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BILL MOYERS: Welcome. This past week, Jamie Dimon, CEO of JP Morgan Chase, was back on Capitol Hill, testifying before the House Financial Services Committee, as he had earlier done before the Senate Banking Committee. He was being questioned on how his bank had lost two billion dollars -- or more -- on risky trading. His reception in the House was less fawning than what he got from the senators. Although many of them also are beneficiaries of JP Morgan largesse, House members were more combative.

BARNEY FRANK: You said you have a fortress balance sheet. That assumes there's something special about the way you are that made us have to worry less. But we can't assume that's going to be the case for every financial institution.

JAMIE DIMON: But I also said that we'd be solidly profitable this quarter. So relative to earnings–

BARNEY FRANK: That's not the question. Mr. Dimon, please don't filibuster.

SEAN DUFFY: You didn't know about these trades. You didn't know about these losses. How do you come forward today and say the regulators should have known that -- what one of the best CEOs in the industry didn't know and couldn't have known?

MICHAEL CAPUANO: With the regulatory regime that we have today -- we both agree that it's not what we want, but it's what we have. Do you really think it's a smart idea to be cutting the legs out of one of those major regulators? Do you think that's good for America?

JAMIE DIMON: I have enough problems. I'm going to leave that to you.

MICHAEL CAPUANO: Well, Mr. Dimon, the only reason I ask is because you have had no hesitancy whatsoever in expressing opinions on other matters. I thought you might want to take an opportunity to express one today.

BILL MOYERS: Coincidentally, just before Dimon’s House testimony, Bloomberg News published data indicating that JP Morgan Chase receives a government subsidy worth about 14 billion dollars a year in taxpayer money.

Money, said Bloomberg editors, that “helps the bank pay big salaries and bonuses, and more important, distorts markets, fueling crises such as the recent subprime-lending disaster and the sovereign-debt debacle that is now threatening to destroy the euro and sink the global economy.”

With me are two guests who can guide us through the thicket of testimony and beyond. Matt Taibbi, contributing editor at "Rolling Stone" magazine, has investigated the folly and corruption of banks and government with scathing, often profane wit and perception. His book, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America, described the events leading up to the financial meltdown in 2008. His newest piece for Rolling Stone is a chilling expose called “The Scam Wall Street Learned From the Mafia.”

Yves Smith created and runs Naked Capitalism, the popular blog on finance and economics. She once worked for Goldman Sachs, McKinsey & Company, and Sumitomo Bank, and now heads a management consulting firm. You'll want to read her book, ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.

Welcome to both of you.

YVES SMITH: Thanks so much.

MATT TAIBBI: Thank you.

BILL MOYERS: So in this particular case, what is JPMorgan's sin? That's the question Representative David Schweikert raised on the day of the hearing. He asked, "What sin has JPMorgan committed other than being big enough to lose billions of their own money in a quarter and still turn a $4 billion profit?" Want to take a stab at answering?

MATT TAIBBI: Yeah, sure. Their sin wasn't the loss. The sin was in being a too-big-to-fail company where we can't afford to have them go under. Why are we there in the first place? If this was a company that, if it went out of business, it wouldn't affect our lives personally and wouldn't have major ramification for the economy, we wouldn't be holding hearings in the Senate and the Congress.

We would say, fine, they lost so much, a bunch of money. Too bad for them. But that's not the case. As we saw in 2008, when these companies go down, we all end up paying for it. You know, we ended up financing of, what, five, six, seven trillion dollar bailout in 2008. And if a company like JPMorgan Chase goes under, there will certainly be some sort of federal action, which is why we have to know about it. We have to know what goes on when they have unexpected two, three billion dollar losses that affects all of us.

YVES SMITH: They were guilty of gaming the system. And the way that they've done it is this unit was using depositor money and yet taking very large bets.

And in this unit, all the other banks similarly have similar units in their treasury department, and the purpose of these portfolios is supposed to be to have liquid assets in case there's a run on the bank.

And Bloomberg News had a story where they actually reported that all the other banks take less risk in these portfolios. And that's before we get to the credit default-- that's before we get to the blow-up part, just in the, even the simpler part of the portfolios. They have, they keep more in treasuries. And they have less in corporate bonds. So Dimon is already taking more risk in this unit than he should have.

And this is something which is frustrating about the testimony. There's a sort of, you know, one of the, again, stories that Dimon was promoting was, oh, well, we didn't find out about it. And then when we found out about it, we jumped on it and now it's all fine. And, therefore, the regulators shouldn't have been able, you know, how could the regulators have found about it?

And, therefore, since the regulators couldn't found out, you know, more regulation is futile. And, in fact, you could have found this information from the outside. You could have seen that prices were moving in this instrument in a really weird way.

BILL MOYERS: Was everybody looking the other way? Have we forgotten so quickly?

MATT TAIBBI: Well, the entire derivatives market is essentially a gigantic black box. It's not like the regulators have access to all this information.

YVES SMITH: I think they're not used to looking for the information.

MATT TAIBBI: Right.

YVES SMITH: I think it's been acculturated that they're used to having tea and cookies with the banks and reviewing their internal reports and not doing any type of external validation and this kind of basic external checking they could do that they're not habituated to doing.

BILL MOYERS: A very curious thing happened when the House hearings opened. Some members of that committee felt that Dimon should be sworn in. But the chairman of the committee, a Republican from Alabama, Spencer Bachus, said, no, that wasn't necessary. Am I making too much out of that?

MATT TAIBBI: I thought that was an incredible moment for a couple of reasons. Obviously, the reason there was a hullabaloo over that was because of what happened when Lloyd Blankfein, the CEO of Goldman Sachs, came and testified before the Senate a couple of years ago. There later was a controversy over whether or not he had perjured himself in those hearings.

So the question was if, you know, Jamie Dimon is going to be sworn in, whether he would have to tell the truth, would be obligated, or whether it would just be a friendly conversation. But what was amazing about that, was that it Spencer Bachus who came to Jamie Dimon's defense. Spencer Bachus is the congressman for the Birmingham, Alabama, region which has been decimated by the Jefferson County swap disaster, which was caused by Chase, which was fined $700 million by the SEC.

So here's a guy who represents the county that has been most affected by Chase's bad behavior, and he comes to Chase's defense in the hearing, which I thought was-- it set the tone for the whole thing.

YVES SMITH: Matt mentioned the toxic swaps. Jefferson County isn't the only example.

There have been a whole series of, you know, since Jefferson County and other municipalities blew up by deals they did before the crisis, there have been a series of swaps done after the crisis with transit authorities, where they are losing a tremendous amount of money. You can look at the way JPMorgan has serviced mortgage loans.

You know, they had to get up and admit that they had been basically breaking the law, and there were criminal penalties associated with this law, by foreclosing on servicemen in Iraq and not giving them rate breaks that they were entitled to. And there are some egregious cases.

MATT TAIBBI: There's $228 million fine that they paid last year for municipal bond bid rigging. There was another $153 million fine that they paid for failure to, for fraud in CDO trades. I mean, there are case after case after case that involve these criminal charges. And what I thought was amazing about these hearings is that nobody brought any of those things up.

BILL MOYERS: Both of you have mentioned the Jefferson County story. Give me a quick summary of what JPMorgan did in Jefferson County, Alabama.

MATT TAIBBI: Well, Jefferson County had to build a new sewer system. And they had to borrow a bunch of money to do that. And it was originally a $300 million project. But they got into a series of swap deals with JPMorgan Chase to basically push their financing into the future. But the deals were heavily mispriced in Chase's favor. And Chase actually bribed another bank to stay away from Chase because they wanted that business. They wanted to give the--

BILL MOYERS: Bribed them?

MATT TAIBBI: They bribed them.

BILL MOYERS: That's against the law, isn't it?

MATT TAIBBI: Yes, yes.

YVES SMITH: Yeah.

MATT TAIBBI: And they were caught for it. A couple of their executives were caught for it, and they were heavily fined by the SEC for doing it. And this resulted in this disaster where Jefferson County's going to be bankrupt for a generation. It ended up costing them $3 billion out of what was originally, what, $300 million?

YVES SMITH: Million dollar, yeah, yeah, yeah. What got to be $2.9 billion deal in the end. And on top of that, my mother happens to live in Jefferson County.

BILL MOYERS: Oh, I didn't know that.

YVES SMITH: You have the average person in-- basically you cannot have access to the sewage system and not pay more than-- and not pay less than 50 bucks a month. So there are people in the poor areas who are deciding what they're going to have: electricity, water, or sewer. I mean, you can't-- they can't afford all three.

BILL MOYERS: Why is that JPMorgan's fault that they have to make that choice?

MATT TAIBBI: They basically got them into these onerous toxic swap deals that were poorly understood by the local politicians. And they bribed the local politicians to accept the swap deals. They did it through middleman companies that bribed the--

YVES SMITH: The consultant on the deal is in jail. The former mayor was involved in other improprieties, too. But the former mayor's in prison. You know, this is--

MATT TAIBBI: For signing off on these deals.

BILL MOYERS: Is there a question you would have asked Dimon if you had been on either of those committees that was not asked?

MATT TAIBBI: The question I wanted to ask is, was, really more about the criminality. I mean, none of the members in either the House or the Senate really got into the issue of all the different offenses that these banks have committed in the last few years. You know, or, an ordinary person, if he commits welfare fraud, never gets a food stamp again in his life.

So given that these banks have systematically and repeatedly committed fraud, repeatedly been caught, you know, in situations like Jefferson County, municipal bid rigging, why should we still give them billions and billions of dollars in emergency lending from the Fed, bailouts, all of this aid from the government? How come there's no consequences for them and there are consequences for ordinary people?

YVES SMITH: I would have asked questions more having to do with what's the justification for complex banking at all? That why do we need, why shouldn't banks be run on the utility basis? Why should we have people like Dimon and his, the members of the CIO unit, most of which he's fired, what the justification for literally that hundreds of millions of bonuses were paid collectively to those people.

