"Failure of Epic Proportions": Treasury Nominee Jack
Lew's Pro-Bank, Austerity, Deregulation Legacy
Juan Gonzalez & Amy Goodman
Democracy Now
January 11, 2013
http://www.democracynow.org/2013/1/11/failure_of_epic_proportions_treasury_nominee
Former bank regulator William Black and Rolling Stone's
Matt Taibbi join us to dissect the career of Jack Lew,
President Obama's pick to replace Treasury Secretary
Timothy Geither. Currently Obama's chief of staff, Lew
was an executive at Citigroup from 2006 to 2008 at the
time of the financial crisis. He backed financial
deregulation efforts while he headed the Office of
Management and Budget under President Bill Clinton.
During that time, Clinton enacted two key laws to
deregulate Wall Street: the Financial Services
Modernization Act of 1999 and the Commodity Futures
Modernization Act of 2000. Black, a white-collar
criminologist and former senior financial regulator, is
the author of "The Best Way to Rob a Bank Is to Own
One." A contributing editor for Rolling Stone magazine,
Taibbi is the author of "Griftopia: A Story of Bankers,
Politicians, and the Most Audacious Power Grab in
American History."
JUAN GONZALEZ: President Obama is facing criticism for
nominating another former Wall Street executive to
become treasury secretary. On Thursday, Obama tapped his
own chief of staff, Jack Lew, to replace Timothy
Geithner. Lew was an executive at Citigroup from 2006 to
2008 at the time of the financial crisis. He served as
chief operating officer of Citigroup's Alternative
Investments unit, a group that bet on the housing market
to collapse.
Lew has also long pushed for the deregulation of Wall
Street. From 1998 to January 2001, he headed the Office
of Management and Budget under President Clinton. During
that time, Clinton signed into law two key laws to
deregulate Wall Street: the Financial Services
Modernization Act of 1999 and the Commodity Futures
Modernization Act of 2000.
On Thursday, independent Senator Bernie Sanders of
Vermont criticized Lew's nomination, saying, quote, "We
don't need a treasury secretary who thinks that Wall
Street deregulation was not responsible for the
financial crisis."
At a press conference at the White House Thursday,
President Obama praised Jack Lew's record.
PRESIDENT BARACK OBAMA: Jack has the distinction of
having worked and succeeded in some of the toughest
jobs in Washington and the private sector. As a
congressional staffer in the 1980s, he helped
negotiate the deal between President Reagan and Tip
O'Neill to save Social Security. Under President
Clinton, he presided over three budget surpluses in
a row. So, for all the talk out there about deficit
reduction, making sure our books are balanced, this
is the guy who did it-three times. He helped oversee
one of our nation's finest universities and one of
our largest investment banks. In my administration,
he's managed operations for the State Department and
the budget for the entire executive branch. And over
the past year, I've sought Jack's advice on
virtually every decision that I've made, from
economic policy to foreign policy.
AMY GOODMAN: For more on the nomination of Jack Lew, as
well as other news about Wall Street, we're joined by
two guest. William Black, author of The Best Way to Rob
a Bank Is to Own One_, he's associate professor of
economics and law at the University of Missouri-Kansas
City, former senior financial regulator. His recent
2446848.html">article for the Huffington Post is called
"Jacob Lew: Another Brick in the Wall Street on the
Potomac."
We're also joined by Matt Taibbi, contributing editor
for Rolling Stone magazine, his latest piece, "Secrets
and Lies of the Bailout," which we'll talk about in a
bit, author of Griftopia: A Story of Bankers,
Politicians, and the Most Audacious Power Grab in
American History.
We welcome you both to Democracy Now! Professor Black,
let's start with you. Your assessment of Jack Lew?
WILLIAM BLACK: Well, on financial matters, Jack Lew has
been a failure of pretty epic proportions, and he gets
promoted precisely because he is willing to be a failure
and is so useful to Wall Street interests. So, you've
mentioned two of the things in terms of the most
important and most destructive deregulation under
President Clinton by statute. But he was also there for
much of the deregulation by rule, and a strong proponent
of it, and he was there for much of the cutting of
staff. For example, the FDIC, the Federal Deposit
Insurance Corporation, lost three-quarters of its staff,
and that huge loss began under Clinton. And the whole
reinventing government, Lew was a strong supporter of
that. And, for example, we were taught-instructed by
Washington that we were to refer to banks as our
"clients" in our role as regulators and to think of them
as clients.
