To support their families, millions of children are employed to work, many of them in hazardous conditions.
Last year, the government came up with an ambitious plan to stop all children under 14 working by 2015.
It is a staggering task, when poor families have relied on child labour for generations.
Previous efforts to stop child labour have backfired. When the US introduced the Child Labor Deterrence Act in 1993, an estimated 50,000 Bangladeshi children lost their garment industry jobs overnight, leaving many to resort to more hazardous and exploitative jobs such as stone-crushing, street hustling and prostitution.
But social commentators claim that there are cultural reasons for widespread child labour in Bangladesh - including the belief it will train young people for work as adults and stop them becoming involved in crime.
On this edition of 101 East, we look at how Bangladesh is tackling the issue of child labour."
Transcript in extended entry
]]> "Nobody goes to jail", "writes Matt Taibbi in his the new issue of Rolling Stone magazine. "This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth." Here is the complete interview from which we played an excerpt on our Feb. 22 show. Taibbi explains how the American people have been defrauded by Wall Street investors and how the financial crisis is connected to the situations in states such as Wisconsin and Ohio.AMY GOODMAN: We turn now to Matt Taibbi. But before I do, let me read a sentence from a recent paper by Dean Baker, who concludes, "Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today."
And this--he quotes David Cay Johnston of tax.com: "The average Wisconsin pension is $24,500 a year, which is hardly lavish. But what is stunning is that 15% of the money contributed to the fund each year is going to Wall Street in fees," which is why we now ask the question, "Why isn't Wall Street in jail?"
Actually, that's the title of reporter Matt Taibbi's new article for Rolling Stone magazine. In the piece, Matt writes, quote, "Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth."
Well, I interviewed Matt Taibbi on Sunday about his report, "Why Isn't Wall Street in Jail?"
AMY GOODMAN: Welcome to Democracy Now!, Matt Taibbi.
MATT TAIBBI: Thanks for having me back.
AMY GOODMAN: Well, we're seeing these mass protests in Madison, Wisconsin, and there's other protests that are happening. We see the working poor, the middle class, under tremendous stress, and yet they're the ones who are being hit hardest, not Wall Street. Explain what has happened. Why isn't Wall Street in jail?
MATT TAIBBI: Well, it's an incredible story. I mean, just to back up and provide some context, I think, for this Wisconsin thing, and especially for the Ohio thing, given what their governor used to do for a living--
AMY GOODMAN: Explain.
MATT TAIBBI: Well, he was an employee for Lehman Brothers, and he was--
AMY GOODMAN: This is Governor Kasich.
MATT TAIBBI: Governor Kasich, yeah, and he was intimately involved with selling--getting the state of Ohio's pension fund to invest in Lehman Brothers and buy mortgage-backed securities. And of course they lost all that money. And this, broadly, was really what the mortgage bubble and the financial crisis was all about. It was essentially a gigantic criminal fraud scheme where all the banks were taking mismarked mortgage-backed securities, very, very dangerous, toxic subprime loans, they were chopping them up and then packaging them as AAA-rated investments, and then selling them to state pension funds, to insurance companies, to Chinese banks and Dutch banks and Icelandic banks. And, of course, these things were blowing up, and all those funds were going broke. But what they're doing now is they're blaming the people who were collecting these pensions--they're blaming the workers, they're blaming the firemen, they're blaming the policemen--whereas, in reality, they were actually the victims of this fraud scheme. And the only reason that people aren't angrier about this, I think, is because they don't really understand what happened. If these were car companies that had sold a trillion dollars' worth of defective cars to the citizens of the United States, there would be riots right now. But these were mortgage-backed securities, it's complicated, people don't understand it, and they're only now, I think, beginning to realize that they were defrauded.
AMY GOODMAN: Explain what the crime is. Who has profited? Who should be on trial?
MATT TAIBBI: Well, you know, again, the broad crime in all of this was just fraud. They were taking--these banks were taking, again, these subprime mortgages, and they would have these billion-dollar pools of mortgages where, in some cases, 70 or 80 percent of the loans were to people who had no identification or no jobs or who had put no money down into the mortgage. And then they were taking these loans and applying this phony baloney, hocus pocus math, these derivative instruments, and turning them into AAA-rated investments. And they were marketing, again, these securities to, say, state pension funds as AAA-rated investments, which means credit risk almost zero. So they took the stuff that they knew was very, very risky and very, very likely to default, and they were going to the state of Wisconsin, the state of Ohio, the state of New York, and saying, "Hey, this is almost as safe as--or in fact, it is as safe as United States Treasury bonds. You should buy this, and you'll earn a little bit more than you'll earn if you buy T-bills." The reality was, they were just taking absolutely worthless stuff and sticking it with these people and then fleeing the scene. This is no different than drug dealers who take a bag of oregano and sell it to you as, you know, a pound of weed. That's exactly the same scam.
AMY GOODMAN: Talk about John Mack and Gary Aguirre.
