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October 3, 2008

BILL MOYERS:Welcome to the Journal. We're covering the two big stories this week, the financial bailout and the vice presidential debate. First, it's been 24 hours since Senator Joe Biden and Governor Sarah Palin met in their first and only encounter, described by pundits as their one championship game. To help us cut through all the post-game spin, I've asked for some help from one of our top scholars of democracy and one of our finest independent journalists. You've seen both of them here before.

Brooke Gladstone was a senior editor for National Public Radio's "All Things Considered" and the network's media correspondent. She now wields her fine scalpel as managing editor and co-host, with Bob Garfield, of NPR's indispensable "On The Media." Kathleen Hall Jamieson directs the Annenberg Public Policy Center at the University of Pennsylvania. Among her 15 books is this one: UNSPUN: FINDING FACTS IN A WORLD OF DISINFORMATION. Welcome back to both of you.



BILL MOYERS: We can't second guess the public on this. Voters will decide for themselves. But I'm curious as to what each of you found to be the most revealing moment last night. Kathleen?

KATHLEEN HALL JAMIESON:When Gwen Ifill reframed the question asked by Jim Lehrer in the first debate: What would you change in your plans, given current economic circumstances? These candidates, like the heads of the ticket in the last debate, punted. You had Joe Biden saying, "Well, we were going to double foreign aid, but maybe we won't do that as quickly as possible. And we won't do all those bad things John McCain is proposing. Well, of course not. If you're elected, you're not going to react to the other person's agenda.

And Governor Palin basically said we're not going to change anything. So we've now had two debates in which candidates have been asked a significant question. And Jim Lehrer followed up repeatedly in the first debate. That in changed financial circumstances, with an unprecedented deficit and debt, with the public debt that is foreign-held, now about to increase over the huge level that it's already at, these four candidates, two presidential, two vice-presidential, don't have the courage to tell us that if elected, they will change their spending and taxing plans.

Even though I believe that if either is elected, he will. As a result, they're campaigning in a way that makes it harder for them to govern responsibility. And they're ensuring that when elected, the electorate's going to feel betrayed by being promised things that they're not going to deliver. And if they keep their promises, they're going to be financially irresponsible and drive this country further into an economic mess.

BILL MOYERS:What was the most revealing to you, Brooke?

BROOKE GLADSTONE:What surprised me, actually, was not a big, cosmic you know, an important moment, a substantive moment like the one that you just outlined, but really, a small one. It was a — it was a kind of a strange switcheroo that actually took me by surprise. And it was when Biden chided Palin for suggesting that because she's a mom and she's a woman, that she understands better what it takes to raise a family.

And then, he talked about his own biography, and his experiences as a single parent, choked up. But what struck me about that wasn't just that, oh, here is an emotional moment, but that in a campaign where gender is so important, he played what I call the "Tootsie" card. Not only am I as good a woman as you, but with my defense, with my Violence Against Women Act and outrage against Alaskans having to pay for rape kits, maybe I'm better.

BILL MOYERS:One critic I read this morning said that this debate was not won and lost on what was said, but on how it was said. That on nonverbal communication, Sarah Palin won. You know, she walks in, blows a kiss to the audience, says to Biden, "I'm so pleased to meet you. Can I call you Joe?" She talks about soccer moms. And I mean, David Brooks last night on "The News Hour" sort of referred to her as the queen of colloquialism. And he sounded sort of very impressed with that."

BROOKE GLADSTONE:You know, I don't know who it was that said it. Maybe it was Queen Victoria. For people who like that sort of thing, that's just the sort of thing they like. In terms of Sarah Palin's persona, it seems time after time and election after election, we're not voting for a policy; we're voting for a person, somebody we can project our hopes and dreams on to, kind of an aspirational figure. You know, as we do when we flip through "Vogue Magazine". You know, it's what we want to see when we look in the mirror. If that's what you want to see, somebody who's kind of like you, only better, then that's then that's what Sarah Palin did for you.

But we don't know we can't trust those snap polls that happen after the event. I know. But the Obama polls, the Obama-McCain debate earlier, also featured those same polls, those same wacky perception meters on CNN. And it seemed that at least on CNN, when she got all folksy and said "doggone it" and stuff like that, the independents dialed down.

So we can't predict what's going to connect. We know that she tried to connect. We know she connected to some people. I guess the question is how many. And that's the mystery, because if policy doesn't matter and persona is all, it's still you know, we can't plumb those depths.

BILL MOYERS:When do you get credible data that enables you as a scholar to say, "This event last night had this impact on this campaign and on the election"?

KATHLEEN HALL JAMIESON:It takes days. And the problem with last night for me, as one assess the so-called winning and losing, is first, there's no way to win or lose 90 minutes of discourse. You can win an argument. You can win a chess game. You can win a football game. You can't win 90 minutes of discourse.

And so, when people then find ways to assess win-loss, they're essentially demeaning the experience, and they're making it harder for people to remember what they did learn about the similarities and differences on issue positions. And when you see one of the channels last night running a meter on undecideds on the screen as the debate is taking place, that's inviting you to see those moments through that measurement device, rather than see it yourself.