He goes from there to Wall Street, where he was a
complete failure. You noted that part of what Citicorp
did was bet that housing would fall. That was actually
one of their winning bets. But they actually made a
bunch of losing bets, as well. And the unit that he was
heading would have not been permissible but for the
deregulation of getting rid of Glass-Steagall under
President Clinton. And you saw, as an example of
Citicorp, why we shouldn't be doing this. Why would we
create a federal subsidy where all of us, through the
U.S. government, are on the hook for Citicorp's gambling
on financial derivatives for its own account, you know,
running a casino operation? That makes absolutely no
public policy sense.
Then he comes into the Obama administration, and he was
disastrously wrong. He tried very hard to impose
austerity on the United States back in 2011, which is-he
wanted, you know, the European strategy, which has
pushed the eurozone back into recession, and Spain,
Greece and Italy into Great Depression levels of
unemployment.
And this is the guy, after all of these failures, who
also is intellectually dishonest. He will not own up to
his role and deregulation's role and de-supervision's
role in producing this crisis-and not just this crisis,
but the Enron-era crisis and the savings-and-loan
debacle.
JUAN GONZALEZ: Well, Matt Taibbi, your reaction to the
nomination of Jack Lew by President Obama?
MATT TAIBBI: I think there's a couple things. I agree
with everything that Professor Black said. I think it's-
the symbolism of this choice is, I think, very important
for people, just the mere fact of picking somebody from
Citigroup and from that same Bob Rubin nexus that
Timothy Geithner came from. And, you know, you heard
Barack Obama, as he's introducing Jack Lew, praising Tim
Geithner as somebody who's going to go down in history
as one of the great treasury secretaries of all time. I
think what this tells everybody is that Jack Lew is
going to represent absolute continuity with the previous
treasury secretary, who had a very specific agenda when
it came to Wall Street. And I think we're just going to
expect more of the same, more of the same really being
overt and covert support of these too-big-to-fail
institutions that Lew worked for, Citigroup being the
worst and most disastrous example of that kind of
company. So I think it's-the choice of somebody from
that particular firm is fraught with pretty upsetting
symbolism for the country, I think.
AMY GOODMAN: I want to go back to 2010, when Jack Lew
appeared before the Senate Budget Committee for a
confirmation hearing after he was nominated by President
Obama to head the Office of Management and Budget.
During the hearing, he was questioned by Senator Bernie
Sanders.
SEN. BERNIE SANDERS: Do you believe that the
deregulation of Wall Street, pushed by people like
Alan Greenspan, Robert Rubin, contributed
significantly to the disaster we saw on Wall Street
several years ago?
JACK LEW: Senator, I-as when we discussed, I
mentioned to you, I don't consider myself an expert
in some of these aspects of the financial industry.
My experience in the financial industry has been as
a manager, not as an investment adviser. My sense
is, as someone who has, you know, generally been
familiar with these trends, is that the problems in
the financial industry preceded deregulation. There
was an increasing emphasis on highly abstract
leveraged derivative products that got us to the
point that, in the period of time leading up to the
financial crisis, risks were taken. They weren't
fully embraced. They weren't well understood. I
don't personally know the extent to which
deregulation drove it, but I don't believe that
deregulation was the, you know, proximate cause. I
would defer to others who are more expert about the
industry to try and parse it better than that.
AMY GOODMAN: That's Jack Lew responding to Bernie
Sanders, who, when President Obama announced his
nomination of treasury secretary-to treasury secretary
of Jack Lew, Senator Sanders said, "We don't need a
treasury secretary who thinks that Wall Street
deregulation was not responsible for the financial
crisis." Professor Black?
WILLIAM BLACK: Well, I mean, we can agree that he lacks
expertise in the area, but he was supposed to have
expertise. This was supposed to be his area of
expertise, both in his role as OMB head under Clinton,
and then, of course, as being in the industry and
actually implementing the fruits of this deregulation.
So-and he has the history, in one sense, correct. He
says the problem arose before deregulation. That's true
that derivatives were already a problem before
deregulation. And so, Brooksley Born proposes to deal
with the problem by having a regulation to deal with
credit default swaps. And then the Clinton
administration, in league with Greenspan, in league with
Phil Gramm, and with one of the important architects of
all of this being Jack Lew, squashes Brooksley Born to
destroy the proposed regulation and to pass something,
the Commodity Futures Modernization Act-talk about a
dishonest phrase-that not only said, "You, Brooksley
Born, cannot go forward with this particular
regulation," the statute actually said, "We hereby
withdraw all regulatory powers to protect the nation,
period. From the federal government, from the state and
local governments, we exempt you from the gambling laws.