And now he says they didn't know what they were doing. There's no justification for this, the sort of level of compensation that we generally have on Wall Street. And I would like to see that myth starting to be punctured in more public places.

BILL MOYERS: What do you mean when you say banks should be more like a utility?

YVES SMITH: Banks, more than any other business, more than military contractors, live off the government. They depend on government backstopping. They exist only by way of government issued licenses, which if you had open entry you'd see much lower fees. And they get some confidence from the public from the fact that they are regulated. Oh, and the most important thing is they have access to--

MATT TAIBBI: The Federal Reserve.

YVES SMITH: --the Federal Reserve.

MATT TAIBBI: They're getting huge amounts of free money.

YVES SMITH: Well, not just the free money. The Federal Reserve basically guarantees the payment system. You know, that's the really critical architecture that banks control is that, you know, we write checks to each other. We have credit cards. They clear through banks.

But the fact that banks can exchange money with each other confidently is because the Fed stands behind that. So there's a much-- there's another layer of Fed backstopping beyond what we think of the way they step in in a crisis or the way they're now intervening to help the banks. So the fact that these institution really depend in a very fundamental way on government support means they don't have any right to the upside.

I mean, they should really be paid like public servants. I mean, I'm not kidding. I mean, and if they had been, if the pay had been ratcheted down after the crisis, I would have had a lot more sympathy for them, even if they just behaved for a couple of years. You know, they were bailed out. And then in 2009 the industry went and paid itself record bonuses, higher than 2007 instead of rebuilding their balance sheets. I mean, this was just a slap in the face for the public.

BILL MOYERS: And there's no shame.

YVES SMITH: No.

BILL MOYERS: You're describing a corrupt financial and political system. And both of you in recent writings, your current article in "Rolling Stone," which is devastating on the scam that the "Wall Street learned from the Mafia," and a recent column you wrote about the mafia state, you're both using that metaphor to apply to our financial and political system. When I read your pieces, you're not playing with words there. You mean it.

YVES SMITH: Yeah.

BILL MOYERS: Why do you mean it?

YVES SMITH: Well, the mafia, when it gets to be big enough, first thing it has services that people feel they need if they're in a difficult situation. So, for example, loan sharking. If you really need money, they do have the money. And people enter into these loan shark deals even though they know it's going to be very difficult to pay 20 percent or more interest and they'll have their legs broken if they don't pay back.

And the banks actually behave very much in that manner when they find people who really need money. So you see this with credit cards, you know, that, or, and with mortgages. That if you hit-- it's not this if you hit any tripwire, that, you know, become in arrears, the banks basically act in this very extortionate manner and don't cut any breaks.

MATT TAIBBI: And I think that there's also this, they are the mafia because of their vast criminality in Wall Street now is that it's bribery, theft, fraud, bid rigging, price fixing, gambling, loan sharking. All of these things, it's all organized.

I mean, the story I just wrote about, which was about the systematic rigging of municipal bond auctions, which affected every community in every state in the country and all of the major banks were involved, including Chase.

They were rigging the auctions that were designed to create a fair rate of return on the investments that towns were getting on their-- the money they borrowed for municipal bonds. And this is not like something that the mafia does. This is what the mafia does. The mafia has historically, it's one of their staple businesses, is bid rigging for construction or garbage or, you know, street cleaning services, whatever it is.

They're doing exactly the same thing. The only thing that's different is there's no violence involved. But what their method of control is that they're ubiquitous. They have this incredible political power that the mafia never had.

YVES SMITH: And they also have what amounts to an oligopoly. I mean, for many of these services, you have a great deal of difficulty going beyond the five biggest banks, you know? This is-- it's the consequence of too big to fail is that when, you know, some of the smaller players, again, you know, like-- JPMorgan buying Bear Stearns.

In the crisis, when the smaller players got sick, they were merged into the bigger players. So now if you want-- for a lot of these services, there aren't that many players for you to go to. You really have no choice in-- other than to deal with the big banks.

BILL MOYERS: Congress is paid to be informed and to hold these guys accountable. Why don't they ask the kind of questions you're dealing with here?

MATT TAIBBI: People refuse to look at these banks and think of them as organized crime organizations.

They in their eyes, organized crime is always either the Italian mafia or the Irish mafia. This isn't what it looks like. But that is who they are. And I think that they're treated with a kind of deference and respect, because traditionally that's not who they were. They were these icons of finance who helped build this country.

But that's not who they are anymore. And I think, it's hard for people to wrap their heads around that and treat them the way they should be treated.

YVES SMITH: Well, I think people don't want to think that there's something wrong with leaders. And CEOs are leaders of the business community. If you really believe that CEOs of businesses that are really fundamental to the economy are corrupt, you have to think of a very serious restructuring of the business and financial system.

And even if people kind of intellectually might be willing to contemplate that, they don't really want to go to what the implications are. So it's much easier for them to block out that thought.

BILL MOYERS: Both of you have been writing a great deal lately about the crisis in Europe. So explain to us simply what hand Wall Street has in what's going on in Italy, Greece, and Spain today and why we should care.

YVES SMITH: Well, I almost want to go one step of abstraction higher because people tend to focus on the immediate ways Wall Street was involved like Goldman Sachs helped Greece cover up how serious its deficits were.

MATT TAIBBI: Which in the situation, it was very similar to Jefferson County, by the way.

YVES SMITH: Right. But the more important story is much higher, which is that the reason the big reason that all, you have basically a sovereign debt crisis, that the governments in Europe, many of them had to borrow a tremendous amount of money in the wake of the crisis. And the euro zone is not well set up to adapt to that. I could go into technical reasons why, but it's not unlike a state.

You know, when a state has a budget problem that suddenly they have to think about, you know, cutting costs and doing all kinds of draconian measures. And while maybe a state or a city can do that, you can't have the biggest economy in the world. I mean, Europe is the biggest economy in the world doing that and not have it basically turn into a down spiral, that you cut spending and then that leads to less income.

And your deficits get worse rather than better. So, but the reason they had that problem is, in fact, very directly the result of the financial crisis. That you had countries that weren't running deficits, government deficits like Ireland and Spain, that were held up as poster children before the crisis of doing things right.

And that when the crisis hit, you both had a big drop in tax revenues. You had bank bailouts. And these countries had decent social safety nets so that, you know, things like, you know, unemployment insurance went up. And so the budget crisis they're having is the direct result of the financial crisis. And yet it's somehow being treated as if they're separate events. Like somehow these governments were profligate and that borrowers were irresponsible –

MATT TAIBBI: Social safety net.

YVES SMITH: Safety net.

MATT TAIBBI: Exactly. Right. That's clearly going to be the place that is going to take the brunt of the damage. I mean, I think the most direct example here in America was a lot of unions and state pension funds were primary victims of the sort of broad fraud scheme to sell fraudulent mortgage backed securities.

So they, a lot of these institutional investors were buying these bad mortgages, huge pools of mortgages from all these, the usual suspects, the big banks. And then when they decreased in value and suddenly there they don't have, it's harder for them to meet their obligation and suddenly the finger is pointed at them and everyone saying, "Oh, look at those pens, the state pensioners or look at those union employees, they're they cost too much money. We have to cut their services. We have to cut pensions. We have to do all these things."

Whereas, in fact, they were buying a fraudulent product from Wall Street and that's why they're in such bad shape now. And I think, but politically, the direction is always going to be let's blame-

BILL MOYERS: The poor.

MATT TAIBBI: That person. The poor.

BILL MOYERS: The guy on the pension. The woman on the pension –

MATT TAIBBI: Right. And we'll never point the finger in the other direction.

YVES SMITH: Well, in fact, the implications, that's true. But the implications are actually quite grim, and they're not being discussed honestly. We're talking about old people dying faster. We're talking about children being homeless and not getting education, and we're talking about grim outcomes like that.

And they're not even part of the discourse. I mean, you look, Greece is the extreme example. But in Greece, the hospitals are breaking down. Garbage is not being picked up. And if you look at the results of the last election, what you saw is even with the efforts to scare people into staying in the euro, you see this polarization where the Nazi Party got seven percent of the vote even after there was an incident in a TV station where there was literally an on-air fight where a Nazi Party member beat up on somebody basically I think it was on camera, you know?

So you've got a real social polarization with radicalization going on. And I've seen a number of reports out of Greece saying that it's basically on knife edge of breakdown.

BILL MOYERS: Could it happen here?

YVES SMITH: If things, if we have another crisis and things aren't addressed, I could see this definitely happening maybe not nationally but in significant regional pockets. I mean, you know, this is a country full of guns. And people don't like to think about what happens when people are pushed, you know, I mean, the kind of random violence, the sort of, you know, going postal phenomena?

MATT TAIBBI: When I was in a foreclosure court last year. I spent a week in a foreclosure court in Jacksonville.

BILL MOYERS: Reporting on it.

MATT TAIBBI: Reporting on it. And the amount of raw anger that you see in these proceedings from people who have lost their homes, they have no illusions about who's to blame for the situation. They know exactly, you know, where the problem is. And I--

BILL MOYERS: And it's where?

MATT TAIBBI: It's with these banks that sold them these mortgages. And I think there's a growing awareness out there in the public, more and more people have had a personal problem on some front with Wall Street, whether it's credit card debt or a mortgage debt or they've lost their jobs. And I think there's anger and it's starting to become more organized.

BILL MOYERS: Both of you trace this back to what you call fraudulent debt. Is that right?

MATT TAIBBI: In the case of the mortgage markets, absolutely. I think what a lot of these, this was a fraud scheme. It's the same scam that you see here in the streets of New York when somebody's selling a phony Prada bag or a phony Rolex watch in the street. These banks were selling phony mortgages that were, they were selling them as triple A rated instruments when, in fact, they were essentially worthless.

