!
    FOOLED AGAIN
    thanks

  • http://www.billmoyers.com/ AnneLBS

    Hi gradyleehoward,

    Our intention is to keep content, and edit or remove posts that contain personal attacks and hate speech.

  • suejazz

    I completely agree. Reed did everything except say “I’m shocked, shocked there’s gambling going on”-the oft used line from Casablanca. His statements were extremely self serving and I was disappointed that Bill, whom I adore, was so gentle with him.

  • Keyser5632

    Dear Mr. Reed,
    Would you be willing to campaign for the complete reenactment of Glass/Steagall?

  • Gail

    I have always liked, felt comfortable, with Bill Moyers, I am so pleased he has his own “backed” show now & that it is available here! What a sad problem we have with un & under-educated America; so very few of the (unwealthy)understand the “Power” behind the thrones of not only America, but of the world. Most of “us” do not strive for wealth or even waste our precious time dreaming & wishing for it. What we do strive for (especially since our rude economic awakening) is a government we can trust & leaders we can be proud of & a man of “our choice” running & being elected, by the people, with no corruption, dirty money, etc.  involved. We must go back many years to find that & it expands with each on-coming election!  The Americam “CITIZENS” are fighting now to keep from drowning in these vile conditions. They have progressed to actual fear to speak our minds freely without the heavy hand of a corrupt system. Educate your children people!, see to it that they are involved from early ages so they do not lay back & allow themselves to be manipulated to the death of Democracy, as our generation has! We allowed this by our own blind trust & inactivities. But it is ner too late & we have great help; Amy Goodman w/ LINK  TV & all their Associates, men like Bill Moyers & his backers, etc. etc. Show our support & our thankfulnes by  learning!    Look & Listen & Fight for right.  And hear what Ron Paul is saying!!
    And may God Bless & Protect Us All as we join together to take our Country away from these greedy, uncaring & ultra wealthy people!

  • RJ

    Wow. Mr. Reed still doesn’t get it. And has a short memory. Guess who created low doc/no doc mortgages? Reed’s people in the late 80′s, the last time Citibank almost went down. Guess who created a credit scoring system that was very predictive of mortgage performance and was instrumental in repairing the business proposition? Reed’s people in risk management. In point of fact Fannie and Freddie used that model to value tranches of loans for sale at one point, so their memories are a bit flawed as well. And guess who ignored that predictive model that seems to be part of the problem according to his responses? Pretty much everybody, worst of all Citi, who needed only to talk to the consumer risk managers who still have that model and could easily upgrade it to attach a value to all those loans. Essentially across the hall in the SAME organization. I was there, and watched 900 of my 2700 associates lose their jobs in our downsizing. $3 billion later the bank was back on its feet. And repeated the same mistake, while watching the entire market do the same this time around. You needed better questions Mr. Moyer.   History repeated itself. Ask Mr. Reed about that the next time you see him.

  • Dsolara

    First of all, the so called “orgy of greed”was also a middle class issue. Any person that does not fully understand borrowing money from any person, institution etc. deserves what they get. I was raised that you work hard you put down 20% on any loan and understand what your monthly payment would be and how it affects your budget. Maybe that was just how I was raised. We are all to blame. My house has lost value. I purchased in 2009 but I pay my mortgage on time, put money away and have kept my job by doing what needs to be done. We all need to stop, find our own solutions and move forward. Government does not know how to resolve this. We individually and together must do this. Stop crying, time to move on. Work- China is.

  • Anonymous

    Grady,
    I would not want my kids to gain money at the expense of other people who were more or less victimized by the antics of the banking industry. The banks did what amounted to betting on people losing the homes that the same bank bent the rules for so those people could buy houses they could not afford.
    Mr. Reed probably earned the $3 million bonus he had been getting but even he was shocked that it jumped o $15 million!

