so in some ways, the more obvious bi-racial identity that i have to affirm, african-americans also have to affirm, and white americans have to affirm, because they partake in a hybrid culture. you know, the truth of the matter is, is that american culture at this point, what is truly american, is black culture to a large degree. flip on the television set. and it's had a profound influence on this entire nation, and it has to be affirmed. in "money matters" this morning, wall street, where leaping stocks have investors jumping. we're going to turn the bull loose. ivan boesky: one of the great things about this nation is that we can seek profit. shriver: is money the number-one goal? yes.

rogers: we've had 29-year-olds making $1 million a year, expecting to make $2 million the year after that. diana ferry: but if you've got plastic money, there's nothing holding you back. history will prove the bakkers were honest people. reporter: insider trading could become wall street's watergate. pauley: what do we call greed the day before an indictment? i'm afraid recently, we've called it success. ♪

robinson: the u.s. economy, which used to be the envy of the world, is in the most serious trouble since the great depression. inflation is rising while our standard of living is declining. thomas: there was tremendous inflation and not much growth. the country was not in a great depression in 1980, but the united states was in the dumps. dobyns: on wall street, it was cold, gray, wet, and miserable. there was no comfort to be found outside. and for investors, there was not much inside, either. the tickers carried almost nothing but bad news. mclean: we'd come off a terrible decade for investing. people were skeptical of the stock market. it was a very sleepy wall street back then. most economists expect a serious recession, with at least 2 million more americans losing their jobs. president reagan: i regret to say

that we're in the worst economic mess since the great depression. literally from the first moments of his presidency on, president reagan let it be known that his top priority is the nation's economy. i put a freeze on pending regulations, and set up a task force under vice president bush to review regulations with an eye toward getting rid of as many as possible. the philosophy behind deregulation was that markets worked better than government controls. this bill represents the first step in our administration's comprehensive program of financial deregulation. tett: introducing deregulation, finance began to get much more creative and, frankly, much more profitable, too. in "money matters" this morning, wall street, where leaping stocks have investors jumping. when the market opens for trading this morning, the dow jones industrial average will stand at its highest level ever. cordtz: the past few months have been among the wildest in wall street's history. i need 65. stock and bond prices soared in a frenzy of activity. red sheet, pick up tanner!

optimists on wall street are talking about the beginnings of economic recovery. gumbel: the supporters of deregulation point to the soaring stock market as evidence that a deregulated economy makes money for everyone. sorkin: the stock market took off like a rocket, and the public saw this happening, and they would read about it. and so all sorts of people who used to have nothing to do with this world started pouring their own money into it. and that's in large part also what drove prices to go even higher. donaldson: the ronald reagan motorcade rolled onto wall street today to the new york stock exchange. in the last five years, we've moved from malaise to hope, confidence, and opportunity with the volume of shares traded hitting record highs and more americans than ever before participating in the market. we're bullish on the american economy. [ cheers and applause ] [ crowd chanting "ronnie!" ] when reagan shows up at the stock exchange, them yelling "ronnie! ronnie!" is a way of saying "america's back."

and that was ronald reagan's genius. he was able to link economic faith with faith in america. donaldson: no sitting president had ever visited the new york stock exchange before, but it seems safe to say that no recent president would've beaten mr. reagan for the honor if a vote had been taken among the floor traders. they gave him round after round of cheer. we're going to turn the bull loose. auletta: the whole world from reagan's white house on was basically saying wall street is the engine of our economy. it represents growth, it represents opportunity, it represents the american dream. and so these guys were basically saying "we're gonna go do it." brokaw: this is the big draw on wall street -- the smell of money. this is where the action is. this is the over-the-counter trading floor of shearson/lehman. more than 17,000 daily transactions involving millions of shares and millions of dollars made and lost here every day. and it's a game for young people. when you get home at the end of the week and you look back on what you've done sitting in this desk, what gives you a sense of satisfaction?