They were highly risky, toxic instruments. And they knew it. They were buying, they were in cahoots with companies like Countrywide and Long Beach, these sort of fly-by-night mortgage operations who went out and they gave mortgages to everybody and everybody who had a pulse. They took these mortgages. They bundled them. They waved a whole bunch of phony hocus-pocus math over them and reconfigured them into triple A rated investments.

Then they went out into the world and they sold them to every customer all over the world, pensions, unions, foreign trade unions, foreign governments. And they--

YVES SMITH: Trade councils in Australia. I mean, real know nothings.

MATT TAIBBI: Everybody. Everybody bought this stuff. It all blew up like, everybody who was in on it knew it eventually would because they were betting against the stuff as they were selling it. And, and the, and that's why we have this, this situation that we're in now.

YVES SMITH: Yeah, but even the most even if I'm giving Wall Street more credit than it deserves. But even if you take out the bad creation and selling of the product, you also have the fact that Wall Street basically demands an asymmetrical deal with contracts, that if you have a credit card deal or if you have a mortgage, if you make the tiniest, little violation, you know, we get to take our pound of flesh.

And yet if you're a union member, it's perfectly fine to break your contract. You know, our contracts count, but we can break all the other contracts in society to get our obligations honored. I mean, this is just crazy.

MATT TAIBBI: But they genuinely think that they earn their money. And I think that was one of the illuminating things not only about the Dimon hearings but also the Lloyd Blankfein, slash, Goldman Sachs hearings a couple of years ago. These guys really think that they're, they have a unique and special genius that entitles them to earn the vast sums of money that they pay themselves, that somehow that they're creating all this wealth for themselves.

And they really genuinely don't think that they're getting their money-- from all of us. And to them it's irrelevant that they're getting all their money for free from the Fed and that they're lending it all out to us at five percent, 10 percent, 20 percent, you know, 25 percent. They think they deserve the money. And I think that's the scariest part.

BILL MOYERS: There's a definition of a sociopath as being radically deprived of empathy. Do you see characteristics of sociopathic behavior on Wall Street?

MATT TAIBBI: Absolutely.

YVES SMITH: Yes.

MATT TAIBBI: I'm sorry, just what Yves was talking about with, you know, the old people who were dying earlier now, people who don't have kids, who aren't going to school, garbage that's being left in the streets. That's all because some guy was sitting up in a skyscraper in Wall Street and knowingly selling some communities, some municipality a fraudulent, toxic mortgage backed security.

I mean, he knows that that instrument is going to blow up in, you know, six months, a year. But he's selling it to them anyway. But he doesn't care, you know, because he can't see it, you know? I think in the eyes of a lot of these guys if they can't see the effect, it doesn't really exist. And to me, that's classic sociopathic behavior when you're blind, you're willingly blind to the consequences.

YVES SMITH: I mean, it's really the growth of the trading culture. You know, in the old days, I worked on Wall Street when Wall Street really was only criminal around the margins. I mean, you really, Goldman Sachs in those days had the expression long-term greedy which meant you didn't kill the--

BILL MOYERS: Long-term what?

YVES SMITH: Long-term greedy. That they were long-term greedy. And that meant you didn't kill the goose that laid the golden egg. You know, you wouldn't put your customer into egregiously bad deal. If you took a little extra, you only took it when the customer was making money, too, so if they ever figured it out they wouldn't be really upset.

That attitude has changed completely. And I attribute it significantly to the growth of derivatives. Over-the-counter derivatives where you can't see the price on an exchange. You can't see the history.

And they're much more complicated. And those started growing really in the early '90s and became, and it becomes very interwoven in the practice of finance. Because the derivatives are so complicated, you can't price compare. The risks are often bundled in within formulas that the buyers can't understand. And so they can load all kinds of basically what's equivalent to hidden fees in these things by the way they structure the risks in the terms.

So they're the perfect vehicle for stealing because you're selling, no, you're selling somebody something they can't evaluate.

BILL MOYERS: When you come back, I want you to take the whole hour and explain to me what a derivative is and how it works. Okay? Is that a promise?

MATT TAIBBI: Absolutely.

BILL MOYERS: Alright, Yves and Matt, thank you very much for joining us.

MATT TAIBBI: Thank you.

YVES SMITH: Thank you.

Matt Taibbi and Yves Smith on the Follies of Big Banks and Government

June 22, 2012

Rolling Stone editor Matt Taibbi and Yves Smith, creator of the finance and economics blog Naked Capitalism, join Bill to discuss the folly and corruption of both banks and government, and how that tag-team leaves deep wounds in our democracy.  Taibbi’s latest piece is “The Scam Wall Street Learned from the Mafia.” Smith is the author of ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.

Join us on Twitter on Sunday, June 24, 2012 at 6 PM ET with @mtaibbi and @yvessmith. They will answer your questions. #moyers

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  • Albie Farinas

    “Revolutions do not evolve in a vacuum….”

  • Anonymous

    I am curious…knowing what  Smith and Taibbi know about the banking and stock market environment…I wonder if they personally use them? 

  • Murray Reiss

    Why are these banks, organized criminal enterprises though they are, treated with such deference and respect? For the same reason all crime bosses are — they’ve got a whole lot of money and power. And they can use it to help you or hurt you.

  • http://oracleofburbank.blogspot.com Mark Etprophet

    I love the way Matt always tells it like it is.

  • Gb2k

    Bill this is “jaw dropping.”   You are incredible and the only TV journalist exposing the real truth about Wall Street’s vulture capitalism.
    With the Supreme Court’s “Citizen’s United” decision overturning 100 years of limits on “corporate” election donations America is doomed.
    America has become a legalized global “Corporatocracy” — owned and run by multinational corporations.

    And thank you, Matt & Yves.
    I’ve read “Griftopia” (fantastic) and will start following Yves’ blog, Naked Capitalism.

  • Strawman411

    The single most depressing aspect of this legalized criminality is that the subject is not, nor will it likely be, at the forefront of mainstream election campaign discourse.

    Corporate-owned media and politicians will make certain of it.

    A bovine electorate will let them get away with doing so. 

  • Junior2116

    I think the OWS crowd could have taken a break and celebrated a holiday.
    My suggestion is: Bastille Day.

  • Junior

    I think the OWS crowd should have taken a break and celebrate a holiday.
    My suggestion: Bastille Day

  • http://www.facebook.com/laserhaas Laser Haas

    HELLO – earth to the geniuses. We have the series of events/ cases to bring down Goldman Sachs/ Bain (even Romney) by massive federal frauds, federal corruption & Even Confessions by their law firms of Lying under oath 34 times over 4 years – to cover it all up.

    Why is it so Damn hard to get you people to listen to the very proof you claim you desire So Much?

    http://petters-fraud.com/Bain_Cap_GSachs_eToys_Frauds_2001_tillNow.pdf

  • http://www.facebook.com/laserhaas Laser Haas

    It is NOT legalized criminality.

    They are Breaking the Law & our tax paid public servants have no interest in defending the U.S. citizenry or Constitution of the United States.

  • http://www.facebook.com/laserhaas Laser Haas

    I’d luv to get 7 minutes with Taibbi and get a straight damn answer why he & Rolling Stone keep ignoring the federal proof overwhelming & irrefutable against Bain Capital & Goldman Sachs.

  • http://www.facebook.com/laserhaas Laser Haas

    Concur!

  • http://www.facebook.com/laserhaas Laser Haas

    Damn good question!

  • http://www.facebook.com/laserhaas Laser Haas

    Explain please – albie Farinas?

  • Dgrahamdixon

    Thank you so much, Mr. Moyers. This was the best news/commentary I’ve seen in a looong time. Please bring Yves Smith & Matt Taibbi back onto the show to talk about Derivatives. It is the most important part of the financial crisis and, as Mr. Taibbi said, it is a black box issue; and not just to regulators, but, most importantly, to the public. I always enjoy your programs and guests, but this was a treat.

  • AndNotGoingToTakeThisAnymore

    Why the Main Stream Media (MSM) is not highlighting this issue is mind-boggling!  Are they, or their bosses, in cahoots with these Wall Street crooks!  These Wall $treet criminals and their crimes are themselves frightening, but even more frightening and frustrating are the White House and Congress co-conspirators who are obviously holding the coats of these bullies while they are beating the out of the rest of us. 
    Thank you, Mr. Moyers – and Matt Taibbi and Yves Smith – for showing us that these crooks ARE beating us to a pulp! 

  • Spoiler Room

    Excellent episode – props due to Bill Moyers for digging deep into the esoterica of financial and banking shenanigans.  Both Taibi and Yves do a great job of presenting a holistic view of the banking system.  Jamie Dimon would love to say that the CIO office lost just $2 billion and that they can easily cover it.  That misses the larger points raised by Yves and Taibi.

  • Ninaflannery

    I agree, though I think ‘bovine’, however apt, is an unkind choice to describe we fearful masses who don’t even huddle anymore.

  • Ndmaidlow

    Dear  watchers of Moyers and company.. Why is it every time a tidal wave of indignation starts to build with regards to wall street . The local churches in my area start running “wedge” campaigns against “liberals” or our president?  Spreading lies and half truths..Why does something “more important” like the Sandusky trial take the fore front of our news or a four year old trial about a former candidate for president take  up 1/4 of our national news coverage.. Because those are the wheels being greased..  Thankyou Bill for helping to gease the wheels of the truth tellers!!!

  • Karl Hoff

    Really enjoyed hearing your two guests. They really stuck it to the banks & government. Now we can see how long it will take for the banks & government to make the changes the people want. I guess that was a stupid thing to say, because I will never live long enough, being it has only gotten worse through out my life. If the banks have gotten worse and the government has backed them up then what does it matter what anyone says. When I grew up people put their money in the bank to protect it, to draw a little interest and to let it build for a rainy day, (I didn’t need a checking account until I went into business at age 27). In the 1950s I know no one with a credit card, so people were just more responsible. All that went away when the credit cards and easy credit came. What I realize is, that if all our problems with the greed of credit went away, we would only go back to what work so well!

