 Hello, and welcome to INET's webinar, Trillions in COVID-19 Bailouts, Where Did It Go? I am Pia Malani, Senior Economist here at INET. Today we are pleased to welcome Jesse Isinger, Senior Reporter and Editor at ProPublica, and author of the book, The Chicken Shit Club, Why the Justice Department Failed to Prosecute Executives. Jesse won a Pulitzer for his work on Wall Street's questionable moral practices and has, for the last few months, been bringing his keen reporting skills to understanding how and for whom the bailout has been working. Jesse will be talking today with INET's President Rob Johnson. They're going to speak for about 40 minutes and we'll take some questions after the discussion. If you look at the bottom of your Zoom screen, you should see a Q&A button where you can type your questions and we'll get to as many as we can. So with that, let me hand it over to Rob and Jesse. If you can both unmute. Sorry, Rob, if you could unmute. Okay, now unmuted. I want to thank you, Jesse, for joining us. This is a very important theme that you're pursuing. I've often said that the key to excellent analysis, 90% of the key is to choose the right questions. And while people are scurrying around in the distress and the chaos that's related to the fallout from the pandemic, I observed you to be digging deeper. Your papers at ProPublica, the bailout is working for the rich. And this Treasury official is running the bailout and it's great for his family. Compliment the power of the work that you did in the Chickenshit Club, as well as your extraordinary Pulitzer Prize-winning work at ProPublica. This question, as what you might call the anxiety, the acute anxiety of the onset, how you say moves into the distance behind us, these distributional questions and the legitimacy of governance that the people of the United States feel will become central to what we have faith in and how we construct our society going forward. So I would like to turn it over to you and please, we can interact back and forth. But you're the star of the show today and I'm interested in these people hearing your voice, which has so profoundly affected me. Well, thank you so much, Rob, for that. And thank you, Pia, and thanks to IMET for bringing me onto the webinar. I really appreciate it. I'm a reporter and editor at ProPublica and so I'm editing our bailout coverage. And we are seeking to hold the powerful accountable, as we do at ProPublica, and raise questions about how the bailout is working, who it's working for, and what the consequences of the bailout will be into the future. And I'm glad that you raised the story about the Treasury official, Justin Nuzinich, who is really running the bailout effectively. He's Steve Mnuchin's right-hand man because that was an investigative coup by my reporters, Justin Elliott, Lydia DePillis, Robert Federici, and Paul Keele, who worked for me and I'm editing their story. But that was really an extraordinary piece of reporting about how Nuzinich himself has engaged in something of a fake disclosure of his family's bond buying business and is benefiting from the bailout himself. We can get into the details there. But largely, I have been struck by two things, and they're kind of related to each other, Rob. And what I want to kind of talk about today is that this bailout has some very different contours than the bailout from 2008. Of course, it has a completely different cause and unforeseen pandemic. Now, pandemics, of course, are not unforeseen, but this specific one was unforeseen, and the scale has been much greater than anything that we've seen in our lifetime. That's obviously the case. But there are similarities, and there's certainly similarities to the two bailouts in 2009 and this year. And unfortunately, in my view, the similarities are that we're replicating a lot of mistakes. And the very simple way to think about this is we are privileging capital over labor. We are bailing out investors first and bailing out average workers second and inadequately, which leads me to the other main point of this, besides that we're ruffle-hitting mistakes of 2008, is that what are the problems and what have we seen from the bailout so far? And I think what we've seen is one very broad thing, which is that the wealthy are being helped, and average Americans are receiving significantly less help. Now, I don't want to minimize the many billions of dollars that have gone to expand unemployment insurance. And the stimulus checks, that was an extraordinary effort. The biggest effort, certainly in my lifetime, bigger than the 2008 bailout by not just dollar figures, but by, I think, a portion of GDP as well. But it is completely different from the effort that the Federal Reserve is doing, which disproportionately helps the wealthy by helping asset holders. And there are four ways. One is speed, another is conditions, the third is question of limits, and then the fourth is its permanence or time delineation. And we can get into all of these, but there are really stark differences between the way the wealthy are being helped and the poor. And I think we, or average Americans, not just low-income Americans, but average Americans, including low-income. And I think it's very important to focus on that and understand it. Got to unmute. Well, Jesse, I'm very interested in one dimension, which is the pandemic itself requires a change in behavior, lockdown, people staying home, et cetera. And as people in the lower reaches of income and wealth become scared, they're tempted to take more risk with their own life by going back to work and therefore contributing to the propagation in the, what you might call, the depth and duration of the pandemic. Should these bailouts have been structured differently to extinguish the, what you might call, necessity of people