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Financialization of the economy and pervasive corruption go hand-in-hand. The stronger the financial sector and more parasitical it becomes, the more profound and systemic the corruption. Paul Jay joins “The New Untouchables” for a discussion about Bill Black’s conception of “control fraud.”
This is Steve Grumbine with a new episode of The New Untouchables. Today besides my normal co-host of Eric Vaughan and Patrick Lovell, we have a guest that I have followed for many, many years, and you all probably gotten to know as well. Paul Jay formally of the Real News Network now of theAnalysis.news, and Paul Jay has just done some amazing work. In particular, most recently, he’s done a nine-part series with the incomparable Bill Black. So without further ado, let me say hello to our guest. Welcome, Paul Jay; how are you, sir?
Hi, well, thank you very much for the invitation.
Absolutely. So as you have known, and offline anyway, that we have been doing a very, very deep dive into the elite control fraud and all of the machinations surrounding the 2007-2008 financial crisis, including many of the things that are happening right here right now. And this series that we’re doing is all about bringing about a spotlight on the control fraud and the banking system that has ultimately backstopped some of the most nefarious theft of regular people property the world has ever known. And so with that, I’d like to hand it over to Patrick and allow him to kind of set the stage for what we would like to talk about. Patrick.
Well, off the top, Mr. Jay, it is just an incredible honour to have you interact with us because we’ve been admirers of your work for quite literally, for myself, at least close to a decade. And to see your ongoing work with Professor William Black and all of the incredibly, profoundly important material that he brings forth. I said, for example, last night, Paul on Twitter, that I won’t rest until the entire government is listening to William K. Black, which means we need to get the people to listen to William K. Black. And in your ongoing efforts really across the board in the tapestry of everything that you bring forth, where does control fraud fit in for you in terms of the breadth of knowledge that you have access to and awareness of by way of the systematology of the power structure of the United States?
Well, first of all, thank you. And the second, it’s a pleasure to hear all the kind words sitting in the basement here, COVID basement and such. And even over the years, one wonders how much effect the work has. So I thank you for that.
I think it’s important that in terms of the development of control fraud, the corruption that Bill describes, I think is inevitable. It’s not new. I think the American economic system, the state was founded on slavery and genocide of Native people. Corruption, it’s been part of the American way for forever. It gets on steroids as the system develops. There was enormous fraud and scams that led up to the crash in ’29-’30. There were attempts to regulate and make capitalism more rational during [Franklin D. Roosevelt] FDR in the ’30s, whether it’s Glass-Steagall regulations on speculation on commodities. And because of the crash in ’29-’30 and the deep crisis of capitalism in the ’30s, the forces within the capitalist elites that were rational and understood, there needed to be serious reforms to mitigate the excesses or the system itself would implode. They gained some strength during the ’30s because the crisis was so severe and that World War II strengthened the role of government again.
But if you look at this graph, it’s been out there for quite a bit. The percentage of GDP that’s finance over the 20th century into the 21st century goes up like this until ’29-’30. It kind of goes down because of the amount of government spending in the ’30s and then even more government spending in World War II. But after World War Two, it starts to go up like an airplane taking off. But when digitization really unfolds and you get the [Ronald] Reagan era, and one of the points I want to, I’m gonna try to make here is that this isn’t about good guys and bad guys. If it hadn’t been Reagan, it would have been somebody else, and if it hadn’t been a Republican, it would have been a Democrat.
It’s that digitization as an objective force; the way industrialization changed the economy and the politics and relationships, digitization did much of the same thing. So you look at the percentage of GDP that’s finance starting late ’70s into the ’80s, it takes off like a rocket ship. Digitization is beyond jet propulsion for financialization. And it’s an objective process. It’s not like somebody came up with the let’s all be neoliberals. Oh, what a good idea. Well, I’ll be a neoliberal too. No, it’s as much as the Industrial Revolution was the result of scientific advancements, humans learning how to interact with nature and technology and all the breakthroughs that gave rise to mass production, and the amount of capital needed to develop that industrialization changed the nature of banks. So that instead of just being lending institutions, they start becoming controlling institutions throughout the whole economy.
So that takes off again on steroids in the 1980s. And with digitization, banking gets even more profitable, more powerful. Partly because digitization makes globalization, which is nothing new. I mean, you have a global economy early in the late 19th century, never mind the 20th century. But digitization means you can take a tube of toothpaste, buy it in Walmart on a Monday and Monday night in China or Vietnam, they know to make another tube of toothpaste. I mean, the global supply chain changed radically because of computerization, which meant productivity went way up. Profits went way up. But because they could play off now cheap Asian labour against American workers, wages barely moved from the 1970s on.
So where did all the money go? Where did all that new wealth go? Well, we know it goes to the one percent. We know it goes to the banking, but it goes into the financial sector. So these guys, not only do they become so dominant and so powerful, they’ve always had enormous sway; some people own Congress. But nothing like what happens from the ’80s on. They so own Congress. They can’t be regulated, and this is where you get into control fraud and Bill’s thesis. Why, like in the interviews Bill talks about during the S&L, savings and loan debacle, there were what, thousands of indictments and many convictions and people went to jail. Why doesn’t that happen in ’07-’08?