  • Warren Ross

    And I assume, by the quality of your writing that you received a pretty good education.  Aside from doing what needs to be done, this education helps to keep you in a job.  Many people haven’t had such advantages. Good on your parents and good on you.  Those who haven’t received a good education make up much of 40+ million US unemployed.  We can take the view that whatever happens is our fault. That we are in perfect control of our destinies. For the successful this is gratifying. For those less so it a source of discomfort and for those at the bottom of the economic construct it is a sure road to neurosis.  This is well explained in by Barbara Ehrenreich in her “Smile or Die” where she explains how cirumstance is removed from much social reflection in US media.  It leads to a very judgemental population.  Joe Bageant in his “Deer Hunting with Jesus” describes many Americans as “crazy as sh..house rats” and puts much of this down to their education or lack of it.  In short, some things are damn wrong.  What happened in the sub-prime saga was wrong.  We shouldn’t blame the person who hadn’t the literacy but had the desire for a better life.  It is Government’s job to protect the vulnerable, yet as we saw in the above interview they were betrayed. Let’s not add to this wrong by claiming it was their fault.  It is most definitely not time to move on. It is time to down tools unitl the 99% is cut a better deal.  This starts with a good publicly funded education system.  By the way Bageant, set the US working class at 66%. He argued many who prefer to elevate their status are kidding themselves.

  • http://twitter.com/JLAssociatesLtd Private Investigator

    Private Investigators* We have always known how corrupt our political & financial institutions are, making it public hopefully will wake up this country…Good job Mr Moyers     http://www.Corporate-Investigators.com

  • Sis77susan

    …and how rich are the politicians that expedited this? (And what role did John LaFalce play?)…

  • Jorge Quarleri

    No va a existir nadie tan brillante en Citibank……  lamentablemente hoy en día está en manos de mediocres …. una lástima.. Mi admiración a John Reed y Bobby Gamarra. Idolos indiscutibles como Maradona y Messi.
    Jorge Quarleri ex Citibanker.

  • greenback

    What a bunch of apologetic, whitewash nonsense. There was a clear conspiracy from the FED down to the giant commercial banks to run the biggest ponzi scheme bubble in the history of the world. The bubble was the US economy itself and it is about to collapse. These bankers need to be hung for treason. They’ve destroyed countless lives and ravaged our nation. They are the enemy.

  • Lweisberg1

    Sandy Weil would be a great “get”, even if he spent the entire time defending his actions. He’s gone underground. Or how about Bob Rubin? Greenspan, who deserves much of the blame, at least admitted to mistakes in front of Congress.

  • PTarr

    That is precisely what makes this Moyers interview and the prior one w David Stockman so powerful: they allow  the individuals to reveal themselves.  What makes Moyers superior is that he understands his role is not to play gotcha or elicit tearful mea culpas.  John Reed is arguably John Reed and did what John Reed did, or agreed to do, in that deal with Sandy Weill, precisely because he is coldly calculating, or perhaps a tad more sympathetically, simply calculating.  Errol Morris’s extensive interviews w Robt McNamara were revealing in the same way — McNamara wants to say he did wrong, but cannot quite bring himself to a point most people in the audience probably want him to come to.  You feel that like McNamara, John Reed would have made the same decisions if the clock were rolled back and he had another go at the same opportunity.  He is now able to see why things went awry, but he isnot able, as you point out, to emote about it or feel deep empathy with possible victims.  He simply identifies an error.  That analysis is very satisfying to me, in the sense that I now have a sense of how one big player in the Glass-Steagel drama rationalized his decisions at the time.  Now, let’s ask Bill Clinton — how about it?? 

  • outraged citizen

    True enough.  Still, it would have been even more revealing had Moyers replied, “You do understand that people lost their homes, jobs, life savings, and some, even their lives, don’t you?”

    Reed’s response to that sharp-ish question would have been even more revealing.

  • Evebudai

    dear bill   love your show.  esp. this one.   yvonne budai   ps welcome back bill from a canadian friend

  • ARthur R. Flew

    I still think John Reed was and is one of the best executives ever. He admits his mistakes and is willing to learn. Sandy on the other hand, took a great bank and drove it into the ground and he still can’t admit his erroneous thinking.

