Plundering Our Freedom with Abandon – Robert Scheer on Reality Asserts Itself (6/10)

PAUL JAY: Welcome back to Reality Asserts
Itself on The Real News Network. We’re continuing our discussion with Bob Scheer. Bob is a veteran
U.S. journalist, currently the editor-in-chief of the Webby Award-winning online magazine
Truthdig. And his whole biography you’ll find beneath the video player. We’re just going to pick up where we were. So here’s what I’m accusing you off, that
you seem to be suggesting that there’s some rationality left in this system within the
elites. And I’m not talking–of course there are some individuals that have some rational
long-term view. I mean, even people like Soros has been crying about the lack of banking
regulation. And there’s people in different sectors of the elites who realize this is
a train wreck and about go over a cliff. But those voices are actually marginalized. Even
somebody who’s got as much money as Soros within the banking and financial elite is
completely marginalized. Nobody really listens to a word he says–people with power, at any
rate. [1:07] ROBERT SCHEER: Well, they listen to–. JAY: Let me finish the point. SCHEER: They listen to Buffett. JAY: Well, maybe. But Buffett doesn’t raise
as much alarm as Soros does. But within there–they don’t even seem to be able to rule in their
own interest. It would be in the interest of global capitalism to have more rational
banking regulations as they introduced in the 1930s. It would be in the interest of
global capitalism to deal with the threat of catastrophic climate change. It would be
in the interest of any rationality not to let fossil fuel and the arms industry so dominate
U.S. foreign policy, particularly in the Middle East, I mean, this fueling of a Saudi-Iranian
conflict. The idea that, you know, could there be a United States without a massive military,
yeah, there could, but not this United States, not this economic system, not this elite.
These guys aren’t going to come around to some kind if view of we could be an equal,
modest country. SCHEER: Well, you’re absolutely right that
the current configuration of power in America is irrational. We don’t have adults watching
the store. And we go from one disastrous pursuit to another. I mean, there was no reason whatsoever,
if we had adults watching the store, you’d go knock off Saddam Hussein in Iraq, who had
nothing to do with al-Qaeda, was a force against Iran, which–you know, we backed him in his
war with Iran. So the contradictions are obvious, that we don’t have adults watching the store,
we don’t have rational policy. However, I think you are not the only person
that now knows that. JAY: Oh, I’m sure lots of–I would say most
ordinary people kind of know it. SCHEER: No, I think even in those circles
there’s an awareness that we’re not doing very well, and there are reminders that we’re
not doing well. You know, our economy is stagnant. We’re up against some real problems in terms
of our future. Income inequality is one. You don’t have to be some wild lefty liberal to
see that. I mean, the whole foundation of our country was always on a stable middle
class and an expanding middle class, opportunity, equal playing field. I’m not saying that was
the reality, but that was always the expectation. You know. And, you know, whether it’s de Tocqueville
or the founding fathers, there was always an assumption that at least for what you thought
was the base population there would be this opportunity. You know. And we have been forced
over the last couple of decades to recognize that no, it’s going alarmingly in a different
direction. Internationally, we know we’re not doing very
well. I mean, we don’t produce a whole lot of products that everybody in the world is
dying to get their hands on. The main thing that we’ve been effective on is this tech
stuff, and our tech companies are the ones that are most concerned that our political
model is not a good one. They’re the ones that are out there having to sell this stuff,
and this stuff involves getting confidence and knowing the culture, caring about other
people, winning their confidence. And that’s been endangered. So the only thing I would–I don’t disagree
with you at all as to whether our model is in trouble. It’s in trouble. I disagree with
you only on whether–the number of people who know it’s in trouble. JAY: I would say even most of them–I would
probably think most of the elite know it’s in trouble. They’re just going to cash in
on it, and it’s going to be someone else’s problem to do something about it. SCHEER: Okay. You’re putting your finger on
something that I feel is very critical. And I have spent my life interviewing people generally
around power, in government and so forth. I’ve traveled with Nelson Rockefeller and
David Rockefeller. You know, I have interviewed people who became president, from Richard
Nixon, Clinton, and so forth and so on. And if I were to try to explain, the big shift
that I’ve seen is long-term as opposed to short-term, that most of the people I had
interviewed in the first stage of my career, say somewhere up until 1970, were people that
at least were concerned what their grandchildren might think. You know? There was either through
family, inherited wealth, or going to certain schools, or there was some sense of social
responsibility, you know, that you could find, that we have to leave our mark, we have to
leave it a better place, we have to–and just for our place in history, that it mattered.
Okay? So you could be concerned, oh, we’d better get with the civil rights movement,
because otherwise we’re going to fall apart, or we’d better care about the economic condition
of the rest of the world, because otherwise it will rebel, we’d better worry about the
living condition of our own people here or they’ll rise up with pitchforks and toss you
out. I think what happened is we went into this
madcap period of short-term greed. JAY: And let me just–Bob wrote a book called
The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street