Right? Predicated and this was the point, though, Mr. Jay, and this is what; I’m so glad you brought this up, predicated on 30,000 criminal referrals that the Office of Thrift Supervision, enabled the media to put pressure on the powers that led to the results that Bill was able to create. So that therein lies the question and answer.
Right, the media seem to play a much bigger role.
So then why didn’t it happen in ’07-’08? The power of finance within the economy and politics had really grown to such an extent. They’re too big to fail. They’re too big to prosecute the revolving door between every President picking their finance team out of Wall Street. And it’s gotten to the point now, and I don’t know whether this is maybe where Bill and I don’t agree, I don’t know. I actually think we’re past the point of no return on being able to regulate these guys. Although, I urge and applaud every attempt to do so and any legislation that can mitigate the power of finance I’m for. And I’m jumping ahead here, and there’s lots to get into before, but I’ll just finish the point here. I think we have to really look at what publicly-owned banks on a real national/international scale could look like. Not just because of the financial side, but because of the political power side. How do you weaken the power of finance?
I think that is such a critical question because one of the things that really troubles me right now is that it seemed to be in the earlier periods of time, you know, mammoth corporations and banks were still much smaller than the government that overs saw it. And I’m not so sure if that’s the case anymore. It seems as though that we have institutions that are somehow above, as far as power and sway goes, sovereign States. And that’s like one of the real troubling things to me. I think that there are actual real things that can be done by the government. But when you have so much money, you think of the BlackRock’s of the world and the Vanguards of the world, and so on and so forth. They have so much sway with their government. I think that that’s where the nexus is because the government still has the ability to do what it needs to do. However, it’s never going to be able to as long as they’re getting their paychecks cut from the same entities that are going to regulate.
Yeah, you know, there’s a really good speech FDR made. I think it’s 1937 to ’38 on monopolies. And there he says the issue is the bankers. It’s the banks. This is back in ’37-’38. He’s talking about the— and it’s a speech about fascism and the danger of fascism. And he says, when one sector of the economy becomes dominant over government and politics, I’m quoting him now. He calls it the definition of fascism, and then he goes on to say, it’s the bankers, and that’s ’37-’38.
We’re in the situation now where finance is so much more powerful than it was then. You mentioned BlackRock, and there is this article I did on BlackRock. BlackRock is certainly, perhaps, the biggest player when you talk about the concentration of ownership, but it’s one of several big players. But just taking BlackRock as the example and Vanguard and State Street, the three biggest asset management companies, that between the three of them control— what is it now? I think they’re up to $15 trillion they manage, which is bigger than the GDP of China. They’re very close to— Bloomberg predicted within three or four years they’ll probably have more under management than the GDP of the United States. These are these index funds where they buy a whole index, and they also have what they call discretionary funds, where they pick and choose stocks. But people call them like their passive investors. The thing is, they actually do get to vote— the shares at annual meetings, boards, general meetings of these companies, they get to vote the shares of those $15 trillion.
So BlackRock, Vanguard, State Street and the other big asset management companies have enormous say in who gets to run everything that’s on the stock exchange, which gives them an interest in every sector of the economy.
So I was talking in my article about how the same three Goliath’s not only own essentially majority control in terms of how they vote shares of all the major media companies, with the exception of Bloomberg and Washington Post. Bloomberg, has private ownership, and Washington Post is owned by Bezos.
The New York Times is 93% owned by financial institutions. And that same group that owns 93% of the New York Times owns most of the fossil fuel companies in the world. I think the only big exception is Total from France because of the amount of national government ownership, and there’s others; the Saudis own this and that. But the big fossil fuel companies, all the big arms manufacturers, all the companies that make nuclear weapons in the United States; it’s a system that’s unfolded that— you know, they talk about how the arc of history bends towards justice. Well, I hope that’s true, but one thing I do know, the arc of history bends towards monopolization. And we better face up to the consequences of this because as much as BlackRock likes to talk about the problem of climate change, so far, it’s smoke and mirrors with what BlackRock is actually doing. And the smoke is literal because the finance sector, even if as individuals they mean well, and I don’t mind saying Larry Fink, means well. I mean, there’s no point demonizing individuals here because unless you’re talking about control fraud, which is another story. Their individuals do play that kind of role.
But systemically, these companies can’t do it on their own because if they try to deal with climate seriously in any way undermining their ability to profit, then another fund is going to jump in, pick up their business and do what’s more profitable. So it requires the government to come in and absolutely regulate fossil fuels, regulate and take over serious sectors of kind of planning, that finance right now can do what it pleases, and they know it. The BlackRock’s of the world know it.
The problem is if the government is going to play that role, they’re also going to want to regulate finance in a serious way. And finance is willing to risk armageddon in order not to be regulated. And so we got to get this message out to people because as much as people are being put to sleep on some of these questions, they got to get how the system operates. And then we have to talk about okay, then what do we do as people to try to deal with this?