  • Free Market Socialist

    Actually, yes the FDIC did stop crises.  It was created after the Great Depression as part of the Glass-Steagal Act to prevent banks from vanishing with folks money.  You are obviously ill-informed about the history of the banking system.  
    I’m not sure what you are referring to in the 70′s, but if it’s inflation that was largely due to the US leaving the Bretton Woods Accord followed shortly by an oil embargo from OPEC.  
    Again, not sure which part of the late 80′s you’re referring to, but the S&L crisis was brought on largely by …. (wait for it) … poor banking regulation!  And the Tech bubble?  Well, that was everybody and their cousin speculating on dotcom dreams.  I don’t recall any banks getting bailed out on that one.

  • Macraigtech

    This is outrageous!  H0w can Americans expect a fiar deal when this kind of underhanded back door dealing is going on? 

  • Nkjmorrow

    Sure  Grady  I’d like my son to get the $15 million bonus but that’s exactly the problem…because of human nature being what it is. That is the reason why we need regulations, laws, moral coercion etc. to ensure that the strongest and greediest of  us don’t get more  then the fair share.  Fair share should be on some kind of  sliding scale, so if I invested more time, effort, risk  etc. I should be “fairly” compensated for that but not at an undue cost to others that have also contributed.
      

  • My Golly

    Brilliant segment; Mr. Reid should be an Obama advisor.  I DVR’d this and cannot stand to delete it!

  • Debandem74

    and so will this Glass Stegall act be reinstated??

  • Anonymous

    We hear a great deal today about saving the middle class and very little about saving the lower class. My life’s experience has been that the bulk of the middle class became middle class by providing goods and professional services to the lower class: people like me. The cost of those services has wiped out the lower class person’s ability to participate in the culture. And that is the real burden that our society of cultures is suffering.

  • Anthonygusa

    I was there when it happened, my heart sunk that day as it was easy to predict that Travellers would destroy the greatest banking instiution in modern times.  John was a sensible, if not intellectual banker, who changed banking in a psoitive way, much like he refers to Gates and Jobs.  He was essentially the father of the ATM.  To see him admit to mistakes is a testament of his integrity, Weil on the other hand was always just greedy and could care less about his actions and how it effected others, as ong as he got richer and richer.

  • Joan Adam

    Bill Moyers makes incomplete, biased statements.  Right off the bat, Bill Moyers taints himself when he speaks about the money Vikram Pandit earned.  What Moyers fails to mention is that for two or three years, Pandit earned only a dollar.  Pandit only started taking a salary when he got the bank back on its feet.   And Moyers leaves out information that could balance the discussion.  An example is the $12 billion the bank paid the government for the loan itself.  While these points were not the basis of the discussion, they remind me why I haven’t  listened to Moyers for years.  I can’t trust him to give me an honest, balanced viewpoint.  Reed was excellent, as always.

  • Sam in Texas

    I think you missed the point of the disclosure of Pandit’s compensation.  The point is that the $1 token salary is completely misrepresents what Mr. Pandit’s actual compensation was for the past 3 years.  And, this is the very point, that many a corporate executive receives much more compensation in stock options and benefits than is actually reflected in any salary that the corporation may pay her or him.   That Pandit made such a show of receiving only $1 in salary hid the fact that he wasn’t just getting $1 a year.  And, sure, you may add “well, his actions led to the success of Citi, so his stock options were earned”, unless, or course, you are aware of the fact that he received preferential stock options as part of his deal.  In other words, Mr. Pandit was never in danger of starving, or earning less than a couple million at any given point.   This is not a “biased statement”; it is a statement of fact.  

    Also, I’m not quite sure what “the $12 Billion  the bank paid the government for the loan itself” refers to.  Citi, along with a host of other corporations, received emergency funding from the government at the beginning of the 2008 Financial Crisis.  Citi paid back that portion of the TARP fund from which it received funds in order to avoid some of its restrictions.  However, as was disclosed by Bloomberg News a few months ago, they are receiving tens of billions in additional support and funding from the Fed.  

