Rachel Maddow and Matt Taibbi on New Treasury Nominee
Rachel Maddow and Matt Taibbi on the Obama administration's lastest nominee for the number two spot at Treasury, Neal Wolin.
MADDOW: Irony alert, jobs at President Obama‘s Treasury Department have been hard to fill. In the worst job market in at least 27 years, some jobs, like the job of cooling the economic meltdown, apparently have not been seen as worth taking.
Nine days ago, the president told “60 Minutes” that essentially, he couldn‘t give top treasury jobs away. People kept backing out because of expected scrutiny or embarrassment or low pay or all of the above.
But tonight, good news-bad news developments here. First the good. In the last week or so, the president has announced six new picks for top treasury jobs. Now choices for 10 of the top 23 treasury jobs have been announced, nominated or confirmed, which I think means they‘re running ahead of the Republican National Committee on that.
The bad news? One of the newly announced job candidates, the guy tapped to be the deputy secretary of the treasury, the second in command to Tim Geithner - he has a worrisome line on his very distinguished resume.
While serving as general counsel in the Clinton Treasury Department, Neal Wolin reportedly played a role in the drafting of the Gramm-Leach-Bliley Act of 1989. Gramm-Leach-Bliley overturned Depression-Era regulations and wisdom and made it OK for commercial banks and investment banks and insurance companies to all be the same thing, to merge with one another.
After decades of that being against the rules, Gramm-Leech-Bliley let giganto-mega companies form in the financial sector, companies that were essentially too complex to police well and also too big to fail.
Gramm plus Leech plus Bliley in 1999 equals trillion-dollar bailout 10 years later. Reporter Greg Sargent at “The Plum Line” reports that Stuart Eisenstadt, a deputy treasury secretary under Bill Clinton, confirmed that as treasury‘s general counsel at the time, Neal Wolin, quote, provided the technical and legal drafting for the Gramm-Leach-Bliley Act.
And now, with the seminal act of today‘s global crisis on his resume, Neal Wolin is on track to be the deputy secretary of the treasury. A Treasury Department spokesman did not refute the report about Mr. Wolin today but told us that “Plum Line” took the quote about him from Stuart Eisenstadt out of context.
The treasury secretary today told us, quote, “Mr. Wolin supervised a few of the lawyers who worked on it but he didn‘t do any of the legal writing or drafting of the legislation.”
So Mr. Wolin supervised the writing of this deregulation that effectively mugged the country but he didn‘t personally write it. He supervised the writing. He didn‘t write it. That‘s going to be the only defense here?
Joining us now is Matt Taibbi, “Rolling Stone” contributor and author of the book “The Great Derangement: A Terrifying True Story of War, Politics and Religion.” Matt, thanks very much for joining us again. I appreciate your time.
MATT TAIBBI, AUTHOR, “THE GREAT DERANGEMENT”: Thanks, Rachel. Thanks for having me.
MADDOW: So remind me who else is nominally in charge of cleaning up the mess caused by deregulation also was part of the way that we got deregulation in the first place?
TAIBBI: Sorry, what‘s the question again?
MADDOW: The guy who‘s going to be number two at treasury worked on Gramm-Leach-Bliley. We‘ve got Lawrence Summers who was the treasury secretary when it went into effect and hailed it.
TAIBBI: Right. Right. I mean, there‘s a whole host of people who are in that Clinton White House as key economic players who are now in the Obama treasury. You know, Robert Rubin and Lawrence Summers were key figures on Obama‘s transition team and they were both treasury secretaries under Bill Clinton and prime sponsors of the Gramm-Leach-Bliley Act.
I mean, the truth is we should be rounding up anybody who had anything to do with that law and chaining them to a rock in the middle of ocean. And instead, we are basically putting them right back into the White House. The only person who is missing is Rubin himself and he was leading Obama‘s transition team.
MADDOW: Why is it that the only people who were - it‘s only people who were part of the problem who are being put forward to provide the solution? Surely, there are other candidates who weren‘t part of creating this mess, right?
TAIBBI: Well, this is just the way Washington works. I mean, who did you think was going to get these key jobs in the treasury secretary - I mean, a child poverty advocate? No, I mean, it‘s always people from Wall Street who get these jobs.
And it seems like it‘s the same narrow group of people who get regurgitated throughout these posts over and over and over again.
MADDOW: Matt, supposedly some of these people have had epiphanies. I guess post-crisis epiphanies.
TAIBBI: Right. Just had that come-to-Jesus moment, right?
MADDOW: Yes. I was a deregulator then. But now, I see the error of my deregulating ways.
MADDOW: Do you believe them? Do you think it‘s just convenient?
TAIBBI: Well, of course it‘s just convenient. I mean, did you really think that if the politics weren‘t, you know, heavily swung the other way, that they would have had that change of heart?
I mean it‘s telling that when these people were feeling confident about their - you know, their opinions that they actually were enthusiastically in favor of deregulating the entire economy.
Now, of course, it would be politically impossible for them to have any other opinion except that they‘re against it. So it‘s - you know, it‘s impossible to trust these sort of late-stage conversions that they are all having.
MADDOW: I don‘t want to chain anybody to a rock and put them at the bottom of the ocean except proverbially speaking.
MADDOW: But what do you think needs to happen in American politics for deregulation to be something that people don‘t want to associate themselves with for the long run? I just feel like ideologically speaking, there‘s been such a paucity of good argument around this stuff.
TAIBBI: Well, one thing that really has to happen that hasn‘t happened with this financial crisis is that we need to go back and hold everybody who was responsible for this mess accountable in some way or another.
I mean, the only thing that‘s really happened to the people who are guilty of causing this whole mess is they either received trillions of dollars of public money or they‘ve been given, you know, incredibly influential posts in the White House. Those seem to be the two outcomes for people who were primarily guilty of this crisis.
I mean, there has to be some kind of consequence for people who made these errors and there hasn‘t been. And it sends a tremendous message to Wall Street that they can continue, you know, to pursue this kind of thinking and without any kind of retribution.
MADDOW: People like Barney Frank, people like Byron Dorgan who pretty famously was right about Gramm-Leach-Bliley and the other deregulation that helped cause this mess. They have said on this show that they think that the re-regulation of Wall Street will be for real, that it will actually be done well and that there‘s reason to be hopeful about this thing being put back together in a way that makes more sense and isn‘t going to get us into this mess again. Do you think that‘s ridiculous?
TAIBBI: Well, I do think it‘s ridiculous because you have to remember that Gramm-Leach-Bliley itself was sold as a regulatory program. It gave the Federal Reserve sweeping regulatory powers over the financial services industry. And it was supposed to actually help tighten legislation, or that‘s what they said at the time.
Another famous move that was supposed to be increasing regulation was in 2004, when we created the so-called Voluntary Regulatory Program that actually relaxed lending rules for the top five investment banks in the country.
So every time they tell us that they‘re going to give us more regulation, it almost always turns out to be exactly the opposite. So I will believe that when I see it.
MADDOW: Well, I hope that you will come on this show and help me make fun of them while they do it. Matt Taibbi, contributor of “The Rolling Stone” - thank you so much for joining us tonight, Matt.
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