While Mugging Main Street. And this was a kind of turning point you’re talking about. SCHEER: Yeah, that’s really what my book is
about, because you had sensible rules of the road that came out of the New Deal, and there
was a recognition, because of the Great Depression, that you just can’t have this madcap, crazy,
Gilded Age society. Again I overuse this concept of adults watching the store, but I remember
going back to just being a kid in the Bronx, and you didn’t leave the children to run the
fruit stand, ’cause they’d give everything away or they’d go off themselves and play
stickball. Somebody had to be there to make sure the stuff got sold and money was paid
and things. And you lost that. You got people coming out of the law schools and the business
schools that were shysters. You know, they just wanted some hustle, some scam. That’s
how you got into credit default swaps and collateralized debt obligations. JAY: Yeah, but the bubbles are euphoric,– SCHEER: Yeah. JAY: –if you’re in on cashing in on the bubble. SCHEER: And anybody who looked at that knew.
I mean, I was interviewing people during those years, and they’d say, this is, you know,
as Buffett said, financial instruments of mass destruction. You know, how could you
believe in any of this stuff? How could anybody believe if you–this is what my book was about–you
take all these loans and you redefine them and you talk about the risk in stupid ways
and you give loans to people who can’t support it, and somehow, okay, and whether you were
in Fannie Mae, Freddie Mac, or whether you were in the private sector, ’cause Fannie
Mae and Freddie Mac were being traded on the stock market, you had to know that this was
going to explode. They knew it. And they got the laws to change to make it legal. It should
have been illegal. You know. I mean, the Commodity Futures Modernization
Act, which Bill Clinton signed off as a lame duck president in 2000, after it was already–you
know, the election was over, he was now a lame duck, and he signed this bill. What was
the purpose of it? It was to make all of this garbage legal. It said–I think it was Section
3 of the Commodity Futures Modernization Act–a Republican-Democratic bipartisan bill–said
no existing law or regulatory agency will have jurisdiction over credit default swaps
or collateralized debt obligations or any of these new financial mechanisms. Why? Because
they said this is modern. We have to compete with Europe. You have to be able to do these
things. We can’t let–we have to give legal certainty–Lawrence Summers, you know, secretary
of the Treasury–we have to have legal certainty for these financial instruments; otherwise,
they won’t be effective. Right? Legal certainty meant no one’s going to look at it, no one’s
going to challenge it, no one’s going to set any standards, no existing regulatory agency
or law will apply. So it was a license to steal. JAY: Now, for people that don’t understand
the concept, quickly. SCHEER: Well, quickly, what happens is they
developed all these new financial gimmicks. You know, a credit default swap was something
that was an insurance policy, but it was not an insurance policy. It’s what AIG did and
got into so much trouble. They said, you do these collateralized debt obligations, you
take all these different loans, subprime mortgages–. JAY: Which were invented in Baltimore, by
the way. SCHEER: Yeah, auto loans, or any of these
things, and then they don’t make sense on their own and they all seem quite risky, but
we’ll put them into a pool and we’ll assess their value and we’ll get these credit rating
agencies that have a stake in saying, yeah, they’re all good to go because they’re going
to get money from it. So there was no regulation. And then you pass a law that says you’re allowed
to do this, no one will look at it carefully, no existing regulatory agency will have control.
So you’ve got a license to steal. Go knock yourself out. You know? And they, selling
all these loans, packaging them, and then reselling them to people over the world. Right?
And we can predict, you know, get this income and so forth. And then, if it looks shaky,
we’re going to give you these phony insurance policies, right, that will seem to back them
up. But there’s no money behind it. It’s not like a real insurance policy. Nobody’s putting
any resources. So, suddenly, you’ve got this thing that’s
going to explode, and AIG, which is supposed to be backing up the insurance, says, hey,
we can’t do that; we have no money for that. So now your housing bubble has collapsed and
AIG can’t support it. And it’s nothing more than the mafia doing a scam, only you have
passed laws that say that’s all legal, that’s all legal. Now, you’re absolutely right. You wouldn’t
do that if you were worried about how even you would appear to your grandchildren. Okay?
People looking back now know these people were crooks, whether they went to–they didn’t
go to jail, ’cause they they get the law passed to make it that it’s not a crime to defraud
people. It’s legal. It wipes out half of the wealth of African Americans in this country,
wipes out the economic gains of the civil rights movement, ’cause they were particularly
a group that was particularly victimized. It wipes out two-thirds–these are Pew Research
Center figures–wipes out two-thirds of the wealth, the collected wealth over generations
of Hispanics in this country because they were subject to these subprime. They lose
everything when they lose their house. But the guys putting it all together, they escape
with their billions. They don’t go to jail. So, yes, if what you mean by your opening
statement was we don’t have solid, responsible people who even care how they will appear
to their grandchildren–. You’ve got a guy like Robert Rubin, okay?
Robert Rubin was secretary of the Treasury under Bill Clinton. He had come from Goldman
Sachs. He had convinced Clinton you could do all this stuff, this is all great, we’ll
