The Labor Department has just announced the U.S. economy gained
only 69,000 jobs in May and the unemployment rate rose to 8.2
We end today’s show with part two of my
conversation with the Academy Award-winning director Charles
Ferguson. He first examined the network of academic, financial
and political players who contributed to the nation’s financial
crisis in his documentary, Inside Job.
now has a new book out that’s called Predator Nation:
Corporate Criminals, Political Corruption, and the Hijacking of
America. It’s based on newly released court filings that
reveal how major players contributed to the financial crisis.
began by asking Charles Ferguson about a recent comment of Mitt
President Obama is an old-school liberal whose first
instinct is to see free enterprise as the villain and
government as the hero. America counted on President
Obama to rescue the economy, to tame the deficit and
help create jobs.
Instead, he bailed out the public
sector, gave billions of your dollars to companies of
his friends, and added almost as much debt to this
country as all the prior presidents combined.
consequence is that we are now enduring the most tepid
recovery in modern history.
And let’s follow that up with the interview he did with
CNN’s Soledad O’Brien when he talked about not being
concerned about the poorest Americans.
I’m in this race because I care about Americans. I’m not
concerned about the very poor. We have a safety net
there. If it needs repair, I’ll fix it
O’BRIEN: You just said,
"I’m not concerned about the very poor," because they
have a safety net. And I think there are lots of very
poor Americans who are struggling who would say that
sounds odd. Can you explain that?
Well, you had to finish the sentence, Soledad. I said
I’m not concerned about the very poor that have a safety
net, but if it has holes in it, I will repair them.
O’BRIEN: Got it. OK.
The challenge right now - we will hear from the Democrat
Party the plight of the poor, and - and there’s no
question, it’s not good being poor, and we have a safety
net to help those that are very poor.
But my campaign is
focused on middle-income Americans.
My campaign - I mean,
you can choose where to focus. You can focus on the
rich. That’s not my focus. You can focus on the very
poor. That’s not my focus. My focus is on middle-income
Mitt Romney. Charles Ferguson, your response?
Mr. Romney is doing a good job of focusing on the rich,
including himself, with a net worth of almost $300 million.
Unfortunately, the best way to - in the long run, to help the
poor in the United States is to give them fairness and
And that is not something that Mr. Romney’s
policies or the direction of the country have been giving us
recently. And his comments about the adequacy of America’s
safety net also seem highly questionable.
In fact, in this
morning’s New York Times, there’s an article about
the imminent cessation of long-term unemployment benefits
for very large numbers of Americans who have been unemployed
for, in some cases, up to four years.
So, I fear that a
Romney administration would not bring us a solution to
America’s economic problems.
And Mitt Romney’s advisers you referred to earlier, as you
talk about, for example, Larry Summers and President Obama?
Who does Mitt Romney turn to? And also talk about the fact
that he is running for president not as the former governor
of Massachusetts but as the former head of the private
equity firm Bain.
That is what he is saying is his - are his
credentials for the job.
Yes, both disturbing.
Glenn Hubbard is one of his principal
economic advisers, and Hubbard not only has the major
financial conflicts of interest that I detail in the film
and also in the book, he also, when he was head of the
Council of Economic Advisers in the
George W. Bush
administration, was one of the principal designers of the
Bush tax cuts, half of whose benefits went to the upper 1
percent of the population.
So, I do not think that Mr.
Romney’s choice of economic advisers indicates his concern
for the middle class, needless to say not for the poor.
With regard to his record at
Bain Capital, the private equity industry, in general, and
including Bain Capital, is an industry that is largely
unregulated. And although in some cases private equity
deals, private equity transactions, have had benefits for
companies that are required, for the most part private
equity is an extremely efficient machine for making lots of
money for private equity executives, in some cases at the
direct expense of the companies themselves or the
One thing that is not widely discussed about the
private equity industry is that it frequently depends on
hidden subsidies from the government, of the sort that Mr.
Romney says he opposes.
For example, for-profit - largely
unregulated, for-profit universities depend extremely
heavily on subsidized student loans, and there have been
very widespread abuses of - by private universities that have
been owned by private equity firms, including Goldman Sachs.
I want to go to a clip, Charles Ferguson, of your Academy
Award-winning film, Inside Job.
The clip includes
your interview with Scott Talbott, one of the top lobbyists
for the Financial Services Roundtable.
In the U.S., the banks are now bigger, more powerful and
more concentrated than ever before.
There are fewer competitors. A lot of smaller banks have
been taken over by big ones. JPMorgan today is even
bigger than it was before.
JPMorgan took over first Bear Stearns and then WaMu.
Bank of America took over Countrywide and Merrill Lynch.
Wells Fargo took over Wachovia.
After the crisis, the financial industry, including the
Financial Services Roundtable, worked harder than ever
to fight reform. The financial sector employs 3,000
lobbyists, more than five for each member of Congress.
Do you think the financial services industry has
excessive political influence in the United States?
No. I think that every person in the - in the country is
represented here in Washington.
And you think that all segments of American society have
equal and fair access to the system?
The - you can walk into any hearing room that you would
like. Yes, I do.
