So what happened to Cassano? Mike Taibbi works for Raibbi. You compare this whole thing to a casino. We now own controlling stakes in an enormous variety of companies, a dying insurance giant in AIG. The Big Takeover Takeofer 23, takover 2: But did you know we produce our daily news hour at a fraction of the budget of a commercial news operation, all without ads, government funding or corporate underwriting?
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Links Transcript This is a rush transcript. Copy may not be in its final form. This is Treasury Secretary Geithner. We need to extend those protections and authorities to cover the risks posed by our more diverse and complicated financial system today, and we are proposing legislation to provide those tools and look forward to working with this committee and the Congress to pass such legislation as quickly as possible.
Federal Reserve Chair Ben Bernanke argued in his testimony, if the government had allowed AIG to fail, it would have jeopardized the entire financial system. Geithner, who has come under fire for not doing enough to block the bonuses, said he shared their anger. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
Welcome to Democracy Now! How did this big takeover happen? The biggest movement in that front was the Gramm-Leach-Bliley Act of , which repealed the Depression-era law called the Glass-Steagall Act, and that allowed all of these companies to merge together and create these enormous mega-companies, like Citi, like Bank of America and like AIG, which was once basically an insurance company but evolved to become, you know, a very complicated hedge fund, an investment bank and a variety of other things.
And under these new regulations, it was also allowed to choose its own regulator, and it chose the weakest and most impotent of the regulators, the Office of Thrift Supervision, which is one of the big reasons that it was allowed to sort of spin out of control. All they had to do is open up a thrift in one state. And the Office of Thrift Supervision is by far the smallest and least aggressive of the regulators.
And, in fact, it only had one insurance expert on its entire staff. So they had really very little expertise to deal with the situation. AIG was a company that had over , employees. And because the CDSs were unregulated — and this is because of a specific law back in the year called the Commodity Futures Modernization Act, which was sponsored by Phil Gramm. These instruments were unregulated. And then we are going to talk about these bonuses and who these people are.
How Wall Street insiders are using the bailout to stage a revolution. You have to let us kind of work this out. And a great example of how Wall Street has actually risen in influence is this new program that Timothy Geithner introduced the other day, which is really just state-subsidized hedge fund profiteering. This was absolute unity on the part of both parties. They both were absolutely complicit in passing these deregulatory moves.
You know, in the instance of the Gramm-Leach-Bliley Act, that was sponsored by Phil Gramm and by the Republicans, but it was very, very enthusiastically supported by Robert Rubin and Larry Summers, and it was signed into law by Bill Clinton and passed with the support of all those very powerful Democratic senators. It was Hank Paulson, who was the former head of Goldman Sachs.
I mean, this whole situation is rife with Goldman Sachs employees. He was allowed to stay on at a salary of a million dollars a month. And, in fact, he kept earning that salary, even after AIG was bailed out, for at least another month. But, first of all, who are these people in the London office? Are they British? We can basically do whatever we want. The fact that we had to resort to those measures is extraordinary in itself.
The only people who understood these CDSs and these derivative instruments was the people who were actually writing these contracts. And this is a tiny, tiny unit. Lay out the analogy for us. And they had to do that, because they were afraid that they were going to be regulated by, you know, state gaming agencies. Who lost? We now own controlling stakes in an enormous variety of companies, a dying insurance giant in AIG. And, of course, every hedge fund in the world was throwing a party at the news that Geithner came out with this plan yesterday.
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Faele What do you mean, they made this mtat We can basically do whatever we want. The British Empire probably peaked in relative power around and found it increasing expensive to maintain power afterwards due to the rise of France, Germany, Russia and the United States. In our case, we are seeing a rapid decline in our relative power. Many view the massive losses at AIG as the result of corporate greed combined with lax government oversight and regulation.
BIG TAKEOVER MATT TAIBBI PDF
Links Transcript This is a rush transcript. Copy may not be in its final form. This is Treasury Secretary Geithner. We need to extend those protections and authorities to cover the risks posed by our more diverse and complicated financial system today, and we are proposing legislation to provide those tools and look forward to working with this committee and the Congress to pass such legislation as quickly as possible. Federal Reserve Chair Ben Bernanke argued in his testimony, if the government had allowed AIG to fail, it would have jeopardized the entire financial system. Geithner, who has come under fire for not doing enough to block the bonuses, said he shared their anger.