  • Sam in Texas

    John Reed still doesn’t seem to have fully come to terms with the fact that Glass-Steagall would actually have prevented the 2008 crisis, merely because it would have prevented the outrageous concentration of money and power in the hands of a few corporations.  CitiBank, Bank of America, JP Morgan Chase, would not be the monoliths that they are, would not have been able to force smaller competitors out of the market, nor would they have been able to dominate the securities markets if they weren’t able to gamble with depositor’s money.  AIG never would have been able to play with the investment banks.   

    Also, most people seem to have forgotten that, while they have no depositors, Goldman Sachs is now a bank, with access to the Fed window, and thus is able to gamble with taxpayer money.  Glass-Steagal would have at least forced them to choose what kind of institution they wanted to be.

  • Sam in Texas

    In short: nope.  Or, not until we can kick out all the bums, so to speak.  And, unfortunately, having a candidate run on something like reinstating Glass-Steagall seems to be a non-starter with a woefully uninformed electorate.  

  • GradyLeeHoward

    So you’re showing us that banker weasel (public figure) bragging how he bonused $15 million a year for defrauding us all one more time. What happens when you’ve re-run all six episodes?
    Do you start a third round?  Are you celebrating National Lazy Days at Public Affairs Television or can we have a sniff of what’s cooking? I’m going to Europe Monday and you better have fresh veggies for me when I return April 2nd. Get the re-hashing out of your system.
    Suggestions: Interview Neil Shea. Interview Jeremy Scahill. Let people hear Matt Taibbi talk. Grow a backbone. Remember- I like you, so here’s one last chance.

  • GradyLeeHoward

    You have a high class intellect.

  • GradyLeeHoward

    Obama considers Reed a spider monkey compared to the 800 lb. financial gorillas already on his team.

  • GradyLeeHoward

    We need to nationalize big banks, restructure the debts, and spin off healthy smaller ones. If   Mitt Romney were not an irredeemable megalomaniac crook he could do that for us, but he is and always will be. Obama is in their pocket. Glass-Steagill is s-o-o 1930s! Aspirin don’t cure brain cancer.

  • GradyLeeHoward

    Not with our woefully un-moneyed electorate.

  • GradyLeeHoward

    No, Bill. Don’t discuss “Pandit’s money.”
    People will call you envious.

  • GradyLeeHoward

    Know what, I’m tired of rehashing and I want some fresh veggies by April 2. Six episodes in two months is shortchanging your loyal audience. Hearing a second time  how John Reed bonused $15 million a year while sitting on his hands demoralizes people and does not move them to action. 

    Suggestion: Interview Neil Shea. Interview Jeremy Scahill. Let people see what Matt Taibbi looks and sounds like. The wars are the rottenest thing this Empire does. Maybe someday you can interview jailed journalist Abdulelah Haider Shaye about how President Obama called Saleh in Yemen to keep Shaye  silent on US bombing of civilians. 
     
    Or then again you could just censor this post. I think I’ve discussed that option with you often enough. Show what you’re made of.

  • GradyLeeHoward

    Your theory is far more plausible than John Reed’s testimony. The Meltdown Extortion was the second act of a fascist coup (9/11 inside jobbing and related warmongering and suppression of rights was the first half) finally corporate puppetizing the Federal Government.

  • http://www.billmoyers.com/ AnneLBS

    Hi GradyLeeHoward,

    Good news, fresh, hot episodes being served up next week! Thanks for watching.