i guess, uh... making a lot of money. for yourself or for the company? myself and for the firm, yeah. when the economy started to recover and become more vibrant, i think there was a great sense of exhilaration. you know, we survived this miserable period, "let's celebrate. let's party. we have money to spend." today, the fad among young people is to have big salaries, fancy clothes, and fast cars, and they are called yuppies. rose: but who are these partiers with portfolios, these yuppies? a yuppie is a person who owns a macintosh, who eats fine quiche, and drinks white wine, and that's me. i'm having a great time here. 29-year-olds making $1 million a year, expecting to make a million and a half next year and $2 million the year after that. shriver: for this generation, business is hip. capitalism is no sin. it's in. shriver: is money the number-one goal? yes. ♪ ♪ all of the fun ♪ ♪ is waiting for you at the castle ♪ ♪ trump's castle ♪ wallace: in a world where mere millionaires are a dime a dozen.

there's a new billionaire in town. he's 40 years old, his town is new york city, and he's made his money mainly from manhattan real estate. he puts his name on almost everything he builds -- says it's a symbol of quality. but others say it's part of the hype. troy: donald trump, he is the brand, and he is the symbol of a new swashbuckling approach to commerce, to entrepreneurship, and also to conspicuous consumption. smith: we definitely do now have people who have become celebrities just from being rich. i'll take the trumps as a good example. i mean, their celebrity is generally that they are rich. donald trump has also ventured into gambling and professional football and says he could negotiate a nuclear disarmament treaty with the soviet union. wallace: they say he's land-hungry, money-hungry, power-hungry. the power is nonsense. i love the creative process. wallace: what about the name of trump city? trump tower we're sitting in? trump plaza? trump castle? it sells, mike. all i know is --

that's all it is? it has nothing to do with the ego. all i know is it sells. what do you do? security. we don't need security here. let's go outside. we have people outside. auletta: leona helmsley was the wife of harry helmsley, one of the major -- much bigger than trump -- real estate developers in new york. i asked for something. i did not get it from you. i want it. you have nothing to do? connelly: leona helmsley, "the queen of mean." the idea was that she was so mean because she wanted you to have a great experience in one of her hotels. really? seemed like she was just mean. oh, my. it's paradise. he stands here and he says "i'm taking inventory," i own this, i own this, i own this, and that one and that one and that one." he plays monopoly, but with real buildings. with real buildings. wallace: they bought this connecticut estate a year ago -- 26 acres, 28 rooms -- for just the two of them. and this building structure is just what?

tell him. it's the enclosure of the swimming pool. and up top? on top, we're going to have, of course, a dance floor. ♪ dance in an old-fashioned way ♪ leona helmsley became a kind of a symbol of the excesses of the '80s. am i comfortable? i make a living. here's how tommy lost 30 lbs on noom weight. i'm tom. noom helped him use psychology to lose weight.

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♪ ♪ ♪ wherever you go. wherever you stay. all you need is one key. earn and use rewards across expedia, hotels.com, and vrbo. kuralt: this is the way we live now. nice even temperature, no rain, no snow, no loud noises, music is playing. everything's perfect in the mall. troy: in the 1980s, you have 16,000 malls popping up like mushrooms. and they become the high temples of the great american religion -- shopping. kuralt: pam and melissa, 15 years old, come to the mall almost every day. they call themselves mallrats. i love it, too, pam. it's only $24. tett: consumerism definitely took off in the '80s.

people emerged from the 1970s, which were tough economic times, and went "wow, we can now spend." i want you to think about this florentine plum also. honey, that's what's gonna set your eyes off. brands: the economy started growing, and it was largely a consumer-driven growth. but the consumer economy was funded by debt. kiker: the national bankruptcy rate is soaring. greg and diana ferry -- annual income $32,000. they had over $12,000 in unsecured debts when they bought a new home. then they bought a new washer, a dryer, a microwave oven, and a betamax tv recorder. then they went bankrupt. i knew i didn't have the money, but if you've got plastic money, there's nothing holding you back. all of a sudden, it became very acceptable to have debt. it became very acceptable to have a credit card. more than acceptable if you wanted to pull it out of your wallet and use it. live from tampa bay, florida, it's the home shopping club. [ horn squeaks ] safer: every doodad and and tchotchke that man's hand hath wrought.

