Simon Johnson, James Kwak On 'Bill Moyers Journal' (VIDEO): 13 Bankers Authors Explain Financial Crisis, Reform Effort

Simon Johnson and James Kwak, the authors of 13 Bankers, appeared on "Bill Moyers Journal" Friday evening to discuss the financial crisis and the push for Wall Street reform.

The pair, who both blog at BaselineScenario.com, painted a disturbing and dysfunctional picture of the relationship between Wall Street and the politicians who craft the rules that govern them.

Kwak and Johnson explained that Wall Street created the crisis, relied on public money to generate private profits, and is spending billions to defeat reforms that would protect Americans from another financial crisis.

Johnson said that people in Washington are wrong when they talk of "populist anger."

"Most of what I encounter," Johnson said "is legitimate, sensible anger. People actually understand what happened. They understand what went wrong and they want to stop it. And the banks don't get this."

To illustrate how out of touch banks are with reality and the bailouts that facilitated their profits, Johnson pointed to comments by JP Morgan Chase CEO Jamie Dimon. In May 2009, Dimon told shareholders that Chase had its "finest year ever." Roughly six months prior to his speech, JP Morgan Chase benefited from $25 billion in U.S. Treasury funds.

Johnson trashed Dimon's view. "They didn't have their best year ever," Johnson said. "They went through crisis. They were saved like the rest of the financial system by the government, by the taxpayers. But that's not how they see it. That's not what they believe. That's really important. That belief must be shaken if we're to make any progress at all."

Pointing to the power of Wall Street's lobbying money, Moyers said that the American people don't stand a chance against the Washington-Wall Street oligarchy in the fight for financial reform. Johnson wasn't ready to concede and pointed to the political events of 1902, as proof that reform was achievable.

In 1902, President Theodore Roosevelt took on J.P. Morgan and filed an antitrust suit to dissolve the banker's railroad monopoly. Johnson argued that there was no precedent for Roosevelt's campaign for reform, and yet the president won.

Johnson acknowledged that modern financial reform movement lacks an advocate like Roosevelt, but he told Moyers that they're out there. "We must find them," Johnson said, "and we must fund them financially, sufficiently, to fight against this nonsense from the corporate sector."

WATCH:

Comments

[coach-1640280]

09:51 AM on 04/19/2010

Too Big to Succeed

Wallstreet is the oligarchy capital of the world. Today’s corporate management structure is a classic oligarchy bureaucratic pyramid management flowchart. Hundreds of thousands of American jobs depend on the success of this business model.

Hypothesis:

Wallstreet corporate industries will be back for more government assistance precisely because these industries are in reality “too big to succeed”. Like a huge dinosaur with a walnut sized brain, these entities roam without consciousness of direction and the trampling under their feet.

There is limit to the oligarchy bureaucratic pyramid management flowchart business model that guarantees breakdown when business size gets “too big to succeed”.

It is not possible to prove this hypothesis until too late. Recent occurrence of large corporate failures, however, suggests a pattern. (Citibank, AIG, Chrysler, Enron, Massey…) Large corporate failure is not limited to any particular industry.

It is only prudent our federal government plan carefully for re-occurrence of massive corporate “bailout”. The American taxpayer wants readiness when another starving brontosaurus corporation comes foraging for food. A thoughtful dismantling may be just what these business systems need.

How much “bailout” denial is required before this hypothesis is accepted and we face the problem squarely?

Citizen is coach to team democracy. Coach is responsible for success. It’s your call, coach.
http://coach-1640280.newsvine.com/

[Bobg]

12:02 AM on 04/19/2010

The biggest news is that Bill Moyers (and NOW) are apparently being given the pink slip by PBS. Is this true everywhere? Does anyone know what's going on?

[Billl]

09:47 PM on 04/18/2010

A campaign to throw all incumbents out of office could send a remarkable message that would be the killer app to pursue change.

Even if the bad guys put up their own candidates in the election to carry out their corrupt agendas a clean sweep of all incumbents will be earth shaking and galvanizing.

The seething anger of all abused Americans could be directed at putting all corrupt people in prison regardless of their power or influence or positions in business or government from bureaucrats to the highest elected office holders.

This revolution with the single purpose of the November election being to get the crooks out of controlling our lives and into jail could be simple and understandable for everyone.

Defeating every incumbent is the key; no exceptions, good incumbents if there are any, must also go to send the message.

This is a way we can fight politicians who aren’t listening to us.

We can get our country back in November by throwing out every single incumbent.

Hopefully following the November elections there will be better opportunities for debating changes.

Without removing the crooks from government and Wall Street our country can not survive.

[interlude]

11:58 PM on 04/18/2010

"We can get our country back in November by throwing out every single incumbent."

This is painfully naive. There's no guarantee that the incoming would not be crooks or turn into crooks after a few years in office. And there's no guarantee that some getting swept out shouldn't be.

[suzc]

11:15 AM on 04/18/2010

There is no way to fight those with all the money (and the ability to print it) and all the tanks; that means Congress and its masters. It includes the big bankers. There isn't enough money left in the country to elect candidates not already bought. Voting no longer matters; we saw that in 2000 when Scalia appointed W. against the popular vote (just in case it didn't work out right in Florida).

I don't see any way out of this mess because the people in control of it all are the ones who created it all.

[Louis Leo IV]

06:53 PM on 04/18/2010

It's time to make voting matter. First we need to reboot the system.

Watch Harvard Law Professor Lawrence Lessig's new presentation, Ctrl+Alt+Del and learn how you can join the citizens unite movement to save our democracy.

http://iv-time.blogspot.com/2010/04/fix-congress-first-lawrence-lessig.html

"For far too long, through both Democratic and Republican administrations, Washington has allowed...lobbyists and campaign contributions to rig the system..., no matter what it costs ordinary Americans.