    Best regards,
    Anne

  • Anonymous

    Anne: Thanks for making me an integral part of your promotional effort. Let me guess: Mike Daisy will appear March 24th doing a monologue about how he punked “This American Life.”
    I hope not, because one would have to be way gullible to believe most of the cutsie tales Ira Glass chooses. Consider this: With the mixture of creative arts and hard news issues filtered through a small production team Moyers&Company shares many positive elements of performance art. It is often attacked in many of the same ways by authoritarian elements calling the content degenerate. Culture and information combining to perfect hearts and minds is always threatening to entrenched vested interests. So go back to what you were doing and don’t mind me. But be extremely careful and think several moves ahead. This Spring, the American Spring, is going to bud some thrills and spills, and hopefully no new nuclear mishaps.
    (Why are the 6,000 daily hits on this sight almost silent, nearly invisible?)

  • Anonymous

    Vikram Pandit (rhymes with bandit) “earned” this money? There’s a textbook example of a biased statement. It’s comical envisioning costumed ringmasters getting zombie bank behemoths back on their feet. TBTF doesn’t have a leg to stand on without “the full faith and credit of the laboring American People.”  And yet these parasites persist in abusing their rescuers. Joan’s fantasies are evaporated by cruel enquirer Bill Moyers. She cannot bear to watch. Quick-turn back to “The Bold and the Beautiful.”

  • Anonymous

    Laws don’t prevent crimes and conspiracies, but provide a basis for punishing misdeeds.

  • Anonymous

    A close appraisal will reveal Gates and Jobs as no net benefactors of the public good, despite the best efforts of their press agents. Anthony, by “I was there when it happened,” do you mean at an ATM in downtown Hartford? Or do you mean that you share the blame for failing to oppose the merger?

  • Anonymous

    Yes, i do mean sight, as in “my second sight.”

  • riquesuave

    Thanks Mr. Moyers for your program.  I am surprised that nobody is suggersting that this man should be in jail.  Mr. Arthur Flew, speak of Reed as if he is a hero but you never suggested that he should be in jail.  Hence the problems has the potential to continue in our future and with those possibilities will come the destruction of whole societies and the people that make them.  

    Mr. Moyers I think you missed one important question to Reed and that is, “Do you think you should be in jail at this moment?”

  • david

    as poster children and average investors, my beautiful wife of now 30 years and i sat watching the evening news in november ’99 as president clinton and company overturned glass-steagall. in utter disbelief and to this very day, i remember saying; ‘within a decade, banks will fail as a consequence of this horrible decision’.

    and here we are early in the decade after that decade as we work our way out of this calamity.  glass-steagall’s death started for us an obsession to look constantly and think deeply about leadership.  leadership is failing us–top to bottom–and that rate of failure is accelerating.

    how have we fallen so far that practical, curious, middle class couple can sit in their homes and know better than their president, their congress, and their business leaders about governing and commerce?

    my contempt and indignation are complete and rooted in facts on the record for anyone, for everyone, to review to their complete disbelief.  we are leaderless.

  • Carolynduanelacy

    I listened with great appreciation what John Reed had to say about the financial dilema, but was sad to find that the recording froze at 35:32. I hope this can be remedied so I can hear his final remarks. What courage he has to be so forthright!

    Carolyn

  • Karl Hoff

    From all this I can see why we have had no visitors from other planets. If they came here and hovered over the US, and observed, they would say: Look at that, about 397 million people with the skills and good working attitudes are being controlled by 3 million people living in an orgy of pleasure seeking, and get this, they are still being supported by the 297 million that keeps them in power…………….and then they turn around and go back to their planet!!!

  • Bill

    Dsolara, I sincerely hope you don’t lose your job. You have been taught how to handle your money, prudently and thats a good thing. The orgy of greed as you put it was done at the top, by institutions that control our nation and our every day business, and our every day lives, and you forget about all the people that did things right, and still lost all, it seems that you haven’t     been touched by the carnage yet, just hard work alone wont pull us out of this depression we are all in. So i guess we will all see how this mess shakes out, good luck Dsolara, hope you stay lucky.

  • Bill

    Margaret, you are right on, we need folks like you to run for public office, just hope you have the money, no money no electy, thats how we elect now, its who has the most money to advance the monies ideology.  Not who will be the best at helping EVERYONE, not just the folks that can afford it.