americans seem utterly hooked on home shopping. your order has been completed for one of the ruby bracelets. so, i have you down for two of the plush musical bunnies. [ cowbell clanging ] safer: there are home shopping club parties. like-minded consumers gather together to do what comes naturally. i want four of those bird figurines. you don't have to leave your house, and stuff will come to you. welcome to america. jim bakker: give us 300 more people to call on their credit card, right now... if you and enough people will send me $100 immediately, i need some very quick money. go to the phone right now. now! quit talking about saying you believe in god without ever acting on his word. now! faith is an act! koppel: in all, there are 1,600 television ministers. and of the $1.5 billion grossed annually, just three of them -- pat robertson's, jimmy swaggart's, and jim bakker's -- took in close to $500 million. safer: the prime-time preachers say they need the money

to stay on the air, and they need to stay on the air to raise money -- money for the kind of electronic equipment any network would be proud to own. i believe god wants us in the next 30 days to have every one of these bills paid in full, and ptl can live if we pay our bills. it pays the bills if we would all just do [voice breaking] something. troy: as televangelism grows, jim bakker is the one who truly gets it. he understands that preaching on television is not just about standing up and giving a fire-and-brimstone speech. he understands that in the age of television, the johnny carson approach to televangelism, that being more intimate, showing your lifestyle, and your beautiful family is essential because it brings people in. and he's a brilliant entrepreneur, and he's a brilliant salesman of himself. ♪ ptl ♪ and now here are jim and tammy! clayton: their appeal is powerful. last year, a million people responded to the bakkers' constant request for money. tammy bakker: how many do you have right now? just about 30. 30 what?

silver 7000 clubs. that's $90,000. praise god. clayton: the bakkers have been criticized for their own lavish lifestyle. well, just because i'm a christian doesn't mean i don't like nice things, either. i love nice things, and jim and i work very, very hard for nice things. they say the only difference between men and boys is the price of their toys. rose: toys like a fleet of luxury cars and a string of fancy homes from palm springs, california, to tega cay, south carolina. troy: they create what i call the "gospel of prosperity" where they think that by them living well, by them having rolls-royces that everyone will think, "ah. god is shining his countenance upon them, and thus upon us." and ptl also becomes the vehicle for their media empire, for their theme parks. jim bakker: if we are to be fishers of men -- that's what the bible says, we are fishers of men -- we've been using some pretty lousy bait. we've just built better bait to reach people. you can have a lifetime partnership with ptl for a one-time gift of $1,000.

four days and three nights every year for the rest of your life. troy: that mix of god and greed ends up derailing them, and ends up leading them to breaking the very rules that they are preaching about. television evangelist jim bakker has stepped down as the head of the praise the lord, or ptl, ministry. hazinski: bakker's resignation reportedly came because of a sexual encounter seven years ago. hall: jessica hahn is to be paid monthly as long as she keeps quiet about the incident. it turns out that jim bakker has been paying off this secretary, and that shakes the evangelical world. the evidence seems to indicate that effort and money have been expended to cover moral failure. if jim bakker paid jessica hahn "hush money," what else has he been doing with the ptl money? do you worry about the investigations that are going on? jim and tammy: not at all. history will prove the bakkers were honest people. we interrupt this program for an nbc news special report. jim bakker, the defrocked head of the ptl ministry,

has been found guilty on all 24 counts of fraud and conspiracy by a jury in charlotte, north carolina. jones: bakker kept selling lifetime partnerships at heritage usa even though he knew they were oversold. for example, the heritage grand hotel could accommodate only 25,000 partnerships, but 65,000 were sold. and for the lower-priced bunkhouse partnerships, about 7,000 were sold for a building that had only eight rooms. gumbel: estelle pollard sent jim and tammy bakker's ptl club $15 a month for 15 years. she thought that by giving to them, god would ease her pain and that of her ailing husband. i have been one to help make millionaires out of those people when i don't have enough to even live on. jones: bakker could be sentenced to 120 years in prison and fined over $5 million. i would say i feel sad, but encouraged in god. hall: tammy bakker said she could best describe her feelings in song. ♪ on christ, the solid rock i stand ♪

♪ all other ground is sinking sand ♪ it's not over till it's over. ♪ ("please don't go" by harry casey, richard raymond finch ) ♪ (ping) ( ♪ ♪ ) ♪ please don't go ♪ ♪ please don't go ♪ ♪ please don't go ♪ ♪ please don't go ♪ ♪ don't goooooo! ♪ ( ♪ ♪ ) ♪ don't go away ♪ ( ♪ ♪ ) ♪ please don't go ♪