do all this crap. He brings in Lawrence Summers. Timothy Geithner, who’s a younger person working
in there, he becomes the Treasury secretary under Obama. They do all this stuff. They
get Clinton to sign off on it. He does it with Phil Gramm, the Republican, so it’s bipartisan.
Very few people challenge it. You know, now, I think if you ask anybody about Robert Rubin,
they say, God, yeah, he wasn’t too good for it. I’ll bet you his own family members think
he got his–you know, what happens? He leaves the Clinton administration; he goes to work
for a bank that he makes legal, right? The merger of Citibank and Travelers Insurance
they make legal with their reversal of Glass-Steagall, the Financial Services Modernization Act,
and then they got the Commodity Futures [Modernization Act], which makes these gimmicks legal. He
gets $10 million a year for the next decade. Sure, he’s got money salted away. But I don’t
think he’s got a reputation that’s worth anything. I don’t know. Lawrence Summers, again, I don’t
think people particularly treat those with respect. But they have money. You know, they
can take care of their nephews and nieces. But I think it’s generally accepted they caused
a lot of damage to the economy. JAY: But it’s not, like, that it’s just a
bad group of people happened to get into power. And I’m not suggesting you’re suggesting that. SCHEER: No, it’s the best and the brightest
that Halberstam wrote about in Vietnam. These are very well educated people who know what
they’re doing and, I believe, have to know it’s going to destroy the lives of millions
of people, and they go ahead and do it. It’s just like–. JAY: Yeah, ’cause they say if it ain’t me
doing it, it’s going to be him doing it, or her. SCHEER: Whatever their rationalizations, they
surround themselves with lawyers and PR people who tell them this is all wonderful, and they
get away with it. JAY: But it’s the way the system has evolved
that so much money is in so few hands. There’s not much else for them to do with it than
bet and gamble against each other, create this massive speculative sector of the economy,
which is financializing everything. Even when they talk about climate change, all they really
have in mind is a way to financialize it. So whether it’s this group or the other group,
the sort of system itself is created where there’s–so much capital has become completely
parasitical. SCHEER: Yes, but they could also be decent
people. They could actually wonder about what would Jesus do. They could actually think
about what does their lives mean. JAY: I think some do and drop out. SCHEER: A few. JAY: Some do, and they can’t take it anymore,
and they drop out. SCHEER: Yeah. JAY: But they’re not in any position to change
the course of the ship. SCHEER: Well, but also the question you should
ask is why aren’t they being observed in doing this. And the reason is because they can buy
off everyone. JAY: Especially the media. SCHEER: The media, but the universities, the
grants of–you know, build buildings at universities. Come on. JAY: I want to stress the media ’cause they
have this theatrical show going in the elections–I’m not saying there isn’t a real contention for
power, but when you have unlimited contributions, unlimited spending, what are they spending
it on? They’re spending it on TV advertising. SCHEER: Yeah, and they’re spending it on candidates
who will not give them a hard time. There’s no question about it. But it’s not just the media. I mean, I don’t
want to exonerate the media, but you–you know, in the day of the internet, you should
have more critical voices, right, ’cause–but even there you look at where could–you know,
okay, to understand the economy or foreign policy requires a little brainwork, okay?
Most people have got to take care of their job and their family and pick the kid up and
how do I pay this bill and am I going to lose my job and/or how am I going to make that
sale. And so their lives are taken up. And then we have a group of people, whether they’re
called journalists or professors or consultants or what have you who actually have the time
and are really charged with figuring stuff out. Now, most of this stuff is not all that difficult
to figure out. So then you have to ask yourself the question, why didn’t you figure it out?
I mean, why didn’t the media–in my book I describe how The New York Times was a cheerleader
for this radical deregulation. They used words like modernization. They said long overdue.
Now, why? You know, because they were living in a culture and benefiting from a culture
that was benefiting from the ripoff. These are the people who advertise. These are the
people who invest in your venture, in your media. These are the people who buy chairs
at the schools where you’re teaching. These are people who support the charities or political
causes that you happen to agree with. There is a culture of corruption, I mean, ’cause
anyone else looking at this, they say, wait a minute, this is nonsensical, this is bad.
Why are you selling–I remember writing about this stuff. I would go out to what they call
the Inland Empire in California where they’re building all of these–. I said, who’s going
to live here? How are they going to get to work? Who’s paying for this? Why are they
making the loans? And then you realize there is no there there. Don’t confuse the thing–I
remember an old advertising [incompr.] don’t confuse the thing being sold with the thing
itself. They’re not selling a house to somebody who needs a house and is going to live and
be able to afford the payment; they’re selling this collateralized debt obligation that’s
1,000 of those houses that you have made and chopped up and iced and diced and everything
and sliced, and then you’re going to make that seem like a good bet to somebody. Where?
In Saudi Arabia or in France or–. JAY: Knowing it’s all going to default. SCHEER: Yeah, but you’re going to get in and
out before it defaults. JAY: Yeah. So please join us for the next
segment of Reality Asserts Itself with Bob Scheer on The Real News Network.

