05/29/12 05/29/12 [captioning made possible by democracy now!] >> from pacifica, this is "democracy now!" >> hours after the commission, announced the runoff. >> report from sharif abdel kouddous in cairo after results of egypt's first of a competitive presidential election results in a runoff. we speak with charles ferguson, director of the oscar-winning documentary "inside job." >> forgive me, i must start by

pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail and that is wrong. >> now charles ferguson is back with a new book, "predator nation: corporate criminals, political corruption, and the hijacking of america." >> it is up to the american people to get angry enough to force the leaders to act. it has happened before, and i'm optimistic it can and will happen again. >> all of that and more coming up. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. the new york times reporting president obama personally oversees a "kill list," containing the names and photos of individuals targeted for assassination in the secret u.s. drone war. according to the new york times, obama signs off on every

targeted killing in yemen and somalia and more complex and risky strikes in pakistan. national ticketing adviser said "he is determined he will make these decisions about how far and wide these operations will go." obama is also said to personally improve every addition to the expanding kill list, individuals include u.s. citizens as well as teenage girls as young as 17 years old. the new york times quotes former white house chief of staff william daley about obama's decision to assassinate awlaki, a u.s. indocin in yemen. he called the decision to strike the u.s. born cleric "ntc 1." since april, the u.s. is carried out at least 14 drone strikes in yemen and six in pakistan. over the weekend, u.s. drone strike in yemen killed at least five people. in related news, the wall street journal reports the obama administration plans to arm italy's fleet of 3 per drone aircraft, a move that could open the door for sales of advanced

hunter killer drone technology to other allies. the sale will make italy the first foreign country besides britain to fly u.s. drones armed with missiles and laser-guided bombs. critics of the proposed sale include the head of the senate intelligence committee, dianne feinstein, a california democrat. she said -- international pressure is mounting on the syrian government following a massacre in the town of houla that killed at least 108 people, almost half of them children. u.n. observers attributed the massacre at least partly to the syrian army and pro-government militias, but this year in government blamed islamist militants. earlier today, syrian president bashar al-assad met u.n. envoy coffee and non. on monday, kofi annan said syria must take bold steps to implement the u.n. peace plan. >> i have asked the government

to take bold steps to signal it is serious in its intention to resolve this crisis peacefully, and for everyone involved to help create the right context [unintelligible] and this message of peace is not only for the government, but for everyone, every individual with a gun. the six-point plan must be implemented on comprehensiveness and this is not happening today. >> on sunday, the and security council condemn the use of artillery and tanks in the houla killings. most of the dead were executed at close range. the u.s. general chief of staff threaten military intervention in syria during an interview on fox. >> there's always a military action, but it should always be wielded carefully because one

thing of learned about war -- i have learned personally about war -- is it has a dynamic all its own and takes on a life of its own. you always i military leaders to be somewhat cautious about the use of force because we're not entirely sure what comes out on the other side. but that said, and they come to a point with syria because of the atrocities. >> and other news from syria, reports have emerged the young syrian filmmaker bassel shehade was killed on monday in the city of homs. he appeared on "democracy now!" in december. at the time, he asked we only use his name for security reasons. he described the fighting in hos. >> what i saw the last week there, it is almost like a simple where. crack down on the city punishing [unintelligible] forcing the locals to form an

arm of resistance to the regime forces. they are supported by army deserters. the flights are between the locals and the security forces and supporters of the regimes. the rising areas are besieged by the regime forces. >> we first met bassel shehade at syracuse university. he was a fulbright scholar there, standing filmmaking. bassel shehade, the young syrian filmmaker who back to syria, was killed in homs. nato officials say a coalition air strike has killed a saudi man has been described as al qaeda's second-in-command in afghanistan. sakhr al-taifi reportedly oversaw the transport of militants into afghanistan. meanwhile, afghan authorities say at least eight family members, including six children, having killed in a nato airstrike in the eastern province of paktia. 160 girls have been hospitalized