And you saw another network that was asking to call in to vote to see who won and lost. It was Fox, so you're not surprised to hear that Palin won. You have the most illegitimate form of evidence gathering you can have taking place. Because you now have a poll of the people who are disposed to watch that channel, voting, with the other side presumably try to run their own numbers up as well.

So what you see essentially are measurement devices to answer your question, that make it harder to answer the question long term, because they may actually affect how people perceive the event, and how its impact carries out.

BROOKE GLADSTONE:That stark contrast I couldn't agree with you more. But on the larger question of being distracted from the substance by being asked to participate in the win-lose aspect of it, I think we've already lost that war. The fact is, is that just as every member of the public today is a media critic, they're also a political quarterback. Everybody, not just us who are paid to do it everybody is sitting there watching that, saying, "I wonder what the American public thinks about that."

That great mass, undifferentiated mass out there we're all trying to plumb its depths. When we're watching television, we're all aware that this is an event. It's so meta by now, that I don't think we can roll back to the substance any more.

KATHLEEN HALL JAMIESON:But first, we do now that even with all of that and it does hurt the ability to learn. People who watch debates do learn from them. And so, there is learning that takes place. The question and it's accurate learning. The question is: How do we increase the likelihood that that happens? And this all distracts from that.

Focus groups can't be generalized to anything. They have no business being there, creating a frame for interpreting a debate. What would you like to see after a debate? A discussion of where they showed similarities, where they showed differences. And where, in the big picture, they deceived the public about what they would do, or what they had said, on either side and where they were communicating something that was relevant to governance and where they weren't.

And we don't need to see after the debate is that somebody got the name of something wrong, or they got one number wrong by some increment. The question is if there's a lack of fact underlying what they said, when is it consequential? When does it matter in your vote?

BILL MOYERS:So, did it matter that to the public at large did it matter to you that say, Governor Palin not only got the name of our commander in Afghanistan wrong, but she misquoted what he said? Does the public care about that?

KATHLEEN HALL JAMIESON:But first, the person who's being quoted offered a very complex and nuance statement. And neither Senator Biden nor Governor Palin got it completely correct. And people would be well advised to go back and read the whole thing. But does it matter.


KATHLEEN HALL JAMIESON:Read the entire statement by the General. What was at issue there is whether the McCain strategy, the strategy McCain advanced, telegraphed as the surge, but better described as a counterinsurgency strategy, which has a lot of elements under it, is the appropriate strategy to pursue in Afghanistan or not. And what are the additional elements that the General who is being cited, thinks need to be in place?

BILL MOYERS:So, Brooke, are these really debates, or are they glorified press conferences?

BROOKE GLADSTONE:I think they're kabuki. Everybody is completely constrained by the rules. Gwen Ifill, who couldn't, who stuck went right down the middle, stuck to the rules, never asked any follow up questions. Any follow ups were done by the candidates themselves. And maybe that's okay.

BILL MOYERS:Well, that because the Debate Commission, which is controlled by the two parties, sets the rules the moderator, the journalists have to follow. So are the journalists handcuffed by the rules set by the parties for the benefit of the candidate?

BROOKE GLADSTONE:I think to some degree, they are. And it's always been that way. There really hasn't been it's not like there's, you know, a 200-year tradition of debates. They had-

BILL MOYERS:Let me go back to 1960.

BROOKE GLADSTONE:And then there was-

BILL MOYERS:Lincoln-Douglas.

BROOKE GLADSTONE:And then, after Nixon, there was a long period when there were no debates at all. These have been entirely at the pleasure of the candidates themselves.

BILL MOYERS:So are they valuable?

BROOKE GLADSTONE:Well, I think so. I mean, I'm totally convinced by what you said. People do learn from these debates. I think the problem is, is that you have to peer very, very hard through the fog to learn anything. The example of the surge. We have to understand what, how the surge strategy worked or didn't work, or what was wrong the surge in Iraq, before you can talk about transporting that strategy.

And what the General said, the General said, they would need a quick infusion of troops. That doesn't necessarily mean that's all they need. So when she talks about the surge strategy, she's talking about that exclusively. When the General talked about it, he was talking about surging, along with a whole complex range of other activities.

So Biden picked up one thing, she picked up the other. The there, nobody learned anything. And similarly, when the question of do you think global warming is manmade came up, I think this is quite a similar issue. She says, it really doesn't matter how it happened. We have to deal with it. And Biden says, well, it does matter, because if we know what caused it, then we can go to those activities and reduce them.

Again, the specifics weren't there. You have to sort of know the story before you can decode a lot of those comments. And that's the problem, is you have to bring so much information to these debates to get any information out of them.

KATHLEEN HALL JAMIESON:The reason that the format matters is that in a format in which you have a short answer, no follow up, no exchange between candidates if a candidate has one layer of information and doesn't have the ability to follow up and follow up and follow up with depth, you don't know that. That's the format that was not the format that was problematic for Governor Palin when she was interviewed by Katie Couric. Katie Couric's questions and then Governor Palin's problematic answers came largely in the second and third follow ups. And so, the format matters, because it let Governor Palin feature a strength without testing what is a potential weakness.