MATT TAIBBI: This is an amazing story, just because it demonstrates how far above the law these people are. John Mack is one of the most powerful people on Wall Street. Right now he's the chairman of the board at Morgan Stanley. He used to be their CEO. Way back in 2001, when he was sort of between jobs, he had left Morgan Stanley and was interviewing with Credit Suisse First Boston. He was involved in a case that was investigated by the SEC. A hedge fund called Pequot made a very suspicious investment into a company called Heller Capital, which was about to be acquired by General Electric. This hedge fund bought, you know, an enormous amount of Heller stock three weeks before this acquisition by GE of Heller. Credit Suisse First Boston was Heller's investment banker. John Mack was interviewing for the job with Credit Suisse a few days before Pequot made its purchases, and he was in direct contact with the hedge fund guy who made those purchases. Under any normal circumstances, he would be targeted for investigation by the SEC.
AMY GOODMAN: And his name was?
MATT TAIBBI: The investigator's name was Gary Aguirre. And Aguirre--
AMY GOODMAN: And the guy buying up?
MATT TAIBBI: Art Samberg was the name of this hedge fund manager. He was a big star on Wall Street. In fact, there are articles about, you know, how does Art Samberg manage his amazing returns year after year? Well, you know, this was sort of a clue as to how.
Anyway, this SEC investigator named Gary Aguirre wanted permission to go interview John Mack, and his superiors at the SEC told him--they basically told him that he couldn't, and the reason they said was because Mack has, quote-unquote, "powerful political connections." At the time, he was a Ranger, one of Bush's fundraising Rangers. He would later become a major fundraiser for Hillary Clinton. So he played both sides of the fence. This, again, is very typical of Wall Street. And Aguirre, when he pressed the matter, he was fired by the SEC.
AMY GOODMAN: And talk about the high-level people involved, like Mary Jo White.
MATT TAIBBI: Mary Jo White was the former U.S. attorney in the Southern District of New York. She was basically Rudy Giuliani for a few years. This is the top cop on Wall Street, basically. And she, at the time, was representing Morgan Stanley for the defense firm Debevoise & Plimpton. Again, this is what all these investigators do. When you leave a high-ranking position from the SEC or the U.S. attorney's office, they all jump to these lucrative partnerships at corporate defense firms, where they make, you know, $2, $3, $4 million a year. So the incentives to really prosecute these guys are all backwards. And they all leave, and they take these jobs. Mary Jo White had left the U.S. attorney's office. She's representing Debevoise & Plimpton. She intercedes on behalf of Mack. And one of the SEC officials that she was in contact with, Paul Berger, Aguirre's superior, ended up working for Debevoise & Plimpton a year later. And this is a very typical situation.
AMY GOODMAN: And Aguirre is fired.
MATT TAIBBI: He's fired. He was--
AMY GOODMAN: He's told to investigate, and then he starts to seriously investigate, and he's fired.
MATT TAIBBI: Right. They gave him--two days after he started work at the SEC, one of his superiors handed him Pequot, just generally. They said, you know, "Look at this company." Within a year or so, he was onto the Samberg case, and he had targeted Mack as a clear suspect in the case. He had overwhelming evidence. I mean, there were emails, there was documentary evidence. They put Martha Stewart in jail for much, much less than they had on Mack.
AMY GOODMAN: What did they have on Mack?
MATT TAIBBI: Well, again, they had emails demonstrating that Mack had been in touch by telephone with Samberg. They had the fact that Samberg had a personal relationship with Mack. They knew that the company had never had any meetings about this Heller Capital. It was--Aguirre described it to me as though Samberg awoke one morning, and God Himself told him to start buying shares of Heller Capital. And they had the fact that Mack was clearly privy to the inside information. He had had this meeting with Credit Suisse. He would later say that he destroyed his notes of his meeting with Credit Suisse on the way home from Switzerland, after that meeting. But clearly, he was--under any normal circumstances, he would have been targeted, would have been interviewed, but he was not.
AMY GOODMAN: So, Pequot is bought up?
MATT TAIBBI: Right. Well, no, Heller was bought.
AMY GOODMAN: Heller was bought up.
MATT TAIBBI: By GE, of course.
AMY GOODMAN: By GE. And how much does Samberg make? How much does--
MATT TAIBBI: He made--Samberg made $18 million on that trade. Another important part of the story is that Mack--Samberg cut Mack into a different deal that Pequot was doing, and as a result of that deal, Mack made about $10 million. So, all the dots connect. You know, Mack comes back from Switzerland. Samberg starts buying Heller. GE acquires Heller. Samberg makes $18 million. Mack gets cut in for $10 million. This is the outlines of a classic insider trading case.
AMY GOODMAN: So you think Mack should be in jail.
MATT TAIBBI: Well, he should--absolutely he should have been on trial. I mean, you know, it's not for me to say; I'm not a jury. But clearly, they have prosecuted on far less evidence before.
AMY GOODMAN: Matt Taibbi, talk about Dick Fuld.
MATT TAIBBI: Well, Richard Fuld, whose nickname on Wall Street was "The Gorilla," he was the head of Lehman Brothers. He was a much feared and ferocious character on Wall Street. And Fuld, again, he oversaw Lehman during this period when it was going through its death spiral, and there were a number of irregularities about Fuld that were extremely interesting.
