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'Capitalism: A Love Story' DVD Extra - Harvard Professor Elizabeth Warren

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The very, very smart people who run Wall Street, and run these financial institutions They knew exactly where the car they were in was going, right? Toward the cliff! And figured out how to - how to... still live while taking the car over the cliff. Right. That's the most astonishing part of this whole wreck now is that the very people who drove the car over the cliff have been instrumental in shaping how the American tax payers were supposed to save it and reconstruct it were supposed to save it, and reconstruct it and.. and... that's really - it's really amazing. In the past, when you drove the car over the cliff you lost your job I was talking to someone who spent many years as a prosecutor ... and he said 'You know, when that much money disappears... it's usually because somebody broke some laws somewhere'. But if we don't look, if we don't ask, if we don't uncover it, make it all public, we'll never find out. Where is the criminal investigation that needs to happen here? I haven't seen it. I just haven't seen it at all. What the government didn't do is it didn't turn around and say: 'Wh... you lost how much money?!' 'You wiped out how many pensions?' 'And you wiped out how many jobs?' 'I wanna know who did what'. Whether or not any laws were violated, where the gaps are in the system that would permit this to happen. I wanna hold somebody responsible. Responsibility is not just about blame. Responsability is about making sure we fix this and it will not happen again. But it starts with a notion that that's the right question to ask. Rather than, 'what can I give you now to make it all better?'. During the 90's, corporate America did very well. You would think at the end of that decade they would have the attitude of 'Jeez, we've done really well, this is great! You know, let's create a better country, let's help... you know let's - maybe there's something we can give back. Instead, it seems like they, they went looking for - 'Where's the next source of revenue? Because we need to make even more...'. And they they said 'Whoah.. there's all these Americans that own their homes. Let's get them their - let's get them their refinance! And let's get them into these adjustable-rate mortgages to where they may not be able to pay it back. And we may be able to get all this equity in our hands, taking it from their hands. It's a big part of what happenned and then just later on top of that can we sell them more credit cards that are loaded with with tricks and traps and ways that you can squeeze out 35 dollars here and 49 dollars there... From people who have pretty modest means, financial products - and they are products - they're products just like toasters, are sold today with the most dangerous features embedded in them because that's what drives profitability. What's astonishing is that we let this happen. You know, you can't buy a toaster in America that has a one in five chance of exploding. But you can buy a mortgage that has a one in five chance of exploding. And they don't even have to tell you about it. We don't hand people a wiring diagram with a toaster and saying 'You figure it out'. But you sit down to do a mortgage closing and it's 'sign here, sign here, sign here, sign here, sign here' for a hundred an forty one pages. And, boy, if it turns out, back on page 89, that they really socked it to you then you've just been socked to. We have consumer protection for everything you touch, taste, smell, feel... This glass tabletop, the jacket you're wearing, your glasses, my lipstick... But there's no equivalent for credit cards, for mortgages... There's nothing. I'm old enough that I remember a credit card I could understand! Pour into the Wall Street Journal, in 1980, the typical credit card agreement was about a page and a half long. Today, it's more than 30 pages long of incomprehensible text. My own credit card, I looked to see what the interstate was that they were going to charge me... Are you ready for this? I counted 47 lines of text, that included libor and rediscount and... right? And take it down to the last line The last line says 'Notwithstanding the foregoing, (laughter) the company reserves the right to charge any amount at any time for any reason. That's a standard term in a credit card now. We'll charge you what we wanna charge you when we wanna charge you and you're legally obligated to pay it. You know, it's not just the - the poor people that have been fooled Everybody has been fooled in this game. And - and right now the legal system is on the side of the banks. The legal system says 'Yup, there it is.' Page, page, page 32 on that particular 47 lines, look at the bottom. I teach Contract Law at Harvard Law School, and I can't understand my own credit card. MM: Are you kidding? EW: No I am not kidding you. We're all at risk that a toaster could blow up. Whether you're rich or whether you're poor. But a credit card blowing up It can happen to any of us. But if you're rich enough, it won't hurt so much. If you're poor, it can wreck your whole life. I grew up poor in Oklahoma and I've got a lot of family who really worked hard. They played by the rules, they did their best, and they got socked in like lots of other people on this. The only reason I'm here in Washington is to try to let those people have a seat at the table just for a minute They didn't have a seat at the table while we built this problem. While - while we kept our ears covered and - and let these banks go off and and - and create this monster. And now, here we are letting many of those same people construct what they say will be the solution. If the people who were directly affected The people whose lives have been wrecked by this are not represented at the table, we won't get the right solutions. In fact, what we'll go back to is a world that just - just makes this worse. 'Yeah, we will patch this one together'. And then, in ten years, it crashes again, and it crashes again, and it crashes again. I wish I could say something shorter and better and more direct about it. But that really is my job. My job is to be here - is to be here for the people who - who just don't get a voice in this game. They've been shut out now for thirty years in this. It's to say no more. MM: This is what I've just come to believe is that - that capitalism, in and of itself, at least the capitalism we know now is - it's - it's immoral, it's not democratic, and, worst of all, it doesn't work. And they've proven it doesn't work. But we made up these rules. And the rules - the rules are of men, of people. We pick what the rules are. The rules have not been written for ordinary families, for the people who actually do the work. We have to re-write these rules.

Video Details

Duration: 8 minutes and 24 seconds
Country: Brazil
Language: English
Genre: None
Views: 127
Posted by: zeitgeistbrasil on Feb 26, 2010

'Capitalism: A Love Story' DVD Extra - Harvard Professor Elizabeth Warren on How Wall Street Got Away with Murder

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