Bill Moyers Journal

by Bill Moyers

  What do you have in common with conservative Christians?

  Actually, just about everything except certain beliefs about where it all came from and who’s looking over us. I could go down and pick a pastor from some small country church along the byways of Alabama and I’ll bet if we sat down and talked about our deepest beliefs together, we’d come up with more agreements on more things than disagreements. And then isn’t that the American way? We could say, “Let’s put that aside for a while and work together when we really have something we need to work together on.”

  Yes, but Ed, many of the Christians who read the Bible literally reject the conclusion of scientists that we’ve evolved from lower forms. They believe the earth is not our home. We’re heaven-bound. Some of them believe the second coming of Jesus is imminent. You addressed your book The Creation: An Appeal to Save Life on Earth to a Southern Baptist pastor. Why did you do that?

  Partly because that’s my background, although I’m now a secular humanist, a thoroughgoing secularist. I understood and respected greatly the people of the culture I grew up in. But also, in addressing evangelicals instead of Unitarians, there was what I call the New York effect. If you can make it in New York, you can make it anywhere. In other words, if you can make it with Southern Baptists, you can make it anywhere. And the argument I make in The Creation is extremely simple. I said “Let us, in the service of a transcendent moral obligation and concern, put aside our differences for the time being and not fuss with each other over evolution. In other words, where it all came from. Let us agree, looking at the evidence, that it is disappearing. And let us, dare I use the word, gather at the river. Come together on common ground where we can exercise the extraordinary power we jointly have.” I argue, and few people disagree with me, that science and religion are the two most powerful social forces in the world. Having them at odds with each other all the way up to the highest levels of government and the popular media all the time is not productive.

  In your book, you ask both science and religion to set aside their differences about metaphysical issues.

  Meet on the near side of metaphysics.

  But can you ask religion to do that when it’s concerned with the metaphysical, with unseen deities?

  Sure you can. You know, I have a lot of physicist friends working on string theory who also are preoccupied with things they can’t see or measure. The point here is yes, you can, and we’ve done it.

  You say you’re a secular humanist. What do you want me to hear when you say that? That term drives the Christian right into a frenzy.

  A humanist is a person who believes that in matters ethical and in matters of aesthetic and central concern, we should put humanity as the first and final purpose of it all. We have just this one planet to live on. We are not being looked over. We are on our own, essentially. And we are responsible for ourselves and we better get together as a species and work it out and stop relying on supernatural powers. That’s basically what humanism is.

  What would you have us do to try to make a difference on the footprint we humans are leaving on this earth?

  Let’s go down one layer of thought from what we had earlier, and go to the deepest level. If we could change our worldview, it would be somewhat radical, but it would mean seeing ourselves as a biological species in a biological world. That we are a species exquisitely well adapted to this planet, and that we originated here, and that our peculiarities, including the ones that threaten our own existence, can be understood by the history of the way we originated in that living world. If we could just place ourselves realistically in that context and stop thinking of ourselves as semi-angels, that this is just a way station on our way up to an idealized existence, I think we would get pretty serious about peace and long-term security and saving the rest of life. Keeping our options open for the future.

  SIMON JOHNSON

  Wall Street’s ability to come up with ever more ingenious and mysterious ways to extract a dollar—or rather, billions of them—without regard for the devastating impact their alchemy may have on people struggling to make a living is as breathtaking as a performance by magician David Copperfield.

  In the fall of 2005, the banking giant Citigroup even conjured up a new word, plutonomy, to define an economic system where the privileged few make sure the rich get richer with the government as their enabler. Deciding that the time had come to publicly “bang the drum on plutonomy,” the bank outlined an “equity strategy” in a document entitled “Revisiting Plutonomy: The Rich Getting Richer.” Here are some excerpts:

  Our thesis is that the rich are the dominant drivers of demand in many economies around the world. ... These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries. ... The top 10%, particularly the top 1% of the US—the plutonomists in our parlance—have benefitted disproportionately from the recent productivity surge in the US ... [and] from globalization and the productivity boom, at the relative expense of labor.

  The great collapse of’08 not only did little to dismantle those “dynamics of plutonomy,” it reinforced them. Even after the fall, which cost millions of people their jobs, homes, and savings, the plutonomists—their own name for themselves, remember—are doing just fine; in some cases, even better, thanks to the bailout of the big banks which meant record profits and record bonuses for a few in the midst of widespread suffering. A recently released report from the U.S. Survey of Consumer Finances confirms that the rich continue to get wealthier and account for a disproportionate share of income and wealth. The dynamics of plutonomy are still intact.