I talked to a former Lehman Brothers lawyer named Oliver Budde, who was responsible for vetting some of Lehman's public disclosures, and Budde discovered that Lehman had been hiding about $250 million worth of Fuld's income from the SEC in its public disclosures. He, too, ended up having to leave his job because he was told that he couldn't do his job. He protested the way that Lehman was doing its disclosures. He got kicked out. He went to the SEC in 2008, six months before its collapse. He gave them a huge packet of information about what Fuld was doing, and he was completely blown off by the SEC. He tried repeatedly over a period of six months to get them interested in the case. They said no.
When Fuld later testified before Congress, after the company's collapse, he told Congress that he had only earned somewhere in the region of $350 million during his tenure at Lehman. Budde knew that the real number was more like $520 million. He told the committee members in Congress that Fuld had probably lied while he was testifying. And they weren't interested in that, either. So here we have a situation where Roger Clemens is being investigated--you know, the state is trying to put Roger Clemens, baseball star, in jail for lying to Congress, but Dick Fuld apparently is not worth going after.
AMY GOODMAN: A man recently named the worst CEO of all time--
MATT TAIBBI: Right.
AMY GOODMAN:--by Portfolio magazine.
MATT TAIBBI: Absolutely. Again, Fuld presided over Lehman during this period where it was engaged in all sorts of irregularities. I mean, aside from this matter of hiding his own personal income, Lehman, during the last few years of its existence, was engaged in these very, very shady transactions called the "Repo 105" transactions. This was a kind of Enron-esque accounting where they were essentially borrowing tens of billions of dollars at the end of every quarter and then booking all that money as revenue. So, if you were an investor in Lehman Brothers and you're looking at their bottom line, you're thinking, "Hey, they're making a lot of money. They're doing great." In fact, those were all loans, and after the quarter was over they were repaying that money. And it was guys like Fuld who were cashing out while everybody else was staying in.
AMY GOODMAN: Oliver Budde, who was he?
MATT TAIBBI: He was Lehman's lawyer. He was the guy who uncovered those irregularities about Fuld's reporting income, and he was the guy who went to the SEC and was told that, you know, they weren't interested in his story.
AMY GOODMAN: No regulation?
MATT TAIBBI: Well, no. I mean, clearly--you know, the interesting thing about the Fuld case is that Lehman had been taking advantage of a loophole in the SEC's rules in the early part of the 2000s to misreport Fuld's income. But they actually caught themselves. They noticed that this practice was very widespread, and they created a new rule specifically to target this kind of income hiding that Fuld was doing. But they created the rule, but they didn't do anything about it. They had clear cases of this rule being misused, and they chose not to do anything about it. So, even when we do have regulation on Wall Street, the laws are really often meaningless, because you need someone who has the will to prosecute, the will to investigate, to make them real.
AMY GOODMAN: Has anyone gone to jail?
MATT TAIBBI: Well, Bernie Madoff. And clearly, he's the only person in this whole tableau--
AMY GOODMAN: Always called the greatest swindle of all time.
MATT TAIBBI: Right. But Bernie Madoff, honestly, compared to all these other guys, he's really small potatoes. He's also not really representative of what went on on Wall Street during this period. He's a garden variety Ponzi scheme artist. Of course, he did it on a much bigger scale than most Ponzi scheme artists, but this is a crime that could have happened in the '20s, the '30s, the '40s. It had nothing to do with this incredibly sophisticated, complex criminal fraud scheme involving, you know, the mortgage bubble and the sale of these phony baloney mortgage-backed securities. Madoff had nothing to do with that. He was just a garden variety criminal. And this is exactly the kind of case that the SEC and the Justice Department do prosecute: these outliers, these guys who are not part of the top echelon executives. And they make these cases, and they say, "Here's evidence we're doing our job." The reality is very different.
AMY GOODMAN: So, talk, Matt Taibbi, about what are the repercussions of what happened. What did the 2008 crash mean?
MATT TAIBBI: Well, it was--you know, this was the collapse of a giant bubble scheme. You know, when they did this, when they pumped the whole country full of these defective cars, which were these defective mortgages, it created a very, very dangerous situation for the entire country. They ended up essentially bankrupting or fatally wounding pension funds and insurance companies and banks all over the country. And so, now we're all paying for those phony scams.
But the other amazing thing that they did is, you know, the banks, when they flooded the market with these phony securities, some of them were smart enough to realize that they were eventually going to blow, so they started betting against them. They went to companies like AIG, and they took out trillions of dollars of credit default swaps and pseudo-insurance policies on these mortgages. When they all blew up, you know, it blew up some of these companies, like AIG. And that's what the bailout was really all about. The bailout wasn't really to pay off real losses in these mortgages. It was really to pay off the bets on these mortgages. So, not only did they flood the market with a trillion dollars of defective merchandise, they got the United States taxpayer to pony up $5, $6, $7 trillion worth of bailout money to pay off their bets on all this stuff.
AMY GOODMAN: Which brings in the Obama administration. You talk about a lot of this happening under President Bush, but talk about what the Obama administration, what Geithner--talk about also Alan Greenspan, through the Bush years.
