Rachel Maddow Show: Matt Taibbi on Why Financial Institutions Should Be Broken Up
Matt Taibbi talked to Rachel Maddow about his article at Rolling Stone The Big Takeover and what needs to be done with these mega-financial institutions that are too "big to fail".
Maddow: You think the Obama administration should break the financial companies that are in crisis down. Stop letting them get so complex that they can't be understood and they can't be regulated. Why do you think that should happen?
Taibbi: Well first of all I'm obviously not an expert on any of this stuff but I think on this one point the logic here to me doesn't seem all that hard to follow. If these companies are too big to fail, they're too big to exist. In a capitalist society we can't have a situation where all you have to do to stay in business forever is get so big that whenever you screw up the government comes and bails you out.
That's the reason we had the trust busting and the anti-monopoly laws back in the day and I think that's the reason we have to make sure that these companies are manageable and if they are incompetent and irresponsible that we can just let them fail.
They go on to discuss how AIG after deregulation that occurred under the watchful eye of Phil Gramm in the nineties was allowed to choose its own regulator. Of course that being one that wouldn't really be capable of...actually regulating them. From the Rolling Stone article.
In the biggest joke of all, Cassano's wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.
Making matters even more hilarious, AIGFP — a London-based subsidiary of an American insurance company — ought to have been regulated by one of Europe's more stringent regulators, like Britain's Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms — GE, AIG and Ameriprise.
That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a "disparity between the size of the agency and the diverse firms it oversees." Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world's largest insurer!
Taibbi fears that the Obama administration is not going to be a change from Bush with how this crisis is handled because of the Wall Street crowd he's chosen to take care of it. Frankly I agree with him. So far they've shown me nothing to indicate that they're not going to bow to their buddies on Wall Street. If they actually start busting these companies up I'll feel a little better about the path they're taking. I'll also be happy to be proven wrong if what they're doing works but I'm not optomistic about watching our tax dollars flow down what looks like a bottomless pit right now. A yet to be regulated pit at that.
I totally agree with both of you, the monopolys need broken up, and Obama's financial team, discredits him.
Gosh "beave" they didn't change a damn thing. I bet almost the same would have happen with Hillary. McCain would have been the same except for no police and allot more homeless people right now, I am sure we still would have had the same financial teams regardless of the corporate candidates the MSM chose for us. Insanity I tell ya.
Apart from cosmetic differences, all corporate-supported mainstream candidates for president are basically interchangeable in terms of economic and foreign policies.
That's why, in my view, the progressive left makes a big mistake when it pooh-poohs candidates such as Nader and Paul.
"If these companies are too big to fail, they're too big to exist."
Billiant! Hey, Government! Hey, People we elected! Are you listening to this guy? Do something with this!
Mickey: "It was an epiphany. Do you know what an epipany is?"
Keoni: "NOT NOW MICKEY!"
It's just basic common sense, having studied economics it actually still makes me laughs how this collapse could happen.
They did everything opposite of what I learned at University, every broad accepted economic principle regarding risks spreading and prudence was raped and torn apprt, everything we learned from past crisis they overlooked or pretended it wasn't relevant anymore.
Quite frankly I was not the best of my promotion since I had actually a very low interest in economics overall (should have gone for engineering or politics rather), but the few things I remember allways made say "how could they have been so stupid". It's like we would have to prove again that the earth is round and not flat.
Companies have been forced to break up before and it is clear those need to be split again.
http://www.youtube.com/watch?v=tbad22CKlB4
Diabolus est Deus Inversus
http://www.youtube.com/watch?v=8ULZwzF9s5A
lol. This was for the MushMouth link, woops.
http://www.youtube.com/watch?v=At9OIgqgBm8&fe...
Diabolus est Deus Inversus
future obligations fobbed onto whoever inhabits this corner of the world for the next seven hundred years.
generation and younger. Or 40 and under.
Tabibi sounds like that sound we used to make and make and make and make and make and make and make and make and make and make and make and make by vibrating our index finger on our lips
Diabolus est Deus Inversus
the Robber Barons are saying if they watched this on TV.
That was a classic. Very funny in a f*cked up kind of way :-)
Are you off the wagon?
booze anymore it just comes naturally
http://www.youtube.com/watch?v=BXuukHaqbKQ
Diabolus est Deus Inversus
it was a Fat Albert pronunciation
http://www.youtube.com/watch?v=pMADJcimnds
Diabolus est Deus Inversus
What the hell is that Smirk doing on your face?
I mean your futures secure what about us?
that is all you got from it, the fact that he was a relatively jovial fellow?
What the hell happened.
Maybe that's how this name was pronounced when young:
http://www.youtube.com/watch?v=61OE5D_poxM&fe...
Diabolus est Deus Inversus
Let America Be America Again
The same one that got us into this mess? Or some other one that existed only in peoples imaginations?
America never was America to me
We're just starting to recognize it.
http://www.youtube.com/watch?v=syBH1aJOH5A
Diabolus est Deus Inversus
you are to much!