We exempt you from the boiler room laws to prevent
fraudulent operations." It's one of the most
extraordinary abusive things in the world, heavily
involved with AIG's ability to produce not just the
disaster at AIG, but the disaster of credit-of the CDOs
that blew up a larger portion of the world. And those
CDOs would not have been possible without these credit
default swaps.
So, this is a guy who designed the disaster,
participated in the disaster on Wall Street, was made
rich by it. We haven't talked about the fact that he got
a huge bonus for destroying-helping to destroy the world
at Citicorp. And he got it through the bailout of
Citicorp by the U.S. government. So he produces
disaster, profits from the disaster, we pay him bonuses
for causing the disaster, and then we have the absurdity
of the president of the United States saying that this
is a man with a track record of unmitigated success. It
is exactly the opposite, in terms of finance. He is a
worthy successor to Tim Geithner, in that he has screwed
up everything substantively he has ever touched.
JUAN GONZALEZ: William Black, I'd like to ask you about
another aspect of Lew's portfolio: his stance on
austerity. You have raised questions in terms of his
continued support of austerity measures, as opposed to
efforts by the government to stimulate the economy.
Could you talk about that?
WILLIAM BLACK: Yeah, and this is an irony, as well, in
terms of the political aspects and Obama. So, under Lew,
in his new incarnation a while back as OMB head of-for
Obama, I have a piece that talks about how OMB under
Obama sounds almost exactly like the tea party. So, it
adopts all of their rubric about, you know, these
terrible social programs, this terrible safety net and
how it's going to imperil our nation, and what we need
to do is be balancing the budget-in other words,
austerity.
Now, had Obama succeeded in following Lew's
recommendation in July 2011, when they were trying to
negotiate the so-called "grand bargain," which is really
the grand betrayal of the safety net-unemployment in
July 2011 was 9.1 percent. Austerity in the United
States would have done just what it did in Europe.
Unemployment would have surged. So, all through 2012,
the election year, unemployment would have been going up
well above 10 percent, quite possibly into the 11 and 12
percent range, which is where it is in Europe. Obama
would have been toast; would have been no chance. He
would have been crushed in the election. The Democrats
would have lost control of the Senate, and such. And
these folks, even today, are claiming that the failure
to achieve the grand betrayal and to cut the safety net
is their great disappointment. So, they not only tried
to destroy themselves and the country, they are
continuing to do that, and indeed, but for Harry Reid
literally throwing the Obama administration's suggestion
that they do cuts to the safety net in the fireplace and
burning it up, they would have gotten it as part of this
interim austerity deal that was just done about eight
days ago.
AMY GOODMAN: We're going to break, then come back to
this discussion with William Black, professor at
University of Missouri-Kansas City, and Matt Taibbi,
Rolling Stone editor. "Secrets and Lies of the Bailout"
[is] his latest piece. This is Democracy Now! Back in a
minute.
Four years after the massive bailout that rescued Wall
Street, we look at the state of the financial sector
with Rolling Stone's Matt Taibbi and former financial
regulator William Black. In a new article for Rolling
Stone, Taibbi argues the government did not just bail
out Wall Street, but also lied on the financial sector's
behalf, calling unhealthy banks healthy and helping
banks cover up how much aid they were getting. The
government's approach to the banks came under new
scrutiny this week after it reached an $8.5 billion
settlement for improprieties in the wrongful
foreclosures on millions of American homeowners,
including flawed paperwork, robo-signing and wrongly
modified loans. The settlement will end an independent
review of all foreclosures, meaning the banks could be
avoiding billions of dollars in further penalties, in
addition to criminal prosecution. [includes rush
transcript] Filed under Wall Street, Financial
Meltdown, Author Interviews, Matt Taibbi, William Black
Guests:
Matt Taibbi, contributing editor for Rolling Stone
magazine and author of the book Griftopia: A Story of
Bankers, Politicians, and the Most Audacious Power Grab
in American History. His new article for Rolling Stone
is "Secrets and Lies of the Bailout."
William Black, associate professor of economics and law
at the University of Missouri-Kansas City. A white-
collar criminologist and former senior financial
regulator, he is the author of The Best Way to Rob a
Bank Is to Own One.
JUAN GONZALEZ: We turn now to look at the state of Wall
Street four years after the massive bailout and the news
of this week's mortgage settlements with the major
banks. Matt Taibbi has just written a new piece for
Rolling Stone titled "Secrets and Lies of the Bailout."