This is a hugely important point that you just made. And I want to clarify from an MMT, Bill Black, and ECON perspective that when you look at the banks, we have today, every single bank in existence has been given a charter from the federal government. They can’t operate as a bank without having a charter. And that charter is a regulatory document created by the Congress of the United States. Congress has control of these things. I’m not doing anything is what it’s done. I want people to understand that it’s not the banks that have done this so much as our feckless government. Our government has the power. In fact, it has the responsibility to do the regulating of each of those industries, including finance.
And one of the things that you said about public banks, every single bank in its original state is a public bank because Congress alone gave them the charter to even operate, to give the unit of account as an IOU. And so, without that charter, without that regulatory presence, they’re running amok, and they have become bigger and badder and stronger and faster than any one of us could have ever dreamed of.
Although to your point, way back when, the 1920s-1930s, they knew this, and they took action by creating Glass–Steagall to try to block their ability to do a whole lot of what we’re seeing today. So I’m curious, within that space, how do we get the message out to regular people? It’s not just some wave our hands in the air. Our government has a responsibility to take direct action. Unless, of course, our government is captured and, in effect an arm of these agencies.
Well, I just have one point to what you just said, which is it’s not just the charters. They don’t survive without public money.
The Fed has just shovelled trillions of dollars to keep the banks afloat. They speculate wildly. They should have taken enormous losses. And instead of the public getting some equity in return for all this bail-out money, they get nothing. People use this term socialism for the rich, capitalism for the poor. Well, it’s been absolutely a type of socialism for the financial sector, but without the critical point of socialism, which is public ownership.
And it’s ridiculous. That’s why I say that the dilemma here is that the guys are so big. I think you have to have a dual-track strategy. You have to demand regulation, demand accountability. Do what Bill says; put some of these individuals in jail. There needs to be that level of individual accountability just to slow these guys down and hopefully weaken them to some extent. But at the same time, we have to have a really serious conversation of what public sector banking looks like.
And let me just add one point to this. I think there’s a genuine concern about public banking on a large scale. If it got too concentrated in ownership and in a few hands in the federal government, that’s dangerous too. Any concentration of ownership is dangerous, whether it’s in the private sector, or if it’s in a monarchy, or in a one-party, suppose it socialist system. The concentration of ownership is inherently dangerous.
The challenge of our time, and because we live at a time of artificial intelligence and such digitization, there’s the potential for diversified ownership of banking that’s publicly owned, I think. In a way, there never was earlier in history. So as much as digitization, I think, has caused a lot of the problems with finance, a lot of the solutions might be there too.
Rohan Grey of the Modern Money Network worked with Rashida Tlaib and some others to create the Public Banking Act. Which would, in essence, create — mind you, we already have public banks; it just takes a hell of a lot to regulate them. So the idea of creating a new postal banking and community banking owned in the local communities, federally funded because that’s where the money comes from, the federal government. And then ultimately being able to deploy this as a law. I just want to say that there is action on that, nobody’s passing it right now, but there is a bill out there to do exactly what you’re talking about.
Paul, you’ve checked off almost every box that has basically aggregated the journey that Eric and I have been on for 11 years—starting with my experience in the 2008 Great Financial Crisis where I got wiped up, and I started asking questions. Nothing quite frankly made sense to me until I happened to catch William Black on Bill Maurer’s. And suddenly I was like, that’s the guy I need to talk to. So I reached out to Bill, and this was in the midst of what Eric and I had already been working on. As a matter of fact, we had been close; I don’t want to call us disciples, but we certainly had studied just about everything Matt Taibbi ever wrote at Rolling Stone at that time. And I was picking pieces of whistleblowers that suddenly seem to connect the dots of like, well, wait a second, Michael Winston represents one side of the equation. Richard Bowen represents another. Gary represents another. Why aren’t we telling the story of where they all converge?
And it wasn’t until Eric actually found this horrific story on Addie Polk, a 91-year-old African American woman in Akron, Ohio, who committed suicide the day they were evicting her from a house that she lived in for four decades that we understood that this was a ground-up situation. And we were able to piece that together with Bill. And the reason why I bring that into this confluence as it pertains to the four of us, quite frankly. Steve represents the other side of the house of what we’ve run into here. He is a fiscal policy expert. He understands the Fed as well as anybody. The whole idea of modern monetary theory brought us to understand that what we have to your description, quite frankly, and this is the way I frame it, we have MMT for criminals. I call this thing— Eric says I’m being redundant for a reason, but I call it corporate fascism undergirded by a criminal syndicate.