  • Nheifferon

     No, this is not a good question, Laser. With the banks’ choke hold on the economy, there are few other options for us. Are you really suggesting that only people who hide their money in the mattress are entitled to speak out against the malfeasance? Actually, if they have huge portfolios and are speaking against their personal financial interests, they have great credibility.

  • http://www.facebook.com/PoorManSurvival Bruce David

    This is a topic I’ve posted on for several years at our PoorManSurvival site and blog.  I call it the Washington-Wall Street Cartel and they’ve created the new version of the middle class I call “The Whittled Class.” Good job Bill!

  • Machen Vapid

    Finally, voices of opposition! When the first episodes of “Money & Politics” aired on Moyers & Company, which included a laundry list of the usual (criminal) suspects, I thought that there was little hope for PBS. However, this episode was refreshing. Perhaps next time, Bill (and his producers) can prepare a bit better, at the very least with understanding several germane concepts like “derivatives.” If the public broadcasting audience is as educated and intelligent as the audience demographic analysis indicates, then likely, they already understand: MBS, ABS, tranche, CDS, derivative, synthetic derivative, con, fraud, fraudulent inducement, etc. If so, then interviewers (and their producers) should be prepared to intelligently translate these concepts to “the public,” via public media. So long as the public believes this issues are complicated to the point of unapproachable, the fraudsters will continue to commit crime for which we — the public — will continue to pay. And, that is the way the our financial “clergy” prefer a sheep-like “congregation” to behave.

  • Anonymous

    Post 1 of 11MAJOR MISUNDERSTANDINGS ABOUT UNEMPLOYMENT”10%” unemployment – that does *not* include people who have already run out of their unemployment benefits.Look up U6 and BLS (Bureau of Labor Statistics) page, which is currently in the 14-15% range.  In the great DEPRESSION, riots occurred around 25% unemployed. New unemployment claims in the 400,00+/- range are *weekly*.  Effectively, 1.6+ MILLION more people have been put out of work EACH WEEK for many months. 
     
    Yet, it’s “good news”, if it’s “only” 385,000 IN ONE WEEK??The job creation reports are *monthly*.  Compare the “good news” of 134,000 jobs created for a MONTH with that 1.6+ MILLION newly unemployed for that same month.  And, and don’t forget the unpublicized “adjustments” to those reports that are worse, just a week or two later.

  • Anonymous

    Post 2 of 11
    JOBSApples to apples, how many, IF ANY, of those very few newly “created” jobs went to AMERICANS AT ALL?
     
    When ADP reports its monthly employment figures, apples and apples – how many firms with how many thousands of employees no longer use ADP AT ALL, because the firms went out of business, merged, or went out of bankrupt, thereby permanently eliminated white collar corporate office workers for H/R, accounting, etc.?
    The real issue is that American workers have been totally, permanently replaced by cheap legal/illegal foreign workers, onshore or offshore.

  • Anonymous

    Post 3 of 11
    JOBS
    JPMorgan Chase had (has?) a business division that was specifically to replace American workers with foreign workers.  Bank of America made headlines a few years back for requiring American workers to train their foreign replacements or lose their severance packages!Duh, and then the “bankster” banks wonder why reserves based on the bank accounts of those now-unemployed workers no longer exist?
     
    When I was a consultant at the Federal Reserve of Chicago in 2007, based on my CPA background, my MBA from UCLA, and my 20+ years in IT, the programmers on the project were foreigners.  It appeared that the program code was put into production with no review by project management at all (what if there are “back doors” into the Federal Reserve servers?)
    As a consultant, I made over $100K in 2000, but have never found another job since 4Q2007.  If you can hire a foreign worker for $3.50 an hour (with college degree not required), I am too old, “overqualified”, AND NOT FOREIGN.

  • Anonymous

    Post 4 of 11
    NO AMERICAN CONSUMERS
    And if there are few jobs for American workers), why are we surprised when so many American corporations are laying off more and more full-time workers?
     
    There are no American *consumers* for their products!  Any corporations showing improving bottom lines are ones that have changed their markets to developing countries, with the use of even more foreign workers in those countries and no IRS liabilities.Also, how many of those American corporations are using “free labor” via interns where students are required to complete an *unpaid* internship (which conflicts with their paying job to pay for that college degree) in order to graduate from college?
     
    Astronomical college debts are being predicted as the next “bubble to pop”, particularly since a large percentage of new graduates cannot find jobs AT ALL.
     
    And if you can hire a foreign worker for $3.50 an hour with no college degree required, then what was the point of getting a college degree vs. work experience in the first place?

  • MK

    Excellent interview. Thank you Bill Moyers!

  • Anonymous

    Post 5 of 11
    MAFIA
    Regarding the Mafia analogy, I totally agree with Taibbi and Yves (it was nice to put faces to them!) – the phrase is “banksters” in the fraudclosure arena.Add insider trading by elected politicians – is that insider knowledge what *caused* the 2008 crash?

  • Anonymous

    Post 6 of 12
    ENTITLEMENT
    Social Security is not “entitlement” – it was part of the “bankster” extortion of funds from workers and their employers that was used for other purposes. 
     
    Until my social security benefits equal what I paid in, that is money I was due back. 
     
    And it’s a Ponzi scheme when the commitment for what I would receive after I retire cannot possibly be covered by what was paid in on my behalf.

  • Anonymous

     
    Post 7 of 12
    FINANCIAL STATEMENT FRAUD Both Taibbi and Yves are missing the fact that the accounting statements of the TBTF “bankster” firms being reported to the stock markets are totally fraudulent:
    1. How many, IF ANY, of the major losses for foreclosed properties, both residential and commercial, have been written off ON THE INCOME STATEMENTS?  How many times do we hear “off-balance sheet”?  Huh?
     
    If 99% of foreclosure sales are purchased by the (alleged) Plaintiffs, is that so they do *not* have to recognize those losses?  The phrase is “shadow inventory” and they are not even on the market as REOs for sale.
     
    2. If the “banksters” “helped” Greece hide losses, why wouldn’t they be doing the same for themselves?
     
    3. Did JPMorgan simply run out of ways to hide that $2 billion loss?  Past reports indicated that it had illegally sold silver stock “naked”, which was covered by a foreign bank (how did that accounting work?)

  • Anonymous

    Post 8 of 11
    INSOLVENCY
     
    If the federal/state/local governments are INSOLVENT, how can any of the poverty programs recommended by Edelman be FUNDED?  Particularly when foreign workers do not pay IRS taxes?
    How are the “bankster” firms and the federal/state/local governments any different than the “dumb consumers” who signed mortgage and credit card contracts based on income/revenue experience that subsequently decreased dramatically, likely permanently? 
     
    If federal/state/local governments are INSOLVENT themselves, how can they pay their own bills, any more than the newly-poor who must choose between electricity, water, sewage, AND FOOD?

  • Anonymous

    Post 9 of 11TRUE DEPRESSION MENTALITY
    I will never eat fast foods or at eat at a restaurant again.

    I will never go to any movie/sports/concert entertainment event again.
     
    I do not even glance at TV or newspaper ads.

    I would have terminated my cable service, like many millions of other people have already done, except that
    I need Internet access for my minimal contact with the world outside my home.
     
    I can no longer afford gas to even go visit a friend.
     
    I only keep $300 cash in my bank account with a *community bank*, since the banks took a “bank holiday” in the Great Depression. 

    And my prior bank was taken over by the FDIC and sold to US Bank, because the billionaire owner made the mistake of investing in Fannie (Freddie?)  “preferred” stock.

  • Anonymous

    Post 10 of 11
    INFLATION
     Oh, but there’s no inflation – then, how come my frozen Banquet “meals” (< 300 calories) have gone up from $.79 each to $1.02 each?  Oh, right, food and gas aren't included in inflation calculations/comparisons.

  • Anonymous

    Post 11 of 11
     
    THE FUTURE/IF ANY
    There is a new word/market, “preppers”, for those preparing for disaster-
     
    Even major investment newsletters discuss a “Plan B”, to leave the United States ENTIRELY.

    The US media is using the Eurozone as “sleigh of hand” to avoid discussing the insolvent status of the U.S. My predictions based on 2-3 years of solid research relative to fraudclosures (1 in 9 properties is vacant across the entire country) is that we are on the verge of a worldwide DEPRESSION.

  • Jpkp1947

    Poleretired professor of History, Comparative Religion116 Fans2 seconds ago (12:09 PM)I very much appreciate that good Rabbis speak up for this earth and its environment. Appropriate actions would have been taken years ago to reverse global warming and our carbon footprint if it were not for a very simple but very powerful influence. I am referring to money. So much is in the hands of commercial and industrial parties who see financial loss if we change direction for life and future generations. That influence has corrupted political voices who if properly informed and motivated could have altered our use of fossil fuels. I fear that the tipping points has been reached and present and future weather changes are only the beginning. Its interesting how deep the money trail permeates. It includes all communication media, governments and industries who know of no other way to operate than to continue to spew pollution into our waterways and air. Those who finally survive will no doubt scratch their heads or appendices and wonder: What were they thinking?

  • Jpkp1947

    I very much appreciate that good Rabbis speak up for this earth and its environment. Appropriate actions would have been taken years ago to reverse global warming and our carbon footprint if it were not for a very simple but very powerful influence. I am referring to money. So much is in the hands of commercial and industrial parties who see financial loss if we change direction for life and future generations. That influence has corrupted political voices who if properly informed and motivated could have altered our use of fossil fuels. I fear that the tipping points has been reached and present and future weather changes are only the beginning. Its interesting how deep the money trail permeates. It includes all communication media, governments and industries who know of no other way to operate than to continue to spew pollution into our waterways and air. Those who finally survive will no doubt scratch their heads or appendices and wonder: What were they thinking?

