Simon Johnson and James Kwak, the authors of 13 Bankers, appeared on "Bill Moyers Journal" Friday evening to discuss the financial crisis and the push for Wall Street reform.
The pair, who both blog at BaselineScenario.com, painted a disturbing and dysfunctional picture of the relationship between Wall Street and the politicians who craft the rules that govern them.
Kwak and Johnson explained that Wall Street created the crisis, relied on public money to generate private profits, and is spending billions to defeat reforms that would protect Americans from another financial crisis.
Johnson said that people in Washington are wrong when they talk of "populist anger."
"Most of what I encounter," Johnson said "is legitimate, sensible anger. People actually understand what happened. They understand what went wrong and they want to stop it. And the banks don't get this."
To illustrate how out of touch banks are with reality and the bailouts that facilitated their profits, Johnson pointed to comments by JP Morgan Chase CEO Jamie Dimon. In May 2009, Dimon told shareholders that Chase had its "finest year ever." Roughly six months prior to his speech, JP Morgan Chase benefited from $25 billion in U.S. Treasury funds.
Johnson trashed Dimon's view. "They didn't have their best year ever," Johnson said. "They went through crisis. They were saved like the rest of the financial system by the government, by the taxpayers. But that's not how they see it. That's not what they believe. That's really important. That belief must be shaken if we're to make any progress at all."
Pointing to the power of Wall Street's lobbying money, Moyers said that the American people don't stand a chance against the Washington-Wall Street oligarchy in the fight for financial reform. Johnson wasn't ready to concede and pointed to the political events of 1902, as proof that reform was achievable.
In 1902, President Theodore Roosevelt took on J.P. Morgan and filed an antitrust suit to dissolve the banker's railroad monopoly. Johnson argued that there was no precedent for Roosevelt's campaign for reform, and yet the president won.
Johnson acknowledged that modern financial reform movement lacks an advocate like Roosevelt, but he told Moyers that they're out there. "We must find them," Johnson said, "and we must fund them financially, sufficiently, to fight against this nonsense from the corporate sector."
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