So to your question, how do we get the regular person to get past the sort of academic questions here to understand that this is just simply theft, but on a massive scale where all the upside goes directly to the managers of this operation, and they have an unlimited backstop for a criminal enterprise. Now some people might think, hey, is he being hyperbolic? No, we’ve spent 13 years aggregating the details of the greatest criminal conspiracy and cover-up in history. That starts, quite frankly, I think, with Matt Taibbi’s work, and it works its way through Bill Black to the likes of what you’ve been talking about for years, which gets us to the final aspect of this. It’s neo-feudalism that’s run by the financial sector. You put that technological aspect together with the back door sort of scenario with the Fed. And you’ve got this thing that’s like [George] Orwell could never envision it or imagine it. The yellow brick road is nothing even remotely close to the massive conundrum that we’re facing, given the climate crisis and the impending rental crisis, and so forth. And maybe, the rental moratorium, and so forth.
I wonder if you can comment, based on the criminal aspect of this, if American society doesn’t understand that the federal government failed to bring to account the people that made this thing happen, what then?
Well, I guess if I knew, really knew the answer to your question, I’d be talking to more people than I am. The criminal aspect of it is very important. Even more so, the convergence of the financial sector, out and out organized crime, doesn’t get talked about very much. Like there’s a crime family led out of Toronto, where I am now, that started in Southern Italy but is one of the stronger Mafia families. And I was seeing in the mainstream press here an estimate from some prosecutors that they’re doing 60– I believe it was $60 billion a year. This is just one family. And that money is being laundered through real estate and casinos.
Well, Deutsche Bank owns one of the biggest casinos in Las Vegas. Real estate is all about banking. So the conversions of outright, Mafios, and of course not just Italian Mafia. Whether it’s the Russians or the Colombians, or you name it, the finance sector is laundering money. So the criminality is at the most overt state.
One of the problems here is that so much of what they do which destroys people’s lives is legal. That’s the other thing about criminality is that so much more of it should be criminal, but because they have such influence over Congress, they make what they do, so much of what they do legal. Like, it used to be illegal to buy your own stock, right, for corporations. Now it’s legal to have stock buybacks, which creates a totally artificial stock price. That goes on and on; the undoing of Glass–Steagall.
I think what I want to keep going back to is that it’s part of — and this is why I keep going back to public ownership. We’re at a point now where a system based on the private ownership of at least critical sectors of the economy, starting with finance, it’s played out its usefulness in any way that’s good for human society. It used to be. Banks, even in the 20th century, even as rotten as they might have been, they did play an important role in the development of modern society, okay. They’re now so parasitical, and that parasitism isn’t just in what it does to the economy. You can see, like, where does Trump come from? Even in the most narrow definition, Robert Mercer, a high-speed quantitative trader, and Sheldon Adelson, a guy who owns a casino. Two of the most parasitical activities you could possibly have in the economy make Trump President. Without those two guys, he never would have had an election campaign.
As we know, Robert; for people who don’t know Robert Mercer owned Breitbart. Steve Bannon, Kellyanne Conway, that whole team is put together by Robert and Rebecca Mercer, who is from Renaissance Technology. These guys just went out and hired physicists and mathematicians to game the stock exchange so they could figure out algorithms to make enormous amounts of money on tiny fluctuations of the stock market. It’s absolutely nothing productive. It doesn’t do anything good for anybody except speculators. And these are the guys who make Trump President.
So it’s gotten so rotten, and, of course, people who feel so disposed and desperate wind up falling for the populist; I don’t even want to call it populist, demagogic bullshit. And then the finance sector, who has the biggest say on what goes on in the Democratic Party, facilitates this because all they care about is making money. But it’s systemic. It’s not like these individuals are evil guys. You go to Harvard. You get a job at Goldman Sachs, and you become Goldman Sachs. They used to say you are what you eat. No, you are how you make your money to eat.
So you got Steven Mnuchin, and you got Kamala Harris, both of which knee-deep in this stuff going back to a time where we should have all had media covering this thing in way better detail, but it never ever came to be. Now, all of a sudden, Steven Mnuchin ends up in the Trump cabinet. He ends up as the Treasury Secretary, nonetheless. And now, all of a sudden, that revolving door that you so eloquently spoke about earlier is on fire. We are talking about, like straight up, a fire here. And Patrick lay out the rest of the Mnuchin aspect.
Well, you know, one of the pictures that encapsulated it for me guys was going back to about; I think it was about two years ago, around Christmas time. I saw a picture of Michael Milken and Steven Mnuchin after Michael Milken’s conference, and ultimately, they’re flying on him G5 because the government was shut down because of some sort of cutbacks that Mnuchin was on top of. So he’s flying around on Milken’s private jet. The King of private equity, the King of Hedge Funds that were right around during the S&L Crisis, and it brings it full circle to what Paul’s been unpacking for us.
And then ultimately, guys, what it all comes back to for me when I think about these policies and these entities that come out of Wall Street through the revolving door, as you said. And by the way, the Kamala Harris part of it is extremely important to identify because you just gave us a multi-party situation, right. And where was Kamala during the 2008 Great Financial Crisis? I think it was getting a lot of influence from the financial powers out of San Francisco, and then we know what happened in the tragic aftermath. The tragic aftermath of these insane foreclosures, Paul. All throughout California, where women, minorities, the most vulnerable amongst us were literally, through fraudulent paperwork, churned through the courts. The courts weren’t looking for the specificity based on their own laws cause there was such volume. And I’m not trying to give any excuses. Who knows in detail why the judges or the DAs did what they did.