  • domprime

    Greed is the addiction that is tolerated by big business and   Government.  And is legal.  Drug or or alcohol addiction is not tolerated.  And penalty’s exist. The rich generally look the other way, wink wink.   There is a toleration for the 1 percent.  They have no problem paying for legal representation.  With legal representation,  justice can be bought.  The 99 percent can’t afford legal representaton. This is one of the reasons  Obamacare has political support working against it.  Even though its just the 1 percent that are against it.  

    Government by the Corporations for the corporations.  Its psychopathic control.    

  • JonThomas

     I like your comment in general terms but I must point out that not just the 1% are against “Obamacare.”

    I hate Obama care and I’m nowhere near the 1%, matter of fact, I’m nearly living in the street.

    A large number of us are against Obama’s health care plan because it is nothing but a sell out to insurance companies.

    At least before there was an insurance mandate I could legally choose to take my chances on my own health.

    I already owe back taxes and can’t catch up with those. Now you want to crush me entirely because I can’t afford health care. Why don’t you people just pull the trigger already?

    This country has a simple sentence in the constitution…”The right to pursue happiness.”

    I, for one, contend that without universal healthcare, and freedom from a corporate enriching insurance mandate, there are many people not free to pursue happiness. Such a mandated financial burden further hinders such a pursuit.

    By taking the single payer system off the table, and spending all his early political currency on a seriously flawed healthcare bill, Obama lost the respect of many people who really did hold out “hope.”

    He showed whose side he was really on and lost legitimacy as a helper for the average person. Instead, he is seen for what he is…another politician paid for and owned by the corporations ad the 1%.

    If I am wrong about him then let him prove it and I will apologize.

  • JonThomas

     I think you make good points… but in defense of Mr. Moyers and his producers, giving them the benefit of the doubt, it seems to me that the comment he made about them coming back to explain derivitives was a slightly humorous way of saying…”it would take too much time to talk about the details.”

    That segment of this show was a more generalized overview of the corruption found in banking today.

    But, your point that a better educated people would be more equipped for today’s world is right on track.

  • Guest

    I’m for DRAFTING MS SMITH and MR TAIBBI to SERVE IN THE WHITE HOUSE FOR THE NEXT SEVERAL DECADES!!!  They made MORE SENSE – and had MORE GREAT SOLUTIONS - then all the politicians out here put together!!!

  • Wcoady

    How the Bankers Copied A Bar owners business plan:
    Talk about
    putting it in a nutshell!

    Helga is the proprietor of a bar. She realizes that virtually all of her
    customers are unemployed alcoholics and, as such, can no longer afford to
    patronize her bar. To solve this problem she comes up with a new marketing plan
    that allows her customers to drink now, but pay later.

     Helga keeps track of the drinks consumed
    on a ledger (thereby granting the customers’ loans).

     Word gets around about Helga’s
    “drink now, pay later” marketing strategy and, as a result, increasing
    numbers of customers flood into Helga’s bar. Soon she has the largest sales
    volume for any bar in town.

     By providing her customer’s freedom from
    immediate payment demands Helga gets no resistance when, at regular intervals,
    she substantially increases her prices for wine and beer – the most consumed
    beverages.

    Consequently,
    Helga’s gross sales volumes and paper profits increase massively. A young and
    dynamic vice-president at the local bank recognises that these customer debts
    constitute valuable future assets and increases Helga’s borrowing limit. He
    sees no reason for any undue concern, since he has the debts of the unemployed
    alcoholics as collateral.

    He is
    rewarded with a six-figure bonus.

    At the bank’s
    corporate headquarters, expert traders figure a way to make huge commissions,
    and transform these customer loans into DRINKBONDS. These
    “securities” are then bundled and traded on international securities
    markets.

     Naive investors don’t really understand that
    the securities being sold to them, as “AA Secured Bonds” are really
    debts of unemployed alcoholics. Nevertheless, the bond prices continuously
    climb and the securities soon become the hottest-selling items for some of the
    nation’s leading brokerage houses.

     The traders all receive a six – figure bonus.

    One day, even
    though the bond prices are still climbing, a risk manager at the original local
    bank decides that the time has come to demand payment on the debts incurred by
    the drinkers at Helga’s bar. He so informs Helga. Helga then demands payment
    from her alcoholic patrons but, being unemployed alcoholics, they cannot pay
    back their drinking debts. Since Helga cannot fulfil her loan obligations she
    is forced into bankruptcy. The bar closes and Helga’s 11 employees lose their
    jobs.
     
    Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value
    destroys the bank’s liquidity and prevents it from issuing new loans, thus
    freezing credit and economic activity in the community.

    The suppliers
    of Helga’s bar had granted her generous payment extensions and had invested
    their firms’ pension funds in the BOND securities. They find they are now faced
    with having to write off her bad debt and with losing over 90% of the presumed
    value of the bonds. Her wine supplier also claims bankruptcy, closing the doors
    on a family business that had endured for three generations; her beer supplier
    is taken over by a competitor, who immediately closes the local plant and lays
    off 150 workers.

    Fortunately though, the bank, the brokerage houses and their respective
    executives are saved and bailed out by a multi-billion dollar no-strings
    attached cash infusion from the government.

    Wayne Coady Canada

    They all
    receive six a figure bonus.

    The funds
    required for this bailout are obtained by new taxes levied on employed,
    middle-class, non-drinkers who’ve never been in Helga’s bar.

    Now do you understand?

  • Ebodine

    Here is the problem with banks.  Every large bank in the Federal Reserve system has the ability to create up to 9 times the money they have on deposit.  This meets the 10% reserve requirement of most large banks.  That means for every $100  you deposit in the bank, the bank can create $900 to play with.  If a bank loans the $900 at 5% interest over 30 years, the bank collects $45 interesr and $30 principal every year (or $75 total per year).  The bank coundn’t do this if you had not originally deposited your $100 in their bank.  The bank is making 75% return on the $100 you originally deposited in this case.

    If the same loan is over just 3 years, the bank still collects $45 interest per year, but they collect $300 principal per year totaling $345 made on the $100 you originally deposited in the bank.  That is a 345% return on your $100 deposit.  And just how much interest does the bank pay you on your deposit???

    This banking process is called “Fractional Reserve Banking” and has been used for centuries starting in Europe (probably Germany or England).  If you take time to learn about this banking proceedure, you will start to understand the magnifying glass banks operate under to legally manufacture money (or as they refer to it as “make money”).

    To answer Bill Moyers question, “What is a derivative?”  Here is a simple explanation:

    A derivative is a risk transfer agreement, the value of which is derived from the value of an underlying asset. The underlying asset could be an interest rate, a physical commodity, a company’s equity shares, an equity index, a currency, or virtually any other tradable instrument upon which parties can agree. Derivatives fall into three categories. The first is over-the-counter (OTC) derivatives, which are customized, bilateral agreements that transfer risk from one party to the other. OTC derivatives, which are sometimes called swap agreements or swaps, are negotiated privately between the two parties and then booked directly with each other. The second category consists of standardized, exchange-traded derivatives, which known generically as listed derivatives or futures. In contrast with OTC derivatives, listed derivatives are executed over a centralized trading venue known as an exchange and then booked with a central counterparty known as a clearing house. Finally, the third category is cleared derivatives, which like OTC derivatives are negotiated bilaterally, but like listed derivatives are booked with a clearing house.

    Common people like you and me don’t have a chance.

  • JonThomas

     You forgot about the trusted “around-the-town bar and restaurant reviewer(and listed reference on the loan application)” for the local paper, giving “Helga’s” a triple rated review.  ;)

  • JonThomas

    …triple “A”* rated.

  • Madchen Vapid

    I thank you for your response and critique. Perhaps your intuition of Moyers’ response is correct. Earlier Moyers & Company episodes allowed Blythe Masters to explain the genesis of the modern derivatives — from her (and the industry’s) perspective about risk mitigation — so I was taken aback by Mr. Moyers comment to Smith (and Tiabbi) regarding the matter, especially in light of what happened recently to JPM Chase (which Moyers used to introduce the interview). Indeed, this was a more general story about banking, centering thematically around mafia-style fraud (bid rigging). However, the simple fact that many large national banks use their assets (toxic ones) as collateral to borrow from the discount window is really difficult to address without mentioning — even in brief — the full magnitude of banks’ exposure without taking about the degree of leverage due to derivatives. In fact, the banks are too big to fail because of this exposure. Most public broadcasting viewers and listeners can surely understand leverage with only a cursory introduction to derivatives. And, it seems that despite complexity of banks’ machinations, the prosecution successfully explained the municipal bond rigging con (Tiabbi’s article referred to in the interview) to a jury of average American citizens. In short, the tools might seem complex, but the destruction — the crimes — are fairly simple. Con. Fraud. Theft. If reporters convey that the subject matter is difficult to understand and/or too time consuming to explain — even if mentioned in jest — then I fear that the public will assume it is ill prepared to investigate, evaluate, and act to prevent these crimes.

  • CR Pierpoint

    Brillant!! It’s the first time I’ve heard about the link between Wall Street and the Europeen crisis. Now it’s making perfect sense !
    Continuing to properly denounce the fraudulent schemes as actions performed by ”an authorized Mafia” just might wake up the country out of its denial.
    Looking forward to hearing more on this subject from Matt Taibbi and Yves Smith.  
    Thank you Bill, as always … for your excellent investigative reporting.  

  • Scristaldi

    Agree there is a lot of blame to go to financial institutions but no one ever talks about the people who lied their brains out on their applications, about realtors who knew exactly what was going on … etc. There is a lot of culpability but people like Matt only blame the financial institutions. Why? What about the people that signed the purchase agreements with flat out false statement? Why do they get a free ride? 