Also still with us is former financial regulator William
Black, author of The Best Way to Rob a Bank Is to Own
One. He is an associate professor of economics and law
at the University of Missouri-Kansas City.
Matt, beginning with you, the latest announcement of the
agreement for some of the banks to pay several billion
dollars now to-supposedly to homeowners who were cheated
in one way or another in the foreclosure crisis?
MATT TAIBBI: Yeah, I mean, I think this is just-to me,
the most significant aspect of this is that it speaks to
the failure of the government to address the foreclosure
problem still, four and five years after the financial
crisis. And one of the points I make in the piece I just
wrote, "Secrets and Lies of the Bailout," is that
foreclosure relief was originally written into the
statute, the TARP statute, as a primary function of the
original bailouts. It's right there in black and white,
section 109, that TARP was supposed to provide all-a
massive program of foreclosure relief, and they never
got around to it. And the only bailout program that ever
provided any foreclosure relief was HAMP, and that only-
to date, they've only ended up spending about $3
[billion] or $4 billion out of all the bailout on that
program. They have now-through litigation, there are
these settlements that are starting to trickle in, but
it's just too little, too late. And you contrast that
with what happened at the beginning of the bailout,
where the banks and the financial companies were
instantly handed hundreds of billions, trillions of
dollars of relief, and I think that that dichotomy is
important for people to recognize, that the relief for
ordinary people is still coming slowly and
insufficiently years later, whereas relief for Wall
Street came instantaneously and was excessive.
AMY GOODMAN: The latest news about AIG, the board has
decided not to sue the American people-
MATT TAIBBI: Right.
AMY GOODMAN: -for not bailing them out enough, not
joining the former CEO, Hank Greenberg.
MATT TAIBBI: I think they probably didn't want to become
a Saturday Night Live routine this weekend, but yeah.
AMY GOODMAN: Can you talk about the significance of this
and what actually is going on? Greenberg, the CEO, the
former CEO, is suing.
MATT TAIBBI: Right, right, yes. This is a longstanding
dispute between the former CEO of AIG, Hank Greenberg,
and the government. And it's funny. If you actually read
Greenberg's suit, there are some points in it that have
a little bit of validity. I mean, it's still
preposterous that Greenberg, who was, in a way, kind of
like the Patient Zero of the financial crisis, because
the scandal that he started at AIG back in the 2000-in
the early 2000s. It was a reinsurance scandal where he
was artificially inflating the balance sheet of AIG,
that led to a downgrade of AIG, which led to the
catastrophe of 2008, when the company went into-
imploded. And that subsequently caused the entire
financial crisis. You can really point to Hank Greenberg
as maybe the guy who caused the financial crisis, and
here he is suing the American government over the
bailout.
But one of the things he says in this-his lawsuit is
that the bailout of AIG was not really a bailout of AIG,
it was a bailout of the companies that were owed money
by AIG, because they gave 100 cents on the dollar to all
the companies-the counterparties of AIG, like Goldman
Sachs and Deutsche Bank and Barclays, and that if he
were in that position, he would have negotiated a much
tougher deal. That's probably true. I mean, there's
actually some validity to that point, that there's no
way, under any rational circumstances, that those
companies should have gotten 100 cents on the dollar for
the money they were owed by AIG.
JUAN GONZALEZ: William Black, I'd like to ask you about
this whole issue of the mortgage settlement that was
announced. It is really, to me, amazingly scandalous
that, years later, justice has not been forthcoming for
all of these homeowners who lost their homes. I think
the settlement calls for about $3.5 billion in cash to
some three million homeowners; that works out to maybe
about $1,000 a homeowner. And here we had instances of
banks, with the massive robo-signings, evicting people
from homes that they didn't even legally own at the
time. And the thing became such a mess that the
government review ended up wasting about a billion
dollars just on the consultants hired to review all the
bank foreclosures. What do you make of this settlement?
WILLIAM BLACK: So, the first thing is, this is more of
what Matt and people like me have been writing about for
years: the complete immunity of the elite Wall Street
folks who caused this crisis through fraud, who became
wealthy because of those frauds, and were then bailed
out as a result of their frauds. None of them are being
prosecuted. So we have admissions-and, by the way, this
would have continued but for the discovery of this
fraud. In other words, the banks weren't stopping it on
their own.
The robo-signing, that means what they were doing was
lying systematically to the tune, typically, of the
large places, of 10,000 times a month, so over 100,000
times a year, committing felonies that would lead to
people being made homeless in America, in many cases.