One can walk into any hearing room. One cannot
necessarily write the kind of lobbying checks that your
industry writes or engage in the level of political
contributions that your industry engages in.
Between 1998 and 2008, the financial industry spent over
$5 billion on lobbying and campaign contributions. And
since the crisis, they’re spending even more money.
That was Matt Damon, the actor, narrating the Academy
Award-winning film, Inside Job. Charles Ferguson
directed that film and then went on to write Predator
Nation: Corporate Criminals, Political Corruption, and the
Hijacking of America.
Take the lessons we learn from
Scott Talbott, Charles Ferguson, to what we’re seeing today,
for example, with Jamie Dimon and the $3 billion loss at
Who has access? Who doesn’t? His lobbying,
for example, JPMorgan Chase and Jamie Dimon, against the
Volcker Rule and what this all means? Is it strong enough?
The fierce lobbying about the implementation of the Volcker
Rule is yet another example of this phenomenon.
industry, including and frequently led by JPMorgan and Mr. Dimon, have spent enormous sums of money to push back
against strong implementation of the Volcker Rule and other
aspects of even the relatively weak regulation embodied in
And Mr. Dimon repeatedly has said
that he doesn’t think that such regulation is required. And
indeed, one of the most astounding things about JPMorgan’s
recent loss is that regulation is still sufficiently weak
that we don’t know what that trade actually is.
We do not
know the details of that transaction, because they do not
have to be publicly disclosed. It has been said by people
who apparently do know something about the transaction that
if the situation in Europe worsens, the losses could extend
upwards of $5 billion.
And this is a loss that occurred in a
relatively forgiving economic environment, at least in the
United States, and in a bank that is widely regarded,
probably correctly regarded, as the best-run bank in the
So, it doesn’t give one a great deal of
security about what could happen if we have another
financial crisis and what could happen in other less
well-run, less financially strong banks.
You talk about the crisis in Predator Nation being
not just, you know, a Republican affair or a Democrat
affair, it’s a bipartisan affair. Talk about the role of
Democrats in all of this.
The role of Democrats, I would say, has been at least as
great as the role of Republicans.
The most important
deregulatory legislation was actually passed in the Clinton
administration, championed by Robert Rubin, who was
secretary of the treasury, a former CEO
of Goldman Sachs, and then also Larry Summers, who was first
deputy treasury secretary and then treasury secretary.
there was the repeal of Glass-Steagall, the law that separated
investment from commercial banking. And then, in 2000, the -
That was under Clinton.
Yes, under the Clinton administration. And then, in the year
2000, also in the Clinton administration, the Commodity
Futures Modernization Act, which actually banned regulation
of all so-called over-the-counter derivatives, including the
credit default swaps and many other instruments that were at
the heard of the 2008 crisis.
To his credit, President
Clinton has actually publicly stated that he now regrets
having passed that law. But it was definitely championed by
major fractions of the Democratic Party and policy
And then, of course, we’ve seen in the Obama
administration very little reform and no criminal
prosecutions, and the appointment of a very large number of
Wall Street executives to senior positions in the
government, including some people who were directly
responsible for causing significant portions of the crisis.
You also talk about how the once-revered figures Alan
Greenspan and Larry Summers have simply become courtiers of
the - to the elite.
Unfortunately, I think that’s an apt description. Of course,
Alan Greenspan was a private economist before he went into
the government, and had even taken money in the 1980s for
lobbying on behalf of savings and loan executives who were
later sent to prison, including Charles Keating.
Summers was first an academic and actually did not start
working for the financial sector until after he left
government for the first time, when he was president of
Harvard and then subsequently a professor at Harvard.
has consistently favored the financial sector’s interests in
all ways, and now he has made, by this point, tens of
millions of dollars from the financial sector.
The issue of regulatory capture - you talk about the
importance of more regulation, but what about the - that
revolving door between business and regulators?
Very important problem. Difficult to address, but not
impossible. I think that one very important measure that
would be very beneficial would be raising the salaries,
dramatically raising the salaries, of senior regulators and
senior civil service personnel responsible for economic
In some other nations, senior regulators are very
well paid, hundreds of thousands, even in some cases over a
million dollars a year. And if that’s the case, their
temptation to favor banks, to go to work for banks, is of
course much reduced. And I think that increased pay for the
public sector should be accompanied by much stricter
restrictions on what people can do after they leave
Of course, people should be permitted to work in
the private sector, but, for example, a five- or 10-year ban
on lobbying would, I think be a very beneficial thing.
Charles Ferguson, director of the Academy Award-winning
documentary Inside Job. His new book is called
Predator Nation: Corporate Criminals, Political Corruption, and
the Hijacking of America_. You can go to our website at
democracynow.org to hear wall">part one of the interview.
Tune in next Wednesday for our
interview with economist Joe Stiglitz and our coverage of the
recall election of Wisconsin Governor Scott Walker as he
competes for the governorship with Milwaukee Mayor Tom Barrett.
We’ll also be speaking next week with Congress-member John Lewis
and be covering the verdict in the Mubarak trial in Egypt.