  • Scristaldi

    Why are so many liberal groups (this one) afraid to publish the ‘dislike’ tabs. Everything must be ‘like’. You do know that is not real life right?

  • Jon Dom

    Good discussion. It seems to me that much of the mainstream media’s (including public radio and television) abdication of its responsibility to report about these financial and macroeconomic issues created an opportunity for Rolling Stone (Matt Tiabbi) and NakedCapitalism (Yves Smith) among many others: Barry Rithotlz, Max Keiser, Simon Johnson, etc. Frankly, I don’t want Moyers & Company staff discussing many of these issues, because it they have little experience with the subject matter, and it would take them too long to catch up with the most current material. That seems to me the most likely reason Bill sat down with these two guests. PBS, like many other conventional outlets, is still playing catch up.

  • Mikeyjojo4559

    How to open our fellow citizens eyes to the creeping criminality of our economic system??

  • JonThomas

     Thank you for accepting my comment graciously. At times, in these types of conversations,  I can be overly “nit-picking.”

    You picked up the ball and ran well,  I enjoyed the furtherance of your thoughts…well said!

  • Ndmaidlow

    I totally agree with you scristaldi that  is why I pressed the liberal “like button” under your comment ..Many former home oweners are to blame as well… Of the 4 “culprits”I know personally.. none of them were bailed out and they have no “personal” lobbyist or representation in washington. Not to mention all of them are living a VERY austere life by any americans standards right now.. Their being  punished, if that’s what you want for them. Unfortunately like the bankers they have’nt really learned their lesson either.. I think what alot of us “liberals” are driving at is for folks”rich and poor” to start behaving in a more civic manner and not in an entitlement manner.  I might add, alot of us believe the scales are tipped WAY in favor of the very rich.. And they  have’nt been punished for knowingly and wreaklessly ruining Americas economy.

  • Mike D

    Firstly, my compliments to Bill for a program juxtaposing the ‘stars’ of the universe – Wall St. and Congress with its ‘dark matter’ – the poor. Dark Matter constitutes the bulk of the universe and the poor are an alarmingly increasing demographic. It is to the credit of Bill, Tavis Smiley and a few other humane jounalists that a faint light is being shone on an issue no one wants to talk about but one which has very deep implications.

    Then, I had to laugh when Bill asked Matt Taibbi to explain derivatives to him; because Alan Greenspan testifying to Congress after the crash, said that he didn’t know how derivatives worked either, they were just too complicated.

    Before the financialization of the Western world began in the 1990s, money was a measure of material wealth eg. the GDP, something everyone understood. After that, with derivatives, credit default swaps, e-trading, etc money became monopoly money. Clearly an insane scheme which we are now waking up to.

  • hourglass1

    and her beverage suppliers continue to extend credit and deliver? the suppliers’ continue to put off breweries?

  • Anonymous

    I”m not sure if you watch Fox, listen to Rush, to politicians, to Wall-Street itself…Because they’ve spent most of their time blaming the home-owner in some recreation of history that selectively picks facts to support their position. The Caveat Emptor canard is everywhere. Why? because it fits with this narrative that big business is responsible to know-one & that middle class and lower-income Americans are responsible for EVERY pain they have experienced.

    Why blame Wall-Street? Because, it is clear (just read Morgenson (NYTimes fin. editor), Michael Lewis (The Big Short) – who makes it abundantly clear that wall street collectively knew they were engaging in trading based upon fraudalently created ‘paper’) for years.

    I will not blame the least amongst us for 1-momentbecause each of those moments is a distraction, a slight-of-hand, from the true criminals whether morally, civilly, or criminally.

    Lastly, they do not get a ‘free ride’…they lose their homes, their kids have no home to come to at the end of a school day etc., and the endless suffering of millions and millions is DIRECTLY the result of a system designed to encourage exactly what ocurred. A system from contract to foreclosure where the game is rigged, the playing field unlevel, and the least amongst were prayed upon via a system so complicated that even those within it barely understand it.

    Politely I say ‘Give me a Break’.

  • Pete

    Loved the show tonight. With our neo-Conservative government here in Canada slashing social programs and funding, I fear that we are following in America’s footsteps.

  • http://alechudson.com/ Alec Hudson

    WATCH THIS Hear the real reasonwe are in a Depression

  • http://alechudson.com/ Alec Hudson
  • Traymond003

    Thank you for interviewing two of my favorite bloggers. As usual, they are right on the money. The reception Dimon received on Capitol Hill was disgusting.

  • Tom Youngjohn

    How many mortgages sold by Washington Mutual turned out to be “toxic”? That’s what I want to know. Chase swallowed up Washington Mutual in a backroom deal. Now, technically, how well have Washington Mutual’s mortgages performed? My guess would be “above average.”

  • Mkexplorer

     Thanks for having Yves Smith and Matt Taibbi on the program.  They were superb!  Smith and Taibbi really know how to connect the dots and present the truth.  Compelling television, Moyers-style.

  • http://www.facebook.com/people/Harold-C-Hayes-III/1373482973 Harold C. Hayes III

    Fantastic show! Saddened, angered and  disgusted by the actions chronicled, but the truth is the truth.

  • Zeeto

    …and you all still believe in GOD when it is clear that Satanic  Company  are clearly in charge of your life and your children’s as well for looong time. How sad how bad …?  “We believe in GOD but we pay the banks debts in taxes ?”

  • Durkster

    I also liked the reference to the connection between the US financial industry and the euro crisis. But my gosh, look at how this simple truth is portrayed as ridiculous and mocked (read the commenters) in coverage of what Barroso said at G20

    http://www.telegraph.co.uk/finance/financevideo/9342988/EC-President-Jose-Manuel-Barroso-blames-North-America-for-economic-crisis.html

  • http://twitter.com/fashionRIP deborah j barnes

    thank you again for having the courage to stand up. This was all i needed to fully empower my alternative plan (barter and/or trade by creating the “:events” to get my Masters in Interdisciplinary community engaging, trust building,  projects design that spread the feeling disasters accomplish without the disaster. It is do-able, i have experienced it twice. When i set up the shoot for Species on the Verge and again in a co-op art show designed to see mif i could replicate some of the feelings , the miracle i felt i was witnessing during the video shoot. This is one of those “you know it when you feel it things” and once you feel it you understand the joy inherent in the cooperative, collaborative process with a common worthy intent. Words don’t deliver ..it is action real time experience ..aka life in the light.

  • Randy Pierce

    Thank you for expressing my thoughts so well. Taking single payer off the table with no discussion and giving everything to the insurance cartels doomed the ACA.

  • Hwalterh

    Both guests were brilliant.  My solution is to nationalize the Banks…Put the execs to work in the agri fields…Take away ALL their truly unearned assets…No human needs that much, just to say they have it, while so many do not have enought to eat or to pay for needed care…It’s a travesty.  Dimon belongs behind bars next to Madoff….and all…I say all who have profited from totally illegal activities….

  • Pchild

    Yes, everyone knew that the lenders were out of control (except our gov’t?) but try talking someone out of the ‘great’ deal they just got from their bank to buy this house or refinance their home so that they could do things like pay their kids tuition. Believe it or not, people actually believed the banks wouldn’t give them a loan that they couldn’t pay back! Lenders told them that they could refinance in a year because of the equity they would gain in the value of their home.
    Ya, there were some crooks on the buyers side of the table but there were many, many more on the lenders side.

  • Guest

    This interview was outstanding; I’ve read Taibbi’s columns for some time now, but I was very much impressed by Smith’s knowledge and expertise.  But I winced as the interview closed with Moyers’s comment:

    “When you come back I want you to take the whole hour to explain to me what a derivative is and how it works…”

    Indeed, that’s the crux of the biscuit.  Almost nobody knows, and yet they have this profound impact on everything.

  • http://www.facebook.com/people/Scott-Duke/100000487357794 Scott Duke

    wonderful!!

  • ErikTheRed

    Right On, Right On, Right On Bill….     Expose the Bastards, Inform the public, Give them Hell.  Only the Truth will propel us to rise up against the plutocrats who have polluted and corrupted our Republic.  

  • lgfromillinois

    The Old Testament prophet, Ezekiel’s,  cry of anger againest “Shepards who feed themselves’ fits these large, too-big-to-fail, banks: “…Woe be the shepards of Isreal that do feed themselves! should not the shepards feed the flocks.”  (Eze 34 v2 KJV)  With huge salaries, an imperious attitude and an expectation that we, the American people, will bail them out, these bankers are predators of our money, not shepards.  How long must we suffer before we wise up and begin to break up these monsterous institutions?

  • Hwalterh

    Right on my friend…I am also an accountant soon to be retired I hope, like around12/31/13….Bless your heart, and be well….

  • snowqueen

    now read Naomi Klein’s The Shock Doctrine and understand how and why they don’t care about the poor people with guns – it’ll simply bring more money to ‘Homeland Security’ aka the military industrial complex who are of course inextricably linked to the Wall Street consensus.

  • http://pulse.yahoo.com/_2CQ6C6JXM6MIKM64MGP5XWIWLM Michael Couch

    I have an email from March or April 18, 2008 saying there was a secret joint meeting of Congress that week to brief them about the economic collapse set for September and the civil unrest and martial law they were expecting to have then. They planned the collapse.
    Bailouts and zero FED interest to the banks were so they could buy up all the bottomed out assets that Giethner didn’t just give JPMorgan for $2 a share while Jamie Dimon sat on the board of the FED; or by propping up AIG to pay out 100% on derivative swap claims.
    Talk about prosecutable fraud…

  • Anonymous

    Moyers, Taibbi and Smith are smart and their hearts and minds are on the right page, so why aren’t they seeing the whole picture? It’s like fish swimming totally unaware of water.

    They can’t see it is the type of MONEY we are using in itself what the main problem is. In order to understand this crisis we have to realize it is in THE SYSTEM CREATING MONEY we are currently using, the key to solving the conundrum.
    This FRAUDULENT system is called Fractional Reserve Banking.

