How Big Banks Victimize Our Democracy

Yves Smith, creator and editor of the finance blog Naked Capitalism, and Matt Taibbi of Rolling Stone spoke with Bill Moyers about the continuing fallout of the economic crisis and the corruption, ignorance and collusion that guarantee the situation will not improve for most Americans.

The three began with JPMorgan Chase CEO Jamie Dimon’s appearance before the House Financial Services Committee last week. Taibbi and Smith offered the questions they would have posed to Dimon:

MATT TAIBBI: The question I wanted to ask is, was, really more about the criminality. I mean, none of the members in either the House or the Senate really got into the issue of all the different offenses that these banks have committed in the last few years. You know, or, an ordinary person, if he commits welfare fraud, never gets a food stamp again in his life.

So given that these banks have systematically and repeatedly committed fraud, repeatedly been caught, you know, in situations like Jefferson County, municipal bid rigging, why should we still give them billions and billions of dollars in emergency lending from the Fed, bailouts, all of this aid from the government? How come there’s no consequences for them and there are consequences for ordinary people?

YVES SMITH: I would have asked questions more having to do with what’s the justification for complex banking at all? That why do we need, why shouldn’t banks be run on the utility basis? Why should we have people like Dimon and his, the members of the CIO unit, most of which he’s fired, what the justification for literally that hundreds of millions of bonuses were paid collectively to those people.

And now he says they didn’t know what they were doing. There’s no justification for this, the sort of level of compensation that we generally have on Wall Street. And I would like to see that myth starting to be punctured in more public places.

— Posted by Alexander Reed Kelly.Moyers & Company: