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Former New York Governor Eliot Spitzer sounds off on bank bailouts and the lack of accountability for bad bets.
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We continue our conversation with former New York governor and attorney general Eliot Spitzer governor if I was surprised -- used to be -- by Wall Street people although.
Not to surprise me but it it begs a question what you think about the bailouts for the banks.
Focus that the bailouts were flawed in the way they were -- let's Begin first principles we could not -- let the entire financial system collapsed.
We would have had a cataclysm.
Exponentially worse than what we had having said that.
The failure was that we gave these enormous.
Gargantuan sums of money to the people who had made the most horrendous business judgment in the world then asked for nothing.
Not a single CEO was -- to leave office nobody was -- -- for the horrendous judgments and outright fraud that was committed.
And then once the banks had all the money they began paying themselves crazy salaries again.
Lobbied against the reform that we needed I believe in capitalism and competition.
And that is what we don't have -- Wall Street the bailouts were purer crony capitalism where they not.
They were crony capitalism we had the pretext and legitimacy only of the need.
Not to let the entire world collapse but the report that just came out from Bloomberg I don't -- They of the sorry for -- referred to another new that it.
-- by the way we had a lawsuit against the Federal Reserve and I think that gets their documents that I same documents are right business also sued the Federal Reserve we got the documents.
That showed eventually the banks made thirteen billion dollars.
On all the money that they collected everything they traded on that instead of lending it out right we're given seven point eight trillion dollars in aggregate terms of guarantees -- a -- about a much at zero interest essentially then augmented out at that you know 12%.
Banks live on the spread we should we should mention that the Fed did not lose money that's what they say in their own defense they say look we didn't we lent this money out it wasn't a gift.
We -- banks did to cover bad bad bad dark period and it worked to some of our that in Europe.
Some -- what was a gift you know look I think and this is why I've had in intellectual disagreement with Tim Geithner.
He -- leave all this money away.
And did not negotiate for the structural reforms that we -- did you ever call about the second Tim -- make it a big mistake we -- put through this well why I look I wasn't in a position at a point in time did.
Have that conversation but trust me I -- my view might use -- we still have too big to fail.
In fact let their children -- let victories and trust me we've made my my views known how I mean let you know I -- art -- I had an eleven you know I was ice.
Spoke to people who they have.
Have confidence anyway -- back any explanation he disagrees and will which is fine you know I I've never said anything.
Critical about him at a personal level I disagree with them fundamentally.
About how we -- move forward with some of the architectural reforms of our banking system so doesn't this show to me what it shows because I'm a big free market -- you know -- to me what this shows is that government working hand in glove -- business is a big mistake.
It leads to these politically influence decisions that are much better left to the business world -- here's where you and I disagree you and I both.
Want capitalism competition.
And -- markets.
My view is that in order to have those real markets sometimes you need a government that sets the rules that intervenes that put places limits on size and power of certain market part of what happens with the with a TARP bailouts for example worry -- all these political influence lows for example to Maxine Waters husband's bank.
Which was a terribly run -- they'd never -- TARP money but they got it and we know why they got it.
There are going to be abuses and those have to be investigated -- prosecuted that's what I did when I was the attorney general.
But I Begin to with the notion that if you don't have rules for the marketplace.
For integrity disclosure and real competition.
Then things that the biggest -- be going back to Glass-Steagall back to the separation of commercial banks and investment banks aggregate I would look seaquest people put but could see if I proposed west people you've had a want government tell me what banks should be able to do Glass-Steagall was -- FDR.
Motivated depression originated but we still -- happens when the investment banks are able to gambling with walls with -- main -- money I -- -- And the -- so you would agree the quest he was a good thing and in fact that was at the root in the intro you talked about.
Our investigation of the analysts on Wall Street this was the biggest crisis -- -- began that -- -- let me get down to the nitty gritty of what's happening in Washington taxes because Governor Cuomo has.
Has taken over your job and and actually done a pretty good job at at from a lot of free market Republicans are people who look at the job he's done what do you think of the -- -- I agree with the many of the things he's done I -- -- taxes no I disagree with him on that here's where people what he has permitted is -- roll back of attacks.
That would have helped in New York State million -- the so called millionaire's tax which actually kicks in at 200000 dollars.
He has opposed to even extending a tax on millionaires.
Which would have permitted State of New York to can you continue to pay a temporary tax but.
-- it was put in place as a temporary tax right now not a temporary means temporary short -- OK but what I'm saying is he is opposed the extension continuation of attacks that would have generated sufficient revenue.
Pay for the schools to pay for the mass transportation to pay for the infrastructure -- -- -- and it.
Benefits from -- Anderson -- permit -- I have to wait and have 9%.
Unemployment should you be doing anything.
To raise taxes on the people to -- job -- this was a continuation.
Of the current tax structure to permit.
The state of new York and governments across a lot of or people moving out of New York because the Fed to actually -- our populations -- And what we in fact are seeing is that those -- -- Europe.
And I studied this issue -- -- a little little of people credit students gathered up right and I and I know you were there for awhile and -- I get my hat goes off you perhaps for forging this debate.
Come out I come at a different point.
I think that those who or wealthy enough courtroom in the million dollars in Europe can pay a bit more -- -- -- tiny -- that would nonetheless a permitted us to finish the second avenue so what.
So weakened that have the transportation system to permit the central business district to succeed -- that News Corp.
want to be -- to the Goldman Sachs want to be here.
Because every time -- going to -- subway station I don't wanna be here that that would probably have better RB it gets better now than it used to be because we're -- and good place and this every governor Spitzer stay with -- we want to know what your future plans are coming up.