Sounds like you're just starting to recognize it.
Diabolus est Deus Inversus
the line above (America never was America to me) is part of Hughes' poem, Let America be America Again.. he contrasts reality with the dream that brought diverse people here, a dream so strong that it overpowers his cynicism about the gangsters that prey upon us..
just tried to find the poem, but didn't, it had been printed in full on Amazon, I still cry when I read it.. in case you may not know, Langston Hughes was one of the bright lights of the Harlem Renaissance and he was gay and he cared deeply for all people. Some of his best writings were at a time worse than this.
http://www.youtube.com/watch?v=RcrgXmyc6KY&fe...
http://www.youtube.com/watch?v=RcrgXmyc6KY&fe...
http://www.youtube.com/watch?v=tAeJZQyBPKc&fe...
http://www.youtube.com/watch?v=tsoKQGBKZR0&fe...
These are just some of the versions on youtube.. I think it is best read for ourselves.. it's been noted that Hughes does not touch on gender or sexuality and other issues but this is still a transcendent statement of universality and patriotism.. And very appropriate to today!
I've been alarmed about Wall St. for more than a decade. But after reading this, my hair's on fire. Geithner would do better to oversee a new system than to try to patch this rotting cadaver.
The great philosopher of capitalism, wrote that capitalism cannot exist with monopoly and that one of the primary duties of government is prevention of monopoly.. in Wealth of Nations..
Our crooks have been crowing about markets which, for the most part, really no longer exist. Whatever it is that we have is not free and is not open.. our crooks warn of socialism even as they subvert our capitlism.. the regulation which they permit is that which promotes their monopoly.. their corporate bureaucrats have taken over our government while they warn of government bureaucrats whom they control..
I do feel lucky we have Obama but he needs us really badly.. Geitner is probably his health policy right now.. and if we want true reform, we have to find a way to be his health policy.
As in granite top counters and Plasma TV's?
more like empowered individuals.. granite tops and plasma TVs are among the baubles for which we individuals traded our power
"Toys and trinkets"
from the Widget makers.
...exists in and around the trees.
I read Matt Taibbi's article yesterday and it made a tremendous amount of sense. Far more sense than the kind of confused hand flapping scapegoat hunting theater of moral indignation we have been treated to in the rest of the media and by our allegedly representative government.
Mr. Taibbi connects the dots and advances a timeline of events and actions that paints a coherent image of the crisis. Sure, he punctuates his revelations with outraged expletives that reveal his moral perspective towards recent history but his is a voice that points out what should have been glaringly obvious all along - that the people who engineered this catastrophe have MASSIVE conflicts of interest when it comes to fixing it - and should not be the ones creating policy or making decisions about how we proceed now that the world is engulfed in the conflagration they made.
We need to decide if we believe the elite of wall street are the people who should be attempting to fix the result of allowing their ideological crusade against regulation and sanity to reach critical mass then cataclysmically detonate or are these geniuses attempting to put the fire out with gasoline. At the very least we could all benefit by adopting and demanding Mr. Taibbi's emphasis on systemic legal and regulatory mistakes that must be undone before we can hope to 'fix' anything at all rather than screaming for some scapegoat du jour's blood.
Substantive, constructive, and consistent attention must be paid by everyone who cares about living in a sane future. The corporate media will continue to blind us with trivialities, witch hunts, and other entirely unproductive and irresponsible wastes of time - the elite don't want too much attention paid to their attempts to patch up their giant screw up - they want to go back to squeezing and fleecing the great unwashed as soon as possible. They want to protect their oligopoly, they want to keep their massively consolidated 'too big to fail' mega-corporation structures intact and to keep removing barriers to further consolidation, they want to escape any reckoning for the destruction their greed and foolishness has wrought.
They will get away with it too, if we let them.
by spreading a thin layer of elites and oligarchs on it.
I have generally opposed capital punishment on grounds that it is barbaric, arbitrary and capricious.
But the Rightards claim there's a deterrence factor. That, regarding the possibility of the mortal consequences of their acts, people will refrain from acting in ways that might accrue for them the ultimate sanction. I think we could profitably put the matter to a test. Case in point: Bernie Madoff.
Bernie Madoff confessed. No ambiguity there. His actions led directly to the deaths of several folks and the immiseration of countless others, including the Elie Weissel foundation.
So plunk old Bernie down on a gurney, on national tv, and let them juices flow.
Maybe it won't have the deterrent effect...
But it'll sher stop the hell out of recidivism...
... great analysis.
Amy Goodman interviewed him on
democracynow.org
yesterday.
I'm Boycotting NewsCorp! Heres what not to buy: http://www.cjr.org/resources/index.php?c=news...
Too little, too careful, too late.
"The Prez" caved in too soon, and it will jump up and bite us in the ass.
Obama's problem was that he didn't have the banks already in collapse when he took over, as FDR did in '33. He didn't have soup lines and hoovervilles and 25% unemployment. None of those headline, front-page grabbing images to help propel reform.