remaining publicly engaged in those lower rungs? Would that have brought the crisis to an end sooner than what we're doing? Well, this is a little bit out of my depth. Of course, it's a question, one, for epidemiologists and not an epidemiologist. Two, I've been much more focused and would be on firmer ground talking about the Federal Reserve and the bailout of asset holders. But I think what's important, and this is not my original observation, many people have made this observation, but I think it's very important, is that we have seen a relatively successful bailout happening for average working citizens, and that's in Europe. And it seems quite clear that a much better way to have done this would have been to underwrite payrolls in some way, ensure people's salaries and income. And that would have avoided an enormous number of moral hazard problems, which are kind of of lesser concern than the actual direct bailout, because we want to bail out in a terrible fire, and then you worry about moral hazard as a secondary concern. It's not a significant concern, but it is a secondary concern. And we would have also really avoided this disproportionate benefit to the wealthy and to asset holders with no conditions on it. So I think that we had a clear policy. We have a mechanism for understanding what people's payrolls are through the IRS, through tax forms, and other ways, and we could have gotten that money to average Americans. It sort of brings me to one main point that we have here, which is that Congress and the Fed have both acted. And I do blame Congress primarily and not the Fed for what it's doing, although I think the Fed could be doing a more thoughtful and better job here. But the way we have helped working Americans was very slow. And the way the Fed worked was instantaneous. We have mechanisms in our society that can channel money to asset holders instantaneously, literally overnight and less than overnight. And our mechanisms for getting bailout money aid to average Americans takes time, days and weeks to mail checks. And in fact, for low-income Americans, many low-income Americans are not going to get stimulus checks. My reporters Paul Keel and Justin Elliott wrote a story now a couple months ago about how low-income people are not going to get stimulus checks for a variety of reasons. Some insane, discouraging, frustrating, appalling systems where low-income people, when they go to get tax prep from companies like TurboTax, which is owned by Intuit, they actually get signed up for a third-party bank. A third-party bank opens up an account for them. And this is just to channel the fee from the tax prep. Now, as a side note, these low-income people probably shouldn't have to pay for... They don't have to pay for a tax prep because there's a law and the IRS has a program to give tax prep to the vast majority of Americans for free. And Paul and Justin have done fabulous reporting about how the tax prep companies undermine that IRS program for literally decades. So they set up this third-party account, it's a one-time account that just channels the fee to the companies, and the IRS sent the checks to this third-party bank. And so people couldn't get access to it. And sometimes the third-party bank sent it back to the IRS. Terrible owners' delays for the people that really needed the stimulus the most, most quickly. So we have a broken system in this way, and that has really turned out to be disadvantageous, not surprisingly, to the weakest and most vulnerable among them. You mentioned the four conditions, and you've discussed speed. But the question of limits and conditions pertaining to what these people who get the fast and big money are restricted to do or not to do. Can you illuminate a little bit about what's missing that you think should be there? In that dimension of the bailout? Yes, well, it actually is outlined in Congress. Congress put a series of conditions on the money that went through, but they're much more strict, the smaller the company, the bigger the company, the less stringent the conditions are, and ultimately the biggest companies all essentially have no condition. The conditions are that the money needs to be used as a kind of path through to workers, and that there are other attendant conditions broadly that the monies can't be used to buy back stock or pay dividends or give excess executive compensation. So broadly speaking, those conditions are the right conditions. But as I say, they were attached to small business. The PPP, the Paycheck Protection Program that was run out of the Small Business Administration, has a series of big problems, but it had a bunch of serious conditions attached to it. And I think the conditions, some of them were quite good. I didn't think it was designed very poorly. And we can get to this in a second, but this just very quickly is one of the reasons why we're replicating the mistakes of 2008 is we have unleashed a series of programs. We've initiated a series of programs that are needlessly complex. And in 2008, we had needlessly complex programs that were funneled through the banks to help people with their mortgages, to help with principal write downs or mortgage refinancing and lowering mortgage rates and things like that. And there were disasters, hamp and harp, because they were complex and we needed to get the incentives right for the banks. And the Obama administration really never did a major scandal. Here again, we had a needlessly complex program through the SBA, the Small Business Administration, which was ill-equipped to do this kind of program and had to work through banks, which got billions of dollars in fees to funnel money to small businesses that really did not work perfectly, certainly didn't work perfectly. That's an understatement. There were some big companies that got it. Banks privileged their own existing clients over the basic needs of small businesses. We are now seeing that white-owned businesses were able to access funds more easily than African-American-owned businesses, because African-American-owned businesses don't have as much access to capital or relationships with banks. And the conditions were onerous, and so that sort of made people less willing to participate in it. One of the conditions was that you had to spend money on the payroll through, I believe through June, if I'm not mistaken, and of course here it is June. It was only kind of two-month program, but the pandemic is still with us and people aren't paying their payroll. And so small business owners were reluctant to sign on to the second round. The first round was oversubscribed and often went to big companies. So that was a big problem. As we move up and we go to the Feds program, we see that the conditions were fewer and fewer and they were waivable by Steve Mnuchin in a process that was completely lacking in transparency. And there's another issue that we can get into, which is that there's really no oversight of the programs. The Congress essentially built in a series of oversight mechanisms for the bailout this time, trying to remedy a problem that we had in the 2008 bailout, which is that the oversight didn't have enough teeth. And in fact, we have screwed it up entirely and we have less oversight and worse oversight in this program than we do the last time around. In your book, The Chickenshit Club, as I read it, there were rules. There were laws about what should be enforced by the SEC or the Justice Department. And I thought a lot of what you illuminated was that we're not invoking those rules. We're not doing what we should be doing. It seems like this is what you might call a repeat performance in many respects, that the right thing to do is not what people are choosing to enforce. And laws are only as good as their enforcement. Well, that's certainly true and I think that there is a shameful culture of impunity, especially at the highest echelons of corporate America and in white collar crime. To be clear here, I don't think that there are crime, evident crimes in corporate America that are not being investigated related to the bailout. But going back to the Justin Muzinich example, what we do have is, and this is going to come as no surprise to observers of the Trump administration, but a complete collapse in any concept of conflict of interest or any kind of public service ethos from the administration. And so now I want to walk through the Justin Muzinich example for you to understand how audacious this was because I think it's a really stunning story and I hope it gets some further attention. Let me just reiterate, there's no evidence that there have been any crimes committed here. But Justin Muzinich came to the administration to be an advisor to Steve Mnuchin, the Treasury Secretary from his family's firm. The family's firm specializes in buying bonds. It's an investment house that manages assets for clients and buys bonds, especially specializing in junk bonds. And this is going to be relevant in the second. And Muzinich spends the first year advising on the tax cuts, which of course, as we know, disproportionately benefited the wealthy and have included a massive corporate tax cut. And he does not divest of his fortune, which is well over $50 million. They don't actually force people to disclose anything over $50 million. So all we can say is that it was over about $65 million, but we don't know specific. And he doesn't divest that at all. He's supposed to, but somehow the ethics people allow him not to divest it. While he's negotiating the tax bill. The tax bill has serious beneficiaries, among them clients who give money to Muzinich and company, the asset management company owned by his family. So there's sort of direct beneficiaries right there. Finally, he does, he is forced to divest. And the way he divests is, as I said at the onset, engages in a fake divestiture according to one ethics expert. He enters into an agreement on a completely opaque agreement that is not disclosed. And we had to really dig this up, but he enters into an agreement with his daddy, his father. And the father, he sells his stake to his father. And his father has an IOU back to Justin that says, I'm going to pay you back, but I'm going to pay you back with interest. The interest is incredibly low and the, I don't have to pay any principal back for nine years. And the reason why this looks completely fake is it looks like Justin has just merely parked his family's stake with his dad. And when he leaves, he's going to probably or possibly get it back. Now, why is this a scandal? Well, it's a scandal because the Federal Reserve's programs, which Justin has been a chief architect of since he's been at Treasury and he's been advising the Fed and has been involved in the Fed's discussion. And the Treasury plays a key role and the Treasury gets to veto certain programs and gets to waive conditions if it sees fit. Well, Justin's been involved in this and one of the major beneficiaries of the Fed's program is Muzinishin Co. Because the Fed has bailed out the corporate debt markets and literally in an unprecedented way. The Fed has never before bought corporate debt, including the debt of junk-rated companies. And this is why my argument is that it disproportionately helps the wealthy is that junk-rated companies are owned by speculators. We can get to that in a second. But Muzinishin Co. funds, 28 of 29 funds, I believe, rose substantially on the Fed's programs worth billions of billions of dollars in asset appreciation to Muzinishin Co. Which is owned by the Muzinish family, where Justin Muzinish has a stake that he certainly has a receivable from the company. He's owed debt from the company, so he has a direct interest in their viability and their financial stability. So the Fed bailed out a Treasury official who was a key architect of the bailout program. It's a huge scandal. Let's talk, the bailout is working for the rich article, which I remember Ed Loos citing in his swamp notes in the FT and brought to my attention. Talked about how a whole lot of firms that were very, very highly leveraged had been doing stock buybacks or whatever, private equity firms like Blackstone. After this bailout structure was enacted, their stock prices skyrocketed. Yeah. What's going on there? Well, so the Fed's bailout had two prongs to it. The first efforts were to shore up the liquidity of our capital market. And I take no issue with any of that. They essentially took almost every program, I believe every program off the shelf from the last bailout and started throwing money at the capital markets to protect the liquidity. And when we say liquidity, we mean the willingness for people to buy and sell and the willingness to land, especially for financial players to lend to each other. It's absolutely crucial for the functioning of capital markets for people to trust each other. The Fed plays a key role in this. The Fed's role expanded dramatically in 2008 from the classic cliches that there's a lender of last resort. They have become, in economist Perry Merling's phrase, the dealer of last resort. They've essentially become a kind of asset buyer, but they were buying mortgages in the wake of 2008. And they've expanded that dramatically in their second phase, which went beyond liquidity to really kind of protecting assets and almost kind of insuring assets or creating a bottom for the market. Not just the corporate debt market, which it said it was operating into, but it had still over effects into the equity markets, into the stock market. And this is why we can see the stock market absolutely soaring in record ways in the last several weeks until the last couple of days where it's been kind of rocky. And what the Fed announced was that it was going to buy debt, corporate debt. And it wasn't just going to buy the corporate debt of the safest companies in America, but it was going to reach down into the dregs of corporate America to buy the riskiest bond, the bonds of the most fragile companies, the bonds of the companies that had the most debt, junk-rated companies. Both loans and bonds and ETFs, exchange-traded funds, kind of mutual funds that trade during the day, that also buy the riskiest debt. Now, who owns the riskiest debt? Well, it's not mom and pop. It's not average Americans. Sure, there's a little bit of pension money here and a little bit of 401k money there, but the vast majority is owned by the most risk-seeking speculators in the American global capital markets, mainly private equity firms. The wealthiest people owned by billionaires, Steve Schwartzman and Carlisle, owned by David Rubenstein and Apollo, owned by Leon Black, who incidentally, many of them are friends of Trump, but that's a kind of incidental issue because this is kind of helping the most, you know, all private equity firms and risky hedge fund managers. And you could see this immediately. You saw that the stock market went up spectacularly, but the stocks of private equity firms went up even more, even more spectacularly because they understood the leverage involved and the leverage involved disproportionately helps these risk-seeking investors. So the Fed's bailout efforts disproportionately helped not just the wealthy, but the wealthy who take the most risk. And when you, in theory, you're seeking the highest returns and you're willing to take the most risk, the idea is that sometimes you lose. And sometimes it doesn't work out. You're supposed to be compensated for the risk you're taking by getting those high returns. Instead, we've just guaranteed high returns and protected the risk indefinitely. And this is really the striking thing that I think that I want to underscore and I've alluded to it, is that what the Fed said was, we will do whatever it takes. For as long as it takes and as much money as it takes, we will protect these markets from any problem. And of course, the average American has got temporary assistance. Unemployment insurance is going to run out at the end of this month. State and local governments have received no financial aid. Congress has decided not to give any money to them. And so it's completely temporary and it was limited for working Americans for the wealthy, for Leon Black. The help from the Fed is limitless and permanent forever money. The late Paul Volcker was a good friend of mine and I've known him going back into the early 80s where I worked at the Fed. And he talked to me a lot about how there was a case in 2008, which people like Secretary Geithner or Lawrence Summers or others, would say that the problem is if you don't take care of those big firms and those big financial institutions, the system will crash and it will take everybody down the drain with them. On the other side was the tension that in the world it's not what you might call a one-shot game and we were starting two things. The mother of all moral hazards, which meant these people would start taking more risk expecting to have access to contingent financial capacity and that we would, what you might call because they were the donor base, they would know they were buying that capacity and it would turn everybody into an austerity, how would I say, an austerity freak who wanted to preserve and keep the powder dry of that fiscal capacity so that it was there when they needed it, not for schools, not for hospitals, not for the poor. And Volcker said, in essence to me, the danger right now is that the Fed looks like it's picking winners and it's picking the strong and the Fed's independence is going to go down the drain. Yeah, so there are a lot of, a lot to that and I generally agree with that entirely. In the wake, the operating theory by Tim Geithner, you know, the New York Fed head and then later secretary of the Treasury under Obama was the kind of trickle down theory that we needed to shore up the capital markets and we needed to save the banking system and that in 2008 this is and that was going to eventually trickle down to stabilize the housing market and help average Americans and corporate profits recovered in a matter of quarters by the third quarter of 2009. Corporate profits had recovered and median wealth in the country did not recover until I believe 2016, maybe 2015. So average workers waited years and years for a meager recovery and of course housing took a very long time to bounce back and there was really no help or very, very limited modest help for people who are under water in their mortgages or had been evicted from their homes or had lost their homes to foreclosure. And so the trickle down theory didn't work at all. And the second problem with the bailout in 2008 was that there were no consequences to blowing up the global economy. We Geithner, and I think this was a profound problem, confused saving the financial system, saving the banking system. He got confused by aiming to do that, but he saved individual institutions thinking that J.P. Morgan or Bank of America or Citigroup were the banking system. And so we saved in individual institutions and preserved them in such a way that their shareholders were protected, their bond holders were protected. In many cases, their executives were protected. And so Jamie Dimon and Lloyd Blankfein could retire as basically is feted. Well, Jamie hasn't retired yet, but he will be feted when he is. Lloyd was feted and they both are billionaires. Essentially stewards of quasi public trusts, Goldman and J.P. Morgan that had been bailed out by the government and they end up being billionaires because of it. So here again, what we have is a federal reserve that is operating with a trickle down theory, which is that if we bail out corporations, and we throw an enormous amount of money at the bonds, the debt of corporations. And we essentially attach no conditions to them. We essentially ask them not to buy back stock, or to pay dividends, or to raise executive compensation. And let me be clear that if they're participating in the Treasury programs, there are some conditions that are sort of attached to this, especially when you get to medium businesses. A program incidentally that has not been rolled out yet they the main street lending program has not commenced yet many weeks into this. But if the Fed has underwritten the bond market, and then companies go out and raise records amount record amounts of corporate debt, as they have and now we're looking at corporate debt and around the 17 trillion mark which is a record. And I think inherently worrisome. Given that we have that with no conditions they're going to return that money to shareholders through stock buyback through dividend and to the executives through increased executive comp, and that money is not going to go to workers. So we've replicated the problem again that we have bailed out the equity class and the wealthiest and we're waiting to see whether that really trickles down. I suspect it won't. And I net our research director Tom Ferguson is very well known for his work on money politics and his book the golden rule, essentially he who has the gold rules and very intensive data analysis for many, many years showing the role of money and politics is quite profound. What concerns me and I'll use my own phrase here is the commodification of social design. Capitalism is supposed to get its moral legitimacy by being embedded in and governed by a democracy. But when the institution of democracy is so dependent on money for campaigns and for many things related to perhaps private wealth accumulation. We've that I net looked through research about how some of the blind trusts have done very, very well for congressmen and senators over the years. But all of these what I will call perverse incentives relative to democratic representation can become quite demoralizing. And as I said at the outset in my introductory remarks, when it looks over and over again with highly concentrated wealth, large corporations, much more powerful than individuals. That we're at a place where people on both left and right are justified in not trusting in government. And that leaves us in the, which I might call tatters of what we're going through right now the unsustainability related to inequality the unsustainability related to climate. The angst, the despair, the diseases of despair that people like Ann Casey and Angus Deaton have cited. In some sense that Donald Trump's election came because he stood out and acknowledged that quote the system was rigged is what you might call diagnosis. For some people was refreshing because the politicians were hiding from what they were really doing. Now I'm not saying he prescribed the right remedies once in office by any means, but Jesse, how do we get to a place where we start doing things that reinvigorate the trust in American governance and the legitimacy of a capitalist system. Well, that's a, that is a big profound question that really is kind of above my pay grade. What I would say in, we as investigative journalists. Well, we tend to have a little bit of a problem of kind of looking in the weeds and focusing on small examples of larger problems, and sometimes not thinking as broadly or profoundly as we should as your question raises. But what we're trying to do is hold people accountable and rebuild trust. Well, we try to be trustworthy as a news organization to try to help people begin to trust the media again by having very high standards both of accuracy and fairness and to try to do serious minded journalism, focused on big questions, questions of inequality, questions of injustice, of accountability. So we're trying to answer big questions with high standards in a trustworthy way. But then we're also trying to expose the way things actually work to arm people with specifics and facts. So in addition to the Mizinich story, we have another journalists have exposed that the oil and gas industry directly lobbied for an expansion of the Main Street lending program. So we want people to understand that the fossil fuel industry has an open door in this administration. Those are facts that people can take take away what they want from that. We're also looking at the role that BlackRock is playing. BlackRock is the one of the world's biggest asset managers now and has been hired in a no bid contract to help the Fed run some of its programs. And the Fed, BlackRock has made this seem like it's altruistic, made this seem like it's a public service. They're waving their fees to do it. And the Fed said, please go buy some ETFs for us. And BlackRock went out and bought ETFs. And just so happens that BlackRock runs most of the biggest ETFs in the country and bought most of its own ETFs. But it waived its fees on that. What was really extraordinary was the markets understood that BlackRock is playing such an important role. And the markets investors put assets, billions of assets with BlackRock ahead of its playing this own role, this role for the Fed. And so BlackRock got this free advertisement from the Fed, waived its fees on this modest amount of activity, and then got billions and billions in benefit. And one other thing to understand about BlackRock to your point about a captured political system is that BlackRock has spent the last 10 years fighting against the reform efforts of the post 2008 crash. So we had Dodd-Frank, of course, a regulatory overhaul that I think was really woefully inadequate. But one of the reasons it's been made inadequate is that entities like BlackRock have become extraordinarily powerful and influential within Washington, and then lobbied against the fixes for some of the markets that had to be bailed out. One of the markets that had to be bailed out was the money market. Money market funds had to be bailed out. One of the reasons is that they hold no capital so that they were acting like bank deposits, checking accounts, savings accounts, but they were notionally not backed by the FDIC, backed by the federal government, and they had no capital. They blew up, and in the 2008 crash there was a supposed fix from Dodd-Frank to try to have them hold capital. And one of the main entities that lobbied against this, which happened to have some of the biggest money markets in the global capital markets, was BlackRock. BlackRock was an extraordinarily successful lobbyist against financial reform. And then when we had another financial crash, capital markets crash, BlackRock was called upon by the Fed to help the Fed bail out the capital markets. And BlackRock has benefited from it. So we have a broken system. There's no question. We as journalists, you know, we try to expose this and explain this to people in simple and clear ways so that we can arm them with facts that they can assess the situation accurately. Well, as a doctor's son, I'm very fond of the notion of diagnosis before prescription of remedies. And while it is sometimes difficult to look in the eye, the system that we are meant to have faith in, and diagnose the maladies, it is an essential part of restoring what you might call the health and the faith of our society. And I think that you and your colleagues, and God bless Herb Sandler, an old friend of mine going back to when I worked on the Senate Banking Committee, are doing a tremendous job in the realm of diagnosis. And I know I took you out on the diving board in that last question, because I think the diagnosis we are at the crossroads. I'll use my namesake, Robert Johnson, the old blue singer. When we're at the crossroads, the proper diagnosis can lead to a prescribed remedy and a healing or it can lead to despair. And I'll finish by quoting the last verse of Robert Johnson's crossroads. He says, I went down to the crossroads, mama, I looked east and west. I went down to the crossroads, baby, I looked east and west. And Lord, right now I have no sweet woman. Oh, well, baby, I'm in my distress. I want to say it is necessary to get beyond distress to repair and heal, but we couldn't do it without the kind of insights and the kind of courage that you and your colleagues represent. I'll turn things over for the question and answer period, but I want to thank you profoundly for being with us here today. Thank you, Rob. I don't think I can top Robert Johnson. So, I know they end on that note, but I'm happy to take questions and that's very flattering. And Herb Sandler was a great man. And I was very, very lucky and privileged to be at ProPublica and we are, it's a wonderful organization with incredibly talented reporters and editors. And we're grateful that people support us, you know, foundations and individuals. So if any listeners want to donate. They should support you because you guys not only have insight, you have heart and courage. Thank you. Thanks, Rob. And that was a really interesting conversation. You're right, it's hard to top Robert Johnson, but I did want to go to a couple of questions. And Jesse, if you don't mind, I wanted to start with one of my own. You said that money markets had to be bailed out. And it was interesting after the 2008 crisis. I remember watching John Stuart when he had Obama on right after Obama had been elected. And