  • F P Harrigan

    Unbelievable! 
    Mr. Reed’s naiveté that the people who work for big businesses are not
    concerned with getting rich is dumbfounding!  Can he be that “innocent?”   He can’t
    believe that lobbyists are trying to keep the repeal in place?  These people are not small business
    owners.  If they were concerned with
    their customers, they would be happy with what they have and realize the level
    of greed and narcissism they exude when they are making tens of millions of
    dollars for themselves while wiping out meager savings of their clients.

     

    MIT should be ashamed of having such an obviously
    uncomplicated individual associated with it.  He was obviously a yes man and a simpleton working for the
    federal government who took the bait – hook, line and sinker – from the much
    more savvy businessmen bound on making themselves rich.

  • UniqueDesigns

    Questions indeed. How about something better than softballs. How about, why shouldn’t he give us a list of everyone who made profits and bonuses even when they screwed up? Why shouldn’t he be prosecuted? Come on Bill, your tougher than Diane Sawyer, aren’t you??

  • http://profile.yahoo.com/4WTE5BUSEQVUOA7O4MSL2C72IQ dadba

    you are so right!

    I blame Clinton most of all for the 2008 collapse, Phil Gramm lead him around like an ox with a ring in his nose.

  • http://profile.yahoo.com/4WTE5BUSEQVUOA7O4MSL2C72IQ dadba

    If I recall in the interview Mr. Reed stated he had already left his position as CEO @Citigroup around the year 2000-2001 but was still an insider.

  • Virgil Starkwell

    It’s good to see that Reed only took 13+ years to figure out something that many of us knew years ago.

    The enemies of the United States of America are located right here in Manhattan. And contrary to popular myth, they aren’t Muslim.

    We’re still waiting for the perp walk….thousands of white guys in blue suits.

    We’re still waiting…..

  • Anonymous

    UFB. It’s a model of fascist economic policy hand down.
    Corporate interests over and above ANYONE else.

  • dfat

    what a bunch of hogwash JReed…
    wondering what the lobbyist action was like back then,prior to
    the repeal of  Glass-Stegall?

  • lee w.

    (not)breaking news…

           finance plus poltical system  > greed

  • Oneshoewoo

    Here comes round ll. House scheduled to on Republican Jobs Bill 3/20/2012. Rolls back all regulation. Dems have signed on already. Read: Huffington Post. View: The Take on Youtube.com. Story of laissez faire capitalism unleashed on the peoples of Argentina.

  • Richard A. Lawhern, Ph.D.

    This is a horrifying story from many points of view. But even this story is one element of a larger picture.  The demise of Glass Steagal was engineered by politicians who were to all effective intents and purposes BRIBED by political campaign donations from a tiny number of super-rich families and their corporate interests.  This process of greed is continuing.  It is  perhaps most obviously visible in the refusal of the Republican party to embrace tax increases on billionaires, to help reduce the Federal budget deficit.  But neither party is free of taint.  Most Obama administration economic advisers and operators be should now be serving 20 year sentences in Leavenworth Prison for grand larceny or fraud, rather than dancing through the revolving door back to Wall Street.  These people were rewarded with millions of dollars for willfully ignoring the scams being worked in the financial derivatives industry from 1998 onward. And they KNEW what the results would likely be for the US economy as a whole.  

  • Karl Hoff

    Excellent view. Isn’t it strange that so many people will complain that government is bought and still thinks that giving money to someone that says they will fix the problem of politicians being bought can’t see that’s the real problem. If everyone did as I do and that is to never give one cent to anyone running for office, everyone would really know who is supporting them.  Also, I think 20 yrs. may be too short. They may be young enough to get out and do it again!

  • Dnadanyi

    I would love to hear from Jeremy Scahill.

  • Dnadanyi

    What do Rubin and his ilk do with all the money they got by manipulation.  Do they buy countries?