But there's another reason that I'm concerned about the format. You asked about the journalists and their constraints. A journalist is now on live television. And when a question isn't answered, could say, "For my next question, could you please answer the last question?" "For my next question, could you please answer the question that I asked earlier?"

And what you saw with Jim Lehrer in the first debate was he went back to the concerns about how you would change your plans again and again. When a question isn't answered in this format, and the moderator feels constrained by those rules, you get a shot gunning of information. And you get the phenomenon that you're talking about, when you say, "This happens and this happens and this happens." You have to bring an enormous amount in to make sense.

When a moderator can follow up and when candidates have time to exchange views, you get more depth on information. You get more clarity. You find out more not only about what they know, but about where they stand. This was a very impoverished format.

If you wanted to ask not who won and who lost, but who was qualified to be the next president of the United States in unanticipated circumstances for that question to be answered, you need a more open format with more follow ups and more direct exchange.

BILL MOYERS:Speaking of the Katie Couric and Gibson interviews, Palin took a parting shot last night when she blamed her problems in those interviews on "gotcha journalism". What did you think about that?

BROOKE GLADSTONE:Well, it's so easy these days. It's the most popular target there is, the media, as a great monolith. No matter who it is that's doing the attacking, the entire media gets whacked for it. And when it isn't an attack, you still get whacked. It's very, very easy to do that. As a matter of fact, the public's opinion of the media is a record low.

BILL MOYERS:So is of Congress and the presidency. I mean, we're in a trough here.

BROOKE GLADSTONE:And yes. And, you know, the same lack of trust across a wide range of institutions is reflected in what transpired over the bailout. But in the in the case of this, when you have and the main and brand new, actually, over the last ten years, criticism of the media is that is regarded as partisan. And if you watch television, and if you watched the post-debate quarterbacking, you would see that that is absolutely true. Depending on where you tuned in, you had a completely different assessment of how the debaters did. So if Americans feel this way about their media, that they can't trust them to get the straight facts, then an attack like that of Palin's falls on very receptive years.

BILL MOYERS:Were there deceptions last night that have consequences for us?

KATHLEEN HALL JAMIESON:I think that's the way to ask the question. Because there are little factual slips that really aren't consequential. There are things that do make a difference, that if you voted on that information, you might vote against your own self-interest, or against what you think is best for the country. Is Governor Palin accurate when she called Senator Obama's health care plan government-run? Not by any reasonable stretch of the imagination.

BROOKE GLADSTONE:The word mandate is when she really went off track there.

KATHLEEN HALL JAMIESON:Well, when she uses the word mandate, she's evoking the Hillary Clinton plan. And if you'll remember, Hillary Clinton's big point was you can't get to universal coverage without a mandate. And Barack Obama didn't have one. He only has a mandate for covering children. Now, here's another deception. If you take him at his word, it is not a government-run health care plan. And hence, he probably isn't going to get to universal coverage.

But she's being unfair in that attack against what the proposal actually says it will do. And so, when you have those kinds of exchanges, if you're voting on those matters, you want to know what they said, what is accurate. Because it's consequential to your vote.

BILL MOYERS:Brooke, you mentioned the bailout a moment ago. Why is that on your mind this morning after this debate?

BROOKE GLADSTONE:Gee, let's see.

KATHLEEN HALL JAMIESON:You know, how's your 401K doing today?

BROOKE GLADSTONE:I'm afraid to look. But the fact of the matter is, is that we got into I can't, we didn't get into the financial situation because of a lack of trust in American institutions. But we certainly hit paralysis in the early part of this week because of it. With again, belief in, trust in the government at record lows. Trust in the President scraping the bottom. Trust in the main conduit of information, the media, also way down there. The public felt that they couldn't believe what they were hearing from anybody. Hence, this tremendous rush from people who didn't believe in the bill to inundate their legislators' office with e-mails and phone calls, and shutting down the switchboard.

BILL MOYERS:A Vesuvius of...


BILL MOYERS:Of popular anger.

BROOKE GLADSTONE:It ran nine to one against the bill when the mail came into the legislators' office. So what we have here with the collapse of trust in these institutions is a kind of government by e-mail and phone call referendum.


BROOKE GLADSTONE:Rather than trusting the leaders to make the decisions that we elected them to make.

KATHLEEN HALL JAMIESON:Language does our thinking for us. When the public doesn't have any sense about what's really going on, this is very confusing and very complicated. Framing matters. If this is described as a taxpayer bailout of Wall Street, it's not popular. If it's described as taxpayer investing in the well-being of the economy, it's far more a more positive. Now.

BILL MOYERS:Was that done?

KATHLEEN HALL JAMIESON:The first frame that was offered by the Bush Administration was not strong enough in favor of the bill. And as a result, the press picked up the language that you used, the language of bailout.

BILL MOYERS:Of Wall Street?


BILL MOYERS:The greedy.


BILL MOYERS:All right.

KATHLEEN HALL JAMIESON:So, my money to Wall Street in a bailout. What is benefiting me there? Where's the positive? When President Bush came forward with his second speech, he's beginning to frame it as a rescue plan. But we're not that clear that the rescue plan is for the economy and consumers. The rescue plan is still being cast as Wall Street. You still don't see a lot of reason that you'd want to rescue Wall Street.