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smith: today, we travel to the lone star state to visit tycoon entrepreneur t. boone pickens, the highest paid ceo in the country.

even here, wall street is in charge. wall street being a parrot -- green, as in money. he reigns over an entry foyer that runs the entire length of the house, and at the end of that long foyer, we find this morning boone pickens. good morning, sir. how are you? good morning, harry. why don't we go ahead and head into the trophy room, if you don't mind? sure. nocera: t. boone pickens was a texas oilman who became the original corporate raider. he would buy a bunch of stock in the company, talk about how the executives needed to be tossed out, and make a play to take over the company. rodriguez: pickens' company, mesa petroleum, which is only 1/20th the size of phillips, moves first by buying 5.8% of the stock privately. now pickens lets it be known that he wants to buy another 15% from the shareholders and thus gain a seat on the corporate board. there's one thing i want to put in place, is that stockholders own companies and managements are employees. stahl: phillips agreed to buy back its stock from t. boone pickens

to stop his takeover bid. the profit to pickens and his partners -- $89 million. it is no secret that you've made about a half a billion dollars through losing on your attempted takeovers. do you go into it anticipating that a loss is still gonna stand you very well? well, you never like to lose, but if you lose and make money, well, it makes it a little easier. i remember i was someplace and the guy got up and said, "i have a question." he said, "you're making a lot of money out of this," and i said, "the shareholders are, too." he said, "yes, but you're a fast-buck artist." "fast-buck artist." i said, "who in the hell would want to be known as a slow-buck artist?" i see it as a free-enterprise system working at its best. burrough: pickens was really the first major investor to realize how undervalued american companies were and what you could buy there. and it was his early tilts at gulf, city services, all these famous deals that brought this new reality

to the attention of other investors, who followed in his wake and sought to imitate what he did. i freely admit that i'm an investor and i want to make a profit. i freely admit i'm not robin hood. it is not wrong to want to profit in capitalist america. it's fair. delaney: ivan boesky has made a fortune buying into companies being pursued by takeover artists. boesky doesn't want to run those companies -- just to profit from the run-up in their stock prices. levine: forbes magazine lists boesky among the 400 richest people in america, estimating his wealth at well over $200 million. where's my share of the profits? stewart: ivan boesky gave the commencement speech 1986 at berkeley, and he really became famous for one line in that speech. [ laughter, cheers and applause ] [ laughter ] stourton: a new film, "wall street," used boesky's words as the basis for some of the dialogue.

greed is good. greed is right. greed works. [ applause ] auletta: when michael douglas, in the movie, said, "greed is good," i mean, it was a cartoon expression. but there's truth to it. there was a sense that it is okay to be greedy, it is okay to maximize your wealth. what i want to see above all is that this country remains a country where someone can always get rich. brokaw: big companies gobbling up little companies. little companies gobbling up big companies. eight years ago, there were 1,500 corporate takeovers. last year, there were 4,000, involving $200 billion. aug: this type of deal is called a leveraged buyout. the company borrows the money using its assets as collateral for the loan. in return the company issues ious. because the deal is so risky, those ious carry very high interest rates, and they're called junk bonds. now, you may not have heard of michael milken

of the investment banking firm of drexel burnham lambert, inc., but this 40-year-old wall street whiz is said to be the most powerful financier in america. he brought respectability to low-rated junk bonds and then used the money to finance corporate raids and takeovers. without mike milken t. boone pickens couldn't have raided gulf, unocal, and phillips petroleum. pickens: the gulf deal was the first time i saw milken. he said, "if you really want to take over gulf, it's gonna cost you $13 billion." [ laughing ] and i said, "yeah, i get it." and he said, "i can get the $13 billion." palmer: he's the guy that t. boone pickens goes to, and most people haven't heard of him. well, that's just the way he likes it. he doesn't care about publicity. he doesn't care about pride. all he cares about is making money, doing deals, and having power. burrough: he was this shadowy howard hughes-like figure that those of us even in the press never saw, you just heard [whispering] "it's milken." but, you know, it was milken's genius -- and i think that is the correct word -- that created an entire market

