Matt Taibbi Pwns Bailout Apologist

From Morning Meeting Nov. 25, 2009, Rolling Stone's Matt Taibbi and the Financial Times' Chrystia Freeland discuss Matt's recent article at Rolling Stone and the divide between the recoveries on Wall Street and Main Street. Their analysis about what's wrong with the economic team Obama has surrounded himself with is spot on and until he starts listening to some different voices on how to fix our economy, Matt Taibbi is correct, the cycles of bailouts are going to continue to repeat themselves.

Ratigan: But Matt’s ultimate point is that we have all these people that are still perpetuating a policy that is supportive of the banking system for sure, regardless of who’s in there and an economy that is, has small business lending off a cliff, profits back at a record on Wall Street, one in four, one in seven mortgages delinquent; you know I could go on and on with these statistics but basically the economy was torpedoed and the financial markets were supported and the reality Matt is that it’s far more profitable not to lend money In this country. The fact of the matter is we’re giving banks money at a time when the government has rules that say you can make more money if we give you money if you don’t lend it.

Taibbi: Right…right…

Ratigan: And that is the inherent insanity of the entire situation. It’s like giving the banks money, legalizing the banks to make money without having to lend it is like letting the cops create a military state. They’re the custodians of wealth, the custodians of security have been completely compromised—you think it’s the people around the President that are largely responsible for that, correct?

Taibbi: I think so. I mean you have to remember that probably, if you were going to have a Nuremberg for the financial crisis, Bob Rubin would be one of the first people on the dock.

Ratigan: Yeah.

Taibbi: I mean he has a unique responsibility for what went wrong because he was not only responsible for the bad policy, the deregulatory policy under Clinton but he also helped destroy one of the biggest companies in the world in CitiGroup. And yet he was the guy who was put in charge and his people of being the architect of Clinton’s economic policies.

Ratigan: I think he’s got a great point, and I’m a, I was a Rubin, well listen I...I, Bob Rubin is an incredibly, obviously very accomplished, intelligent, etc., etc., etc. and they had an idea which was we’ll create a hyper-efficient system—we’ll create the most efficient financial system in the history of the world—as long as it doesn’t collapse we won’t have a problem. But it’s like an efficient sports car. It goes around the track real fast and then it blows into the wall, but if you’re able to bail out and give the crash to the tax payer.

Freeland: I just think we need to be careful because Bob Rubin isn’t in the White House right now and the big bailout of Wall Street—we have to really be clear…

Ratigan: Umm hmm.

Freeland: …wasn’t Obama’s bailout. The bailout of Wall Street…

Ratigan: Understood…

Freeland: …was Hank Paulson’s bailout. That’s when the TARP happened. It was last… (crosstalk)

Ratigan: There’s no question that the car hit the wall last year… (crosstalk)

Taibbi: With the bailouts every step of the way Obama named…
Freeland: That is absolutely right and it was Obama’s choice to keep him, but it wasn’t Obama’s White House…

Ratigan: Let him finish. Go ahead Matt.

Taibbi: Obama got elected. On the day after he got elected he put two CitiGroup executives in charge of the economic transition team, especially Froman. Two weeks later they do a gigantic bailout of CitiGroup and that very same day those same, those CitiGroup executives hired Tim Geithner to be the Treasury Secretary. It’s an absolute quid pro quo.

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