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Shortly after Jamie Dimon's appearance on Fox last month, PBS's Bill Moyers had former Chairman of the Board of Governors of the Federal Reserve System and head of President Obama’s Economic Recovery Advisory Board, Paul Volcker, whose namesake is the Volcker rule that Wall Street has been lobbying so hard to water down or get rid of, as his guest.

In light of the recent debacle at JPMorgan Chase where Dimon's company lost at least $2 billion on high risk derivatives trading, his advice for Dimon during this interview is downright prescient; If you want to participate in proprietary trading, give up your banking license.

Paul Volcker on the Volcker Rule:

You’d think after such a calamitous economic fall, there’d be a strong consensus on reinforcing the protections that keep us out of harm’s way. But in some powerful corners, the opposite is happening. Business and political forces, including hordes of lobbyists, are working hard to diminish or destroy these protections. One of the biggest bull’s-eyes is on the Volcker Rule, a section of the Dodd-Frank Act that aims to keep the banks in which you deposit your money from gambling it on their own — sometimes risky — investments. [...]

Volcker contends the rule aims to curb conflicts of interest between bankers and their customers. He suggests that former investment companies like Goldman Sachs and Morgan Stanley, which sought banking licenses during the economic crisis in order to access federal protection against failing, should now turn in those licenses if they want to do speculative trading.

“You shouldn’t run a financial system on the expectation of government support. We’re supposed to be a free enterprise system,” Volcker tells Moyers. “The problem of course is once they get rescued, does that lead to the conclusion they’ll get rescued in the future?”

Transcript of the clip below the fold and you can watch the entire interview at the link above.

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You can always count on Greta Van Susteren to allow Republicans like Mike Pence to give an interview full of lies and Republican talking points like he did here and not challenge any of them. Where to begin? How about Greece's financial collapse which Pence blames on the country adopting a Value Added Tax or VAT. I wonder why Mike Pence didn't bother to mention Wall Street and Goldman Sach's part in their demise?

Here's an article from The New York Times explaining what happened there. Wall St. Helped to Mask Debt Fueling Europe’s Crisis:

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting. Read on...

No, the guy who was meeting with Wall Street hedge fund managers last month was instead blaming their problems on the taxes being too high. Despite the fact that Paul Volker has ruled out his idea of a VAT being on the table "now or for the indefinite future", the Republicans have decided this is a good campaign issue for them.

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Alan Greenspan gives us one more example of why the man who's been wrong about everything should not be given any time to weigh in on the mess with our banking system and Wall Street that he helped to create. Apparently Greenspan doesn't think we will be able to separate the Wall Street casinos that got mixed into the formerly trusted banking industry and to do as Paul Volcker has recommended because it will be too hard to "segregate the types of transactions which are helping customers and those which are strictly proprietary". I'd love for someone to explain to me what that bit of mumbo-jumbo means since I don't know how to interpret economics 101-Doublespeak. For some clarity, here's what he's against.

Volcker Optimistic Financial Overhaul Will Include His Rule:

Paul Volcker, a top adviser to U.S. President Barack Obama, Tuesday expressed optimism that a financial overhaul containing a version of his proposal to limit bank risk would pass in Congress.

The former Federal Reserve chairman defended his proposal to give regulators the power to force banks to get rid of divisions that make risky bets with their capital, in order to help prevent another financial crisis.

“We have a promising possibility of getting agreement here” for a “reasonably good bill,” Volcker said, adding he was more optimistic than a month ago. He was speaking at the Peterson Institute for International Economics.

Senate Democrats on March 15 proposed a financial overhaul that would hurt big Wall Street banks by reining in their profits and requiring them to hold more capital. The proposal includes a version of what Obama has dubbed the “Volcker rule.”

Volcker wants to prevent commercial banks with federally insured deposits from engaging in “proprietary trading,” or doing speculative trading with the company’s money. The Senate bill wouldn’t prohibit certain forms of bank speculation outright, but it would give regulators leeway to enforce limits on a case-by-case basis.

“Let commercial banks be commercial banks,” Volcker said. Although it may be a step back compared to developments in the financial industry over the past decades, it would be a step to a “safer and more productive future.” Read on...

Amazingly that made some sense to me, unlike this nonsense that Greenspan was spouting. Maybe anyone that speaks Ayn Randsism can interpret for me. It's really pathetic that this man is allowed to claim that the country "had no experience of the type of risks that arose following the default of Lehman Brothers in September 2008". Really? What the hell does he think caused the Great Depression, or the Savings and Loan Crisis? Couldn't be some pesky thing called deregulation could it? Couldn't be undoing everything FDR put in place to keep us from having another Great Depression, could it?

For anyone that needs a reminder of this man's hubris and why no one should be interviewing him for advice on how to fix our economic problems now, go check out my post here on the Frontline documentary The Warning--One Lone Regulator Warned About Derivatives' Dangers. It's really shameless that ABC thought we should be hearing from this man that helped create the environment for our economic meltdown to occur to come out and give advice on how to fix it.

Transcript via ABC News below the fold.

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MSNBC's Dylan Ratigan talks to Rep. Alan Grayson about the amendment passed by the House Financial Services Committee to allow an independent audit of the Federal Reserve. If Alan Greenspan is not happy about it, I take that as a good sign they did the right thing. It only took putting this country on the edge of financial ruin that we're not out of yet for the S.O.B. to ever admit he might be wrong about anything.

Ratigan: Alright first big newsmaker of the Meeting, Democratic Alan Grayson, better known for some of his fiery comments on Republicans and health care, now taking aim at the Federal Reserve along with so many others. He says the Federal Reserve is more secretive than the CIA, and his new amendment co-sponsored by Republican Ron Paul would allow the first ever independent audit of the Federal Reserve. The amendment edged out a competing proposal from North Carolina Congressman Mel Watt who wants to limit those very audits.

Congressman Grayson now joins the Morning Meeting. Your amendment approved by the House Financial Services Committee—a huge step forward. Where do you go from here and what’s your level of confidence Representative that you can continue to addendum behind this piece of legislation?

Grayson: Where we go is to stop the secret bailouts. There have been hints and hints now for more than two years that the Fed’s been conducting huge bailouts on the scale of hundreds of billions of dollars to favor large failed banks. Now we’re going to find out all about it, and we’re going to decide whether it’s good or bad.

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