The person who ultimately cast this most effectively as something the public ought to support, and the difference in polling is largely of framing, is Warren Buffet, who finds a way to say that this really is going to affect everyone. This is an economic Pearl Harbor.

WARREN BUFFETT:We have a terrific economy. It's like a great athlete that's having a cardiac arrest, you know. And it's flat on the floor and the paramedics have arrived and they shouldn't argue about whether they put the resuscitation a quarter of an inch this way or a quarter of an inch that way or they shouldn't start criticizing the patient because he didn't have blood pressure tests or something like that. They should do what's needed night now. And I think they will. I think Congress will do the right thing.

KATHLEEN HALL JAMIESON:If you had to look around and say who's got the credibility? Who has very wide trust, and who can talk in the English language that's intelligible? Warren Buffet is the answer. And he was putting money into a rescue effort of his own, in the interests, I believe, of making large amounts of money.


KATHLEEN HALL JAMIESON:Hence you're reassured by it. This-

BILL MOYERS:Reassured because?

KATHLEEN HALL JAMIESON:Because this billionaire is putting his money in, saying, "I don't put money into things that I'm not going to make money at. I'm not in the business of a bailout," essentially, is what he's saying. "I'm investing. This economy is going to turn around, and I see these as a good investment." And he's standing behind the plan. He's and he's personable, he's friendly, his examples are concrete. He's speaking the English language. And he's got money in the game. The best communicator for this plan was Warren Buffet.

BROOKE GLADSTONE:And he's from Nebraska, for crying out loud, isn't he? And he did what in all the debates, whether it's Obama, McCain or Palin, I think Biden is the only one who didn't use the expression "walk the walk". But that's exactly what Buffet did.

BILL MOYERS:Are you both saying that a multi-billionaire, one of the richest men in the world, if not the richest man in the world, came to the aid of the establishment, political and economic class this week, to save what would have gone down in the face of this populist revolt?

BROOKE GLADSTONE:Depends on what you think about the bill. Whether what he did was good for us all or bad for us all, depends on whether or not you believe that this was a necessary step.

KATHLEEN HALL JAMIESON:Framing matters. If you buy the frame of rescue plan for the economy, for Main Street. And necessary, because this is an economic Pearl Harbor. And we, the country, are the economy is like that patient in cardiac arrest. This is Warren Buffet then we have to act not because we're acting for Wall Street, but because we're acting for us. Framing matters. And you come back to the question, what about that $150 billion.

BILL MOYERS:Added this week.

KATHLEEN HALL JAMIESON:That's tacked on? One frame of that is that this is pork. One is these are necessarily tax investments. Another is, this is bribery, in order to get those people to support that bill. And we, again, have a contest over framing. But the cost just went up $150 billion in an economy that didn't have the money to afford the $700 billion to start with, but is being told it has to spend it, or things are going to get a lot worse.And then, you have these candidates come in, all four of them, and they won't answer the questions. Does this change your plans at all? And they essentially say, "Oh, no. Everything's fine. We're gonna cut taxes. We're gonna increase spending." Of course, not as much as they will. "We're actually revenue neutral."

Well, no, they're not. And nobody who's looked at their plans for taxing and spending believes it. It's a real disconnect between what's happening in the real world and what these four candidates have said. Two more debates. I hope they get those questions again. I hope somebody tells us the truth. And the danger is, if somebody does, it will be, you know, the kind of circumstance that, you know, Walter Mondale faced in 1984. You say, "I'm gonna raise taxes," and people say not "I'm not gonna vote for you."

Or you may have a circumstance in which they don't tell the truth. That's "Read my lips: No new taxes." George Herbert Walker Bush did increase taxes. That's Bill Clinton saying "tax cut for the middle class." He never delivered that. Neither one of them thought they responsibility could. Both of them, or their parties, were penalized.

BROOKE GLADSTONE:What I found curious was that at the beginning of this, Paulson's apocalyptic statements before Congress were not only repeated by the leaders in Congress, but also by the press. Even as they reported on this, and even as they used the unpleasant word "bailout", as opposed to "rescue", which was, I guess, the principal framing device.

They nevertheless, in mainstream respectable for and there's nothing wrong with that communicated the degree of urgency that seemed to be necessary, that you know, to take this action. And so, why is it that with Congress and the President and the media all working from the same assumption many compared it to in the run up to war, except in that case it was wrong, and in this case, I wouldn't venture to say.

Why is it that they couldn't sell it? And I'm not saying the media were actively advocating for it. But they did accept the assumptions of the President and Paulson and of Congress, in initially laying this thing out. And yet, despite that, it couldn't be sold. That's why I come down to the trust issue again.

KATHLEEN HALL JAMIESON:I think it's remarkable that as many people voted for it as quickly as they did. This is a huge amount of money. And this is very quick action for the House and Senate. And it's happening in a context in which the people who are coming forward have said, "Well, we had a problem in the past. Do this, it will fix it. We had a problem in the past. Do this; it will fix it." And those things didn't fix it.

BILL MOYERS:One domino fell after another.

