Matt Taibbi on Just How Screwed Americans Were By the Bailout
Photo Credit: Shutterstock.com/Stuart Monk
Stay up to date with the latest headlines via email.
The following is a transcript of a Democracy Now! interview with Rolling Stone's Matt Taibbi and former financial regulator William Black.
JUAN GONZÁLEZ: We turn now to look at the state of Wall Street four years after the massive bailout and the news of this week’s mortgage settlements with the major banks. Matt Taibbi has just written a new piece for Rolling Stone titled "Secrets and Lies of the Bailout." Also still with us is former financial regulator William Black, author of The Best Way to Rob a Bank Is to Own One. He is an associate professor of economics and law at the University of Missouri-Kansas City.
Matt, beginning with you, the latest announcement of the agreement for some of the banks to pay several billion dollars now to—supposedly to homeowners who were cheated in one way or another in the foreclosure crisis?
MATT TAIBBI: Yeah, I mean, I think this is just—to me, the most significant aspect of this is that it speaks to the failure of the government to address the foreclosure problem still, four and five years after the financial crisis. And one of the points I make in the piece I just wrote, "Secrets and Lies of the Bailout," is that foreclosure relief was originally written into the statute, the TARP statute, as a primary function of the original bailouts. It’s right there in black and white, section 109, that TARP was supposed to provide all—a massive program of foreclosure relief, and they never got around to it. And the only bailout program that ever provided any foreclosure relief was HAMP, and that only—to date, they’ve only ended up spending about $3 [billion] or $4 billion out of all the bailout on that program. They have now—through litigation, there are these settlements that are starting to trickle in, but it’s just too little, too late. And you contrast that with what happened at the beginning of the bailout, where the banks and the financial companies were instantly handed hundreds of billions, trillions of dollars of relief, and I think that that dichotomy is important for people to recognize, that the relief for ordinary people is still coming slowly and insufficiently years later, whereas relief for Wall Street came instantaneously and was excessive.
AMY GOODMAN: The latest news about AIG, the board has decided not to sue the American people—
MATT TAIBBI: Right.
AMY GOODMAN: —for not bailing them out enough, not joining the former CEO, Hank Greenberg.
MATT TAIBBI: I think they probably didn’t want to become a Saturday Night Live routine, but yeah.
AMY GOODMAN: Can you talk about the significance of this and what actually is going on? Greenberg, the CEO, the former CEO, is suing.
MATT TAIBBI: Right, right, yes. This is a longstanding dispute between the former CEO of AIG, Hank Greenberg, and the government. And it’s funny. If you actually read Greenberg’s suit, there are some points in it that have a little bit of validity. I mean, it’s still preposterous that Greenberg, who was, in a way, kind of like the Patient Zero of the financial crisis, because the scandal that he started at AIG back in the 2000—in the early 2000s. It was a reinsurance scandal where he was artificially inflating the balance sheet of AIG, that led to a downgrade of AIG, which led to the catastrophe of 2008, when the company went into—imploded. And that subsequently caused the entire financial crisis. You can really point to Hank Greenberg as maybe the guy who caused the financial crisis, and here he is suing the American government over the bailout.