Last weekend, NOW on PBS aired an insightful, hard-hitting interview with Elizabeth Warren that moved much of our audience to write in with their opinions and reactions.
A Harvard professor and outspoken economic analyst, Warren has most recently been heading up the congressional panel overseeing how the bailout money is being spent.
NOW Senior Correspondent Maria Hinojosa spoke with Warren about issues including the rise in both stock prices and unemployment, how we got to this point, and where we should go from here.
"If [Congress] gets it right, we're good. If they get it wrong, the country we knew will be gone," Warren tells Hinojosa.
More excerpts from the interview:
ON BANK BAILOUTS AND GUARANTEES
"Think about the business plan now for... a big bank that has a government guarantee behind it. In effect, they can say to the investors, 'Hey, come invest with me. And I'm gonna take it all to Las Vegas, and I'm gonna bet it on red 22. And if it comes in, we are rich. And if it doesn't come in, the taxpayers will pay you back'.... This is capitalism in a world in which the government either explicitly or implicitly says, "We will throw as many taxpayers under the bus as we need to, to keep these large financial institutions afloat."
"Citibank right now is sitting on a $300 billion guarantee from the American taxpayer. Of course their stock is up. Why wouldn't their stock be up? The problem is the rest of us, the real economy, what's happening with unemployment, what's happening with foreclosures... Are we working on government ideas to support the middle class, the working class, to support the real families in America?"
ON CREDIT CARDS
"There are fees for people who pay [credit cards] on time. There are fees for people who don't carry balances. There are fees for being inactive with your credit card. Because the whole point is to... figure out how to wring every last dollar out of them. That's the business model."
"I'm not anti-credit card. Check my wallet. I've got two. I love having a credit card. I am anti-tricks and traps. I wanna see Americans carry credit cards. But I want to see credit card agreements that are a page and half long...and the key terms are right there in front of me, so that I can compare one to another, I can figure out which on is cheaper. I can figure out what the risks are associated with it. And then, I know that the market works for me."
"We have not developed a robust program to get ahead of the foreclosure problem. Part of the problem is that the government showpiece program is really directed toward the problem that existed six months ago, which was all about sub-primes and escalating payment rates. Now, the foreclosure problem has spread, the contagion. And more families with--who are unemployed has made the problem even bigger."
ON EXECUTIVE PAY
"This one, I have to say, truly amazes me, that these folks who are supposed to be the smartest folks in the room, believe that they can take taxpayer money and save their businesses from complete destruction, and still continue to reward themselves as if they had earned it all. It's as if they don't understand the world changed when you had to take money from the taxpayers to stay alive... I think what that means is that we really have to change this one now, again, by statute. I'm sorry, I was really a believer. "The market will heal itself, everything will correct here," at least on executive pay. Because no one would be so foolish as to think, 'I'll take taxpayer money and then, while people are unemployed, I will lard myself with pay.'"
"[Goldman Sachs] paid back the Tarp money, but they're still operating with government guarantees. They still are counting on the taxpayer to back stop them. And I believe that gives the taxpayer a seat at the table in decision making over executive compensation. It's our money. The key has to be that congress needs to rewrite all of the rules on executive compensation. And we need a special set of rules for any company that's relying on any kind of taxpayer back stop."
"This is not capitalism. This is socialism. This is the part where they're using taxpayer guarantees and taxpayer support in order to eek out some kind of private gain. And this is just wrong. [It's socialism] for rich people. And, you know, I just gotta say I'm tired of that one."
ON THE ROLE OF AMERICANS
"This is democracy. And if we, the people, don't insist that those who are in Washington, represent us, then they'll go back to the same rules that benefit the same large financial institutions. And frankly, at that point, then we're all just working for the big banks."
ON THE FUTURE
"If you're asking me, 'Is all hope lost?' The answer is no. Right now, congress has finally stepped up, and is taking this up... Congress is moving and they are going to write a new set of rules. The only question is, will those rules be written to benefit ordinary, hard-working American families, what I think of as the real economy? Or will those rules be written to benefit a handful of giant financial institutions?... If they get it right, we're good. If they get it wrong, the country we knew will be gone."