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Bill Moyers interviews Matt Taibbi (RollingStone) and Yves Smith (NakedCapitalism). Matt and Yves are extremely bright and well informed regarding the financial sector. The two of them have obvious respect for each other and come at the banking industry from different perspectives but arrive at the same point. All in all, it makes for a 30 minute interview with an engaged Moyers that goes by very quickly. Like a great fiction story, I found myself not wanting it to end. Too bad it’s not fiction or likely to end very soon. Here’s the video:
They will be answering questions on Twitter this evening at 6:00 pm ET, @mtaibbi and @yvessmith, #moyers.
48 Comments
Very good. Yves barely touched on it, but the real reason nothing has been done is because the FED AND The Treasury are in collusion with Wall Street Banks and are perpetuating the fraud in order to keep the dollar and US treasury bonds desirable even though out national debt is as high or even higher than all other countries.
It’s a global fraud.
And Yves is only partially correct. The banks don’t break your legs if you don’t pay, they have the cops do it.
Great show. Thanks.
recd
C, here’s a chart of US federal debt levels:
http://www.usgovernmentspending.com/federal_debt_chart.html
As it shows, the Federal debt is 16.4 Tn dollars, about the same as GDP. But the important figure is debt HELD BY THE PUBLIC, because debt that the government owes itself just cancels itself out (think about how much of a financial burden debts you owe to yourself would be…).
And that debt is 9.7 tn dollars.
Which is only 65% of GDP.
Which is much less than most developed countries. Not to mention that the interest paid on that debt is lower than everyone else’s.
So the debt is more than manageable.
As long as the US is stuck in a liquidity trap, the Fed can monetize any deficits that we need to get out of it, and can do so with no danger of any entrenched inflationary cycle.
Comrade, don’t you think misinformation about the debt burden is not the reason the US can’t get out of the “liquidity trap”?
Almost.
$2.6 trillion of that is owed to the Social Security Trust Fund, which holds “special” Treasury bonds that will get redeemed to cover shortfalls in SS revenue. Where will the money to redeem them come from? The same place the money to redeem all other Treasury bonds. We’ll simply roll the debt over, i.e., sell bonds and use the proceeds to redeem the bonds that are coming due. But it’s real debt, just like the money we owe China.
On the other hand, $1.6 trillion of that is owed to the Federal Reserve (Fed), which has bought up those Treasury bonds on the “open market.” They have been paid for with “reserves,” i.e., credit added to accounts at the Fed, i.e., money issued out of thin air. That money spends like any other. And the interest that the Treasury pays on those bonds counts a profit to the Fed, all of which comes back to the Treasury at the end of the year (with some small amount of overhead withheld).
It should be noted, however, that Treasury bonds held by the Fed count toward our national debt limit. Ron Paul and Dean Baker have recommended repudiating that debt. I’d prefer that the Treasury simply buy that debt with a freshly minted $1.6 trillion special platinum coin, which the Treasury can do under existing law.
Yup!
A big problem, imho, is that many progressives seem to buy into the debt-scare and inflation paranoia. As long as they keep it up, we’re going nowhere.
- And, like I said, the SS trust fund is part of the government. I.e. money the government owes to itself. It’s not “money owed to anyone”, except in the sense that the government has promised to spend a certain amount in the form of future SocSec benefits. Where will the money come from to pay those benefits? Future revenue.
So that switches the focus and the concern to *LONG-TERM* future deficits. And the easiest way to fix the long-term fiscal outlook is to bring the economy back to full employment … FAST! It’s the output gap that is creating the deficits. Fix that, and then find 2-300 bn in more revenue (i.e. raise 200 bn in taxes on the rich, 100 bn in the form of a Financial Transactions Tax). That’s all that’s needed.
…
Yes, but not in any way that creates a debt *BURDEN*. It’s money the government owes to itself. What happens is that Treasury pays the interest to the holder of the debt – i.e. the FED – and the fed then transfers that money back to Treasury. So the money comes full circle.
FeetToDaFire – really good show. Like you said, I found myself wishing they would continue.
Thx.
rec’d
The full amount is available to cover future SS revenue shortfalls.
Not necessarily. More likely, the money to redeem those bonds will come from the sale (say to China) of other bonds, i.e., the debt will be rolled over into debt held by the public. An it could be that, in turn, those publicly held bonds get bought up by the Fed. In that case there is no involvement of future revenue.
