The Fate of America's Middle Class Hangs in the Balance
Barrington M. Salmon | , WI Staff Writer | 2/15/2012, 12:06 p.m.
Moyers said none of this happened by accident and describes it as "an inside job, politically engineered by Wall Street and Washington working hand-in-hand, sticky fingers with sticky fingers, to turn the legend of Robin Hood on its head: giving to the rich and taking from everybody else. It's all on the record."
The "richest of the rich" was Citigroup, which at one time was the world's largest financial institution. After the 2008 meltdown, the bank cut more than 50,000 jobs, and taxpayers shelled out more than $45 billion to save it. Last year, CEO Vikram Pandit pocketed about $2 million dollars in salary, almost $4 million dollars in deferred stock - stock options that may be worth as much as $6.5 million dollars, and a $16 million retention bonus, said Moyers.
"There's no clearer example of the collusion between government and finance than the deal that created Citigroup in the first place. At a standing-room only press conference in April 1998, Sandy Weill, head of the investment bank and insurance company Travelers Group, and John Reed, the longtime CEO of the commercial bank Citicorp, announced a gigantic, $140 billion merger."
Just one problem, Moyers said. The merger flew in the face of established law. The Glass-Steagall Act was "a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. President Bill Clinton cleared the way by eliminating the 70-year-old law, thus ushering in the near-total collapse of the economy that was to follow.
An uncertain future
Former Senator Byron Dorgan, (D-ND), was a vocal critic against dismantling Glass-Steagall in 1999. His warnings presaged the economic meltdown nine years later.
"This set back the country significantly," he explained. It was like a bunch of hogs at a slop pail trying to see who could eat the most. They wanted the rules to be gone. All this happened under our noses - regulators and members of Congress. There are really good people who didn't stop to check, who didn't think through the consequences."
"This was not an accident; it is a matter of public policy. It is weighted in favor of the wealthy that have enormous clout on public policy. (And) financial institutions are still gambling today."
Harrison said America is gripped by a "full-scale crisis."
"It's tough. About the only good news was that the growth of the gross domestic product was higher than expected. This could jump-start the economy," he said. "There is strong evidence in the financial crisis of the credit default swaps and the role they played. The system is more complex that anyone really knows. A lot of people only know well where they work or pieces of the whole system."
"I think we've created an economic system, vast, complex machinery. You have to hear something clanking along to know something's wrong."