after they were poison in the classrooms in afghanistan. a similar attack last week sent 120 girls and three teachers to a hospital. afghan officials blame the attacks on radicals opposed to the education of women and girls. in prison bahrain human rights activist ended his hunger strike monday after not eating for 110 days. his lawyer said the hunger strike successfully helped shed light on the plight of political prisoners in bahrain. while he remains locked up, his colleague nabeel rajat, was released on bail after being held for nearly a month. rajab, the president for the brennan center for human rights, still faces a travel ban and criminal charges for allegedly inciting protests in the famous 64 says. he vowed to keep fighting for democracy in the mebahrain. >> how many days, how many months, how many years are they

going to put me? i believe the cause of freedom where fighting for and willing to pay that cost. >> a turkish court seeking multiple life sentences for military commanders over their alleged involvement in the 2010 killing of nine turks on the cause of bound aid ship. the indictments name is ruth's former military chief as well as the former heads of israel's navy, air force intelligence and military intelligence. wednesday marks the second anniversary of the deadly israeli raid. the obama administration has asked a federal judge to reverse order barring enforcement of part of a national defense authorization act that permits indefinite military detention. earlier this month, judge katherine forrest struck down part of the ndaa. the judge's ruling came in a lawsuit challenging the ndaa, filed by greg journalists,

scholars, and political activists including chris hedges and noam chomsky. in campaign news, mitt romney is expected to unofficially to clinch the republican presidential nomination today with a winning republican primary in texas. the obama campaign continues to criticize romney over his record at the private equity firm bain capital. obama's senior campaign advisor robert gibbs appeared on "face the nation goes >> on sunday. >> what they did was focus on job creation. that is not what bain capital does. and loads of companies with debt, it takes money out of those companies and pays those investors. it is not about job creation and that is what mitt romney is running on. >> researchers have found radioactive bluefin tuna off the coast of california that were contaminated by last year's fukushima dai-ichi nuclear plant disaster in japan. the discovery marks the first time radiation from the disaster has been found in fish

that migrated into california waters. researchers say the levels of radioactive product are 10 times that of normal but the amount is still below levels considered unsafe for humans. the ocean off japan was contaminated last year after thousands of tons of seawater were used to cool reactors in an attempt to prevent a total nuclear meltdown following an earthquake and tsunami. the headquarters of a new orleans group that advocates for poor women of color and transgender people has been heavily damaged in an apparent arson attack. the group, women with a vision, provides advocacy, health education, and support to marginalized women. a room containing materials used for sexual health education was targeted in the attack. the group's executive director believes the attack was intentional, but that it would not stop those from helping those without a voice. a trip to minneapolis known for supporting lgbt rights and other social justice issues has burned to the crown.

the century-old walker community united methodist church was home to progressive groups including communities united against police brutality, minnesota democrat rights action committee, and the welfare rights committee. the church welcomed lgbt people and approved a statement last year embracing same-sex marriage. the cause of the fire remains unknown, but one official said it may been sparked by lightning. the church building was also the birthplace of kfai community radio, and the station's first home. the justice department is investigating allegations of widespread sexual abuse by male guards at a women's prison in alabama. the probe comes after the legal aid group equal justice initiative filed a complaint based on interviews with more than 50 women. the group found sexual assault and harassment had become a way of life for women prisoners who were routinely punished and often placed in segregation of the reported the abuse. one former prisoner said male guards had unrestricted access

to showers and would follow women to the bathroom in the middle of the night. in peru, the government has declared a state of emergency in the highlands province. they say to people were killed and dozens of police officers injured and anti mining protests. protesters have halted production at a copper mine owned by swiss-based company saying the mine is contaminating local water supplies. the 30 days state of emergency places the military in charge and allows for the suspension of civil liberties. in britain, an anti-war activist disrupted former tony blair's testimony monday before the judicial inquiry investigating the rupert murdoch spying scandal. the activist, david lawley wakelin, was removed from the proceedings after he called blair a war criminal. >> this man to be arrested for war crimes. he held up the iraq bang for 20