If we do not change our politics, if we do not fundamentally change the way Washington works, then the problems we’ve been talking about for the last generation will be the same ones that haunt us for generations to come.

If we're not willing to take up that fight, then real change - change that will make a lasting difference in the lives of ordinary Americans - will keep getting blocked by the defenders of the status quo."

- Presidential Candidate Barrack Obama

[suzc]

07:34 PM on 04/18/2010

Thanks for the link!

[PBMUS]

02:09 AM on 04/18/2010

The only problem with 13 bankers philosophy is that the very eloquent gentlemen that have written this important book are still talking about banks like we have to have them.....we DON'T....the change that we need includes the feds plans to print new money which will happen to stop this financial holocaust....

[Skyhawk]

07:22 PM on 04/17/2010

Enforce Sherman Anti-trust and repeal the Telecommunications Act.

[catbite]

05:43 PM on 04/17/2010

Another terrific episode from Bill Moyers. At last, we are seeing indictments.

[Mildmannered]

04:47 PM on 04/17/2010

Simon Johnson and James Kwak need to write editorials for newspapers like USA Today, which will reach many people.

[Skyhawk]

07:20 PM on 04/17/2010

Until then read the Financial Times. www.ft.com
Real financial journalism, no th WSJ b.s.

[Countess]

04:21 PM on 04/17/2010

The chances of having a political party willing and able to fight for reforming this corrupt system are little or none. We have the republicans embracing and exploiting right wing hatred of the federal government and the democrats content to tinker and promote hakf-as- reforms that are not radical enough so they continue taking the money from the corporate criminals. On top of everything else race hatred which has been supressed for awhile has resurfaced again. I hope i'm wrong but it is hard to imagine a true reformer coming forward to lead us to a better place.

[TJCole]

03:58 PM on 04/17/2010

We must Rescind Corporate "Personhood" it's Corrupted our Entire System...

We have a system of legalized bribery due to it....!

[ReasonIsMyReligion]

03:20 PM on 04/17/2010

Without knowing Johnson would be on Maher, I watched him and his co-author Kwak on PBS.

Riveting and horrifying.

The fate not only of Goldmine Sacks (heh), but of our nation is at stake.

I say the confluence of banking power and political power will do more to destroy our economy than OBL himself in his wildest dreams.

This is not about market forces. This is about a casino, a rigged one at that.

To the degree we have a free market, it is a market where the market-makers fleece the customers routinely, and expect the customers to bail them out when the fleecing fails.

http://www.pbs.org/moyers/journal/04162010/watch.html

[Zhuubaajie]

02:41 PM on 04/17/2010

It'd be interesting to see what happens this November. If the American voters still just stay in do nothing mode, content in letting their "betters" run the show (even if into the ground and more) in Washington, then they deserve everything that is coming to them.

[msjimmied]

02:16 PM on 04/17/2010

With the media control, constant spin and vitriol, a strong sane candidate will have a herculean task of ever getting a campaign off the ground. We the people need to first clear the way. Our voices need to be loud and the message unmistakable. We can only wrest our government back from the grasp of the bankers who have decimated this country by demanding campaign finance reform and abolishing the Federal Reserve as it exists today. We have been silent too long while the pillage of our own people has gone on unchecked.

The march down Wall Street by the tea baggers, countered by the unions should be a spectacle! but the message is still going to be sent. The clash of these two worlds may just result in fusion, stranger things have happened. Too many people already "get it", just need a bit of fine tuning... I find the energy here very despondent this morning, but remember, the change you seek has to begin with you.

[ECJLA]

02:11 PM on 04/17/2010

Bill Moyers admirably provides weekly solace for a demoralized truly moral majority. But as he himself admits, free speech and "argument" alone will not somehow magically police the infernal "whoreporate" machine that has been unleased in the world and those who avariously run it.

If it is not leading to serious-as-a-heart action "in the arena", Moyers' weekly "shtick" has all the political import of a powerless disapproving bystander in Sodom and Gomorrah.

With such action, the TwiddleDem/TwiddleGOP era of American politics would end.

A significant augury is the boost the British public recently gave to Liberal Democratic Party leader Nick Clegg following his impressive performance in an American style debate with his fellow Labor and Tory Party candidates for Prime Minister.

The British "Lib-Dems" (as they are proudly known) meld economic fairness, civil rights and progressive foreign policy planks into a powerful platform on which to stand (in Neil Kinnock's famous phrase).

America's moribund major parties are vulnerable to precisely the same challenge from a newly minted Liberal Democratic Party, formed initially by the secession en masse of the entire "Democratic wing of the Democratic Party" into a(n instantly viable) third party.

Forming such a new party is the order of the day for American progressives.

The Democratic Party today is similar to the USSR's Communist Party under Gorbachev. Its leader talks a good game but the words are hollow. Elvis (FDR) has left the building.

Eric C. Jacobson
Public Interest Lawyer
Culver City, California

[ECJLA]

02:23 PM on 04/17/2010

Whoops. Make that "...serious-as-a-heart-attack" action "in the arena" ... (Figuratively speaking of course.)

Btw, here is the news item I refer to:
http://www.huffingtonpost.com/2010/04/16/nick-clegg-wins-uks-tv-el_n_540271.html

[telee]

02:03 PM on 04/17/2010

I don't expect anything to come of the fraud charges against Goldman. They'll appeal all the way to the Supreme Court and have any convictions overturned.

[thisisme45]

01:11 AM on 04/18/2010

They certainly can pay for the absolute best representation.