It's just an astonishing aspect that nobody has gone to
prison for all of this and that they gave them one of
the largest grants of immunity you'll ever see.
Second thing, as you say, the money in the press reports
is grossly inflated. There's only about $3 billion in
cash. You're quite correct, that works out to less than
$1,000 per victim. So it is exactly what Barofsky quotes
Geithner as saying, that these housing programs were not
designed for the victims; they were designed to, quote,
"foam the runways" for the banks to reduce their loss
exposure. So the rest of the supposed $5 billion in
settlement is really just what in the commercial world
we call "troubled debt restructurings," which are the
things you would do anyway if the government didn't
exist, because in most cases it's better for the bank
not to have the default, to instead reduce the principal
slightly. So, none of that is actually a bailout. None
of it is actually a settlement. It's just the banks
doing that which will profit maximize for the banks
anyway.
AMY GOODMAN: ...June, when JPMorgan Chase's Jamie Dimon
testified on Capitol Hill. This is Oregon Democratic
Senator Jeff Merkley questioning Dimon.
SEN. JEFF MERKLEY: In 2008, 2009, your company
benefited from half-a-trillion dollars in low-cost
federal loans, $25 billion in TARP loans, of TARP
funds, untold billions indirectly through the
bailout of AIG that helped address your massive
exposure in repurchase agreements and derivatives.
With all of that in mind, wouldn't JPMorgan have
gone down without the massive federal intervention,
both directly and indirectly, in 2008 or 2009?
JAMIE DIMON: I think you were misinformed. And I
think that misinformation is leading to a lot of the
problems we're having today. JPMorgan took TARP
because we were asked to by the secretary of
Treasury of the United States of America, with the
FDIC in the room, head of the New York Fed, Tim
Geithner, chairman of the Federal Reserve, Ben
Bernanke. We did not, at that point, need TARP. We
were asked to, because we were told-I think
correctly so-that if the nine banks there-and some
may have needed it-take this TARP, we can get it to
the-all these other banks and stop the system from
going down. We did not-
SEN. JEFF MERKLEY: I'm going to cut you-
JAMIE DIMON: We did not borrow from the Federal
Reserve, except when they asked us to. They said,
"Please use these facilities, because it makes it
easier for other" -
SEN. JEFF MERKLEY: We would all like to be asking-
JAMIE DIMON: And we were not bailed out by AIG, OK?
If AIG itself would have-we would have had a direct
loss of maybe a billion or $2 billion if AIG went
down, and we would have been OK.
SEN. JEFF MERKLEY: Then you have a difference of
opinion with many analysts of the situation who felt
the AIG bailout did benefit you enormously. And I'm
not going to carry that argument with you now.
JAMIE DIMON: Well, but they're factually-
SEN. JEFF MERKLEY: Sir-
JAMIE DIMON: They're factually wrong.
SEN. JEFF MERKLEY: Sir, this is not your hearing.
I'm asking you to respond to questions. And I also
only have five minutes.
AMY GOODMAN: That was Oregon Democratic Senator Jeff
Merkley questioning JPMorgan Chase's Jamie Dimon. Matt
Taibbi, the significance of this exchange?
MATT TAIBBI: Well, I think that's one of the things
that's really interesting. And one of the things that I
write about in this article is that this is what Neil
Barofsky, the bailout inspector, calls the "original
sin" of the bailout, which is this moment in time where-
right after TARP was passed, where the government
elected to call companies that were unhealthy and
insolvent "healthy" and "solvent." When they scrapped
the plan to buy up troubled assets-remember, TARP was
the Troubled Asset Relief Program-well, they scrapped
that idea a few days after the bill was passed and
decided to just dump a whole bunch of money onto the
balance sheets of these banks. This was called the
Capital Purchase Program. They spent $125 billion right
off the bat. It was spent on nine companies. And one of
the things they said was, all of these companies are
healthy and viable. And it turned out later, according
to numerous sources, including all the SIGTARP reports,
including-according to Barofsky and other sources, that
they didn't even check to see if these companies were
solvent at the time. They had no interest in discovering
that, one way or the other. And, in fact, many of these
companies were on the brink of failure at the time.
Barofsky was told specifically that Morgan Stanley and
Goldman Sachs were both on the brink of disaster when
they were given this money.