    95% of the currency we use today has been created by PRIVATE BANKS as loans to governments, businesses and individuals. It can ONLY exist as debt bearing interest, but the system NEVER creates the money to pay the interest, only the principal, therefore society is always short, functioning in scarcity.

    The world’s countries are in Crisis because they are in debt unnecessarily, since they could have created the currency they need Interest-Free out of thin air, instead of borrowing it from banks, paying them interest, who also create it out of nothing.

    THIS IS IT.

    A Monetary System that destroys the economy when debtors, (government, businesses and individuals) attempt to fulfill their obligations by paying back their debts to banks, choking it from lack of currency, is FRAUD.

    In this system, the more society pays back its debts, as in “Austerity”, the LESS currency in circulation, therefore the less economic activity when exactly the opposite is needed to generate wealth to pay back the debts.
    IT IS A CATCH-22 IMPOSSIBLE SITUATION….. and this is exactly where Greece, Ireland and everyone following the stupid “Austerity” bandwagon are at.

    Fractional Reserve Banking allows Private Banks to create the money out of nothing, for profit charging interest on money they didn’t have, and this has been going on for about 300 years.

    No other problems will be resolved until we change this madness.
    We need Lincoln-Style GREENBACK currency created by the government Interest-Free, and demand banks DO NOT LEVERAGE and only lend out money they actually posses (which is what most people think they do, but don’t)

    The banking sector will automatically deflate to the size it is supposed to have. Banking will be so unprofitable, most banking will be done by non-profit Credit Unions.

    BANKING TODAY IS A CANCER KILLING THE PATIENT

    A Simple Solution to the Debt Crisis
    http://www.youtube.com/watch?v=CrKV6bfqOck&feature=player_embedded

    Debunking Money – 1 Myth and Machiavelli
    http://www.youtube.com/watch?v=5iBSBVew-3Y

    ZEITGEIST addendum
    http://www.youtube.com/watch?v=1gKX9TWRyfs

    MONEY AS DEBT
    http://vimeo.com/3843038

    Essential Knowledge For A Wall Street Protestor
    http://www.youtube.com/watch?v=gV9A2IGShuk&feature=player_embedded

  • Anonymous

    Why was my comment censored out?

    It was published and then it was taken out.
    Why?

  • Anonymous

    Swimming fish is totally unaware of water.

    This is why is difficult to see the root of the problem. it is the type of MONEY we are using in itself what the main cause of the crisis is. In order to understand this riddle we have to realize it is in THE MONEY CREATING SYSTEM we are currently using, the key to solving the conundrum.
    This FRAUDULENT system is called Fractional Reserve Banking.

    95% of the currency we use today has been created by PRIVATE BANKS as loans to governments, businesses and individuals. It can ONLY exist as debt bearing interest, but the system NEVER creates the money to pay the interest, only the principal, therefore society is always short, functioning in scarcity.

    The world’s countries are in Crisis because they are in debt unnecessarily, since they could have created the currency they need Interest-Free out of thin air, instead of borrowing it from banks, paying them interest, who also create it out of nothing.

    THIS IS IT.

    A Monetary System that destroys the economy when debtors, (government, businesses and individuals) attempt to fulfill their obligations by paying back their debts to banks, choking it from lack of currency, is FRAUD.

    In this system, the more society pays back its debts, as in “Austerity”, the LESS currency in circulation, therefore the less economic activity when exactly the opposite is needed to generate wealth to pay back the debts.
    IT IS A CATCH-22 IMPOSSIBLE SITUATION….. and this is exactly where Greece, Ireland and everyone following the stupid “Austerity” bandwagon are at.

    Fractional Reserve Banking allows Private Banks to create the money out of nothing, for profit charging interest on money they didn’t have, and this has been going on for about 300 years.

    No other problems will be resolved until we change this madness.
    We need Lincoln-Style GREENBACK currency created by the government Interest-Free, and demand banks DO NOT LEVERAGE and only lend out money they actually posses (which is what most people think they do, but don’t)

    The banking sector will automatically deflate to the size it is supposed to have. Banking will be so unprofitable, most banking will be done by non-profit Credit Unions.

    BANKING TODAY IS A CANCER KILLING THE PATIENT

    A Simple Solution to the Debt Crisis
    http://www.youtube.com/watch?v=CrKV6bfqOck&feature=player_embedded

    Debunking Money – 1 Myth and Machiavelli
    http://www.youtube.com/watch?v=5iBSBVew-3Y

    ZEITGEIST addendum
    http://www.youtube.com/watch?v=1gKX9TWRyfs

    MONEY AS DEBT
    http://vimeo.com/3843038

    Essential Knowledge For A Wall Street Protestor
    http://www.youtube.com/watch?v=gV9A2IGShuk&feature=player_embedded

  • Mjleppert

    I agree, but what are We, the People to do? I am a child of the 60′s and I can’t think of anything we can do to unseat the smug, entrenched politicians and the Wall St and industrial sociopaths who keep them so entrenched.

  • Mona

    sociopathic behavior -  that certainly explains a lot.  sociopaths do not exhibit christian behavior, do not follow the 10 commandments.  my grandmother said that god would save America because we are a charitable nation.  we may be doomed if we do not have better leaders and oversight.

  • Karl Hoff

    Hi, If everyone would look at how little the Amish need to live well and how they make and grow much of what they need, there is a great lesson to be learned from them that does more to control all the Fat Cats then all the degrees on the planet. You might say I’ve worked backwards because instead of giving my money (which is really my time) to the industrial sociopaths, I build my own when I can, grow my own when I can, and fix my own when I can. All of my costs for nearly everything has plummeted. TV works really well with outside antenna and is free. I work hard so I don’t need to pay a fee to a gym to stay in shape. The beauty of it all is that what I do causes the sociopaths to get less rich and me to have more money after paying my living expenses and I’m not even a rocket scientist. 

  • JonThomas

     Precisely. Money, time, and efforts are indeed expressions of our values. What we spend our resources on not only speaks volumes, but also serves practical results.

    It’s schizophrenic to value noble causes and yet enrich those who work against our own interests.

    May we all learn these simple truths Karl.

    These are the beginnings…I’m sure there are other ways, but I like, and applaud your choices…well done!

  • Karl Hoff

    Jon, thank you for the kind thoughts, Karl

  • Ellizabeth Grady

    That was excellent, please have them come back. 

  • http://www.siliconvalleywatcher.com/ Tom Foremski

    Great points here about how the Euro crisis was sparked by sale of fraudulent Wall Street financial products and not because of “social safety nest” or trade unions. 

    Hold the banks accountable by splitting them up. Too large to fail means they must be treated like utilities and/or split them up so that they can be held accountable.

  • B Comenius

    Privatized money supply using fractional-reserve banking incentivizes bad behavior and dis-incentivizes decent behavior.

    Debt-ridden borrowers must grab what is in short-supply in order to avoid the wolves who will be at the door as soon as the lending-go-round stops!

    To do this they have to squeeze workers, cut corners, lie, cheat, even steal through inflating asset bubbles, selling high, and then buying in again low.

    They have to pull wool over eyes to fleece and glean the vast majority before the money creation slow down makes it harder to repay and service their debts.

    This is the underlying system that incentivizes behavior in our society. These self-interest behaviors arise because of the way money is created. Prophet Mohammad notices as much about 1300 yrs ago.

    These commentators need to wake up from their slumber in the poppy fields and start going back to first principles. We have been deliberately undereducated about these matters and our vocabularies sorely lacking to really analyze and resolve these problems. This System has given rise to 100s or 1000s of these debt crises over 1000s of years. It is time we wake up. The stakes now are too serious with all this interconnection into one global economy.

  • http://corporatewhoredomsandtheamericankleptocracy.wordpress.com/ Christina Marlowe
  • http://corporatewhoredomsandtheamericankleptocracy.wordpress.com/ Christina Marlowe

    Mission Accomplished: The Reagan Occupation and the Destruction of the American Middle Class

    by David Michael Green | June 25, 2010 – 10:38am

    Eighty years ago, something occurred in America that was never supposed to happen. An aristocrat came to the presidency and engineered a policy revolution that created a broad and prosperous middle class where it had not existed as such before.