and fueled this takeover phenomena. reich: we romanticize these characters. the fact of the matter is, these are fat cats, first cousins to the financial manipulators, the robber barons of the late 19th century. these guys are out there, they're trying to make a buck by doing nothing. and they're putting people out of work. kent: economists agree that some unemployment, some hardship is unavoidable, in the vitally important process of making the united states lean and mean again -- what the takeover specialists call corporate restructuring. corporate america needs some kick now and then to become a little bit more efficient, a little bit less entrenched, and that will probably do our economy a lot of good. thursday, goodyear fended off a hostile takeover bid, but victory didn't come cheap. smith: goodyear won by buying back roughly half its stock and taking on a huge debt. plants were closed and workers laid off. the company pays $1 million a day in interest

to 17 banks worldwide. these fellas jump out of the closet, shout "gotcha," and they buy up a company with its own assets, dismember it, and erode the industrial base of this country. maybe we didn't understand how it all worked, but we saw a lot of people losing their jobs and a few people getting super-rich and the vibe of the culture being "that's cool." kent: how much is enough? enough what? enough money, enough power, enough influence, enough takeovers? this is my work. this is what i do. let me do what i do. it's not a question of how much. [ snickers ] [announcer] carvana has hundreds of thousands of five star reviews and counting. to be honest, i thought it was almost too smooth, financing, every step. there were no surprises. well, my monthly payment did come out lower than expected. financing my car with carvana was super smooth. [announcer] finance your next car with carvana today. julian's about to learn that free food is a personal eating trigger.

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it's the mobile made free event-happening now. get started for just $49.99 a month. plus, ask how to get one free line of unlimited mobile. comcast business, powering possibilities. miller: it was a week to remember. banker's hours posted on the doors of savings and loan institutions in ohio didn't mean a thing. the doors were locked. the run on ohio's savings and loans began

when home state savings bank was besieged by depositors who demanded their money. i don't have a whole lot, and i'm 79 years old, and, golly, i need that money. celeste: i made a decision after weighing several options that we had to close all 71 of the privately insured savings and loan institutions. vito: celeste is faced with the dilemma of solving the worst financial crisis in ohio history, a situation that is being called the worst banking crisis in the u.s. since the depression. in the deregulatory climate of the 1980s, savings and loans, which had traditionally invested only in mortgages, were free to invest in pretty much anything they wanted. basically what happened was, the entire s&l industry got taken over by a bunch of entrepreneurs who saw them as piggy banks. abel: vernon savings was shut down by federal regulators, saddled with $1.3 billion in bad loans. the owner, don dixon, lived a life of private jets, yachts, and mansions. they took risks that should've been untenable for a banker, and when that all went blooey,

the entire industry ultimately went belly up. well, get in line so we can have this -- i am in line! i'm next! quiet down! man: guys, quiet down! i'm going to disperse the whole bunch of you. mccarthy: this was the third day of the run on the old court savings and loan association. the only thing i can do at this point, i have no choice -- we have to close. i don't think it's right. that's our money. this year, a record 260 banks will go bust. that's almost 800 in the past five years. bad loans to the third world, bad loans to the oil industry, bad loans to real estate developers. nocera: one of the reasons bankers made outrageous loans was because of federal deposit insurance. if the loan went well, then you rake in the profit. if the loan went poorly, then the federal government picks up the tab. collins: with deregulation, the s&ls got into that commercial real estate market and lost their shirt. pizzo: all over the united states, people were building projects for which there were no buyers -- mile after mile of these partially completed condos.

and they're all on the s&ls books. there's something wrong about the savings and loan industry today. and it isn't me. charles keating was a lawyer who got into banking and was able to buy a savings and loan. kroft: when keating bought lincoln savings and loan of irvine, california, he used it as a private piggy bank for his own ambitions, like the phoenician hotel, which cost $500,000 per room to build. that hotel is a magnificent investment for savings and loan's dollars. no question about it. the real problem is, when our appraisers looked at it, they said, "eh, it's not such a bad hotel, but it's worth $200 million, not $300 million. pizzo: bill black was one of the chief regulators at the federal home loan bank board, who was really the guy who spearheaded going after keating. black: we discovered likely fraud -- just really basic things that no honest bankers would do. "the examiners looked at 52 real estate loans