KATHLEEN HALL JAMIESON:Yeah. And so, now the person comes and says, "We need this because it's not gonna fix it." But I disagree with you that there was not a rhetoric of crisis. There was actually extremely tight coding of language. The while they were talking about crisis, they were also be very, very careful to signal the prospect of depression without saying it. If you listen to the media and you listen to the politicians, they walked right — the worst crisis since World War II. The worst crisis that we've had since the 1930s. But they're not using the depression word. But they're implying it strongly.

BROOKE GLADSTONE:I'm saying that they accepted the media accepted all the assumptions of urgency in their initial presentation. And yet, it couldn't be sold. I think we're in total agreement. I'm just puzzled that nobody bit this time. And I think it's just a big difference from now and many years ago. It may because well be true, those assumptions. I'm certainly not qualified to say. But either way, they were accepted, at least in the initial reporting. They weren't seriously challenged. The discussion of alternatives came after.

KATHLEEN HALL JAMIESON:Let me give you an alternative hypothetical. A president at 60 percent in the approval ratings, who has not gotten us into a war under very problematic argument, comes forward and says exactly what George Bush said. I think the rhetoric changes dramatically. This was a test of the credibility of this administration at its core, and the willingness of individuals to follow an administration that, in the past, had not been fully disclosive, and have used a rhetoric of crisis inappropriately, in order to push the country into precipitous action in Iraq.

BILL MOYERS:Kathleen Hall Jamieson and Brooke Gladstone, thank you for being with me tonight.


BILL MOYERS:On Monday, the people rose up and Congress backed down, sending the bailout to defeat. But then the lobbyists rushed in with a brinks truck of bribes, and this afternoon Secretary of the Treasury Henry Paulson got $700 billion dollars to save the system that his crowd on Wall Street had exploited to enrich themselves while plunging the country to the edge of catastrophe.

The bailout offers almost no help for homeowners, or equity for taxpayers in banks that are being thrown a turns our Secretary of the Treasury into Caesar Augustus and plunders democracy with tax breaks for Hollywood studios, Samoan sweat shops, Alaskan fishermen, rum merchants, makers of toy arrows and giveaways to big oil. All this on the very day the government reports that another 160,000 people lost their jobs last month — that's the most in five and a half years.

No wonder that Congress today resembled Monty Python's ministry of silly walks — one palm open to the lobbyists, the other holding their nose against the stinking odor of a bill everyone said they didn't want — while rushing for the airport to go home and tell the voters how important it is for them to be re-elected — so they can come back and clean up the mess they just made.

Here for a post mortem is Emma Coleman Jordan. She teaches commercial law and economic justice at Georgetown University. She's a former White House Fellow and assistant to the Attorney General, and has served as president of both The Association of American Law Schools and the Society of American Law Teachers. One of her latest books is "Economic Justice: Race, Gender, Identity and Economics." She's now editing a book to be published early next year, called "The Short End of the Stick."

BILL MOYERS: Ms. Jordan, welcome to the Journal.

EMMA COLEMAN JORDAN: It's my pleasure, Bill.

BILL MOYERS: With the bailout today, who's getting the short end of the stick?

EMMA COLEMAN JORDAN:The middle class is getting the short end of the stick. And those who are in that bottom quintile, the bottom 20 percent, who are not getting basic needs met, who are struggling to get by every day.

You know, when I hear some of the politicians say that the fundamentals are good because American workers have been productive, that's true. They have been quite productive. But they have not been rewarded for that productivity with growing wages. The wages are flat or stagnant.

They haven't been rewarded with the benefits of access to college, access to secure retirements and access to home equity as a cushion against economic misfortune. So you know, I do think that the short end of the stick is being handed to the middle class and below.

The top one percent is doing quite fine, thank you. And that misallocation is a large part of what you're seeing in the rage. People are outraged, in the country about the bailout because they see it as giving away opportunity. What could we do with $700 billion? A healthcare plan where every child in America could have healthcare? What are we doing?

We've got a gun at our heads, and we understand that that gun means that if you don't give the $700 billion, bad things will happen. But no one has been able to tell us that if we do give the $700 billion, good things will definitely follow. We haven't been given that assurance.

BILL MOYERS:I want to play you an excerpt from a speech that Bernie Sanders made on the floor of the Senate the other day and see what you think about what he says is not in this bill. Take a look at this.

BERNIE SANDERS:This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight. This bill does not effectively deal with the issue of foreclosures. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.BILL MOYERS:What is not in the bill that you wish were there?

EMMA COLEMAN JORDAN:I wish there was more about foreclosures and mandatory workouts for people who are near foreclosure but not yet there.

BILL MOYERS:And there are a lot of those people.


BILL MOYERS:People still hang- barely hanging on...

EMMA COLEMAN JORDAN:...hanging on by a thread. And that group is going to grow because we've got a recession coming. And so people who are losing their jobs, 159,000 in the last month...


EMMA COLEMAN JORDAN:...who are losing their jobs, are not going to be able to pay even a fixed-rate mortgage. So any of the people who have lost their jobs and also have these toxic mortgages, the ones with the option only, which is pay what you feel like, whenever you feel like. So there's this negative amortization at the end where there's this big balloon that they've got to face, even people who have traditional fixed-rate mortgages are going to be pushed to the edge of foreclosure. So I wish there was more. It does turn out in the 456-page version...