  Why is this? Because over the past thirty years, the plutonomists have used their vastly increased wealth to capture the American government. It hasn’t mattered which party was in power; Republicans and Democrats alike cheered them on while dismantling, or refusing to enforce, safeguards that could have protected ordinary citizens from the plunder.

  Few have the know-how and experience to sort this out and make sense of it for a lay audience. Simon Johnson does. I first discovered him while surfing an early morning wave on the Internet and finding the website called baselinescenario.com. It was founded by Johnson and his colleague James Kwak, with whom he also wrote the bestselling book 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown.

  Simon Johnson once served as chief economist of the International Monetary Fund. He was schooled at Oxford, taught at the Fuqua School of Business at Duke University, is the Ronald A. Kurtz Professor of Entrepreneurship at MIT’s Sloan School of Management, and serves on the editorial board of four academic journals. Hardly a socialist pedigree! But Johnson has emerged from the belly of the beast to become a formidable and oft-quoted chronicler of the “plutonomy” that so shamelessly took title to our government.

  Our conversation took place in February 2009, just a couple of weeks after Barack Obama became president and about six months into the financial crisis. Johnson had just written a piece at baselinescenario headlined “High Noon: Geithner v. the American Oligarchs,” and I wanted to know more.

  —Bill Moyers

  What are you signaling with that headline “Geithner v. the American Oligarchs”?

  I’m signaling something a bit shocking to Americans, and to myself, actually. The situation we find ourselves in at this moment is very strongly reminiscent of the situations we’ve seen many times in other places, but places we don’t like to think are similar to us: emerging markets—Russia, Indonesia, Thailand, Korea. Not comfortable comparisons. We somehow find ourselves in the grip of the same sort of crisis and the same sort of oligarchs as in those countries.

  Oligarchy is an un-American term, as you know. It means a government by a small number of people. We do
n’t like to think of ourselves that way.

  I know people react a little negatively when we use this term oligarchy for the United States. It’s a way of governing, as you say. It comes from a system tried in Greece and Athens from time to time, a very simple, straightforward idea from Aristotle. It’s political power based on economic power. And it was actually an antithesis to democracy in that context. Exactly what you said: a small group with a lot of wealth and a lot of power. They pull the strings. They have the influence. They call the shots. It’s disproportionate, it’s unfair, it is very unproductive, and it undermines business in this society.

  And it’s the rise of the banks in economic terms that translates into political power. They then exercise that political power back into more deregulation, more opportunities to go out and take reckless risks and capture huge amounts of money.

  The big banks became stronger as a result of the bailout. That may seem extraordinary, but it’s really true. They’re turning that increased economic clout into more political power. And they’re using that political power to go out and take the same sort of risks that got us into disaster in September 2008.

  Are you suggesting that the banking industry trumps the president, the Congress, the American government in a crisis like this financial catastrophe?

  I hope they don’t trump it. But the signs that I see—the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees—it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there’s a small group of people who got you into a disaster, and who are still powerful—made even more powerful by disaster—you know you need to come in and break that power. And you can’t. You’re stuck.

  Both The Wall Street Journal and The New York Times reported that Obama’s top two political aides, Rahm Emanuel and David Axelrod, have pushed for tougher action against the banks. But they didn’t prevail. Obama apparently sided with Geithner and the Treasury Department in using a velvet glove.

  What I read from that is an unnecessary and excessive deference to the experts, or the supposed experts. I live in Washington. I follow this very closely. The view is that you need to rely on the technocrats. And the technocrats are saying, “You must not be too tough on the banks; that will have adverse consequences for credit, for the economy, for unemployment.” If that’s what the technocrats are saying now, they’re wrong. That is not the right way to deal with this crisis.

  There are many fine professionals at Treasury with great experience who have spent their lives working on important issues related to the United States. What we face right now is not a typical U.S. issue. President Obama said we’ve never seen anything like this since the Great Depression. Well, that means nobody working on this has any firsthand experience. He also said we may face what we call a “lost decade.” We’ve never seen that anywhere other than Japan in the 1990s. With all due respect to the officials at Treasury, they’re not the ultimate authority. I don’t think they’re the right people.

  The people you should be talking to are the people at the International Monetary Fund. They are saying the policy of being nice to the banks is a mistake. The powerful people in the country are the CEOs of these banks. They’re the people who paid themselves the massive bonuses at the end of the last year. Now, those bonuses are not the essence of the problem, but they are a symptom of an arrogance, a feeling of invincibility, that tells you a lot about the culture of those organizations and the attitudes of the people who lead them.