that lincoln had made... there were no credit reports on the borrowers in all 52." and on top of that, charles keating has lincoln savings sell uninsured junk bonds, and he targets the widows in the retirement community. goldin: there were 23,000 customers who would buy $250 million of these bonds. we had sold our home in sherman oaks. my husband had had a stroke. we moved down here, went to lincoln savings down here. goldin: how much is your debenture? you really want to know? yes. it was $30,000, and for us, that was quite a bit. [ crowd murmuring ] "capitalize on this," the bond salesmen were told. "the weak, meek, and ignorant are always good targets." the regulators were looking at this and saying, you know, "this guy is a disaster, man. we have got to stop this." but by that time, keating had a construction company in arizona,

he had thrifts in california. his tentacles sprayed out to several states, so he was able to call on congressmen and senators like that and say, "hey, get these dogs off my back." this morning, the s&l crisis goes to capitol hill. the senate ethics committee is looking into charges against five senators accused of intervening with federal banking officials on behalf of s&l owner charles keating. the so-called keating five are republican john mccain and democrats alan cranston, john glenn, donald regal, and dennis deconcini. the keating five reportedly received a total of $1.3 million in campaign contributions or donations to favorite causes. former bank board chairman edwin gray says the senators tried to subvert the regulatory process. i was told to come alone. i did. kroft: did you find that unusual? [ scoffs ] absolutely. never happened before. the whole time i was in washington, i never saw that. no witnesses? no. no witnesses.

deniability perfectly built into the meeting. black: they said they wanted us not to take the enforcement action against lincoln savings. the only thing that got them to back off is when we finally said, "we're making criminal referrals. you're going to bat for criminals." mitchell: now awaiting trial on charges of criminal fraud, keating has refused to testify to the senate. mccain: was there something wrong with five senators meeting? yes, it's a bad appearance. but the real question is, did john mccain abuse his office? the evidence indicates clearly "no." brinkley: the keating five became a symbol of the '80s, 'cause it's a group of distinguished u.s. senators that are accused of taking bribe money. they get off the hook eventually, but it really rocked the country because it showed that not only was corporate america being questioned for corruption, but the u.s. senate seemed to be a beehive of bribery. one question among the many raised in recent weeks

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call now 800-710-0020. robinson: the financial scandal causing increasing concern involves investors who make killings on wall street not because of luck or skill, but because of inside information not available to anyone else. martin: this coded document might be a secret earnings report showing disastrous losses or a confidential assessment of future profits. if you are one of the 32 million americans who own stock, such information can either cost you money or earn you money -- perhaps millions of dollars -- if you find it out first. in either case, it is illegal. the single biggest currency on wall street has always been information. and in the '80s, that information was trading back and forth. and investors were talking to their buddies they went to business school and law school with, who were actually working on these deals, to find out. it was pervasive. feldman: the security and exchange commission, which monitors potential abuses,

says that currently, penalties aren't strict enough. this is a serious course of misconduct, and that at present, the sanction is simply akin to asking someone to put the cookies back in the cookie jar. in tonight's "money matters," the biggest insider stock trading case ever. gumbel: investment banker dennis levine collected $12.5 million in illegal profits. he did it by getting advance knowledge of 54 pending takeovers. then from a phone booth, he would call an accomplice in the bahamas, who would buy stocks in the names of two dummy corporations, which levine had set up in panama. aug: the levine case was the first time the sec's been able to nail down insider trading by one of wall street's big dealmakers -- somebody with a $1 million-a-year salary, which, apparently, wasn't enough. brady: insider trading could become wall street's watergate. cassidy: plea bargaining is now under way with dennis levine. authorities might be able to develop a list of new suspects. carberry: we started the investigation, and once his lawyer advised him his interest to cooperate, he would give you the information.

