“They were too big to fail in 2008, they were too big to jail in 2009”

Bill Moyers interviews Neal Barofsky former Special Inspector General in charge of policing TARP (SIGTARP). Mr. Barofsky speaks with clarity about the roots of the present financial crisis, on why nobody has been prosecuted in Wall Street, on why another crash is inevitable, on why “playing ball with Wall Street” is the way to go if you want to succeed in the USA, on why big banks are back to their old tricks, on why they should be broken up and how difficult achieving this goal is going to be.

He does not mention America is now a feudal society, but that does not mean it is not.

Some excerpts either from Bill Moyers or from Neal Barofsky:

6:00 on why nobody in Wall Street has been prosecuted…“they were too big to fail in 2008, they were too big to jail in 2009”

7:30 “I thought, at the time, this was an incestuous orgy going on there, between inside players at Washington and inside players at Wall Street. Is that too strong?”…”It’s probably not too strong. It’s the fact that their ideology matches up. And look, one of the reasons why their ideology matches up is they all come from the same small handful of institutions. And the people I was dealing with on a daily basis came from the same financial institutions that helped cause the financial crisis and were the most generous recipients of bailouts, Goldman Sachs, Bear Sterns, which, of course, had been adopted by J.P. Morgan Chase. Goldman Sachs, Goldman Sachs, it seemed like every time I turned around, I bumped into someone from Goldman Sachs.”

9:20 “It was puzzling to outsiders like me that you had TARP money being used to concentrate further the size of these banks.”

10:30 “Are you suggesting that we could have another crash?”…”I think it’s inevitable. I mean, I don’t think how you can look at all the incentives that were in place going up to 2008 and see that in many ways they’ve only gotten worse and come to any other conclusion.”

12:40 “playing ball with Wall Street has become a novel way of life”

13:20 “And he said to me, he said, “Neil, you’re a smart guy. You’re a young guy. You’re a talented guy. You got your whole future in front of you. You’ve got a young family that’s starting out. But you’re doing yourself real harm.” And the reason why you’re doing yourself real harm is the harsh tone that I had towards the government as well as to Wall Street, based on what I was seeing down in Washington. And he told me that if I wanted to get a job out on the Street afterwards, it was going to really be hard for me.”

17:00 “And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they’re not. And what you’re going to see and what we are seeing is it’ll be a breakdown of those governmental institutions. And you’ll see governments that continue to have policies that feed the interests of — and I don’t want to get clichéd, but the one percent or the .1 percent — to the detriment of everyone else.”

18:30 “Based on the presumption of bailout, the banks get higher ratings from the credit rating agencies which means they can borrow money for less, because their debt is viewed by the credit rating agencies as being less risky. And they get these higher ratings on explicit presumption that the government will bail them out and make good on their debt.”

20:05 “If we really want to get to the point where we don’t have to bailout a bank, we have to make it so that no bank is so systemically significant and large that its failure could bring down the system.”

20:40 “And pressuring members of Congress to put pressure on the regulators, to water down the rules, to basically get as much back to the good old days where they would have free reign to print money, take advantage of their too big to fail status, bully and push out the little guys, take advantage of consumers. And that’s what all of these efforts area about are to preserve these very, very core profit streams that they had before.”


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