11 thoughts on “Plundering Our Freedom with Abandon – Robert Scheer on Reality Asserts Itself (6/10)

  • People who live to behave criminally won't behave logically like you say if they did then there would be real justice get it?  Then they would not be able to monitor your children & anyone who might invent something to threaten their power, their ability to get your children to do what they want or to be able to pick & choose who to molest/etc..they know they would not be able to behave in this manner in a civil society so they will continue to do everything in their power, pay whomever whatever in order to maintain this structure even say they want it removed like Buffett does because he is afraid the general public will look at him or Gates which they should so whatever they say is hogwash they know they have already paid both D & R to prevent anything they "say" they want changed so that people have real choice.

  • They did not develop all these new financial gimmicks the D & R parties said to not regulate them & to let them just do whatever they want to the people of America while the people of America thought they had to behave lawfully they colluded to subvert the law & to give up their ability to use it to go after the people who bribe them to do so.  Just because you control both D & R(who combined got less than 1/2 of all people to vote get it no real consent just people waiting for trial) does not mean you have legal protection it just means you are all going down wait till the end if you wish I surely wouldn't hard to recover from such a fall.

  • 5000 is the tipping point to global genocide

  • With more of these kinds of interviews along with other intellectuals on the right as well like Wilkerson, I would consider donating to TRN.

  • Going forward, in future American elections, anyone who votes for Democrat or Republican candidate(s), especially Hillary Clinton or with last name of Bush, needs their head examined. [or doesn't have kids or grandkids]

  • Buffet is the biggest insider of all time. When he speaks, it is designed to perpetuate the narrative that he is common schmuck,
    Not a oligarch who receives special deals and grow their wealth with political influence and inside information.

  • Mr. Scheer is definitely a hero to the working class and I appreciate him immensely. However he shows either naivete or ignorance of the oligarchy's true motives. You have to take seriously the fact that a real populist leader will not be allowed to live. No Republican or Democrat insider believes the Oswald myth. They don't read the New York Times for info. Only the propagandized public believes it, excepting those who can read a book and not nod off. The left press pretends to believe the various assassination myths because not believing them means they'll have to do something, like give up grant money. Nutshell: If we as a people are unable to bring to justice the murderers of our presidents and leaders like MLK, why are we wasting time with elections

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