    To do this, Franklin Roosevelt and his party had to rewrite the existing rules of wealth redistribution in the United States such that the traditionally fantastically wealthy overclass (which had grown even fatter as the industrialism of the prior century concentrated wealth yet further) would become merely tremendously wealthy from that point forward, in order to leave enough for others to live a decent life.
    Needless to say, this rankled the country club set, but, remarkably, they more or less made peace with this development during the early decades of the post-war era, and largely cooperated with the new economic order. So did their political representatives. The Eisenhower administration was the first chance after twenty years of the New Deal to dismantle the newly created American welfare state, and Ike not only refused to take that opportunity, but famously labeled those in his party who wanted to as “stupid”.
    If Eisenhower, in his gray suit, black-and-white photos and de rigueur businessman’s hat from the era seems quaint today, so does his political restraint. By the 1980s that was ancient history, and remains so to this day, including through (and via) two Democratic presidencies now.
    If Americans understood the real ambitions of Ronald Reagan and his puppeteers, and if they knew the degree to which the supposed patriotism of those folks extended beyond falsity and into the far darker waters of being an irritating irrelevance put on purely for show, then they would not only stop seeing Reagan as some sort of national hero, but would also understand that he instead launched a process far more equivalent to an invasion and occupation of this country.
    The goal of the right – which cares about America about as much as it does about Burkina Faso – has been to restore the economic order last seen under Herbert Hoover, in which a tiny minority possess vast sums of wealth and there is (therefore) essentially no remaining middle class. It is nothing short of a breathtaking display of a world class greed, worthy of the ages.
    It has also been a work of strategic genius (in much the same way one might appreciate the Germans’ engineering prowess in figuring out the logistics of how to mass murder ten or twelve million civilians in a year or two), one which has drawn upon deep psychological insights, absolutely sociopathic amoralism, and clever tactics that have all simultaneously pushed in the same direction. In plain English, they hired some politicians of hit-man level moral integrity, who then marshaled fear, insecurity, hate and deceit into a witch’s brew of self-destruction that would prove highly attractive to a large segment of the population already sinking from the effects of a global economic order rebalancing after decades of post-war American dominance.
    Of course, you couldn’t just come right out and say, “Vote for me and I’ll give your money to people so rich they can’t even imagine what they’ll do with it (but they still demand to have it anyhow)”, so slightly more subtle tactics had to be employed. It is telling that the most honest thing Barack Obama ever said was when he thought there were no microphones in the room. But he was right when, at a presidential fundraiser in San Francisco he told the wine and cheese set that the right uses guns, god and gays (I would add Gaddafis) to scare people out of their money. I’ll believe that Republicans are serious about protecting heterosexual marriage on the day that you can’t find half of them prowling the gay bars of DC every night (and you don’t even want to know what the other half are into).
    This bait-and-switch tactic worked perfectly well whenever it was applied. It didn’t hurt that the regressive Billy-Bobs who vote for these folks are as dumb as a tree. With bags of hammers for leaves. But stupid is really only the facilitating quality, and often one that is neither present nor required. What really drives this stuff is fear. If you can turn that into a loathing of fur’ners, fags, bitches, blackies and brownies, you got their vote. Then you can do what you really set out to accomplish in the first place. George W. Bush’s 2004 campaign was the paradigmatic example. All year he talked about jamming through a constitutional amendment to ban gay marriage. Big priority. Urgent national issue. The religitarded across America just about peed themselves, they were so excited. Then he gets elected and is brazen enough to announce that there’ll be no such effort, after all, and that his signature legislative initiative will be an attempt to hand over the fat Social Security pot of money to Goldman Sachs. The redneck dolts with their Bush/Cheney ’04 bumper-stickers didn’t know what to think. So, of course, they just didn’t.
    Meanwhile, to say that this kleptocratic revolution worked really well is only untrue by means of the verb tense employed. It is still working really well. And the final leg of Reagan’s March to the Sea is now upon us. Chunks of middle class body parts have been hacked off, bit by bit, over the decades, ’til there’s little remaining anymore. Remember how they told us that ‘free trade’ wouldn’t decimate our jobs, our unions and our bargaining power? Is that why little old ladies serve Happy Meals at McDonald’s all across the country, assuming they’re lucky enough to get that job? Remember how they said that massive tax cuts for the wealthy would be ‘revenue neutral’ and would jump-start the economy? Which is confusing since the national debt doubled under George W. Bush, and then he proceeded to hand us the worst economy since the Great Depression. Remember how they told us that we needed to slash wasteful government spending on benefits? Now that we’ve become the ones who need those, they’re gone. Remember when they said that government is our enemy and corporations should be free to do whatever they want? You know, like spill oil or trade derivatives?
    There’s another little trick that is about to become especially prominent in the coming years. When Reagan came to office and began his “voodoo economics” project of nearly quadrupling the national debt, after having promised to cut it instead, many people were puzzled by this. Personally, I figured that they just did the math and realized that in the real world (where governments sometimes live but campaigns rarely do) something simply had to give. If you slash tax revenues and massively increase military spending, guess what’s gonna happen to your budget? Others, however, saw a more nefarious game being played, and perhaps they were right. This is the idea that they intentionally ran up deficits so large that the national government would be forced to do what it otherwise would not, which is to slash spending on popular entitlements and other social programs.
    Whether or not the conspiracy was real, it is the case that the federal government is running humongous deficits every year, which pile up further on the massive national debt. And it is also the case that we are now hearing a rising chorus on the right – especially from the tea party know-nothings – about slashing government spending as the top priority for Washington. Even though, according to the principles of Keynesian economics, this is the last thing we should be doing during a recession.
    And, of course, something tells me that as the pinch is increasingly felt, the call for cuts won’t be in the domain of military spending, even though our allocation there is obscenely out of proportion to any imaginable threat in the world, and is roughly equal to what almost the entire rest of the world spends on defense – that’s one country equal to almost two hundred others, combined. I’m also guessing that we won’t be raising taxes on the wealthiest Americans either, even though they pay far less than they did in the pre-Reagan era, when the country was generally very prosperous, and even though they often pay a lower percentage in taxes than the secretaries and janitors who work for them. No, we can’t touch those folks.
    Instead, the intense pressure now will be to finish the job of eviscerating the middle class and transferring every last nickel of their wealth to the oligarchs who fancy themselves masters of the universe. Unemployment insurance, for example. Never mind that we have ten percent official unemployment and closer to twenty percent in reality, or that whole cities like Detroit are being wiped out. The Republican minority in the Senate, along with the Democratic “moderates” there, are now refusing to extend expiring unemployment benefits (which are already a pittance when they exist). Nine hundred thousand laid-off workers have thus lost their meager sub-subsistence benefits, and that number will grow to more than a million-and-a-half in a few days now. Guess why. Because regressive senators – including John Kerry and Maria Cantwell – are holding unemployment insurance extensions hostage to protecting a loophole that allows wealthy fund managers to be taxed on their profits at an obscenely low percentage rate. How’s that for national priorities? How’s that for compassionate conservatism?
    Next, inevitably, will come entitlements. Indeed, most of the states in the union are already heading that way, cutting pensions for employees. Not to mention certain low priority areas like education, which is getting slashed from California to New York. How long can it be before Medicare and Social Security are put on the chopping block? And why? Because we have our priorities good and straight, pal: a morbidly bloated military and pathetically low tax rates for the wealthiest among us comes first. Then, if we could somehow do it for free I suppose we could allow decent education, or health care, or retirement with dignity for our elders. But, of course, since that can’t be done without cost, those things must go.
    The other strategic initiative now reaching fruition during the right’s three decade-long campaign to massively redistribute wealth in this country – literally, the crime of the century – is the evisceration of the state. This must be done (or, more accurately, it must be done in some respects but absolutely not in others) because the state is the only force capable of standing up to the power of concentrated wealth, and because the state sets the very rules by which such wealth either is or isn’t concentrated. It also must be done because the state nominally speaks for the public and the public interest, as against the private interest.
    Since Reagan, regressive puppet politicians have been spouting anti-state rhetoric and sarcastic venom with increasing intensity. Saint Ron of Hypocrisy told us that government was the problem, not the solution, seemingly without noticing the irony of his massive military build-up or the government-enforced restrictions the right favors on everything from abortion to gay marriage to euthanasia. Now, as gutted and corrupted regulatory institutions have permitted massively harmful meltdowns ranging from Wall Street to coal mines to oil wells, we are forced to listen to sermons from those on the right about the incompetence of government. Well, yeah. If in fact you staff government regulatory bodies with industry shills who are explicitly ordered not to actually, er, regulate, and if you legislate away their power to effectively do so anyhow, and if you pulverize conscientious whistleblowers to within an inch of their lives, then guess what? That little bit of government will in fact be incompetent. In fact, it will be nearly as bad at the competence thing as, say, all the big banks on Wall Street (which had to be rescued by the, uh, government), or all the big auto companies in Detroit (ditto), or British Petroleum, or Enron, or the savings-and-loan industry, or…
    And so, despite the astonishing illogic of it all, the American people now clamor for more harm to be brought upon themselves and more of their money to be looted for the further enrichment of the wealthiest one-tenth of one percent of the population. It certainly doesn’t help that the supposed “party of the people” is every bit as much a part of the problem as anyone else, and arguably far more so given the extra measure of disingenuousness involved. From NAFTA to WTO to welfare ‘reform’ to the Telecommunications Bill, Wall Street never had better friend in the White House than Bill Clinton. That is, until Barack Obama simply outright changed the address of Goldman Sachs’ headquarters to 1600 Pennsylvania Avenue. As we speak, the president and his party in Congress are busy gutting meaningful ‘reform’ of the shamelessly gluttonous finance industry, just as their masters have ordered them to do. And if you think Obama’s bad now, wait until after November. Like Clinton in 1994, he will take the trouncing he’s about to receive in the election as a signal to move even further to the right.
    And thus the Reagan Occupation inches closer yet to a full-blown “mission accomplished”. The middle class is on its knees and shrinking fast. Unions have been broken into irrelevance. Government, supposedly an agent of the public interest, has become a complete tool of those it is meant to monitor. Both political parties are fully owned by the oligarchy. The public has been brainwashed into seeing its allies as enemies and its enemies as allies. We have been drained of hope that any actor on the horizon can come to our rescue.
    Bad policy choices by self-serving politicians? Would that ’twere only thus.
    We are occupied.

  • Anonymous

    I came here from the more recent Bill Moyers program with Yves Smith and Dean Baker to re-watch this program with Yves Smith and Matt Taibbi. Excellent, just excellent. Very disturbing, still and again, but still excellent. Such truth-telling. Yves Smith says in the more recent program (paraphrasing but something to this effect) that Obama’s response to problems is more propaganda. Yves Smith is new to me (my ignorance) but I am so grateful to Bill Moyers for introducing her to those of us who might not have heard her speak/write before. Matt Taibbi gives me hope for the future in contrast to my usual reaction to “the youth” of America, their insight and intellect; he is one sharp cookie. To Bill, Matt, Yves: please keep up the good work. What can you say to Americans who, like me, always vote, write and call our elected officials, speak to others when opportunity arises, and write as a poster on forums, blogs, etc. – all to no avail (the breakdown of democracy): what can we DO???!! We need change, not “hope and change” but CHANGE. What can we do? Thank you three, with great gratitude for your work.

  • Anonymous

    Please change your career and write for a living – or simply as a contribution to community. You are informed and cogent. Thanks for your post.