But the consequence, and we just had this on our podcast two nights ago. And I encourage you to watch the stuff because it’s mind-blowing, Paul. We had elderly women who were up to speed on their payments, who had over a million dollars of equity in their home in Santa Barbara that got in this mess, and Sheriff’s wound up at her door with rifles and forced her into homelessness. And this is somebody who has a million dollars in equity, not behind in payments. They stole the home, Paul. It’s incredible. I’m not making this up out of thin air. That’s how bad this thing has gotten.
So once again, when we’re trying to richter people out of their slumber, they need to understand, like Eric has from day one. This is a street crime. It is the mob, like you just said, Paul. It’s mob mentality, or let’s even use it, you know what was smash and grab through, let’s call it the East India Trading Company and all of the different techniques they used throughout societies throughout the world. I mean, it was like you get these societies into debt. When they can’t pay back, you come, and you crash it, and you trade in your own currency, right Steve? That’s how they were able to do it with the East India Trading Company. Low and behold, you got complete control. Which was charity, at least to our founding fathers; at least that’s what we were taught.
So I don’t mean to ramble. The question to you Paul, again as somebody who from my perspective, and just to finish this question. You’re at this sort of pub, if you will, to some of the best minds that exist. That’s why I watch you religiously because I learn so much from your program. Michael Hudson comes to mind. Matt Taibbi comes to mind. And they all talk about different pieces of this puzzle, but the only one who was talking about the criminality of it, at least in detail, that should lead to prosecutions that could potentially rein this stuff in, is what brought us all together, which was William K. Black. So am I hearing from you that you think, given everything, that holding a couple of CEOs accountable at this stage of the game, it’s too late?
No. Well, I don’t know if it’s too late or not too late, but there’s no question if some CEOs were held accountable, it would be a good thing. And I think it’s part of the process of change to demand that kind of accountability. I don’t think it’s one thing that’s going to do this, but yeah, if the Biden administration wants to claim that it’s going to be the most progressive administration since FDR, which he uses that terminology. Then there damn well better be accountability for individual CEOs and send them to jail, absolutely.
And I think the reason I keep interviewing Bill is because I think it’s such an important part of a process of change. I don’t think it’s the only thing, but it’s a very important piece of it. And if more progressives can get elected to Congress and put more pressure on some of these hearings, it’s an important piece of waking people up. It’s an important piece of at least mitigating how finance acts.
But I do want to add what I think is an important thing that we have to grapple with; most ordinary working people already believe bankers are criminals. They think, why did Trump get elected with I’m going to drain the swamp rhetoric? Even though it was all bullshit, people didn’t need convincing there was a swamp. You know, I lived in Baltimore for almost a decade, and I had a lot of conversations with working-class, black workers, and very poor people, and all kinds of people. It’s almost, they’re almost too cynical about it. You know, they think the elites are crooks. They think it’s just a bunch of criminals, that nothing could be done about it. You know, they just kind of give up in despair, and they don’t see an alternative. And that’s why I keep harping back to this thing. There needs to be exposure of the criminality, exposure of the injustice, demand for individual accountability on people that are committing crimes. But there also needs to be a vision for an alternative.
And I think it’s missing from the discourse in much of both the Left and even the more enlightened sections of the elites. There needs to be a vision and a fairly realistic one. I’ll give you an example of a mind game that I like to play. If there was a really powerful united front progressive movement that included, you know, kind of just about everybody who gets climate change, the climate crisis, who understands the danger of fascism, a really strong people’s movement, and then you elect an actual majority of people in Congress or even at the state level. What would you do? I mean, what actually is the policy that you fight for if you could do it?
I want to make you aware of this, Paul. So in our process, I’ve reached out to Dr. Cornel West religiously. I reached out to Dr. William Barber religiously. They speak so eloquently and so often about systemic racism to our economic injustice, but they don’t understand control fraud. I could say the same thing in a myriad of other enterprises, but I want to turn that over to you, Steve. Just from this standpoint, what Paul just described is what we collectively represent. That’s what we’re desperately trying to do. And from where you’re sitting, Steve, where does the rubber meet the road? Based on all the information that we’ve been able to glean over this course of time with the New Untouchables.
Yeah, so, you know, I walk two worlds. One side is all macroeconomic and policy-based, and the other side is focusing on exposing this control fraud and this Wall Street model of fraud, quite frankly, and the revolving door. Over here on this side, we’ve got the Green New Deal construct. We’ve got the framework for a Green New Deal. We understand the federal job guarantee solves a tremendous amount of ills. We understand that we need health care. We understand that we need to mitigate climate change. We know that we have the transition people out of dirty jobs. We understand that we have to make education a right and that housing is a right. Things that are basic human needs as a right as opposed to something at the line for the private sector to capitalize on. That’s this side.
