http://www.pbs.org/moyers/journal/03272009/profile.htmlhttp://www.pbs.org/moyers/journal/03272009/watch2.htmlhttp://www.pbs.org/moyers/journal/03272009/transcript2.htmlhttp://williamgreider.com/booksMarch 27, 2009
BILL MOYERS: As you know, earlier this week Treasury Secretary Timothy Geithner proposed a vast expansion of government authority that would crack down hard on Wall Street's reckless behavior.
Just in time, it seems. You could almost hear the mob in the streets of Washington as he spoke. Popular anger was beginning to evoke unhappy images among Washington elites of the French Revolution, guillotine and all.
On the Op-Ed page of Sunday's "Washington Post," William Greider, the veteran political reporter of four decades, suggested a glass half full. He wrote that the public's rage "has great potential for restoring a functioning democracy. Timely intervention by the people could save the country from some truly bad ideas now circulating in Washington and on Wall Street."
Perhaps no journalist better understands the intertwining twists and turns of government and money, the collision of capitalism and democracy, than William Greider. He wrote the definitive account of the Federal Reserve system, SECRETS OF THE TEMPLE. In the spirit of Thomas Paine he produced, WHO WILL TELL THE PEOPLE? Followed it with, THE SOUL OF CAPITALISM. And now, COME HOME, AMERICA: THE RISE AND FALL (AND REDEEMING PROMISE) OF OUR COUNTRY.
BILL MOYERS: We saw Secretary Geithner on Monday. We saw President Obama on Tuesday night. We saw Secretary Geithner again on Thursday. And the storyline seems to be, we're going to get tough on the financial industry. Your old newspaper, "The Washington Post," says, calls it, "A sweeping expansion of Federal authority of the financial system. A rebuke of raw capitalism, and a reassertion that regulation is critical to the healthy function of financial markets." That's the storyline as I read the week, but if you read between the lines, what's missing?
WILLIAM GREIDER: Well, among other things that are missing from that story is that we had the rules and regulations, the agencies created some 80 years ago and afterwards to prevent this sort of catastrophe. And these same political players, Republicans and Democrats holding hands, stripped them away, eviscerated them. The same agencies these reformers want to put in power to prevent this from happening again. Starting with the Federal Reserve, the Securities Exchange Commission, other regulators, utterly failed in their duty to do that. Now, we're going to give them new power.
I'm offering a breath of skepticism toward this grand transformation of government. I don't want to be a cynic, but it feels more to me like trying to restore the old order that failed. And I mean by that these big mega banks that had been liberated by deregulation to do as they pleased and the other rules that were undermined. I think this President, and I'm a big fan of this President, but I think his first priority seems to be to recreate those institutions which, some of which are now insolvent, as healthy again.
And actually it's quite scary, because unless they set about to make much more fundamental changes, I fear we will, sure enough, get this back again.
***
WILLIAM GREIDER: .....This not new, of course, they did that 100 years ago when they created the Federal Reserve. 1913, it was a kind of compromise between labor and capital. And it said, we'll take the money question, about inflation, deflation, financial crisis, out of the popular debate. And we'll put it in this respected institution. And over a century it worked for some periods. And for other periods the Federal Reserve, because it is so close to the major banks, did what it could to help those financial institutions. And I say, bluntly, betrayed its public obligation.
BILL MOYERS: Which was?
WILLIAM GREIDER: Which was to run the economy in a balanced fashion, protect it against excesses, on both sides. And be an honest decision maker of money and credit supply. Which is the heart and soul of our system. And in the last year- if you look at what happened, you don't have to be an expert on monetary policy to see this. Step back and look at what happened in the last 25 years, 30 years. An explosion of credit and debt and a valuation of everything from the Dow Jones to these exotic financial instruments went through the roof, while the wages incomes of ordinary Americans flat, even falling, but basically stagnant.
***
WILLIAM GREIDER: .... The bailout of Bear Stearns was really about protecting J.P. Morgan Chase. The story was told backwards in the press, basically, because it's a story the government told that J.P. Morgan came in to buy Bear Stearns at the behest of the government. But in fact, if Bear Stearns had gone down, J.P. Morgan Chase was vulnerable itself to a wave of derivative crashing crisis. When they bailed out A.I.G., the chief executive of Goldman Sachs was in the room. Why was he in the room? Well, because he had big exposure to- through derivatives, to A.I.G. So, when they pump money into A.I.G., it sends the same dollars out and buys back these derivative contracts at par value, not even discounted, to the banks and others who hold them. Goldman Sachs gets $12 billion out of that transaction. This is another scandal waiting to surface. And I trust good, smart reporters are already on the case. And following the dollars that moved around among the leading financial institutions in ways that politicians could not have not known about it. It defies reason to think that Washington didn't know this was happening.
***
BILL MOYERS: A corporate state?
WILLIAM GREIDER: A corporate state. And by that I mean a rather small but very powerful circle of financial institutions the old Wall Street banks, famous names. But also some industrial corporations that bought banks. Or General Electric, which is already half of big financial capital, GE Capital. And that circle will be our new Wall Street club. Too big to fail. Yes, watched closely by the Federal Reserve and others in government, but also protected by them. And that's a really insidious departure. To admit that and put it into law. And then think of all those thousands of smaller banks. How are they going to perform against these behemoths that have an inside track to the government spigot? And for just ordinary enterprise in general? Before you even get to the citizens. How are citizens supposed to feel about that? And I-- my point is, in this situation, with if the leading banks and corporations are sort of at the trough, ahead of everybody else in Washington, they will have the means to monopolize democracy. And I mean that literally. Some of my friends would say, hey, that already happened.
BILL MOYERS: Yeah, the corporate state is here.
WILLIAM GREIDER: The corporate state is here. And I'd say, let's not argue over that. The fact is, if the Congress goes down the road I see them going down, they will institutionalize the corporate state in a way that will be severely damaging to any possibility of restoring democracy. And I want people to grab their pitch forks, yes, and be unruly. Get in the streets. Be as noisy and as nonviolently provocative as you can be. And stop the politicians from going down that road. And let me add a lot of politicians need that to be able to stand up. Our President needs that to be able to stand up.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
