NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • Drums Beating to Privatize Social Security


    Bill Black: A group of Democrats called "The Third Way" are working with President Obama towards the "grand betrayal" on social security -   November 11, 2012
    Members don't see ads. If you are a member, and you're seeing this appeal, click here


    Audio

    Share to Facebook Share to Twitter




    TRNN has... made its mark with amazing original reporting on the Middle East and international protest movements. - Caroline Lewis
    Log in and tell us why you support TRNN

    Bio

    William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

    Transcript

    Drums Beating to Privatize Social SecurityPAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

    And welcome to this week's edition of The Black Financial and Fraud Report with Bill Black, who's an associate professor of economics and law at the University of Missouri–Kansas City. He's a white collar criminologist, a former financial regulator, and author of the book The Best Way to Rob a Bank Is to Own One. Thanks for joining us again, Bill.

    BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.

    JAY: So what caught your attention this week?

    BLACK: Well, last time we talked there was the problem that I pointed out, that Obama was promising, if he were reelected, that he was going to enter into what he calls the grand bargain—and what I call the great betrayal—in which they would put cuts in the safety net on the table and begin the process of gutting Social Security, which is, of course, Wall Street's greatest dream.

    So the first thing that happened, even before the election, there's a group called the Third Way—which styles itself as moderate Democrats but has a board that is completely dominated by Wall Street—said, oh, you know, this is terrible, this talk of it being a betrayal; it's the only choice we have to save America. And then as soon as Obama won—in fact, as soon as he was projected to win, commentators began talking about the very first thing the president needs to do is to enter into this supposed grand bargain (to me, great betrayal). And now we have a flurry of written stuff saying that that's—it's vital that Obama do just that.

    Out of the box we have, of course, leading the way, as it always does, The Washington Post, whose greatest goal is to start the privatization of Social Security. And they have a prominent op-ed by Erskine Bowles, he of Bowles–Simpson. This was the BS report that said before the election we needed to start the process of privatizing Social Security and cutting back the safety net.

    JAY: For people—Bill, for people that don't know the issue that well, what does that mean, privatizing Social Security? How would that affect people?

    BLACK: So Social Security is an exceptionally well-run program with incredibly low administrative costs that has gotten people, you know, a healthy retirement. And it's changed old age in America from about 50 percent of the time being in poverty to a life that you can lead with some degree of dignity.

    But Wall Street's idea is, instead of the money coming from the government, let's take all, or at least a big chunk of it, and put it in the equivalent of individual retirement accounts, IRAs, through Wall Street. And, of course, this would be trillions of dollars of investment, and every year they would get scores of billions of dollars in fees off of it. So this is the unholy grail of Wall Street.

    JAY: And then, of course, if the market—I shouldn't say if—when the market takes another enormous nosedive again, people then lose even more of their retirement income.

    BLACK: Well, they would, except, of course, that you couldn't have an institution that had large numbers of these retirement accounts fail, because politically it would be devastating. You can imagine if 3 million people suddenly lost all of their retirement savings and there was no Social Security backup, and they'd be reduced to literally eating cat food again, like the old days. America would go berserk.

    And so that's another part of the dream of the big banks. They realize that if they get many of these accounts, they would be so far beyond too big to fail that you can't imagine it. You know, no one will even dare criticize them.

    JAY: But people are going to be investing money in mutual funds and stocks and such. So if there's a nosedive, not a crash of the financial institution, but a nosedive in the value of the stocks, there's a nosedive in the value of their retirement savings.

    BLACK: Oh, yes, and catastrophic. You would have no safety net left as a result of this, or a grossly inadequate safety net left. And to give people a real-world example, today, 22, almost 23 years after the Japanese twin bubbles in real estate and the stock market popped, the NIKKEI, which is their equivalent of the Dow Jones, is roughly 25 percent of peak value. And that's ignoring inflation. Right? In other words, it's like the Dow Jones lost three-quarters of its value and stayed that way for over 22 years. You can imagine what a catastrophe it would be for anybody, where we had privatized Social Security in a system like that. So this idea is obscene on multiple levels, but is the greatest thing, and it's going to make them hundreds of billions of dollars in fees.

    JAY: Okay. There's one thing I don't get about this, which is this is all supposed to do because of the debt crisis and such. But I thought Social Security was primarily funded by employer and employee contributions. So what the heck has it got to do with reducing the debt anyway?

    BLACK: It really doesn't have anything to do with reducing the debt now. And if we were to reduce the debt now, that would be—try to reduce it, we wouldn't succeed. We'd just throw the country back into recession, like Europe. So the whole idea is to both adopt austerity and to start taking a whack at the safety net, which means both aspects of it are absolutely crazy.

    And, of course, the crazier idea is that the election results show that that's what people want. And there's—of course, that wasn't an issue at all, and the coalition that elected Obama is opposed to this idea on the order of 80 percent to 20 percent, according to the polls. So this is a pure financial establishment. It's what I call, you know, the Wall Street wing of the Democratic Party.

    JAY: Okay. I got a question for you. As a financial regulator, how did you feel about the election of Elizabeth Warren? And number two, if Elizabeth Warren lives up to the hopes and expectations that have been placed in her as someone that's actually serious about financial regulation, what can one senator do? And two, if she does do something, doesn't that put her at odds with the Obama administration?

    BLACK: So I was thrilled. I was certainly a personal supporter. And our family, you know, sent a small contribution to her, in terms of full disclosure during this discussion.

    She's already an opponent, as perceived by the Obama administration. I mean, I don't think it works the other way around. In other words, I don't think that Elizabeth Warren ever saw herself as an opponent of the administration, as opposed to a proponent of the American people, but the administration hated Elizabeth Warren at times, or at least important aspects of it did—Timothy Geithner and such in Treasury.

    And, you know, we talked about Erskine Bowles. One of the rumors is that Erskine Bowles will replace Timothy Geithner as Treasury secretary. So you may have an immediate conflict there.

    What can one senator do? Well, one senator can't do much, especially a junior senator. The tradition of spending your first year saying nothing in the Senate, which was a very long tradition, is somewhat broken, but it's still going to be difficult to accomplish much. Look for what committee assignments she's given. You know, is she put on things like the judiciary committee and such? Will she have an opportunity to engage in her famous intensive questioning of the regulators and the prosecutors who are refusing to prosecute the elite frauds? These are the near-term things that you want to look for especially.

    JAY: Thanks very much for joining us, Bill.

    BLACK: Thank you.

    JAY: And thank you for joining us on The Real News Network. Don't forget there's a Donate button over here. If you don't click it, we can't do this.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    Assessing the U.S. Environmental Movement on Earth Day 2014
    Exclusive Investigation Uncovers How BP Uses Bribes To Do Business
    The Modern History of Venezuela, The Protests and Democracy - Edgardo Lander on RAI (8/9)
    Greek Politics 4 Years After The Financial Crisis
    CBO Report Confirms U.S. Deficit Back to Normal Level
    Israel Uses Refugees as "Currency" in Arms Trade with Africa
    Who Will Pay for Climate Change Disaster?
    Canada Shifts to Right Under Harper, Mimicking the United States
    The Savings and Loan Crisis Demonstrates the Importance of Glass-Steagall
    South African Platinum Miner's Struggle Challenges ANC Leadership
    TRNN Original Report: Manning Determined to Fight Back After Army Upholds 35- Year Sentence
    Hundredth Anniversary of the Ludlow Massacre
    The Bundy Ranch Standoff Demonstrates Values Shared by Corporations and the Far Right
    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting