Click on the icon above to open a page with the Bill Moyers interview with George Soros (It's not through YouTube, so I can't
guarantee you'll get the vid pic). Here are 3 or 4 poignant, highly enlightening segments of the transcript that I liked :
BILL MOYERS:So as we talk, Secretary Paulson and the government seem to be coming around to what you've been advocating and
that is taking taxpayer money, public capital, and injecting it directly into the banks — in effect, nationalizing some of these
banks. Why do you think that will work when everything else has failed?
GEORGE SOROS:Well unfortunately because they are delaying it, it may not work so well because there's a certain dynamism. And
they're always behind the curve. So there are many things that they're doing now if they had done several months ago, it would
have turned things around.
BILL MOYERS:That's a very gloomy assessment. You're saying that everything they're doing is coming too late? How does that
ultimately play out?
GEORGE SOROS:Unfortunately, that is the case. I'm quite distressed about it. I hope that you know, eventually they'll catch up.
We are determined to put the money in, not to allow the financial system to collapse. And that's the lesson we learned in the
1930s. It's an important lesson. But because we are behind the curve, the amounts get bigger and bigger. If we understood it
earlier, we could have brought it to a halt perhaps sooner. But they've got still a number of things to do. And this idea, you see,
of just buying noxious instruments of you know, off the balance sheet of the banks was a non-starter.
BILL MOYERS:But that was the idea.
GEORGE SOROS:But it was the wrong idea.
BILL MOYERS:But this is disturbing, George. If everything we're doing keeps accelerating the downward negative feedback and
isn't working, are you suggesting, can one insinuate from what you say that we're heading for 1930?
GEORGE SOROS:Hopefully not. But we are heading for undoubtedly very difficult times. This is the end of an era. And this is a
BILL MOYERS:End of an era?
GEORGE SOROS:At the end of an era.
BILL MOYERS:Capitalism as we have known it?
GEORGE SOROS:No. No, no, no. Hopefully, capitalism will survive. But the sort of period where America could actually, for
instance, run ever increasing current account deficits. We could consume, at the end, six and a half percent more than we are
producing. That has come to an end.
[. . . ]
GEORGE SOROS:I am very worried about it. And I hope that they will have a new secretary of treasury, somebody else.
BILL MOYERS:Sooner than later?
BILL MOYERS:You don't think...
GEORGE SOROS:It would be very helpful if...
BILL MOYERS:You don't think Paulson's up to it?
GEORGE SOROS:Unfortunately, I have a negative view of his performance.
GEORGE SOROS:Because he represents the very kind of financial engineering that has gotten us into the trouble. And this buying
off the noxious things was a...
BILL MOYERS:Buying the bad assets, that was his...
BILL MOYERS:First idea.
GEORGE SOROS:Yeah, and before that, he wanted to create a super SIV, special investment vehicle, to take care of the other
special investment vehicles. That didn't fly. And they are now within a week recognizing that they have to change and inject
money into the banks to make up for the whole in the equity because those banks lost money. And they can't make it up by
taking their assets off their hands. You have to recognize the losses and replenish the equity.
BILL MOYERS:Is that what you would do with the bailout money now? Right now?
GEORGE SOROS:Yes, yes, yeah.
BILL MOYERS:You would put it where?
GEORGE SOROS:Into the capital of the bank so that the capital equity can sustain at least 12 times the amount of lending. So
that's an obvious thing. And every economist agrees with this.
You see, what is needed now the bank examiners know how those banks stand. And they can say how much capital they need.
And they could then raise that capital from the private market. Or they could turn to this new organization and get the money
from there. That would dilute the shareholders. It would hurt the shareholders.
BILL MOYERS:Of the bank?
GEORGE SOROS:Of the banks. Which I think Paulson wanted to avoid. He didn't want to go there. But it has to be done. But then,
the shareholders could be offered the right to provide the new capital. If they provide the new capital then there's no dilution.
And the rights could be traded. So if they don't have the money, other people could, the private sector could put in the money.
And if the private sector is not willing to do it then the government does it.
BILL MOYERS:The assumption of everything you say is that the government is going to be a big player now in the economy and in
the financial markets. But what assurance do we have that the government will do a better job?
GEORGE SOROS:We don't. Right now they are doing a bad job. So you want to use the government as little as possible. The
government should play a smaller role. In that sense, people who believe in markets, I believe in markets. I just want them to
function properly. To the extent you can use the market, you should use the market.
Governments are also human. They're also bound to be wrong. Moreover, they are bureaucratic. So they are slow and they are
subject to political influence. So you want to use them as little as possible. But to not to use them, see, assumes that markets are
perfect. And that is a false belief.
BILL MOYERS:Has the whole global system become so complex with such gargantuan forces interlocked with each other, driving it
forward, that it doesn't know how to obey Adam Smith's natural laws?
GEORGE SOROS:No, I think our ability to govern ourselves doesn't keep pace with our ability to exercise power over nature,
control over nature. So we are very complicated civilization. And we could actually destroy our civilization because of our inability
to govern ourselves.
BILL MOYERS:Would this all be happening if we still had a strong sense of the social compact? I mean, our social safety net has
been greatly reduced. The people have a real sense that the gods of capital have left little space for anyone else. People at the
top don't have much empathy for people at the bottom.
GEORGE SOROS:There is a common interest. And this belief that everybody pursuing his self-interests will maximize the common
interests or will take care of the common interests is a false idea. It's a suitable idea for those who are rich, who are successful,
who are powerful. It suits them to justify you know, enjoying the fruits without paying taxes. The idea of paying taxes is an
absolute no-no, right?
GEORGE SOROS:Unpatriotic. So, yes, you must have, in my opinion, you need, for instance, a tax on carbon emissions. But that is
unacceptable politically. So we are going to have cap and trade. And the trading will have all kinds of loopholes and misuse of the
regulations and all kinds of ways of making money without actually dealing with the problem that it's designed to cure. So that's
how the political process distorts things.
BILL MOYERS:One of the British newspapers this morning had a headline, "Welcome to Socialism." It's not going that way, is it?
GEORGE SOROS:Well, you know, it's very interesting. Actually, these market fundamentalists are making the same mistake as Marx
did. You see, socialism would have worked very well if the rulers had the interests of the people really at heart. But they were
pursuing their self-interests. Now, in the housing market, the people who originated the houses earned the fee.
And the people who then owned the mortgages their interests were not actually looked after by the agents that were selling them
the mortgages. So you have a, what is called an agent principle problem in socialism. And you have the same agent principle
problem in this free market fundamentalism.
BILL MOYERS:The agent is concerned only with his own interests.
GEORGE SOROS:That's right.
BILL MOYERS:Not with...
GEORGE SOROS:That's right.
BILL MOYERS:The interest of...
GEORGE SOROS:Of the people who they're supposed to represent.
BILL MOYERS:But in both socialism and capitalism, you get the rhetoric of empathy for people.
GEORGE SOROS:And it's a false ideology. Both Marxism and market fundamentalism are false ideologies.
BILL MOYERS:Is there an ideology that...
GEORGE SOROS:Is not false?
GEORGE SOROS:I think the only one is the one that I'm proposing; namely, the recognition that all our ideas, all our human
constructs have a flaw in it. And perfection is not attainable. And we must engage in critical thinking and correct our mistakes.
BILL MOYERS:And that's one...
GEORGE SOROS:That's my ideology. As a child, I experienced Fascism, the Nazi occupation and then Communism, two false
ideologies. And I learned that both of those ideologies are false. And now I was shocked when I found that even in a democracy
people can be misled to the extent that we've been misled in the last few years.