to him, it was just another deal. i think the judge made it clear that he would have given mr. levine a heavier sentence, except for the cooperation. baird: dennis levine was one guy doing insider trading, and that's not something that's new. but what dennis levine did was lead to ivan boesky. the securities and exchange commission stunned wall street today when it announced that investor ivan boesky has been fined the largest penalty ever for insider stock trading, and he has been barred now from the securities industry. monsees: boesky did what he publicly claimed he would never do -- use insider information to buy huge blocks of stock in companies secretly involved in takeover deals. ivan boesky was an out-and-out crook, handing bags of cash to people who would give him inside information. if we had capital punishment for white-collar crimes, i'd say he'd be a prime candidate. stourton: ivan boesky arrived in court to hear himself described as a man whose arrogance has been stripped away. there's no doubt that the man has become a symbol

of what's wrong with wall street. the news of the boesky indictment was like the bombshell of the decade on wall street. what do we call greed the day before an indictment is filed, if you get my meaning? i'm afraid recently, we've called it success -- that some of the people who have now turned out to have been engaged in criminal activity, such as ivan boesky, were being hailed as heroes while they were at the peak of their careers. green: millions of america's small investors have been appalled at the boesky affair. i think they should get every one of them, put them in jail. jensen: since 1984, there had been more than 48 cases of insider trading brought by new york's u.s. attorney rudolph giuliani. back then, rudy had the aura, essentially, of being the best man in law enforcement without a cape. maybe we can't catch all of them, but we sure as heck can deliver a message, which is if you do get caught, you are gonna lose your liberty. you're gonna go to prison. today, as the prospect of a much wider scandal seems certain, the market was off more than 40 points. this after it was learned that ivan boesky was talking,

and then some. braver: as one former sec official put it, this is like arresting the madam of a brothel and finding her private book of clients. this guy boesky takes a fall, and all over wall street, they're practically jumping out windows. it comes out that he's been taping his phone calls, and maybe his private talks, for three months. and wall street big shots begin wetting their -- well, you get the idea. stewart: of course ivan boesky was guilty. there was gonna be no defense. all he had was bargaining power. who could he deliver? well, let me ask you this. levine was a fish, boesky was a shark. who's the whale that they're gonna catch? i don't know. drexel burnham? well, that's -- that's possible. in the middle of all of this is drexel burnham lambert -- until a few years ago, a little-known wall street firm. then it shot to the top of this high-stakes world by specializing in so-called junk bonds -- high-interest but also high-risk. aug: the commission says drexel and the head of its junk bond department, michael milken,

made a secret deal with convicted stock swindler ivan boesky to make millions of dollars illegally. krulwich: for example, california company wix came to milken's firm and told them that it was planning a takeover. the government charges that milken, in effect, went and whispered that secret to ivan boesky in new york. so boesky bought the stock before it went up, made millions, shared the profits with milken's firm, but the bottom line is, milken betrayed his client, charged a million-dollar fee, and then secretly earned $6.5 million more at the client's expense. levine: authorities are worried that further disclosures resulting from the boesky affair may weaken public confidence in financial markets and weaken the markets themselves. [ indistinct talking ] i just came from inside, and it looks like a madhouse. i guess the bull market's over, huh? it's a bloodbath down there. brady: they're calling it the monday massacre -- the worst drop in wall street history. well, i'd call it the nearest thing to a meltdown i ever want to see. brady: by the closing bell,

the dow jones industrial average was down more than 500 points. this was a crash that people hadn't seen, frankly, since the great depression. no one had seen the stock market fall that quickly that fast. brokaw: paper losses -- more than $500 billion. october 19, 1987 -- wall street's black monday. mclean: that crash was one of the first signs of how dangerous this new era could be -- that what the market had given, the market could take away, and it could take it away really, really quickly. lefevre: there's only two emotions in wall street. one's fear, and the other's greed. usually, we have an excess of one or the other. we have now, i think, an excess of fear. ♪ i'm currently out of the office... focusing on a little blue-sky thinking. i'll be taking meetings... with family and friends. and checking voicemail... as my activities permit. i'll connect with you... after reconnecting with me. ♪