BILL MOYERS:The one passed today.

EMMA COLEMAN JORDAN:..that was passed today, there is one line that permits the Treasury Secretary to provide guarantees, and to provide those guarantees for the purpose of giving incentives to lenders to do workouts of foreclosure, near-foreclosure cases. So that's — that one line — if it is properly administered, can be a way in which foreclosures can be addressed.

BILL MOYERS:While people were talking about sub prime loans, you were talking about sub-slime loans. How come?

EMMA COLEMAN JORDAN:Well because I think there clearly is a racial disparity in the way that these high-cost loans were distributed. THE NEW YORK TIMES did a wonderful study last year showing the racial disparity in the distribution of these loans. And it appears that even qualified minority borrowers in certain communities were given bad loans even when their credit rating was adequate to provide them the opportunity to get a standard fixed-rate loan at a better interest rate. So that is what I meant by sub-slime loans.

The whole package of tactics that brokers used to get people to sign up for things that they couldn't afford. It's, dangle the American dream and people overreach. You know, we're overworked and we're overspent. And the debt mentality of the American psyche has really gotten out of control. And people who are very poor are not exempt from this contagion that we want more than we have.

It's expressed there in our deficit, our current accounts deficit. It's expressed in a number of different ways, our budgetary deficits, the trade deficits, the current accounts deficits that we have. All of these are ways of saying that we are not producing as much as we are consuming.

BILL MOYERS:There've been a lot of voices on cable channels recently blaming this bubble, this crisis, the cause of all of this catastrophe we're in right now, on poor people who took out mortgages that they couldn't afford to buy home they wanted. They shouldn't have. Watch these clippings and tell me what you think about them.

LAURA INGRAHAM:1995 when Bill Clinton decided to tell, you know, Robert Rubin to rewrite the rules that govern the Community Reinvestment Act and push all these institutions to lend to minority communities, many very risky loans, that was a noble idea, perhaps, but that certainly wasn't following free-market principles.

NEIL CAVUTO:I don`t remember a clarion call that said, Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.

LARRY KUDLOW:It's time for the Congress, Republicans and Democrats, to stop encouraging, exhorting, and forcing banks to make low income loans with no documentation. Stop that. The community reinvestment act which was passed in the mid nineties, which was extended in the early 2000s, literally pushed these lenders to make low income loans.

BILL MOYERS:Lending to minorities and risky people. Do you see this, are they seeing this as issues of race and class?

EMMA COLEMAN JORDAN:Absolutely. And it's a cynical manipulation. It's reprehensible. And, in the worse tradition of Lee Atwater, and the-

BILL MOYERS:Lee Atwater.

EMMA COLEMAN JORDAN:-Willie Horton ad, to use race as a wedge issue to make people who pay their mortgages believe that the people who are getting the benefit of the 700 billion dollars, that we're being asked to pay, are poor, minority people who caused the crisis.

This is unconscionable. This problem is not a problem that was caused by the Community Reinvestment Act. The data is very clear that the Community Reinvestment Act loans were being offered in a way to people that were much more responsible and had none of the characteristics of default that are being attributed in this discussion. And what this does is to say, this problem is a problem that was caused by black people.

And it means that it gives an opportunity to bring up that old wedge. But I think the people in the country are smarter today. I just don't think it's going to fly. I think that people understand that the enemy is not a person who got a home loan and was tricked into getting that loan by a fast-talking broker who originated the loan but that the problem was the securitization process, the high leveraging that Wall Street was doing, the lack of regulation.

Front page of THE NEW YORK TIMES today has a bone-chilling story. And the bone-chilling story is about how, in a 55-minute meeting, one of the major rules that constrained Wall Street, and the requirement that Wall Street investment firms have capital adequate to protect against losses from bad loans or any other activity they were engaged in, how that rule was willy-nilly taken away and thrown aside, unanimous decision by the members of the SEC-

BILL MOYERS:Securities and Exchange Commission, right.


BILL MOYERS:I read that story. It's-

EMMA COLEMAN JORDAN:It's bone chilling.

BILL MOYERS:I mean, it was part of the process of taking, you know, of putting the watchdog to sleep, right?

EMMA COLEMAN JORDAN:Well, there's two parts of the story. One part is they decided to take away the rule. And the rule was that they had to have a certain amount have capital. That rule was waived. The second part, which is even more important, frankly, was that in exchange for taking away this capital, the SEC was supposed to monitor these banks, investment banks, to see what their activities were. The statute was not clear about whether the SEC had that authority. And it turned out that what happened was, all of the monitoring was delegated to the industry itself. And so the computer programs of the securities firms themselves were used to monitor them. I mean, it was the most incredible case of foxes guarding-

BILL MOYERS:Starting of what?

EMMA COLEMAN JORDAN:-the chicken coop that I've ever seen.

BILL MOYERS:How do you explain it?


BILL MOYERS:Was it ideological? Was it the belief that markets, you know, will regulate themselves? Or was it out-and-out inside dealing, rigging the rules to favor yourself?

