Bill Moyers Journal March 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.
WILLIAM GREIDER: Unfortunately, Secretary Geithner, has a record- which we know about. When he was President of the New York Federal Reserve Bank. And he was at the table, in many of the bailout transactions. First Bear Stearns then A.I.G. and others. And this is, again, not my opinion, but people on Wall Street talk about it all the time. He got spun around again and again by the big Wall Street players. 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: “The New York Times” on Thursday had this remarkable full page graph, based upon the excellent work of the Center for Responsive Politics, a nonpartisan group you’re familiar with-
WILLIAM GREIDER: Yeah.
BILL MOYERS: That monitors money and politics. They said, where Wall Street trades in political currency, and if you look at this you realize that political connections may be the new currency for deal makers. Right? And it shows which of the financial elites have contributed to which elite politicians.
Flashback to 1981, Ronny Raygun, and Trickle Down Economics
The Education of David Stockman
About a similar situation during the Ronny Raygun administration where Stockman, as his finacial advisor, was spinning the numbers to boost the economy