Stuart asked him about the fact that, you know, the financial markets have been cruising. What are we going to do about this? And Obama's point was, it's really important for us to first shore up the system the way it is now. And then we can worry about making any reforms. Which is very much this point that I think you were trying to make earlier about how, you know, is this the time to be making reforms when things are on fire. And there's this notion about the money markets have to be bailed out. We now have some huge percentage of our population living paycheck to paycheck. And we don't really think in terms of long term, they have to be bailed out. We think in terms of, okay, we're going to give them, you know, this small period of a buffer. But we have a Fed that's going to make sure that the money markets are bailed out because somehow we have in our mind this idea that we can't let them fail. What would it mean to actually just let them fail, you know, something I had this idea of creative destruction. Why, why do we think in terms always of needing to bail them out, as opposed to what happens if we just let them fail. What happens if we put that same attention instead into making sure that they checks are supported that we have a Fed in some sense for the wage side of the equation for the general public as opposed to the financial side of the equation. Yeah, I think that's a great question. And I think we have to kind of separate a couple of things. One is the financial system in the capital markets, we can. Should we bail out the financial system in the capital markets, and then the second thing is sort of corporate America, should we bail out companies should we bail out carnival cruises or Boeing. And so let's separate those for a second. The capital markets are absolutely crucial to the functioning of our economy. And the vast majority of Americans touch the capital markets on a daily or weekly or monthly basis. We cannot just let that catastrophically fail. It's impossible. So what we do what we need to do is make sure that that is safe system and adequately regulated system system that works to function to funnel capital from people who have it to entities and people who need it to start important new businesses and services and the cat and our capital markets have completely broken down and have lost that function. They really don't do that nearly as much as they used to and instead now we have a capital market system that really functions to enrich speculators. So we have a broken system that has not been fixed in the wake of the 2008 crash, Dodd Frank was inadequate. I don't think we're even anyone's contemplating a broad fix now, but it is a vital system that needs to be fixed with something or Carnival Cruises or Avis. We can have bankruptcies. We can have failures and in fact failures and bankruptcies are salutary because they will cause companies to run less risky businesses in the lead up to this crisis. Companies have bought more stock back than than their actual earnings. And they have record amounts of debt now and they often raise debt to buy back stock to return money to shareholders. That's not a very functioning system. We don't have very innovative economy anymore. We have low business formation. We have a collapse in patent, you know, patent wins new patent grants. We're how we have a problem. It seems and I'm very convinced by this of corporate concentration and the biggest companies are benefiting the most and benefiting the most from this recovery you see Amazon stock disproportionately performing outperforming because they're going to come out of it stronger than ever. But Boeing could, and we were talking about this before we went live, Boeing could be forced into bankruptcy. We could try to protect the workers, protect their pensions, but wipe out the equity holders, haircut the bond holders, change management, reduce executive salaries. We could do all of these things. And that would not hurt corporate America. We could allow failure, failure that would be moderated where workers are protected, where we get some reforms that enable a company to reemerge and function much better for society and all the stakeholders. That would be salutary. That would make our economy much, much stronger. And that's what the way we should think about bailouts in the future is that corporations should emerge with conditions with protections for workers with paying their executives much less and elevating, you know, no longer elevating their shareholders and shareholder value as the one value that they seem to need to adhere to. Yeah, I couldn't agree more. You know, with respect to the capital markets, even there we have some idea of what it is that we need to do to be able to control this moral hazard problem. So, you know, there has been talk for a while now about having some kind of a counter cyclical buffer to have banks raise the level of capital towards the end of an economic cycle. March 2, they passed a rule that in fact took us in the other direction which said banks are going to have to keep even less in terms of capital. So it feels like there is underlying all of this. It's not like we don't understand what we need to do at an economic level, but it seems underlying all of this is a deep political economy problem. So, you know, at the risk of going back to one of these big questions, it's very hard to answer. Do we have an understanding of what the political economy is that we can, how do we address the political economy that underlies some of these fundamental incentive problems? Yeah, again, that's sort of above my pay grade and, you know, I'm not an economist, I'm not a political economist or political scientist and I don't, you know, we don't sort of diagnose or, you know, even as a nonprofit, we can't advocate