Yes. The full amount. I was maybe a bit awkward. I meant that it only covers a portion of the (expected!) shortfall.
I think forecasts cluster around a shortfall of 1% of gdp per year, after the trust fund runs out in 2039.
So the problem is minor, and dependent on highly uncertain projections far far out into the future.
In short, the problem is ENTIRELY HYPOTHETICAL.
So, what is “the reason the US can’t get out of the ‘liquidity trap’?”
Exactly! And there is no SS problem for a quarter of century.
So, why are Pete Peterson and his lackey, Barack Obama, so worried about it now? (That’s a rhetorical question.)
The only way that the “special” Treasury bonds held by the SS Trust Fund can be redeemed is to cover a SS shortfall. If they can fix/strengthen SS so there are no shortfalls, that money gets paid back.
It’s class warfare. The income-tax payers have borrowed $2.6 trillion from the working class. They claim that they have stolen it fair and square simply by spending it, and, therefore, they should not have to pay it back. To make that theft a fait accompli, all they have to do is fix SS now. In other words, their concern is not maintaining benefits but rather avoiding repayment. Clever fuckers, these 1%ers.
LOL. I thought we just agreed on that ?!
i.e “misinformation about the debt-burden”, as you said…
I *thought* you meant that it was giving popular support to Austerity policy implemented by the Democrats. Anyway, it’s what I meant, and think.
Not clever, just crooks.
The most outrageous thing about the Social Security “debate” is that much of the “expected” shortfall can be put down to lower payroll-tax revenue due to policy induced wage stagnation. If working class wages had moved up in tandem with productivity increases, we wouldn’t even be having this conversation.
So first they screw you on wages, and then – because they’ve screwed you on wages – they think they “need” to screw you on your retirement.
peachy…
Exactly. Misinformation in the form of debt/deficit hysteria blocked and continues to block any adequate stimulus effort.
Back in 2004, Bernanke insisted that the way out would be a helicopter drop of freshly issued money. Unfortunately, all the money he has dropped to get us out of this mess has been dropped on the banks and the 1% rather than the consumers.
The legitimation/motive of Austerity is not simply greed or incompetence. Those are the comprador’s explanations.
What is the “morality” of the fraud?
Nah. I’ll go with “greed”.
Not surprised. And not very illuminating.
Why don’t you write up what you think, instead of shorthand questions that are frankly pretty opaque…?
Regarding the Moyers interview of Matt Taibbi and Yves Smith, I’d never seen Smith interview before and had only read some of her blog posts, all of which were excellent. She was even more impressive in that interview, which I consider must-watch material for anyone trying to figure out what has happened, i.e., how the kleptocrats have managed to hollow out the American economy.
I remember seeing an interview with her once before on Moyers a while ago.
She is very good. Ives Smith, Taibbi and Noami Prins. Non of which sees the light of day on the MSM, of course.
Can’t have any “wise guys” spilling the beans to the general public, ya know.
Fantastic video: thank you for alerting me to its presence; I missed it.
JP Morgan Chase receives a government subsidy worth about 14 billion dollars a year in taxpayer money?!
Isn’t that a crime?! Is that not treason?! Are our members of Congress and the administration, including the President, a bunch of crooks?!
What is the penalty for high crimes against the state or treason?
The Barefoot Accountant
And who, prey tell, is going to enforce this ?
I mean would this be like expecting Don Corleone to place himself under arrest ?
Well, the Egyptians just got rid of a crook, didn’t they?
It’s called the Socratic method, comrade.
So desperate, o so desperate.
I watched this last night. I admit to dozing off a couple of times because it didn’t come on until midnight Eastern time, which probably isn’t a coincidence.
Moyers asked some good questions, and Taibbi and Smith both did a good job of explaining the tactics of the Wall Street Mafia, albeit this time the Mafia is legal because they control all three branches of the federal government which makes, or doesn’t make, the laws. Still, none of them addressed the fundamental problem, which is the capitalist system itself.
I’ve said it before and I’ll no doubt say it again. The ONLY goal of capitalism is to accrue more capital. All Jamie Dimon and his ilk have done is to act like good capitalists. Smith was wrong when she said “This isn’t what capitalism is supposed to look like.”
This is EXACTLY what capitalism looks like. Ain’t pretty, is it?
But thanks for posting an informative TV show. Recc’d.
I must have missed the report that the military ceded control in Egypt. Exactly when did that happen?