  Timothy Geithner hired a senior lobbyist from Goldman Sachs as his chief of staff. The deputy secretary of state was a vice president of government affairs at Citigroup. A managing director from Citigroup is now assistant to the president and deputy national security advisor for international economic affairs. One of his deputies also came from Citigroup. One member of the President’s Economic Recovery Advisory Board comes from UBS, which is being investigated for helping rich clients evade taxes. Is this what you’re talking about—this web of relationships?

  Absolutely. I don’t think you have enough time to go through the full list of people and all the positions they’ve taken. I’m sure these are good people. Don’t get me wrong. These are fine, upstanding citizens who have a certain perspective and a certain kind of interest, and they see the world a certain way. And it’s a web of interest, exactly as you say. That’s exactly the right way to think about it. That web of interest is not my interest, or your interest, or the interest of the taxpayer. It’s the interest, first and foremost, of the financial industry in this country.

  Do you think the president understands how these guys play the game? Let me play you the recording of a conference posted on the Huffington Post. One of the top officials of Morgan Stanley is speaking to his colleagues. Here it is:

  JAMES GORMAN: I’m going to turn to a topic that I suspect is near and dear to everybody’s hearts, which is retention.... There will be a retention award. Please do not call it a bonus, it is not a bonus; it is an award.... The award will be based on ’08 full year production.... Clearly it would have been cheaper to do it off ’09, but we think it’s the right thing to do, and we’ve made that decision.

  What he’s basically saying is: “Business as usual. Go about your daily lives. Get the bonuses. Rebrand them as awards.” Bill, this is the arrogance of people who think they’ve won. They think it’s over. They think we’re going to pay out 10 or 20 percent of GDP to basically make them whole. It’s astonishing.

  Why wouldn’t they believe it? Before I watched the eight CEOs testify before Congress at the House Financial Services Committee, I read a report that almost every member of that committee had received contributions from those banks last year. In a way that’s like paying the cop on the beat not to arrest you.

  I called up one of my friends on Capitol Hill after that testimony. I said, “What happened? This was your moment. Why did the members pull their punches like that?” And my friend said, “They know the bankers too well.”

  In 2008, the securities and investment industry made $146 million in campaign contributions. Commercial banks, another $34 million. American taxpayers don’t have a flea’s chance on a dog like that, do they?

  It is a massive problem, obviously. The good news is there are people in the White House, the president himself, aware of this broader issue. Remember, throughout his campaign Obama was very good at getting small contributions and trying to minimize the impact of major donors like that. But at the same time, these people are throughout the system of government. They are very much at the forefront of the Treasury. Treasury is apparently calling the shots on their economic policies. This is a decisive moment. Either you break the power or we’re stuck for a long time with this arrangement.

  When Tim Geithner said earlier in the week [February 10, 2009] that the American people have lost faith in some financial institutions and the government, did it occur to you that this was the same man who was president of the New York Fed through much of this debacle?

  I have no problem with poachers turning gamekeeper. If you know where the bodies are buried, maybe you can help us sort out the problem. And during the first three or four minutes of that hearing, what Timothy Geithner said was very good as a definition of the problem, and pointing the finger clearly at the bankers, and saying that the government had been slow to react, and, of course, that included himself when he was at the New York Federal Reserve in the run-up to the collapse. I liked that. And then he started to talk about the specifics. But when he said, in effect, that the compensation caps we’ve put in place, for the executives of these banks, are strong, I just fell out of my chair. That is not true. That is factually inaccurate.

  It’s deferred stock these guys are getting. It’s not restricted. You can get as much stock as you want; as soon as you pay back the government, you can cash out of that. T
hat’s one problem. Second, and I’m sorry to get technical, they can reset the stock option price. This is something you and your viewers need to hear about. Just look for these words, okay? Follow them through the press. When you get into trouble, when your company goes down, and you have massive amounts of stock options that aren’t worth much anymore, because the stock price has gone down, you say, “Oh, well, we’re going to reset our option prices.”

  And basically it means that at the end of the day, these people are going to walk away with tens if not hundreds of millions of dollars paid for basically by the insurance policy that you and I are providing. Think of it like this: Our taxpayer money is ensuring their bonuses. We’re making sure that these banks survive. And eventually the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes—we and our children—so those people could have those bonuses. That’s not fair. It’s not acceptable. It’s not even good economics.

  We should certainly have a big say over critical matters like this. First of all, it’s our money that kept these banks in business. Not just the Treasury recapitalization money, that’s relatively small; it’s the financial support provided by the Federal Reserve that has saved the day. Make no mistake about it, if the Federal Reserve hadn’t stepped in in late September 2008, in dramatic fashion, to prop up Goldman Sachs and others, they would be out of business. It was our money that did that. The Federal Reserve acting on behalf of the American taxpayer.