for policy. But we obviously have an enormous political economy problem in the country and the Trump administration came in. And of course, as Rob was discussing, one, Trump kind of ran on populism, and two, ran against Wall Street. So Hillary Clinton was perceived as the candidate for Wall Street. She'd given those speeches to Wall Street. Trump ran against Goldman Sachs, and then installs Wall Street bankers throughout the administration, and is rolling back regulations. And one of the most powerful figures at the Fed is Randy Corlis. It was on the Fed board, and he has been one of the most aggressive deregulators that we've seen in half a century, and has moved very quickly to one reduced capital at banks, but a whole series of regulatory rollbacks. And these things are, you talk about a political economy problem, the average American is not in the streets protesting lower bank capital. But this has an enormous impact on their lives and on their future wealth accumulation. Of course, it was a terrible time to lower bank capital. As you point out, we should have been raising capital, capital should have been counter cyclical, as you just said, because we had a long, we had a long expansion and profit, corporate profits, we're going to revert to the mean at some point, and we're going to have a recession at some point, which of course we do have. And we may still have a banking problem. There's a big debate about whether the banks are adequately capitalized or not. I lean toward thinking they're probably not adequately capitalized, and can't withstand a sustained commercial real estate decline and a corporate debt crisis, but we will see. But at any rate, obviously we should have reformed the oversight of the capital markets and the banking system to a much greater extent than we did, and we're going to probably pay the price for that in the future. Yeah, to your point. Ina just has a paper just put up a paper by lasonic and his colleagues, looking at what actually happened with the movement of African Americans into the American middle class, and so much of it can be traced to this issue around what we're seeing shareholder value and what we did to actually destroy the functioning of the American corporation. And, you know, we, we do see people on the streets protesting, but as you say they're not protesting the financial issues that in the form the underlying basis for why we have the kind of inequality and injustice that we're seeing in our economy because it's just a lot harder to grasp what is happening in financial markets than it is to just, you know, see the very real problems that we're seeing in terms of police brutality. Let me turn to our questions. We don't have time for very many I have a question here from Georgia or canella from Rome, who says in a market economy instead of bailouts there should be private equity cases rolled on also with public money if necessary but with the purpose to reshape the company and to put it again on the market in the short term of three to five years. What do you think about that. Um, I assume what he means is that the government, we have kind of a temporary nationalization that if that's my my interpretation is correct. Um, we could either have temporary nationalization where government takes over a company and restructures it and put the back out on the market again or we could have the government the Treasury, or the Fed, you know, helping up corporate bankruptcy as we talked about and restructuring company that way. I think we could do that I mean there's a concern that if we had, if the Fed allowed for all the bankruptcies that would have inevitably resulted as from the coronavirus recession that the courts would be overwhelmed the system would be overwhelmed. I think that there's some proof to that. So I think that it would have had to been a kind of moderate kind of they shouldn't they may have needed to find a kind of middle way where some companies had the file for bankruptcy and some industries didn't get help, but others. Others were bailed out serve directly but then when you bail them out directly you could take equity, the Treasury could take equity. That would be have a kind of punitive effect on the equity holders who are the risky, the risky end of the stick they're the ones that are supposed to be able to take losses. And then that would transmit a message that the Fed isn't there as an insurance policy for every contingency. So I do think that that we should have been much more willing to do that. And of course or not because we don't want asset holders to get hurt at all. And the reason we don't want asset holders to get hurt at all and in large part is because they control our political sphere, and the Democrats in as well as Republicans really answer to large donors and capital and investors. They have disproportionate influence on our political system. Thank you we are out of time so Jesse let me thank you once again and Rob thank you that was a really interesting discussion. And I want to thank all of you who tuned in as well. We'll be back in two weeks. We'll be back with Janis Varoufakis, who is the former Finance Minister of Greece, and the information for that will be up on the iNet website in about a week so I hope you will all join us for that. And could I could I interrupt for just a second. Absolutely. Jesse I heard you say that something was above your pay grade about three or four different times. And I think you are providing a public good. And as Oscar Wilde said people know the price of everything in the value of nothing. And I think you perform way above what you think your pay grade is. Thanks again. Thank you very much. Let me just say if you'll want to follow Jesse on Twitter he's at Izingar Jay. So I strongly recommend that. Thank you all. Thank you for having me.