Isn’t the FED comprised of The Banksters of Wall Street plus Bernanke? Timmeh, disciple of Henry “War Criminal” Kissinger, is Treasury and we know from his past performance as head of the NY FED that he’s part of the cabal responsible for the global economic catastrophe.
Book Salon up with Joseph Costello’s Of, By, For: The New Politics of Money, Debt, and Democracy hosted by Jerome Armstrong
This is exactly what unregulated or deregulated capitalism looks like. Brought to us through the bipartisan efforts of Bill Clinton, his economic team, Phil & Wendy Gramm, and the last Congress of the 20th Century
is that sarcasm are you just a fucking wiseass
Tricky. There’s not even an or there.
The MSM won’t be reporting any of this. But, OTOH, the public don’t really care that much for ‘inside the beltway’ discussion. They know what’s going on in their own lives and they want and need more money to replace that which disappeared recently.
It’s an accurate assessment of the situation. The military was and is still the governing force in Egypt. That would be Mister Wiseass to you. Is the “Liberal” in your screen name an example of sarcasm?
We all grew up learning about the fine print. It was largely a joke back when. It’s not funny anymore.
Right and in that world there is ONLY one significant rule. “Let the BUYERS Beware!”
Clinton often said “NO” to his economic team, as in the refusal to adopt NAFTA without the two additional agreements on labor and the environment, the refusal to go along with the initial welfare reform – two vetos – until Dems joined the GOP to provide a veto proof albeit more generous bill, and the economic team’s plan to tear down Social Security where he replaced that plan with a “no change in Social Security AND we had a voluntary 401k payroll deduction for anyone that wants such a deduction (obviously not passed as it was opposed by the Clinton economic team of Rubin/Summers, by the GOP led by Phil Gram and Newt, strongly opposed by the real destroyer of the economy and America, Greenspan (who you forgot to mention), and opposed by all the do nothing regulators that Reagan/Greenspan put in and which the Dems were afraid to replace (thank god for the few GOP regulators that did speak up during the Clinton years).
So your post is not “an accurate assessment of the situation” – it assigns no blane to GW BUSH/Greenspan/Liar loans/and the GOP/Phil Gramm/Greenspan refusal to regulate the derivatives market, and the OBama refusal to take care of any other than the banks via large federal actions – indeed while motivation is impossible to discern about anything, it does have the appearance of an attempt to protect Obama.
It was as good an interview as one could expect – meaning excellent.
Yves Smith (Susan) comes from and is still milking the hedge fund investment side of the world (for info obviously and I believe her firm still consults) – and is not about to kill that source info/income by complaining about capitalism. Talbi is just Talbi – very sharp but not into tearing down things or biting the hand that feeds him. Both believe what they are saying and I do not read them as trying to sell anything thing they think is a lie.
I just enjoy the fact that there are some sharp minds that are expressing some good critical thinking – as I allow for whatever bias that one can expect after years of viewing their work product.
And don’t forget to pay you protection money.
Don’t know where that site gets its data. But the Treasury figures are here. The total debt subject to the limit is 15.7 Trillion. Still $657 B to go to get to the debt ceiling. Also, there’s $140 B still in the Treasury General Account; so the total amount of deficit spending headroom was $797 B on June 20th, an amount a bit greater that the stimulus bill.
thanks feet. i’d never seen yves smith before.
Hi LetsGetItDone,
Thanks for that info, which reassures me that any hysterical attempt toward a “grand bargain” by Obama would be total bullshit.
Peace.
I guess reading comprehension isn’t your strong point as you rush to defend all Clinton all the time. My comment @34 includes both Phil & Wendy Gramm as architects of the deregulation that Bill Clinton, upon signing, lauded as necessary to modernize our financial system. Let’s just agree to not address each others comments in.re. the foundation of the current economic disaster, as you seem unable to either comprehend what I write nor are you able to honestly and accurately portray the role of Clinton and his pal Sandy Weill.
At least the Egyptians are doing more than us Americans: they are trying. And they succeeded in electing a new President.
We are laying dead and allowing corrupt politicians to roll over all of us and to continue to take 85% of the wealth of the nation and transfer it over to the top 20%.
At least they are taking to the streets; and it ain’t over in Egypt, as it is here.
And what makes you think we don’t have tyranny here? With NDAA now allowing permanent detainment without habeous corpus? And with soon to be enacted legislation on the internet, some new version of PIPA and SOPA to be enacted after the election. And with the control of the major media by multinational corporations? You think we don’t have tyranny here?