MATT TAIBBI: Right. Well, the most important thing to get from the Obama administration is that its economic policy represented absolute continuity with the policy of the previous administration. Timothy Geithner was the principal architect of Bush's bailouts, and he was retained. Ben Bernanke, who was the head of the Fed under Bush, stayed on under Obama.
And they essentially continued the same bailout policy, which, again, was essentially to tell Wall Street that we're going to make you whole again. You know, after they flooded the entire international economy with all these toxic debt instruments, their policy was to get Wall Street well again, and ostensibly they were supposed to reinvest in the economy and put people back to work. But instead, they just kept the money. And, I mean, they literally went from being completely insolvent to, you know, making $150 billion bonus pools every year, and that money is all public money. It's pure bailout gift from the taxpayer.
AMY GOODMAN: Is Obama doing this because he's got to raise a billion dollars in 2012 for the presidential race, and he's going to turn to Wall Street for this?
MATT TAIBBI: Well, clearly. You know, look, Barack Obama's number one private campaign contributor was Goldman Sachs. He took more money from Wall Street than any other presidential candidate in history. He was heavily influenced by Wall Street guys. When he was elected, he immediately put Citigroup executives in charge of his economic transition team. I remember when I was covering his campaign how he promised never to bring a registered lobbyist into his cabinet. And one of the first things he did was put Mark Patterson, Goldman Sachs's lobbyist, in the number two job at the Treasury. He's got a JPMorgan Chase executive, who has $8 million in Chase stock, as the chief of staff right now. He's been incredibly friendly to Wall Street. These guys have remained the architects of his economic policy.
AMY GOODMAN: And Jeffrey Immelt, head of GE?
MATT TAIBBI: Well, yeah. I mean, obviously he was a key player, as well. Again, its continuity with the previous administration is the key thing to focus on.
AMY GOODMAN: Alan Greenspan?
MATT TAIBBI: Well, Greenspan--I think what people don't understand about the Fed is what an important role the Fed plays in this entire mess. Going back, you know, 20, 25 years, every time Wall Street gets in a lot of trouble, the Fed has been there to bail them out. They even had a term for it on Wall Street called the "Greenspan Put," which essentially meant that every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over again.
After the crash in 2008, interest rates were slashed to basically nothing. The banks could go to the Fed and get money for free, and then they're out lending it to us at five, six, seven--I mean, how much is your interest on your credit cards? It's 15, 20 percent. It's almost impossible not to make money in banking if your cost of capital is zero. That's what banking is all about. And that's what the Fed has done. It's provided a massive subsidy system for the banks on Wall Street.
AMY GOODMAN: You say in your article that the justice system has actually evolved into a highly effective mechanism for protecting financial criminals, not just not prosecuting them, but protecting them.
MATT TAIBBI: Right. Well, one of the things that I found out when I was interviewing former SEC officials and whistleblowers, people who had been involved in some of these cases, is, you know, when you look at the revolving door situation with all these--the Mary Jo Whites and the Gary Lynches and the Linda Thompsons, these former high-ranking financial cops who leave government service and they go to work in these millionaire partnerships on Wall Street, it creates this collegial atmosphere where it's just a few--a small group of lawyers who all know each other, and they're in this constant merry-go-round, from government, back to private service, back to government again, and they're really in this--it's far too collegial.
There's a scene in my story where the current head of the SEC enforcement, Robert Khuzami, is giving a speech to all these lawyers, and he's saying, you know, "We have a new policy now where if you're a defendant or if you're a company that's being investigated, you can come to the SEC, and we will get you answers as to whether or not the Department of Justice has a criminal interest in your case." So, essentially, the SEC is now acting as a middleman for these companies, so they can go and find out whether they're going to be criminally prosecuted. Then, once they get that information, they can make a decision about whether or not to settle financially with the SEC. And they pay a settlement. Nobody gets criminally prosecuted. No individuals ever get fined. They pay these fines, and they almost always have a little section in there that says that they do not admit wrongdoing. So, they don't even have to say they're sorry, essentially. These companies go and they pay their fines. No individuals have to suffer at all. And it's all done in a very collegial way.
AMY GOODMAN: You suggest in your piece that Bernie Madoff went to jail because it was rich people who were the victims.
MATT TAIBBI: Absolutely. Every single former investigator or current investigator that I talked to said the same thing: Madoff went to jail because the wrong people suffered. You know, it was famous actors. It was, you know, the glitterati in New York. If these were teachers and firemen and all the usual suspects--you know, look at the--we have a million people in foreclosure in this country right now, and a lot of them are there because of predatory lending and because of this fraud scheme, but there are no criminal prosecutions. I think that's the reality now, is that we don't see anybody being criminally targeted unless their victims were powerful people themselves.
AMY GOODMAN: Talk about Lynn Turner, the former chief accountant for the SEC, the Securities and Exchange Commission.
MATT TAIBBI: Yeah, Lynn Turner was the guy that I talked to, the former chief accountant--the chief accountant's job at the SEC is actually an investigatory position. What they do is they look at disclosure violations, which means, you know, when companies issue their SEC quarterly reports, they have to make sure that everything that they say in those reports are accurate. That's the chief accountant's job. And Turner told me that, you know, that was his job, and in his experience, he saw case after case in which they had good evidence against companies that were involved in very shady dealings, and these cases were either slowed down or not pursued at all.