  • Dnadanyi

    Dsolara
    You are to be commended for being prudent but you are also lucky. People who had to invest because they did could not llive on Treasury Bonds were hurt financially because of the Mortgage company and Bank greed etc.  My daughter lost her job becasue of a merger and then got a job a year later at a much lower salary.  She has done everything right got her MBA  from Darden and always worked.  My son lost 80,000 because he was promoted, had to move and there was a forclosure in his neighborhood. My friends daughter’s husband went back to school to get his law degree.  His wife worked.  They bought a house at the top of the market.  Got a job and also studued tax law. Also had 3 children.  Guess what he lost his job,  Then his wife who was able to work from home was told she could not due to a merger.  Two people no jobs,  Had to sell house at a loss move in with parents.  Then there is my friends other son who has bills from law school but NO JOB. Working at a golf course.  This is what these greedy ——– have down to our citizens.  Just thank God you have not been harmed as so many other who did absolutely play by all the rules. And then just think about all the retired people who would have normally helped their grandchildren with college.

  • Dnadanyi

    Dsolara
    Read my respoonse to Bill. It was meant for you.

  • Unsanitorial

    They buy up fertile land and water rights in countries where residents are starving and thirsting. Making necessary things scarce is extremely profitable. That’s another good reason property rights should be conditional, that no one should own more coats than he can wear, or father more children than can be fed.

  • Unsanitorial

    I hear from him on other sites.
    Are he and Bill Moyers incompatible?
    He writes in “the Nation” and is a Democracy Now correspondent.
    He’s ready for the big league.
    He ain’t no (Mike) Daisy!

  • Unsanitorial

    Like a yard dog he kept returning to the kitchen for more kibble. Such a good pooch, he’d never raise his leg in a bank.

  • Unsanitorial

    If five million people send you a dollar you are empowered.
    If one billionaire sends you five million dollars you are enslaved.
    Discretion, moderation and wisdom….. not greed, are leadership traits.
    But our system won’t permit that.
    So we have 100 million Karl Hoffs with no means of money expression and managed procedural 
    deMOCKcrazy. 

  • Karl Hoff

    So true what you say.  If I came into a lot of money, I would still not give one cent to anyone running for office, but that wouldn’t stop me from using that money to speak out in favor or against anyone running for office. Also, if I came into a lot of money I would use it to buy something I have always wanted………a World where no one does without and a World where greed is replaced with kindness and responsibility. If people just sent me money, I would not accept it. If I haven’t done anything to earn the money, I would be no different than those I am trying to stop from getting the power to control us with the idea that just money gets things done. If you took the money away from those that are glowing with the power and fame of money, gotten from inheritance, investment or profits from working people, they would shrink to the shadow of a puff of air on a moonlite night. Thank you for replying.

  • Anonymous

    Exoneration of former President Clinton would be unfair in not forseeing how dangerous ending Glass Stegall was for consumers. But who knew that sticky fingered bankers and advisors had so little integrity as to steal and embezzle from their clients? With bankers, brokers, and advisors like this, who needs them? No signs of relief shows just how important Glass Stegall was to America, and to other nations, all of whom are now on the brink, and all by self inflicted greed and lawlessness.

  • Freedom

    Stop voting for the corrupt officials and I know to many of you this will sound extreme – turn off your television cable / satellite don’t continue to be bombarded with commercials that are the main culprit in complicity to the bribed and corrupt politicians. Obama is the black face for foreign affairs and a con artist who says the opposite of what he does and don’t think Romney will be any different. Boycott Zionism , disinformation, and like our forefathers we need to shift the power back to the people.

    Whether sought or unsought Eisenhower warned us of the military industrial complex overstepping it’s reach in power. Acknowledge, educate yourself, fight back – protest, get out and educate your fellow americans of the tyranny at bay!

  • Brad

    Then you don’t understand the basis for law. Unless you’re a psychopath, it absolutely prevents crimes.

  • Brad Leech

    I would add “Rogue Trader” with Ewan McGregor. Even though its a docudrama it is based on a real person who nearly brought down the entire Asian market by his own actions. That happened well before the US crash and should have been a warning. No markets should be so vulnerable.