Please don't miss this week's Bill Moyers' Journal. The guests are
Lori Wallach, Director of Public Citizen's Global Trade Watch, who talks about trade and the Dems' reprehensible drive to sell out their base (and the rest of America's workers) for yummy campaign contributions from corporations.
LORI WALLACH: We've had a deal this week, new legal text, to expand NAFTA to two, if not four more countries, bizarrely signed off by some Democrats. Expanding these agreements, even with the much-improved labor and environmental standards, is gonna be a net loss for jobs, downward pressure on wages, more unsafe imported food and products. These are not the kind of agreements the American public stood up and voted for. The good news is, they got the administration to agree to add into the agreement's text, binding labor and environmental standards.
LORI WALLACH: The hitch is -- they put those on top of the old NAFTA or CAFTA, Central America Free Trade Agreement, model. So, it's sorta like this. You take a building that you found to be condemned. Foundation's gone. Wall's ca-- cavin' in. You would not wanna go in there. And then you put a new roof on it. And of course, you say, "Well, you have to fix that building before you put the roof on or it's still comin' down on your head." That's the deal that they cut. So, I want the new roof in every trade agreement in the future. Can't walk into that building without gettin' my wages crushed.
Gretchen Morgenson of the NYT, who is the best business writer out there, talking about the mortgage crisis. She falls victim to the false balance that plagues journalism today and hems and haws a little bit with Moyers, calling it a "mania" as if some mass hysteria affected the robber barons and now they're just as suprised as the people they swindled to see what's happening now. Mistakes were made ... The rate of return made me do it. Spare me. But when she lets herself stop equivocating, she hits home:
BILL MOYERS: So somebody lends money to a home buyer who's not a good credit risk, who can't really pay it back. But then that lender, as I understand it, sells the loan to Wall Street. And the lender walks away.
GRETCHEN MORGENSON: Correct. Correct.
BILL MOYERS: And that just escalates with a lot of people doing it?
GRETCHEN MORGENSON: It feeds into this idea that we need to make more loans. The lender in the old days kept the loan on the balance sheet, had an interest in seeing that it was repaid. Now this lender sells it to someone else. Not his problem anymore. Gets the money back to make another loan. The lenders now are more interested in earning the fees associated with the mortgages, which are extremely lucrative. And they have no credit risk because they have pawned off the loan on somebody else; it's somebody else's problem. That helped to feed this mania for mortgage produ-- mortgage securities that then played into this idea of giving a mortgage to anybody who was ambulatory.
BILL MOYERS: No questions asked.
GRETCHEN MORGENSON: No questions asked.
GRETCHEN MORGENSON: We had a situation where they would give money to people who could not document their income, who could not provide a down payment. Then you would have second loans on top of those loans which they call silent seconds or piggy-backs. There was so much money around, Bill, that seeking, you know-- looking for a way to be deployed--
BILL MOYERS: To earn interest.
GRETCHEN MORGENSON: --to earn interest.
BILL MOYERS: Yeah, to earn inter-- right.
GRETCHEN MORGENSON: There was so much money around that they just threw it at anybody.
BILL MOYERS: The chairman of the House Financial Services Committee, Barney Frank said on television this week that it's a pretty simple matter. Don't lend money beyond what they can expect to pay and don't lend money without verifying what people can pay back. That's pretty good advice, isn't it? Why don't they follow it?
GRETCHEN MORGENSON: Sounds pretty simple, right? Well, why didn't they follow it? Because there was so much money to be made in fees by not following it. Throw money at people who can't pay their loan back. It won't matter. I'm not going to own the loan. I'm not going to have it. It'll be somebody else's problem by the time it comes a cropper.
...
BILL MOYERS: Does this contribute to what you and I both know are-- is growing inequality in the country? The gap between the rich and the poor? The greatest gap since 1929? Is this contributing to that gap?
GRETCHEN MORGENSON: To the degree that Wall Street made an awful, awful lot of money on these securities, yes, it contributes to that gap. To people who work on Wall Street, you saw the enormous bonuses, the enormous payouts to the CEOs of these firms. Absolutely. The mortgage mania contributed to that. The little guy doesn't have the benefit of all the powerful friends in Washington and the powerful friends on Wall Street. The little guy is just trying to be able to retire comfortably and not have to scrimp and worry about money. And he and she have a right to that. And if we're in an ownership society that's ballyhooed around, that should be a benefit. That should be who wins. But unfortunately, the little guy is the guy that's usually the bag holder.
BILL MOYERS: Are we living in a new gilded age?
GRETCHEN MORGENSON: Absolutely. A new gilded age. Except this time around, instead of when we had Vanderbilts and Goulds and Morgans and pick your name, building--
BILL MOYERS: Rockefellers.
GRETCHEN MORGENSON: --physical assets that produced goods that people bought or transported--
BILL MOYERS: Railroads-- railroad steel firms.
GRETCHEN MORGENSON: --goods. Correct.
BILL MOYERS: Right? Right.
GRETCHEN MORGENSON: Now, this gilded age is all about pushing paper around and making money on money.
BILL MOYERS: Financial engineering.
GRETCHEN MORGENSON: Financial engineering. Exactly.
What's good for General Motors is no longer what's good for the U.S.A. and the people in charge don't care and if you do, according to them you're a dirty protectionist and probably a racist to boot. Grab a life preserver, if you can afford one.
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