EMMA COLEMAN JORDAN:I work in the world of ideas. And I'll tell you, I think ideas matter. And the core idea that drove this process was that government is bad. It's a problem. The best solution to any problem can be found not in government but in the private sector. Secondly, that markets are rational, that markets will determine where value lies and make choices using the Adam Smith metaphor of the invisible hand. And that these allocations are neutral and fair and to be preferred, more importantly, to any government intervention or solution. Now, the problem is market solutions are preferred on the upside. But when the downside emerges and we're in a crisis because the market has not self-corrected, allowing investment banks to monitor their own risk for lower capital requirements turns out to be a problem because they're not monitoring themselves — surprise, there's gambling in this joint — that that has turned out now to be a source of the major problems that we're experiencing.

BILL MOYERS:Yeah, you know, if I had time, I would show you a speech that I just looked, an excerpt from a speech that President Clinton made towards the end of his administration praising deregulation and saying, "We, Democratic Party, has moved into the forefront now of letting markets work, of supporting, quote, 'free trade.'" So at times both parties joined in a conspiracy against the public, right?

EMMA COLEMAN JORDAN:Well, it's called the Washington consensus.


EMMA COLEMAN JORDAN:And the Washington consensus is that, you know, the effort to take government regulation out of the process of controlling risk and intervening in very focused and definite ways into certain sectors of the economy that were ostensibly private. It's a bad thing.

And the closer you can get to having markets where competition is the basis for allocating winners and losers the better you are. And that ideology was a bipartisan effort, shared effort. And there's no way to avoid understanding that that was something that both Democrats and Republicans shared as an ideology. And the question is to what degree?

And there I do think there is a clear difference. The degree of faith in markets where we're in the middle of an asset bubble, where housing prices are going up, going up, going up, everyone understands that at some point, these prices are not sustainable. But the chairman of the Federal Reserve is cutting interest rates, cutting interest rates, cutting interest rates to keep the party going.

And, at the same time, refusing to use the statutory authority that he had to flush out the fraudulent abusive practices that were being foisted on to homeowners, both middle-class homeowners and poor homeowners with these option-only payments, teaser rates, no exit fees or high exit fees, brokers' premiums, I mean, a whole litany of abusive practices. So he did not use the authority. So what you've got is the specter of the world's leading economists in charge of the Federal Reserve seeing these prices going up and knowing at some point it's irrational exuberance.

BILL MOYERS:I think I've heard that, right?

EMMA COLEMAN JORDAN:Oh, yeah. And that means that what goes up is going to come down.

BILL MOYERS:Given what you just said, what does it say that so many politicians today were willing to give so much money with so little scrutiny to the former head of a major Wall Street firm, Goldman Sachs, to spend on the very people who turned Wall Street, as you just described it, into a crap shoot? Why?

EMMA COLEMAN JORDAN:Well, because of coercion. And let me just tell you about it. It's a political and economic coercive situation. Everyone says hold your nose, vote for it. It's your money or your life. And that's what the country is experiencing right now. We are in a crisis. And it's a crisis that was made by the very people who are now asking for help and demanding that taxpayer dollars be directed to rescue and solve these problems.

BILL MOYERS:An SOS from the people who plug, put the hole in the ship in the first place.


BILL MOYERS:Mainly who did it? Who?

EMMA COLEMAN JORDAN:Well, Secretary Paulson is certainly not exempt but the leaders of Wall Street. Now, let me just mention a couple of things. There is going to be some unintended consequences of the current period of transition. Let me tell you what those are. One of the unintended consequences is that in order to shore up confidence of the average person like me and the public who's got money in a savings account at a bank, we've increased the deposit insurance limit to $250,000 from $100,000. That's good. It's good for confidence. People will leave their money there.

But there is risk in that. And the risk is that we're not going to be paying attention to what the banks do with the money. And so we'll get sloppy and lazy about monitoring what banks are doing with the money. I've seen this movie before. It's called the S&L crisis. It was the same problem with-

BILL MOYERS:Savings and loan — 1989-late '80s.

EMMA COLEMAN JORDAN:Absolutely. That when the savings and loan crisis came about, it was shortly after the period when the FDIC limit was raised from $40,000 to $100,000. And people got comfortable with that. And they left their money. They didn't worry about it because $100,000 was enough to cover it.

And so we developed, as a result of this, something called zombies — that is, banks that were technically insolvent, but they were using the bait of higher and higher, unsustainably high interest rates to keep attracting deposits of the unknowing and unwary and broker deposits, that is big chunks of money coming from various sources, to keep the bank looking solvent. So that's one unintended consequence, that you're going to get this problem that depositors are-

EMMA COLEMAN JORDAN:-not going to monitor.

BILL MOYERS:Before I go home and go to bed and pull the cover up over my head, what's the second one?

EMMA COLEMAN JORDAN:Yeah, the second problem is there's another reorganization that is taking place. If you notice that Bank of America acquired Countrywide, which was one of the most notorious sub-prime lenders and acquired them with the assistance of various measures that were taken by the Federal Reserve to make that a feasible transaction. And so we're getting banks growing larger and larger.

