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Former New York Governor Eliot Spitzer appeared on "The Rachel Maddow Show" on Tuesday night for a lengthy interview about the current financial crisis and the bank bailouts, as well as his reasons for stepping down from office amidst the escort scandal and any he regrets he may have.
Spitzer had some pointed criticism for the way the Obama administration has been handling the bank bailouts. When Spitzer was attorney general of New York, he prosecuted AIG and other Wall Street banks, and Maddow asked him if he saw a connection between those prosecutions and what led to the current crisis.
Spitzer said "Absolutely," and while the specific instruments and mechanisms, derivatives and credit default swaps, may have changed, the "fundamental accounting fraud... the desperate desire to cook the books," is present in the current collapse.
Spitzer worries that despite the government spending trillions of dollars to bail these companies out, "not nearly enough is changing." Essentially, we are not doing enough to combat the systemic problem of companies that are too big to fail:
We are rebuilding the same edifice. We are re-establishing the primacy of the same companies. We are still building in a too-big-to-fail structure so that so that we as taxpayers will be guarantors of companies that when they get into trouble again, we will bail them out. None of this is being confronted by the administration as they, and we through our tax dollars, resuscitate a broken system.
Spitzer also highlighted that one of the reasons for the massive scale of the current financial crisis is that our economy has been so over-leveraged and that what had to happen in order to right our economy was to de-leverage. However, Spitzer argues, we haven't de-leveraged at all; we've simply transferred the obligation from the banks to the taxpayers, and the taxpayers have gotten a raw deal in the process.
In part two of the interview, Spitzer discussed why he resigned the governorship when the escort scandal erupted (it was what was right for the state and his family), as well as answering Maddow's blunt question: "Do you believe prostitution should be legal?" Spitzer's first answer was "No, these are not victimless crimes," but then he demurred, saying "perhaps I'm not the right person to pass judgment at this time." It should be noted that while prostitution is illegal, no charges were ever filed against Spitzer.
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