He gave me an example, you know, the Rite Aid case, which of course turned into--there were many cases like Rite Aid, that, you know, they had this case years before the Enron case blew up. They maybe could have done something about Enron if they had proceeded fast enough.
AMY GOODMAN: And the Rite Aid case was?
MATT TAIBBI: Well, Rite Aid was a company that was hiding billions of dollars in losses. It's similar to the Lehman Brothers situation. They were trying to make their bottom line look better for shareholders, so they created, you know, these little cookie jar companies to hide their losses in. This is very similar to what Enron was doing, very similar to what WorldCom was doing. They had plenty of evidence on this case, but the case went nowhere for seven, eight years. And this is the typical MO of the SEC. They just do not act fast enough.
AMY GOODMAN: You mention that before the corruption starts, the state is at a disadvantage because policing Wall Street requires serious intellectual firepower, and the banks seize a huge advantage from the start by hiring away the top talent.
MATT TAIBBI: Yeah, you know, one lawyer I talked to put it to me this way. He said everybody knows that the top 80 percent of all the graduating classes of all the best law schools, they go to Wall Street. They go to these corporate defense firms where they get the real money-making jobs. The bottom 20 percent, he says, go to the SEC. That's the way this works. And, you know, the way he described it, he says, "It's just such a mismatch, it's not even funny." And even that 20 percent, of course, they get roped into the revolving door situation, so if any talent rises from that pool into positions of responsibility, they get lured away by the million-dollar partnerships.
So what your left is--you know, not to insult the people who work at the SEC, but clearly, the very best and brightest lawyers are working for these banks, where they continually come up with these very fiendish and almost brilliant defenses for the schemes that their companies are involved with. They always find a way to claim that what we did was legal, and they come up with these elaborate justifications. And some of these lawyers are really overwhelmed by these justifications, and they end up, you know, not having the gumption to prosecute or move forward with cases.
AMY GOODMAN: You think of the thousands of people who have been deported in the last years?
MATT TAIBBI: Three hundred and ninety-three thousand last year.
AMY GOODMAN: You think of the people who have gone to prison and what they've gone to prison for.
MATT TAIBBI: Right, right. You know, it's incredible. I mean, there was a case in Ohio that somebody forwarded to me, where a woman, a single--a black single mother of two children, she lied about where she was living so that her two kids could get into a better school system. And the state of Ohio actually prosecuted her for fraud, and the judge in that case insisted--they sentenced her to, actually, I think it was five years in jail, but they insisted that she actually do 15 days. And the judge's quote in that case was that if she didn't do real jail time, that would demean the seriousness of the offense. And so, I mean, the case was ultimately commuted because of the public outcry, but this, to me, is symptomatic of what we're dealing with here.
You have people in this country who--we have two-and-a-half million people in jail this country, you know, more than a million who are in jail for nonviolent crimes. And yet, we couldn't find a single person on Wall Street to do even a day in jail for losing 40 percent of the world's wealth in a criminal fraud scheme? And that tells you that we have--this goes beyond the cliché that rich people have better lawyers and they have an advantage. This is a step beyond that. This is a situation where the system is completely corrupted, and it's true regulatory capture. The SEC and the Justice Department are essentially subsidiaries of Wall Street.
AMY GOODMAN: Finally, you mentioned Obama's chief of staff, Bill Daley, newly appointed. What, $20 million he made last year, mainly from Chase.
MATT TAIBBI: Right, right. I mean, it's--
AMY GOODMAN: What about the media coverage, when people are being appointed, when these deals are made, talking about just basic tenets of good journalism, following the money, talking about who's profiting where and who's surrounding those who are making these decisions?
MATT TAIBBI: Well, it's funny. The general narrative with political journalism in this country--and I know, because I was one of these people for a long time. I covered presidential campaigns and presidential politics. A lot of the reporters who cover the stuff don't know a whole lot about economics, and so they believe this sort of general notion that the guys on Wall Street are the experts; if you want to have somebody running your economy, you have to go to the experts; so it makes perfect sense that the President would want to surround himself with executives from Citigroup and Goldman Sachs and JPMorgan Chase. And I think that their thinking doesn't really get any more sophisticated than that. And so, a lot of these guys get a pass. Then people don't really look at what these companies have been up to, what kind of influence they might have over the President's decision making. And so, I think there isn't very much coverage. There isn't enough debate about what these appointments mean.
AMY GOODMAN: If you were president, what would you do right now?
MATT TAIBBI: Well, I would certainly get rid of all those guys, you know, from Wall Street. I think there needs to be a freeze on foreclosures. I mean, there's all kinds of things that need to be done. But the most important thing is we have to, you know, get the right people into bodies like the SEC and the Justice Department. Everybody I talked to said the same thing. The existing laws we have, you know, they're not perfect, but they're probably good enough to do some real good. It's just that we don't have the right people in the jobs, and the will isn't there to do these prosecutions. So, I think we've just got to get the right people in the right jobs.