It's interesting that Jamie Dimon talks about how his
company didn't need that Fed money. You know, it came
out in the-in Bloomberg's Freedom of Information
request, when they got all the data from the audit of
the Federal Reserve, it came out that his company, at
that time, in late 2008, had a $50 [billion] or $60
billion line of credit with the Fed on top of all the
money they were getting through the TARP bailout,
through the bailout of Bear Stearns and other
facilities. So, apparently, they didn't need all that
money, you know, that $100 billion or whatever it was
they got from the federal government; it was just they
were taking it because they were being polite, they were
being-and they were asked to by the federal government.
And this fiction, that they didn't need the money, that
they were healthy all the time, the government-we not
only gave them money, but we vouched for them, and now
we're stuck vouching for them basically forever. And
that's the ongoing bailout that has become the real
problem.
JUAN GONZALEZ: I wanted to ask William Black-in the deal
that the Obama administration reached on taxes recently
with the House Republicans, there hasn't been a lot of
attention to the issue of what happened to carried
interest. The hedge fund moguls of the world were most
concerned about that, their abililty to evade taxes by
having their payments as capital gains instead of actual
fees and salaries. Could you talk about what the Obama
administration did there?
WILLIAM BLACK: Yeah. Let me mention just one thing,
though, that fits to Matt's point. They also changed the
accounting rules, so the banks didn't have to recognize
their losses, so that they could hide them and pretend
to be healthy. So that's a huge part of that story.
As to taxes, you know, this was, again, a classic
example of the Obama administration snatching defeat
from the jaws of victory, where it had all the leverage
and negotiated against itself once again. And so, yes,
the wealthiest folks-and this is the irony, of course,
is we're talking about the George Romneys of the world-
I'm sorry, the Mitt Romneys of the world-I grew up in
Michigan; I'm dating myself-are the principal
beneficiary through the-something that is completely
unsupportable, on any policy ground, which is this
carried interest, which simply treats income as if it
weren't income anymore for the wealthiest Americans who
receive their money from running hedge funds. And that's
continued.
AMY GOODMAN: Let's end with the legacy of the outgoing
treasury secretary, Timothy Geithner. On Thursday,
President Obama praised his time in office.
PRESIDENT BARACK OBAMA: Thanks in large part to his
steady hand, our economy has been growing again for
the past three years. Our businesses have created
nearly six million new jobs. The money that we spent
to save the financial system has largely been paid
back. We've put in place rules to prevent that kind
of financial meltdown from ever happening again. An
auto industry was saved. We made sure taxpayers are
not on the hook if the biggest firms fail again.
We've taken steps to help underwater homeowners come
up for air and opened new markets to sell American
goods overseas. And we've begun to reduce our
deficit through a balanced mix of spending cuts and
reforms to a tax code that, at the time that we both
came in, was too skewed in favor of the wealthy at
the expense of middle-class Americans. So, when the
history books are written, Tim Geithner is going to
go down as one of our finest secretaries of the
Treasury.
AMY GOODMAN: That was President Obama. Professor Black,
final seconds.
WILLIAM BLACK: OK. First, Geithner is a principled
person who caused the crisis. He was supposed to be the
top regulator preventing it in New York and did nothing.
Second, he has created crony capitalism, American style.
Third, those regulations in fact will not prevent future
crises and were designed to make sure they were not. And
I agree strongly with Matt that the choice of Jack Lew
is to not only produce continuity with Geithner's
disastrous failed policies, but to signal the
administration's desire to continue the bailout of Wall
Street.
AMY GOODMAN: Matt Taibbi?
MATT TAIBBI: Yeah, I think the legacy of Tim Geithner is
simple. He's the architect of "too big to fail." And
that's going to be, historically, his legacy. When this
all blows up-and it's going to blow up, for sure,
because it can't-things can't continue the way they are
right now-people are going to look back in history, and
they're going to say, "Who was to blame for this?" And
Timothy Geithner is going to be the guy who designed
this entire system.
JUAN GONZALEZ: Of course, and he will always be
remembered as the first treasury secretary who neglected
to pay his own taxes.
MATT TAIBBI: Right, right, there's that, true, exactly.
AMY GOODMAN: We want to thank you both for being with
us. Matt Taibbi, a contributing editor at Rolling Stone,
his latest piece, "Secrets and Lies of the Bailout."
We'll link to it at democracynow.org. And William Black,
professor of university-professor at University of
Missouri-Kansas City. This is Democracy Now! We'll be
back in a minute on this anniversary of the earthquake
in Haiti. Stay with us.
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on the left that will help them to interpret the world
and to change it.
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