The flip side is, well, what’s preventing that from happening because almost everybody wants these things. So why is that not happening? And that’s when the combination of the Con and the New Untouchables came to be because there are forces at play that are against us having public ownership of these things. Why is that? Because they have a private interest in maintaining this power structure. And that is what brought us with Bill Black, and Bill Black helped us tie this together. And I think that it’s an important thing to note that there really are solutions over here. We really do have a framework for what we want if we had that majority that you’re talking about.
You know, I’m no expert in U.S. politics, but as far as I can see, the strategy, if we could have such a movement, the strategy, I think, is relatively straightforward. At a national level, it’s almost impossible because of the strength of the Right in so many States. At a federal level right now, to have the kind of breakthrough we’re talking about is very, very difficult. But what might be possible is to focus on a few States.
In two regards: one, take a few really small States that are Republican and try to flip them. So you at least get control of the Senate. And as much as I can’t stand the Democratic Party, it’s the only framework there is to work within right now that isn’t out and out reactionary. And if you could get some progressives elected, I don’t know whether it’s in North Dakota or where it is. Someplace where it doesn’t take as much resources to elect a couple of senators and really do some protracted organizing work.
And then number two in States— and maybe it’s even in New York with what’s going on, I don’t know. At a state level, try to actually start developing the kind of reforms we’re talking about. And it needs to be a pretty big and rich State. And unfortunately, you know, in New York and California, you’ve got pretty big progressive populations, and you have economies the size of countries. At the state level to start developing the kind of policies that we can finance, and of course, that’s going to be a war in New York or California. I mean, it’s gonna be a war anywhere; it doesn’t matter. But we have to get clever about how the war gets waged because the overriding issue here is climate. And honestly, it’s more overriding than economic justice.
You got to say it. As much as economic inequality and economic injustice are absolutely critical, and in the long run, are the big battle that has to be fought. If the science is right and we got what, nine years.
Not even anymore, yeah.
Not even. Then we got to rethink how we’re fighting with the financial sector. So let me say something a little bit, I don’t know, not usual for your show. We are going to have to find elements within the finance sector we can work with, and there may be some temporary compromises. In otherwise, threaten the hell out of them with regulation and charges and convictions. But be willing to compromise if you can get some movement on climate. Because in eight or nine years, we ain’t electing a progressive government that can do all of the above. It’s just that the people’s movement just isn’t strong enough right now.
I couldn’t agree more. I mean, I think that one of the critical issues that I think we face by and large is that the political will to do what needs to be done is not there. And it requires cultural pressure in order to create that political will. And I think that in the modern-day and age, I think that we have a culture of victim-blaming. It happens so often that I think it prevents the individual from going where they need to go mentally, as far as saying, no, we need to break up banks. We need to have public banking. We need all these different things.
However, there were other periods of time where the public will did create political will. I mean, if you go back to Bill Black’s era with the S&L’s, I mean, the 30,000 criminal referrals were what embarrassed the Department of Justice into actually getting off their ass and doing something. And proceeding that all the way back to ’29-’30 and the Great Depression, you had come into the Roosevelt administration, you had Pecora hearings. You know, that started just a little bit before and then continued on through Roosevelt. And the Pecora hearings allowed the public to see the undressing of these bankers and created the cultural pressure that turned into political will to do massive, massive things.
What do we have to do today in order to get the public to put that pressure onto our politicians in order to create that? Because it seems like that’s the part that we’re struggling with.
Well, we’re all working at that. And I think we have to— I guess that what I’m suggesting is we have to get better at imagining what an alternative future looks like because you can’t just fight against finance. You got to fight for something.
But also, I think we have to get better at reaching out and identifying individuals in the financial sector and the elites who aren’t completely insane. And I call it; it’s insanity to see society going over the cliff, and you’re so in a bubble of wealth; an orgy of money-making that you actually don’t care if the society is going to go over the cliff. The preponderance of the elites actually seems to be in such a bubble.
On the other hand, most of those people in the bubble are politically passive. They just consume, they spend money, they go to parties, their egos are paper thin. Their whole identity is defined by how they got money, and they got goods and nice cars and shit. They’re barely human beings. I believe there are some people in the elite, and you’ve got the group, Patriotic Millionaires, you’ve got some others. There are some people that get the systemic risk. Like this is what happened, like FDR, as much as he was for in the end, American Empire and capitalism and all the rest, he at least understood there was a systemic risk to capitalism itself. He was going to try to face up to it.
Those voices are marginalized now. The individuals in the financial sector and the elites who get the systemic risk don’t even get on television. Never mind people like me.
So I’ve been thinking of doing a documentary film called A Letter to Larry. And it’s like the whole film’s addressed to Larry Fink at BlackRock. And the idea is, Larry, you know, you’re talking a nice game here, but your actual— like even your divestment from coal is BS. I mean, I won’t get into the details of it now, but it’s completely smoke and mirrors.
