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

GRETCHEN MORGENSON: Thanks, Bill.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

BILL MOYERS: 34 pages?

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

BILL MOYERS: And Dodd-Frank is 2,300 pages --

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

GRETCHEN MORGENSON: Correct. Absolutely.

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

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

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

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

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

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

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

BILL MOYERS: What makes you angry about this?

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

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

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

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

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

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

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

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

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

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

GRETCHEN MORGENSON: It is my pleasure, Bill.