May 24, 2013
Live Chat: Robert Scheer on Obama’s Call for Less Regulation
Posted on Jan 21, 2011
In this live video Q & A session, Robert Scheer discussed with readers his latest column, “Obama Pulls a Clinton.” You can watch the video, listen to the podcast, and read the full transcript below.
VIDEOS (transcript below) :
Kasia Anderson: OK. Greetings, everyone. We’re here with Robert Scheer to talk about his latest column. How’re you doing, Robert Scheer?
Robert Scheer: Very good.
Anderson: And without further ado, let’s get going with the questions. How’s that?
Scheer: OK. This sounds very formal, but OK.
Anderson: Well, I can get more informal as the broadcast goes on. OK, first question is from Elliott: “I am a 30-year-old writer and yoga teacher in San Francisco. I was laid off from a major Wall Street money-manager in ’09, and have been following the narrative about the financial crisis. At this point, and particularly with Obama’s new call for less regulation, I’m inclined to believe the corporate state is so entrenched that it’s a little helpless. Could you provide, in your estimation, steps regular citizens can take to step up pressure on Washington to reinstate a firmer wall of separation between government regulators and corporations?”
Scheer: Well, ironically, John McCain and [Maria] Cantwell, the Democratic senator from Washington, had a very simple proposal when we were considering financial re-regulation, and that was: Restore Glass-Steagall. Put the wall…and this is really what the Volcker rule, if he took it seriously, would be all about—separate the high rollers of investment banking from the commercial banks that are supposed to be entrusted with the deposits of ordinary people, making mortgages to people. They have to exercise due diligence, and the deposits are federally insured. Now, we crossed that line with the reversal of Glass-Steagall, and then the banking bailout, which is really throwing money at Wall Street, by both Bush and Obama. We allowed these investment banks like Goldman Sachs to cross over and become bank holding companies, but with no real accountability. So I would say that some beefed-up Volcker rule, some sort of wall between investment and commercial banking, has to be done. And that is really a matter of tightening regulation—the opposite of what Obama called for in his Wall Street Journal column. The other thing is we have to do something about people who own houses. We have to have a clamp-down on mortgages. We have to have some kind of moratorium on foreclosures, because if you can’t get housing back, you can’t get consumption back, you can’t get jobs back. That’s the reality of it. We’ve done everything for the banks, but we haven’t…the government, the Fed, the Treasury hasn’t done, really, anything significant to help homeowners.
Anderson: OK. We have another question from Pete from Colorado. He says: “Hello Robert. Big fan of Truthdig. Read your book ‘The Great American Stickup.’ ” That should make you happy …
Scheer: Wow. It does.
Anderson: “ … Thanks for the who’s who of men who are destroying America because of the addiction to greed. I have a two-part question for you: Why do you think Americans are apathetic towards righting America’s wrongs? We need to make a stand against these despotic men, so how can we as citizens bring them to justice within our system?” It’s sort of an add-on to the last question …
Scheer: Well, the real big issue here is … first of all, it’s called a dismal science, economics, because it’s depressing enough to begin with. But what happened with the development of mathematical models—which really did not represent serious economic science, but represented a marketing gimmick assessing risk and so forth, which was at the heart of this whole securitization of debt—[it] put a layer of sort of phony or pseudo-science on top of everything, and it all becomes very intimidating. Yet we know from the testimony of the CEOs, they admitted they didn’t understand these products, they admit there was no real accountability, that it was too good to check as long as the money was flowing. But I think there’s one factor, which is that because of this very large number of PR people, lobbyists, some who now have been brought in—for instance, the two key lobbyists for Fannie Mae and for the banks were brought in to the key positions in the Obama administration. The chief lobbyist, [Thomas] Donilon, for Fannie Mae and the chief lobbyist for JPMorgan Chase, [William] Daley—Daley is now chief of staff. So the guys who were basically acting to disenfranchise the public, to make this stuff obscure, to lie about it, to prevent real regulation, who really specialize in confusing the public, preventing real information from getting out there, are now firmly entrenched in the government. Certainly [Timothy] Geithner, our treasury secretary, certainly others, Sperling and others, are in there. So it isn’t as if this stuff is intrinsically so complicated. It’s that the public is bamboozled by economists and public relations people and lawyers and others who are basically working for the banks, making enormous amounts of money. Daley, for instance, who’s the new chief of staff, got $5 million a year from JPMorgan, basically functioning to influence Congress to go easy on JPMorgan and the other banks.
So we’re really dealing with a situation where this is the opposite of what the founders had in mind. You know, yeoman farmers understanding the issues; the issues were local. In fact now it’s all…public policy is a plaything of the lobbyists. And so I don’t blame the public for not quite getting it. They’re also full with a lot of self-guilt: “You did it, you took the wrong loan, you signed the wrong paper. You made a mistake.” We specialize in that in this country; we blame the victim. “You should have read all 40 pages of it in fine print. You should have gotten a specialist to read it.” Nonsense! People had a right to think the bank extending the loan was extending a legal document. As I point out in my column, if you foreclose on a house and the people don’t want to get out, the bank doesn’t kick you out—they get a government agent, a cop, a sheriff, a marshall to kick you out. And so the government intervenes to enforce the contract; shouldn’t the government be involved in making sure the contract is a proper, legal, vetted document? That didn’t happen. And in fact, we now have 65 million mortgages that are owned by something called the MERS system in Reston, Va., the Mortgage Electronic Registration Systems, and we don’t even really know who owns these properties anymore, which is why the banks have gotten into some difficulty foreclosing. It’s an enormous mess, and no relief is really being given to homeowners who are beleaguered. It’s all been given to the banks; the banks’ quarterly report profits are outrageous, their bonuses are outrageous. Day after day now they’re being announced, and they’re having a banner year. And yet housing sucks. Housing is lower at the end of this year than it was at the end of last year.
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