What we've got is a second wave of institutions, JP Morgan Chase taking WaMu, I guess it is, new huge institutions that, in the next crisis, will certainly be too big to fail. They'll be bigger than the ones that are failing now. And so the risk that we're encountering we're incurring now is a risk that these even bigger institutions that are being created in this emergency crisis driven reorganization of the entire industry that those are going to be at our door the next time.

BILL MOYERS:And then what do we do? Because that whole idea that the government was there not only to protect the individual who fell through the cracks but to prevent the markets from fraud, that idea has really suffered over the last generation.

EMMA COLEMAN JORDAN:Yes, it has. But I am hopeful. I am an optimist. I really am. I see in this crisis danger and opportunity. And the opportunity is that I believe that in this crisis we are rethinking some fundamental premises about the role of government in our lives. And a part of the anger and the rage that people have directed to their representatives in this discussion of the rescue plan or the bailout plan, depending on how you want to characterize it-

BILL MOYERS:Frame it, I think, is the language.



EMMA COLEMAN JORDAN:Frame it or spin it. That what we are going to experience in this process is a real wakening of American values and respect and commitment for government. Yes, the market creates innovation. The market produces so many wonderful things. They're a part of this fabulous quality of life that we have in the United States. And we love it. However, there's a dark side of the market. Dark side of exclusion, the dark side of excess, the dark side of greed and manipulation. And somebody's got to be the cop on the beat to step in when these excesses materialize.

You know, to have these things taking place without any government oversight is a problem. And it'll take leadership to articulate a vision, to articulate a set of values that will allow us to say excessive CEO compensation is wrong. Giving the secretary the power to dole out $700 billion without any serious scrutiny is wrong. If the taxpayers are going to be given the opportunity or the expectation to bail the situation out, we ought to be treated as investors so that if these assets, the securities in this toxic pile, recover, taxpayers get something back in return.

BILL MOYERS:Today, however, did capitalism buy off democracy in this vote in Congress?

EMMA COLEMAN JORDAN:I don't think the story's over.

BILL MOYERS:Emma Coleman Jordan, thank you very much for being here. I've enjoyed this conversation.

EMMA COLEMAN JORDAN:It's been my pleasure, for sure.

BERNIE SANDERS:This bill is still not good enough.

HARRY REID: We've got to get this done.

JIM DEMINT:I just do not believe that this bill gets the job done.

MITCH MCCONNELL: This is the only way to get the right kind of solution for the American people.

JEFF SESSIONS:Now, I'm not going to vote for the thing.

BARACK OBAMA:We have a responsibility to solve this crisis because it effects the financial well being of every American.

BILL MOYERS:I want to take a moment to remind you that tomorrow, Saturday, October 4th, is a very important day. Here's why.

This was the scene in Florida eight years ago this November — Republican operatives sent down from Washington jammed into local election offices angrily disputing the recount of ballots in the incredibly tight race between George W. Bush and Al Gore. This man was heard shouting, "My name is John Bolton and I'm here to stop the count." Bush would later appoint him Ambassador to the United Nations.

We saw in Florida what an unholy mess our voting process had become: A system where partisan officials ran the election, dumped eligible voters off the rolls, and then posed as impartial referees when the fight broke out.

Plenty has changed since 2000, and some for the better. But the American way of voting is still erratic, unwieldy and unreliable; vulnerable to both technological hang-ups and partisan dirty tricks.

Just this week, residents of two black neighborhoods in Philadelphia found scam flyers threatening that anyone with outstanding parking tickets or warrants may be arrested at the polls on election day.

And in Montana, Republican leaders challenged the eligibility of thousands of voters — voters who just happen to live in Democratic strongholds.

The problems aren't confined to partisan players. Just two days ago, this report from the Brennan Center at New York University documented how state officials — often with the best of intentions — purge huge numbers of perfectly legal voters from the rolls.

Hundreds of thousands of legal voters may have been dumped in recent years, many without ever being notified. The report describes a "process that is shrouded in secrecy, prone to error, and vulnerable to manipulation." Hardly reassuring words if you want democracy to work.

This is why Saturday, October 4th is so important. It's the voter registration deadline for five states. Monday the 6th is the deadline for nineteen other states. Many more come later in the week. That means that starting tomorrow, many of you have only one more chance to register to vote, or just as important, to confirm that you're still registered.

If you go to our website at, you can find your state's election rules and a guide for how to protect your vote. Learn what the ballot in your area looks like, confirm the address of your polling place, and figure out what identification you need to get in the door. Make sure your vote counts.

Finally, I'd like to call your attention to a public broadcasting news program debuting next week. WORLDFOCUS is a nightly, half-hour newscast dedicated to giving you a global perspective. It's hosted by veteran correspondent Martin Savidge:

MARTIN SAVIDGE:We'll tell you what happened around the world and what it all means to you...

BILL MOYERS:Next week's daily broadcasts will feature a series of signature reports on the high price of food, shot in South America, Africa, India and Eastern Europe. As the saying goes, check your local listings to find WORLDFOCUS where you live.

That's it for the Journal. I'm Bill Moyers. See you next time.

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