AMY GOODMAN: Matt Taibbi, his latest piece, "Why Isn't Wall Street in Jail?" It's in the latest issue of Rolling Stone magazine. Thanks so much.
MATT TAIBBI: Thank you, Amy.
Guest
Matt Taibbi, political reporter for Rolling Stone magazine. His new article for Rolling Stone magazine is titled 'Why Isn't Wall Street in Jail?'
Transcript in extended entry
]]> World-renowned public intellectual Noam Chomsky discusses several domestic issues in the United States, including the protests in defense of public sector employees and unions in Wisconsin, how the U.S. deification of former President Ronald Reagan resembles North Korea, and the crackdown on political activists with anti-terror laws and FBI raids.AMY GOODMAN: This month is the 15th anniversary of Democracy Now! on the air, and it's a real privilege to have MIT professor, analyst, world-renowned political dissident, linguist, Noam Chomsky with us. I'm Amy Goodman, with Juan Gonzalez, and we've been together for this whole 15 years, Juan. It's really been quite an amazing journey.
As we talk about this revolution that's rolling across the Middle East, we put out to our listeners and viewers on Facebook last night that, Noam, you were going to be in. And so, people were sending in their comments and questions. We asked, on Facebook and Twitter, to send us questions. Here is one of the questions.
RYAN ADSERIAS: Hello, Professor Chomsky. My name is Ryan Adserias, and I'm a graduate student at the University of Wisconsin, Madison, and also the child of a long line of working-class union folks. I don't know if you've been noticing, but we've been holding a lot of protests and rallies here in our capital to protest Governor Scott Walker's attempt to break collective bargaining rights that Wisconsin workers worked hard for over 50 years ago and have enjoyed ever since. We closed all the schools around here for tomorrow--today and tomorrow, actually. The teaching assistants here at the university are staging teach-outs. The undergraduates are walking out of class to show solidarity. And all of this is because our governor and governors all around the country are proposing legislation that's going to end collective bargaining and really break the unions. I've also been noticing that there's not a whole lot of national representation of our struggle and our movement, and it's really been troubling me. So my question to you is, how exactly is it that we can get the attention of our national Democratic and progressive leaders to speak out against these measures and to help end union busting here in the United States?
AMY GOODMAN: That was a question from Ryan Adserias in Madison, Wisconsin, where more than 10,000--some say tens of thousands of people, teachers, students, are protesting in the Capitol building, schools closed, as Ryan said. So, from Manama to Madison, from Manama, Bahrain, to Madison, Wisconsin, Noam Chomsky?
NOAM CHOMSKY: It's very interesting. The reason why you can't get Democratic leaders to join is because they agree. They are also trying to destroy the unions. In fact, if you take a look at--take, say, the lame-duck session. The great achievement in the lame-duck session for which Obama is greatly praised by Democratic Party leaders is that they achieved bipartisan agreement on several measures. The most important one was the tax cut. And the issue in the tax cut--there was only one issue--should there be a tax cut for the very rich? The population was overwhelmingly against it, I think about two to one. There wasn't even a discussion of it, they just gave it away. And the very same time, the less noticed was that Obama declared a tax increase for federal workers. Now, it wasn't called a "tax increase"; it's called a "freeze." But if you think for 30 seconds, a freeze on pay for a federal workers is fiscally identical to a tax increase for federal workers. And when you extend it for five years, as he said later, that means a decrease, because of population growth, inflation and so on. So he basically declared an increase in taxes for federal workers at the same time that there's a tax decrease for the very rich.
And there's been a wave of propaganda over the last couple of months, which is pretty impressive to watch, trying to deflect attention away from those who actually created the economic crisis, like Goldman Sachs, Citigroup, JPMorgan Chase, their associates in the government who--Federal Reserve and others--let all this go on and helped it. There's a--to switch attention away from them to the people really responsible for the crisis--teachers, police, firefighters, sanitation workers, their huge pensions, their incredible healthcare benefits, Cadillac healthcare benefits, and their unions, who are the real villains, the ones who are robbing the taxpayer by making sure that policemen may not starve when they retire. And this is pretty amazing, like right in the middle of the Madison affair, which is critical.
The CEO of Goldman Sachs, Lloyd Blankfein, got a $12.5 million bonus, and his base pay was more than tripled. Well, that means he--the rules of corporate governments have been modified in the last 30 years by the U.S. government to allow the chief executive officer to pretty much set their own salaries. There's various ways in which this has been done, but it's government policy. And one of the effects of it is--people talk about inequality, but what's a little less recognized is that although there is extreme inequality, it's mostly because of the top tiny fraction of the population, so like a fraction of one percent of the population, their wealth has just shot through the stratosphere. You go down to the--you know, the next 10 percent are doing pretty well, but it's not off the spectrum. And this is by design.
AMY GOODMAN: The New York Times coverage of Madison?
NOAM CHOMSKY: Well, that was very interesting. In fact, I urge people to take a look at the February 12th issue of the New York Times, the big front-page headline, you know, banner headline, "Mubarak Leaves," its kind of subheadings say, "Army Takes Over." They're about 60 years late on that; it took over in 1952, but--and it has held power ever since.