Anyway, we need to find a way to actually reach some individuals in the elites who get the urgency of the climate crisis. And I have to add, and I’m working with Dan Ellsberg on a documentary series now based on his book Doomsday Machine. Nuclear war is simply not being talked about. It’s nuts. It is as insane as the irrationality of climate denial or effective climate denial when you won’t implement the policies that will actually do something about it. We’re in nuclear war denial.
The United States and Russia are each going to spend a trillion dollars over the next 30 years, mostly in the next 10, to usher in a whole new arsenal of nuclear weapons. China has just started talking about— China was very modest; they only had about a couple of hundred ICBMs apparently, and some other subs. Because they thought that was enough to defend themselves. Now China is talking about a big expansion of nuclear weapons because they’re falling behind Russia and the United States.
We’re heading into such dangerous territory that there’s serious conversations of going to war with China over Taiwan. You know, I interview Larry Wilkerson all the time. Every war game, according to Wilkerson, that gets modelled in the Pentagon of the U.S. getting into some kind of fight with China in the South China Sea or over Taiwan ends up in nuclear war. And they had to cancel the war game. They have to end it because once it gets to nuclear war. But there’s people in the military elites who actually still talk about nuclear war as winnable. I mean, it’s insane—the level of insanity.
So I do think there are people within the financial and other elites who have enough money to actually have more power than they’re exercising, together with building a people’s movement that can focus on some smaller States and develop a message with an alternative vision. I don’t know exactly what other than me blabbing about it; I’m not sure what I can do about this, but it seems to me we got to head in that direction.
I want to bring something back to the very beginning of this conversation where you said digitization had been the pure steroids to make this thing blow up hugely. From the Internet to the financial transactions to the global economy, this digitization has facilitated this rush into this firestorm that we’re in. And I want to say that going back to FDRs era and the Pecora hearings, there was no online internet. They had simply one or two newspapers that people would get every day. They’d get the morning paper and the evening paper, and they all read the same news.
Even in the ’80s, we still had not gotten to the point where we had online media. There was no online MSNBC, CNN, C-Span, this that and the other. It was only a handful of shows, and people got the same information. And so, there was a chance that the media could create a groundswell.
Now that has changed. In fact, it’s changed so much that alternative media has stooped to the level of clickbait often times just to get people to pay attention to what they’re saying. And the mainstream media, as your point very clearly shows, is owned by the very financial elites that are creating the problems, to begin with.
So the ability to create that mass movement of people, that one narrative that gets everybody moving in the same direction, has literally been watered down to the point that we got to find another way. I mean, I remember in Washington DC, you had the Washington Post and the Washington Star. And so you had two different— then you had the Washington Times garbage, the Moonie Paper, but you had ultimately, you only had one or two papers in each area. And now, because of this digitization, we are literally; on the one hand, we’ve never been more connected. On the other hand, we’ve never been more diluted. What are your thoughts on how we could take media to the next level to get this?
Yeah. I think the answer is this. Do you see what I’m holding up here?
Do you know what this does? It knocks on doors.
It knocks on doors. What’s been changing things? How are the progressives getting elected in New York and other places? Door to door talking to people and now COVID waning, hopefully. You know, it’s this old-school thing. Just bloody go talk to people at their doors, and it’s changing things. As powerful as the media is, they’re having real trouble. They don’t have a good answer for knocking on doors.
So I’m somewhat given some optimism by some of what’s been happening in New York at the state level, even at the federal level with AOC [Alexandria Ocasio-Cortez] and some others. It’s brewing. Bernie Sanders, the extent of support he got and if it hadn’t been for the sabotage of his campaign, who knows how he might have done. And I think the combination of knocking on doors and talking directly to people, I think the more we can get a stronger vision in those conversations.
For example, Medicare for all is a good demand. But I’m in Canada right now, we got Medicare for all, and the financial sector still controls everything. So we need to go beyond just the Medicare for all demand, as we’ve been talking about throughout this. We all got to get out there and join the knocking on the doors campaigns, and we got to contribute to the messaging, so it gets clearer. We’re not going to be able to do as much through the media as anyone thinks. You know, I’m in the media, and I’m very frustrated, but I’m encouraged by what I see in some of these electoral campaigns.
I’m going to have a series coming out soon with a woman named Jane McAlevey. She’s been organizing unions for years. I’m doing a Reality Asserts Itself with her; it’s like her whole life story. And it’s just great the message that comes out of that. She talks about organizing the whole worker. What does that mean? It means that when you go and try to organize a workplace, you’re organizing in the Church they go to. You’re organizing in the clubs they belong to. You’re organizing around the whole micro-culture of that workplace, but the same thing applies electorally. You’re organizing in a whole way.
And so we have to do this dual thing. We got to get our message clear. We got to really support, encourage and join in on people that are doing the on-the-ground organizing. And we got to identify some people in the elites.
So some of our efforts, Paul, in addition to what we’ve discussed today. Look, really, what we’re all predicated about is to create a civil rights movement to purge corruption to save our lives. Everything you’ve mapped out here, especially with the climate side; you know, I take this thing back, and I think it feels like Groundhog Day for me. I wake up every day, and I’m like, what year is it? I mean, what’s different now if you were paying attention and understood how things worked in 2001?