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we will have a recession. we always do. it's just a question of when. my guess is it's probably 1989 rather than 1987. a little present for the new president. presidents always seem to manage to get that as their gift after the inaugurals. i promise you, if congress tries to raise the taxes when i'm president -- and you know they will -- i'll say no. they'll try one more time, and i'll say no. and if they try a third time... ...i'll stare them right in the eye... ...and i'm gonna say to them, "read..." "...my...lips. no...new...taxes!" [ cheers and applause ] troy: in 1988, george h.w. bush is running

to take on the reagan mantle. "read my lips -- no new taxes." miklaszewksi: when ronald reagan left the white house in january, he also left george bush holding the bag -- filled with an assortment of staggering problems. bierbauer: when the president calls, some come running. all agree the savings and loan crisis is an urgent problem. brady: could the s&ls be bailed out without a tax increase? is there any other way to do it? i don't think there is, and i think that's becoming the conclusion of most people. pizzo: bush had to fill this smoking hole left by reagan for him, and the only way to do that was to pass new legislation, because now we had to start dipping into taxpayer money. bierbauer: senators say the only bailout will be for depositors, not for bad bankers. no one needs to worry about one nickel of their money in these institutions. this legislation says to tens of millions of s&l depositors, "you will not be the victim of others' mistakes." thank you all very much.

and now i'm proud to sign this monster. reporter: essentially, george bush is covering the biggest overdraft in history. [ applause ] [ laughter ] bush caves. he raises taxes. that kills him politically but saves america economically. listen carefully to this number -- $500 billion. that's the latest estimate of what the failure of hundreds of federally insured savings and loans will eventually cost american taxpayers. reporter: mr. keating, how soon can you make bail? man: no questions. healy: the once-rapid growth of keating's now-failed lincoln savings of california had been fueled by the sale of a quarter billion dollars' worth of uninsured and now worthless bonds -- the majority bought by seniors, many losing their life savings. i need my money! give it to me right now! black: charles keating was convicted in two trials, but both of those verdicts were overturned,

and then he pled guilty to avoid a retrial and was allowed out for time served. stewart: the climate had gone from celebrating the excesses of wall street to condemning them pretty quickly. reporter: mr. milken! jennings: tonight's headline -- milken pleads guilty in what may be the largest individual case of fraud ever to rock wall street -- a case which ended in a plea bargain with the government. frank: judge kimba wood said milken's crimes merited his removal from society. she sentenced the one-time king of wall street to 10 years in prison. stewart: he didn't end up serving anywhere near that. he did go to jail for just under two years. but i'm confident when he left, he was at a minimum a billionaire, and quite possibly a multi-billionaire. jensen: the game of monopoly could have been invented for donald trump. but monopoly is a tricky game. when you borrow $2 billion and the economy goes into a tailspin and you can't pay the interest on your loans,

the bankers move in. donald's $100 million yacht goes to the boston safe deposit and trust company. his half-interest in the grand hyatt hotel goes to bankers trust. his trump shuttle goes to northwest airlines. the man who was the darling of the '80s is seen as a man in trouble, and he knows it. mcinerney: insofar as we can say that the '80s was a period of hedonism and excess, then the end of the decade was the hangover. it's more like the rich are taking their tumble now. o'reilly: leona and harry helmsley, one of the richest couples in the world, were today treated as common criminals, booked in manhattan on 139 counts of fraud, tax evasion, and extortion. the government charges that the helmsleys renovated their $11 million connecticut estate and wrote the cost off as a business expense on their taxes. clayton: a former housekeeper said mrs. helmsley once told her, "we don't pay taxes. only little people pay taxes." helmsley was sentenced to four years in prison,

given a $7 million fine, and ordered to serve 750 hours of community service. for some, the sentence was too light. i have done nothing wrong. i'm innocent. my only crime is that i'm leona helmsley. no matter how many white-collar thieves get sent away, no matter how long they're locked up, the public will still be paying for this long after they're out. so, what did the 1980s add up to? we put that question to a fair number of people, and more than 95% of them said simply, "it was the decade of greed." well, we learned that greed may be good, but too much greed is bad and that sometimes, people on wall street get a little too greedy. but they learn their lesson, and they would never do it again. some argue that today's bright spotlight on unethical behavior has exaggerated the problem.

but there's no denying the problem is real. and if we excuse unethical conduct by saying "well, everyone does it" or "it's really okay unless you get caught" or "it's not against the law," we miss the point of why it's important we not do it period. the point may be no less than national survival as a people who can live together honorably. if we let lying, cheating, and stealing become an accepted way of life, it's not just a few dollars that'll be lost. it's the spirit of the country that would be lost. the decision is ours. welcome to our viewers joining us,