It wasn't bad enough for the Prez to have the people power to pull off what's necessary.
Those things are coming, but will probably await the next Puke prez, in 2012.
Great piece by Glenn Greenwald here:
statusquObama, change you can only pretend in
Naomi Klien's Shock Doctrine is very consistent with this, vice versa really.. one could probably make an argument that once our oligarchical interests in IMF and World Bank practised on the rest of the world, they turned their attention on us..
And like all large trusts need to be broken up precisely so they do not have this sort of overarching catastrophic effect on the entire system.
It's not that they're too big to fail, it's that they're too big to EXIST.
As F.D.R. would say, "It is no longer free enterprise, it has become PRIVILEGED enterprise."
It isn't the size of these institutions that matters.
It's how they're regulated, not how big or complex AIG or Citigroup are.
Canada has the best banking system in the world. It's liquid, solvent, stable, well-regulated, underleveraged - and profitable. Since mid-2007, when the credit crisis began, Canadian banks have booked $18 billion in profits, while US banks have collectively lost $37 billion - not counting hundreds of billions in bad debt there is no market for. We're in a recession too, BTW.
While the US has suffered major bank failures and trillion-dollar bailouts, Canadian banks have maintained their dividends (two banks actually increased payouts at the end of 2008), sold preferred shares to public investors, and have not required any government bailouts.
Here's the thing - Canadian banks are huge. The market is dominated by 5 big banks, national in scope, that sell insurance, run the investment industry and much else besides. By the definition of this thread, they are "too big to fail". But they're healthy even as the world financial system has collapsed. Canadian regulators compel the banks to maintain a conservative amount of equity capital and conservative lending standards. Subprime loans were a very small part of the Canadian mortgage market, and banks typically keep mortgage loans to maturity. There was no Canadian collateralized debt market.
The downside is that banking in Canada is an oligopoly, and we pay higher fees and somewhat higher rates as a result of lower competition. But we have a stable financial system as a result.
My nomination for... "The 2009 Pulitzer"
By: Truth_Critic On Mon, 03/23/2009 - 11:39
The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution
MATT TAIBBI
Posted Mar 19, 2009 12:49 PM
[From Issue 1075 — April 2, 2009]
PS. I'd love to see Rachel Maddow or Keith Olbermann put the afformentioned script into pictures!!! It's what I've always wanted to say, but was unable too express with such clarity... Bravo :-)
~~~~~~~~~~~~~~~~~~~~ Rachel, I ♥ U ~~~~~~~~~~~~~~~~~~~~
Study the symptoms not the virus...
the government use the influence the TARP funds give it to direct these big institutions to sell operations that get it down to a manageable size. I believe that Citicorp, for example, is not in a position to resist anything directive from the government.
But I do not think outright nationalization is the answer. Dismembering these behemoths, finding new people to run them could take a long time, during which the crisis could be made worse.
We need to break them up and regulate the activities they can engage in!!! Take some of the Glass -Steagell firewalls back and enforce them...They became too big because they were-self regulating and became a pit of snakes! The Congress and bclinton allowed this!
"Henry B. Steagall, of the famed "Glass-Steagall Act"
"Snip - Henry B. Steagall, Asked how to say his name, he told The Literary Digest it was stee-gall (like the words tea and gall), with equal stress on each syllable. He added, "This pronunciation is generally used throughout the South, and rarely used in the North. Our friends up there persist in stressing the first syllable and rhyming the name with 'eagle'."
[The Literary Digest → http://en.wikipedia.org/wiki/Literary_Digest ]
[Henry B. Steagall → http://en.wikipedia.org/wiki/Henry_Bascom_Ste... ]
(Our friends up there persist in stressing the first syllable and rhyming the name with 'eagle') :-P
Amended: "The Literary Digest is almost certainly best-remembered today for the circumstances surrounding its demise. It conducted a "straw poll" regarding the likely outcome of the 1936 presidential election. The poll showed that the Republican governor of Kansas, Alf Landon, would likely be the overwhelming winner. "
Study the symptoms not the virus...
"Carter Glass, of the famed "Glass-Steagall Act"
Snip - Perhaps the most telling comment about Carter Glass came from President Franklin Roosevelt, who called Glass an "Unreconstructed Rebel." Roosevelt meant exactly what the capital "R" on Rebel implies. As the Senate's last surviving member born in the antebellum South, Glass unapologetically fought to retain a society in which property-owning, white males sat at the top of the pyramid. In that regard, he was a man of his times. Carter Glass was born just as the year 1858 began, into a newspaper family that did not back away from a fight.
→ → → http://www.minneapolisfed.org/publications_pa...
Study the symptoms not the virus...
Dear Washington, make a new one. Bring back regulation. And please split these huge monopolies up.
Also, don't listen to a word any Republican speaks. As they have said before, publicly, they want us (America) to fail.
NOBODY 2012
Comments are closed on this entry