Video: Bill Moyers -- aired January 8, 2010 -- includes 2 short clips plus transcript
BILL MOYERS: During the recent holidays, across the ocean in London, in the very heart of the city, the district where St. Paul's Cathedral and other historic churches nestle in the same neighborhood as the big multinational banks, some financiers were showing signs of contrition. These modern day Ebenezer Scrooges were actually questioning how they earned their fortunes.
According to the "Financial Times," they were asking themselves how "Financial capitalism has become synonymous with," and I quote, "Crazy risk-taking, with the passing off of toxic investments to unwitting counterparties and the earning of multi-million dollar bonuses, regardless of merit." Talk about mea culpa.
This epiphany came soon after the British government said it will slam a fifty percent tax on bonuses over 25,000 pounds — that would be anything over 40,000 dollars here in the U.S. In April the tax on those who make more than l50,000 pounds — that comes out to an annual paycheck of around a quarter of a million, American — could go as high as fifty percent.
But that news — as well as tighter banking regulations in the United Kingdom — elicited a hearty "Bah Humbug!" from the London branch of Goldman Sachs, which has hinted that if the tax hike goes through, it just might shut down its London operations and ship them to Switzerland, land of the cuckoo clock and secret bank accounts. Take that, patriots.
But as David Corn and Kevin Drum just told us, on this side of the Atlantic, the specter of tighter regulation or higher taxes isn't keeping American bankers up at night, to the contrary. Last month, the American Bankers Association sent out an update a "call to action" memorandum crowing over its success watering down the bank reform bill that had been approved by the House and urging its members to beat back similar legislation in the Senate. It concluded, "As one of your New Year's resolutions, please vow to do everything in your power to show, and to have your colleagues in your bank show, your Senators the right path to true reform."
It helps, of course, when the so-called right path is paved with gold. The nonpartisan Center for Responsive Politics, an indispensable source for information on money's role in politics, reported in November that "The finance, insurance and real estate sector has given 2.3 billion dollars to candidates, leadership PACs and party committees since 1989." You heard me right: Billions. A sum that eclipses every other sector — including the defense and health care lobbies.
All of this is beginning to break through to harried taxpayers across the country. There may not be a movement yet for fundamental change, as David Corn said, but here, there, and elsewhere, citizens are waking up, looking around, and asking, "What can we do?" Go to our website at PBS.org and click on Bill Moyers Journal and you'll see what I mean. We'll link you to nonpartisan grassroots organizations pushing for financial reform.
America's big banks are back on top. Just a year after their financial gambles brought the American economy to the brink of collapse, requiring a massive federal bailout, they're back in the black and paying themselves healthy bonuses. With so many Americans facing economic hardship, the banks' good fortunes have led to resentment and even some rage among those outside the financial industry. Yet, according to Washington watchers — and sheer dollars spent — the banking industry lobby remains among the most powerful in the nation's capital.
The latest issue of MOTHER JONES magazine looks into this discrepancy, calling it the "accountability deficit." The magazine commissioned a series of articles investigating why no one has been brought to account for crashing the economy.
Two contributors to the issue, David Corn and Kevin Drum, join Bill Moyers on the JOURNAL to explain how the banking lobby continues to hold so much power in the nation's capital.
While the great wealth of Wall Street allows it to lavish campaign contributions on Congress, it is not money alone that gives the financial industry so much power. The influence of Wall Street has managed to change the national conversation. MOTHER JONES political blogger Kevin Drum explained the phenomenon using a term used by economist Simon Johnson:
- It goes beyond regulatory capture, where, say the banks control the S.E.C. That's one thing. "Intellectual capture" means that essentially the financial industry has convinced us — you know, in the '50s what was good for General Motors was good for America — now it's what's good for Wall Street is good for America. And they've somehow convinced us that we shouldn't ask about what's right or what works or what's good for America. We should ask what's productive, what's efficient, what helps grow the economy.
It is this "intellectual capture" that prevents a reform movement from taking hold. David Corn, Washington bureau chief for MOTHER JONES, explains:
- While [people are] angry at Wall Street, particularly on the corporate compensation front — which is very easy to get angry about — they also are fearful of taking Wall Street on, because they've been taught that if the Dow falls, if you take on the big banks, it's going to be bad for all of us. So, it really is this "Stockholm Syndrome," where we're forced to identify with people who are holding us hostage without our interest in mind.
The money, though, plays an important role. Corn notes that the fundraising system itself is a barrier to reform, "I mean, our whole system where the guys in charge of regulating or writing the laws would take cash from the people who want favors, you know, it's kind of, you know, bizarre to begin with."
And though members of Congress deny their donors don't influence their decisions, Drum is doubtful. Citing Senator Chuck Schumer's fundraising, Drum argues, "[Senator Schumer] raised a couple hundred million dollars, a lot of it from the financial industry. And that went to all Democrats. Not just Schumer. It went to all Democrats who were running for the Senate. Well, there's no way you can take that money and not at least be leaning in their direction, one way or another."