But then if you go to an inside page--I don't know what page it is--there's an article on the Governor of Wisconsin. And he's pretty clear about what he wants to do. I mean, certainly he is aware of and senses this attack on public workers, on unions and so on, and he wants to be upfront, so he announced a sharp attack on public service workers and unions, as the questioner said, to ban collective bargaining, take away their pensions. And he also said that he'd call out the National Guard if there was any disruption about this. Now, that's happening now to Wisconsin. In Egypt, public protests have driven out the president. There's a lot of problems about what will happen next, but an overwhelming reaction there.
And I was--it was heartening to see that there are tens of thousands of people protesting in Madison day after day, in fact. I mean, that's the beginning, maybe, of what we really need here: a democracy uprising. Democracy has almost been eviscerated. Take a look at the front-page headlines today, this morning, Financial Times at least. They predict--the big headline, the big story--that the next election is going to break all campaign spending records, and they predict $2 billion of campaign spending. Well, you know, a couple of weeks ago, the Obama administration selected somebody to be in charge of what they call "jobs." "Jobs" is a funny word in the English language. It's the way of pronouncing an unpronounceable word. I'll spell it: P-R-O-F-I-T-S. You're not allowed to say that word, so the way you pronounce that is "jobs." The person he selected to be in charge of creating jobs is Jeffrey Immelt, the CEO of General Electric, which has more than half their workforce overseas. And, you know, I'm sure he's deeply interested in jobs in the United States. But what he has is deep pockets, and also, not just him, but connections to the tiny sector of the ultra-rich corporate elite, which is going to provide that billion or billion-and-a-half dollars for the campaign. Well, that's what's going on.
JUAN GONZALEZ: Well, I'd like to ask you about this whole issue of the assault on unions. Clearly, it has arisen in the last few months in a coordinated way. Here in New York State, all the major business people have gotten together, raised $10 million to begin an ad campaign, and they're being supported by both the Democratic new governor, Andrew Cuomo, and as well as the Republican-Independent Mayor Bloomberg. But they seem to be going after the public sector unions after having essentially destroyed most of the private sector union movement in the United States. They realize that the public sector unions are still the only vibrant section of the American labor movement, so now they're really going after them in particular. Yet, you've got these labor leaders who helped get Obama elected and who helped get Andy Cuomo elected, and they're not yet making the stand in a strong enough way to mobilize people against these policies.
NOAM CHOMSKY: Yeah, you're absolutely right. There has been a huge attack against private sector unions. Actually, that's been going on since the Second World War. After the Second World War, business was terrified about the radicalization of the country during the Depression and then the war, and it started right off--Taft-Hartley was 1947--huge propaganda campaigns to demonize unions. It really--and it continued until you get to the Reagan administration.
Reagan was extreme. Beginning of his administration, one of the first things was to call in scabs--hadn't been done for a long time, and it's illegal in most countries--in the air controller strike. Reagan essentially--by "Reagan," I mean his administration; I don't know what he knew--but they basically told the business world that they're not going to apply the labor laws. So, that means you can break unions any way you like. And in fact, the number of firing of union organizers, illegal firing, I think probably tripled during the Reagan years.
Then, in fact, by the early '90s, Caterpillar Corporation, first major industrial corporation, called in scabs to break a strike of industrial workers, UAW. That's--I think the only country that allowed that was South Africa. And then it spread.
When Clinton came along, he had another way of destroying unions. It's called NAFTA. One of the predicted consequences of NAFTA, which in fact worked out, was it would be used as a way to undermine unions--illegally, of course. But when you have a criminal state, it doesn't matter. So, there was actually a study, under NAFTA rules, that investigated illegal strike breaking organizing efforts by threats, illegal threats, to transfer to Mexico. So, if union organizers are trying to organize, you put up a sign saying, you know, "Transfer operation Mexico." In other words, you shut up, or you're going to lose your jobs. That's illegal. But again, if you have a criminal state, it doesn't matter.
Well, by measures like this, private sector unions have been reduced to, I think, maybe seven percent of the workforce. Now, it's not that workers don't want to join unions. In fact, many studies of this, there's a huge pool of workers who want to join unions, but they can't. And they're getting no support from the political system. And part of the reason, not all of it, is these $2 billion campaigns. Now, this really took off in the late '70s and the '80s. You want to run for office, then you're going to have to dig into very deep pockets. And as the income distribution gets more and more skewed, that means you're going to have to go after Jeffrey Immelt and Lloyd Blankfein, and so on and so forth, if you want to even be in office. Take a look at the 2008 campaign spending. Obama way outspent McCain. He was funded--his main source of funding was the financial institutions.
AMY GOODMAN: Now they're saying he's going to raise, Obama is going to raise $1 billion for the next campaign.
NOAM CHOMSKY: Yeah, and it'll probably be more than that, because they're predicting $2 billion for the whole campaign, and the incumbent usually has advantages.
AMY GOODMAN: Noam, we have to break. We're going to come right back.
NOAM CHOMSKY: Yeah.
AMY GOODMAN: Noam Chomsky, professor of linguistics, Massachusetts Institute of Technology, world-renowned political dissident. Stay with us.
