In an interview with Real News senior editor Paul Jay, Johnson disputes the premises of the bailout, asserting that President Obama should have saved the functions of the banks by essentially nationalizing them instead of pumping money into them.
Among other measures, he argues that to get financial regulatory reform through Congress, it may be necessary to overhaul campaign finance reform to prevent banks from applying undue influence on lawmakers. What's missing from the current bills in Congress is overhauling the credit rating agencies, says Johnson, who argues that their role should be taken over by public utilities.
Johnson also highlights the lack of real reform of derivatives trading, which he calls the "San Andreas Fault" of the current financial system, arguing that they need to be traded on exchanges. And he criticizes the trend on Wall Street to make finance more complicated, such as the creation of derivatives instruments, saying that they come at a huge price because it limits competition in the banking sector.
He discusses his role as the new executive director of INET, the Institute for New Economic Thinking, which he's creating together with legendary financier George Soros.
WATCH Part 1, "Crony capitalism unchanged":
WATCH Part 2, "Wall St: More complicated, more profitable":
WATCH Part 3, "Obama had a choice":