I mean, you mentioned the Saudis and sovereign wealth funds being the power structure of the hybrids between financialization and fossil fuels that have overwhelmed the government’s ability to respond to any of these things because of all of the different background scenarios that have played out. And you mentioned a few things about it being legal because they make it legal. There’s still a whole lot of laws out the that make it not legal. What we just have to understand is who’s in the position to enforce the laws? This brings me back to Bill Black.
I mean, another example of the things that we’ve laid out is what we call within the New Untouchables. We’ve got, and I hope you can discover these guys because they’re pretty extraordinary. We have Paul Pelletier, former third in command, third in level of hierarchy at the DOJ under Lanny Breuer. He was in charge of white-collar investigations. In fact, he told us on camera; it was quite extraordinary, Paul. When we found out that the FBI wasn’t following through with criminal referrals to the DOJ based on all of the mortgage fraud that was taking place there, Chris Wecker, another one of our Untouchables who happened to be the Assistant Director of Investigations just under Breuer [inaudible 00:58:27] at the Department of Justice, I’ll come back to it. [James B.] Comey, of course, and the FBI, put together a national dragnet on mortgage fraud that couldn’t go up the food chain because the OCC didn’t have the ability or everybody else said they were turning over these investigations to create criminal referrals to the DOJ. There were zero criminal referrals.
So we’ve been able to, through this collective work, piece all the people together. Well, first of all, the facts, the people who know what to do to reboot the system and reset it. If only we have critical mass, which brings us back to, let’s say, elites or, in our case, I keep banging on the door, for example, of Tom Morello, one of my favourite musicians of all time. Or if quite frankly, the Edge from U2. I’m looking for those guys because they have for decades been on the right side of the humanist sort of perspective. But they don’t know how control fraud works.
So, in the end, this confluence of banging on doors, of getting the message out, of meeting with the right people to express what we all have collectively been working towards, and you most notably. And again, this is my final comment on our show. Thank you again for Bill Black in your deep dive on control fraud, because to my knowledge, I’ve never seen anybody else do it besides us. There’s the two of us that are trying to create this pincher to hopefully educate everybody you just said. And if we can create our own echo chamber, our own centrifugal force, our own center of gravity, we definitely have answers. And if we don’t have the answers, we can certainly get to the right people who do. We just need the viewer to understand what’s at stake, and guys, for two decades, it’s been at stake. We’ve been on the edge of being controlled by a system that thinks we’re all expendable. That’s my final point.
Well, thank you. I also want to thank Bill too because he’s been one of the important teachers for me about how the system works. And he’s made a very important contribution to our understanding of how it works and what needs to be done.
I want to just thank you, Paul Jay, because what you have done with not only your interviews with Bill Black but also the other work that you’ve done. You’ve connected to an awful lot of other media people. You have a lot of other networks involved as well. In my mind, one of the things that we all do have some access to is, in fact, talking to our other friends in this media segment to be able to provide more access, more opportunities for this information to get out there. And we’re hoping that as part of this move to purge corruption, that we can also create a web, if you will, a network of media and alternative media outlets. That will, in fact, facilitate getting this information out there to the public. Cross-pollinating, sharing each other’s work, and making sure that, in fact, a larger audience starts hearing about it and figuring out what doors they need to knock on. So that’s my hope, that’s why I’m doing this.
Hopefully, by networking with folks like yourself, that we can gain footholds in other places because it’s not me, us, right. Taking Bernie’s campaign slogan, not me, us. This is an opportunity for media and alternative media to band together to get this word out to a web of networks that hopefully will bring about that mass door-knocking campaign.
And I wanted to thank you also for this great conversation that we’ve been having. And I think, kind of in the spirit of what we’ve just been talking about here. On September 21st, we’re going to finally have our docuseries, The Con, out in wide release through all of the various different Tvods and video-on-demand platforms and such.
And one of the really tremendous gifts that you gave us is that you gave us nine episodes of tremendous content that we’re going to be reposting in the run-up to our release of our docuseries. And I couldn’t think of a more perfect set of conversations to post than the ones that you and Bill Black had.
Thanks very much. I think we still have eight and nine. We got to release, which is coming soon. We’re still working on the edits, but they’ll be out soon.
This was a true pleasure, folks. My name is Steve Grumbine, my co-host, Eric Vaughn, Patrick Lovell. And, of course, our wonderful guest today, Paul Jay. Where can we find more of your work, Paul?
theAnalysis.news. That’s the website. theAnalysis.news, and you’ll find everything there, including, obviously, the Bill Black series
Great. And with that bid, you all good day. Have a great one, everybody. We’re out of here.
What exactly is control fraud?
Control fraud occurs when a trusted person in a high position of responsibility in a company, corporation, or state subverts the organization and engages in extensive fraud for personal gain. … Black refers both to the acts of fraud and to the individuals who commit them.