[break]
AMY GOODMAN: Our guest for the hour is Noam Chomsky. He has authored over a hundred books; his latest, Hopes and Prospects, among others.
Professor Chomsky, I want to ask you about former President Ronald Reagan. A very big deal is made of him now on the hundredth anniversary of his birth. Last year President Obama signed legislation establishing a commission to mark the centennial.
PRESIDENT BARACK OBAMA: President Reagan helped, as much as any president, to restore a sense of optimism in our country, a spirit that transcended politics, that transcended even the most heated arguments of the day.
AMY GOODMAN: Noam Chomsky, your response?
NOAM CHOMSKY: This deification of Reagan is extremely interesting and a very--it's scandalous, but it tells a lot about the country. I mean, when Reagan left office, he was the most unpopular living president, apart from Nixon, even below Carter. If you look at his years in office, he was not particularly popular. He was more or less average. He severely harmed the American economy. When he came into office, the United States was the world's leading creditor. By the time he left, it was the world's leading debtor. He was fiscally totally irresponsible--wild spending, no fiscal responsibility. Government actually grew during the Reagan years.
He was also a passionate opponent of the free market. I mean, the way he's being presented is astonishing. He was the most protectionist president in post-war American history. He essentially virtually doubled protective barriers to try to preserve incompetent U.S. management, which was being driven out by superior Japanese production.
During his years, we had the first major fiscal crises. During the '50s, '60s and '70s, the New Deal regulations were still in effect, and that prevented financial crises. The financialization of the economy began to take off in the '70s, but with the deregulation, of course you start getting crises. Reagan left office with the biggest financial crisis since the Depression: the home savings and loan.
I won't even talk about his international behavior. I mean, it was just abominable. I mean, if we gained our optimism by killing hundreds of thousands of people in Central America and destroying any hope for democracy and freedom and supporting South Africa while it killed about a million-and-a-half people in neighboring countries, and on and on, if that's the way we get back our optimism, we're in bad trouble.
Well, what happened after Reagan left office is that there was the beginnings of an effort to carry out a kind of--this Reagan legacy, you know, to try to create from this really quite miserable creature some kind of deity. And amazingly, it succeeded. I mean, Kim Il-sung would have been impressed. The events that took place when Reagan died, you know, the Reagan legacy, this Obama business, you don't get that in free societies. It would be ridiculed. What you get it is in totalitarian states. And I'm waiting to see what comes next. This morning, North Korea announced that on the birthday of the current god, a halo appeared over his birthplace. That will probably happen tomorrow over Reagan's birthplace. But when we go in--I mean, this is connected with what we were talking about before. If you want to control a population, keep them passive, keep beating them over the head and let them look somewhere else, one way to do it is to give them a god to worship.
AMY GOODMAN: Noam, you've written about, over the years, COINTELPRO, FBI raids. We're seeing that today. There's almost no attention given to what we have focused on a good deal on Democracy Now!, from Minneapolis to Chicago, the FBI raids, activists being subpoenaed to speak about in various cases.
NOAM CHOMSKY: Yeah, that's a pretty--it's not just--the raids are serious enough, but what's more significant is what lies behind them. These are the first actions taken under new rulings by the Supreme Court. A very important case was six or eight months ago, I guess, Holder v. Humanitarian Law Project. It was initiated by the Obama administration. It was argued by Elena Kagan, Obama's new court appointment. And they won, with the support of the far-right justices. The case is extremely significant. It's the worst attack on freedom of speech since the Smith Act 70 years ago. The case determined that any material support to organizations that the government lists on the terrorist list is criminalized, but they interpreted "material support"--in fact, the issue at stake was speech. Humanitarian Law Project was giving advice--speech--to a group on that's on the terrorist list, Turkish PKK. And they were also advising them on legal advice and also advising them to move towards nonviolence. That means if you and I, let's say, talk to Hamas leaders and say, "Look, you ought to move towards nonviolent resistance," we're giving material support to a group on the terrorist list.
Incidentally, the terrorist list is totally illegitimate. That shouldn't exist in a free society. Terrorist list is an arbitrary list established by the executive with no basis whatsoever, by whim, for example, but no supervision. And if you take a look at the record of the terrorist list, it's almost comical. So, take Reagan again. In 1982, the Reagan administration decided it wanted to aid their friend Saddam Hussein. He had been--Iraq had been on the terrorist list. They took it off the terrorist list. They had a gap. They had to put someone in.
AMY GOODMAN: South Africa, ANC.
NOAM CHOMSKY: Put in Cuba. They put in Cuba, and I suppose in honor of the fact that, in preceding several years Cuba had been the target of more international terrorism than the rest of the world combined. So, Saddam Hussein goes off, Cuba goes on, no review, no comment. And now, with the new Obama principle, giving--advising groups that are arbitrarily put on this group is criminal. And that was the background for those raids.
AMY GOODMAN: Noam Chomsky, we're going to continue this conversation online and play it on the show again. Noam Chomsky, professor of linguistics, Massachusetts Institute of Technology.
Part 1 (9:35)
Part 2 (8:31)
Part 3 (6:02)