Dylan Ratigan: "Why Are Our Politicians So Desperate To Perpetually Protect The Banks . . . ?" Interview With David Stockman

David Stockman, former Budget Director for Ronald Reagan, says he believes Ben Bernanke is finished, done. He says we need to address the disastrous problems in the banking system, not print more money which has only enriched Wall Street and encouraged massive speculation in commodities, derivatives, etc.

Stockman says it was an Urban Legend that Wall Street's problems in 2008 could have resulted in a Great Depression should the bailout have never happened. He also says the thing to have done would have been to allow the banks to sort out their own problems and restructure after certain of them failed.

Possibly the most contentious example which Stockman describes was what should have happened to GE. Stockman says the blame for GE almost going under rests on the shoulders of CEO Jeff Immelt. Instead of a bailout by the government for GE Capital, Stockman says GE should have been allowed to force their shareholders to take a massive hit, that GE should have gone back to the markets with secondary offerings for their errant behaviour in investing in massive derivative schemes to boost profits.

David Stockman Tells Dylan Ratigan What The Biggest Fiscal Mistake In US History Is

David Stockman, former Director of OMB during Ronald Reagan's administration, and Dylan Ratigan discuss the Tax Cut deal between Republicans and Democrats. Stockman calls the Bush Tax Cuts "the biggest fiscal mistake in history."

As Ratigan points out in the segment's beginning, the defecit has been a problem for the better part of 30 years. In 1981, under Ronald Reagan, our debt was 32% of our GDP. When Reagan left office, our debt/GDP ratio had grown to 52%.

Today, our debt is 94% of our GDP.

Ratigan and Stockman talk candidly about the reasons we are in this sad state of burgeoning debt and shrinking revenues.

As Stockman so succinctly says, "We are destroying the Economy on Uncle Sam's credit card. And the idea that (the extended Bush Tax Cuts) this will cause consumers to spend for some more junk from Home Depot that's going to be made in China . . . to me . . . doesn't make any sense at all."

And toward the end of this interview, Stockman let's loose with this:

"In January 2000, there were 72 million middle class jobs . . . manufacturing, construction, finance, insurance, real estate, the professions, transportation, distribution and so forth. Today, a decade later, there are only 65 million (middle class jobs). We've lost 10% of our middle class family supporting jobs, and we've only created temporary, part-time jobs, so there's been no real growth. What we've had instead is a Fed engineered serial bubble that's created the appearance of wealth, that has caused people to consume beyond their means through borrowing and that has flushed the income and the wealth of our society up to the top as a result of the Fed turning the financial markets into a casino.

These are pure casinos. They are NOT capital markets. They are not adding to the productive capacity of our Economy. They are simply a bunch of robots trading with each other by the millisecond as a result of the Fed giving them Zero Cost overnight money and giving them all kinds of hand signals on what to front run.

This is a very bad mess and we're not going to get our Economy solved until we get a totally new policy at the Fed and a clean up of this whole casino that used to be called Wall Street."