billion but he was paid $6 million every year for jpmorgan but the man as a war criminal. >> and those are some of the headlines. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. protests erupted in egypt last after final results were announced in the country's first-ever competitive presidential election. the top two candidates in the first-run of the race are mohammed morsi and ahmed shafik, the last prime minister under hosni mubarak, who was ousted 15 months ago. morsi and shafik will face each other in a runoff vote set to begin on june 16. the race was tight with the top four candidates all garnering between 20% and 25% of the boat, but the so-called revolutionary votes -- that were neither for the muslim brotherhood or for members of the mubarak regime -- were split between third and fourth place. three of the top candidates in the race filed appeals alleging

violations in the vote, but there were all rejected by the president reductions commission. the decisions by the commission cannot be challenged. hours after the official announcement, protests erupted in cairo and alexandria. the headquarters of ahmed shafik were stormed and set on fire "democracy now!" correspond sharif kudus is in cairo filing this report. >> presidential elections commission makes the official announcement. mohammed morsi of the muslim brotherhood and ahmed shafik, the last, minister under hosni mubarak, are the two top winners in the first-ever competitive presidential election in egypt. hours after the official decision by the commission announced the two in the runoff,

the streets of tahrir have been killed once again. they're calling for some kind of change. a member of the revolutionary socialist movement. >> there are hundreds growing into thousands, hopefully. i think it is a reaction to the official results being announced putting morsi first and should seek in second place. i think it is a lot of people expressing discontent. a lot of people have boycotted and do not trust the system and are taking to the streets. others cannot believe egyptians have chosen should seek an morsi to be the final two. >> not long afterwards, the campaign headquarters for ahmed shafik are stormed and set ablaze. outside the campaign headquarters of ahmed shafik,

there is a chaotic scene. fire trucks have put out a fire. people are blaming the muslim brotherhood for what happened. others are planning revolutionaries. -- others are blaming the revolutionaries. each its first of a crowded presidential elections, the outcome is the deeply divisive one. more than 23 million egyptians took part in the landmark poll last week a turnout of 46%. the race was very close with morsi coming out on top with 25% of the vote followed by ahmed shafik with 24%. the anticipated first round results have been called the nightmare scenario by caro based journalist. >> i do think for a substantial number of people who were pro revolution aires, the they're hoping for an outcome that would not be this binary choice that oppose the mubarak -- hosni

mubarak of the muslim brotherhood brega >> the so- called revolutionary votes for most the divided among the candidates who plays third and fourth in the elections. the dark horse candidacies. abdel moneim aboul fotouh garnered 20%. many expected the brotherhood to do well by virtue of the group's vast grassroots network. this is an assistant professor at the university. >> on one hand, the muslim brotherhood has to mistreated the real ability to mobilize its home base. -- has shown its ability to mobilize its home base. >> what came as more of a shock was the success of ahmed shafik and the elections. as mubarak's last prime minister, his forces out of office by popular protests just three weeks after mubarak step down.

in his race for the presidency, his campaign on a law-and-order platform, vowing to use brutal force to restore order within a month and says he will act as a bulwark against islamists and government did this is a researcher for human rights watch. >> he speaks the language of mubarak's regime. what that means is the retention of broad discretionary powers given to the executives and given to security forces, a very strong role for security agency involvement whether intelligence or ministry and terrier security agency to restore -- ensure control over protests, which as far as he is concerned, are the source of instability. >> former air force general, ahmed shafik is seen as the candidate of supreme forces that has been ruling since the ouster of mubarak. experts say his campaign was boosted by mubarak's old party networks. >> its still remains a perhaps

we did not see it work in the parliamentary elections where the old, former ruling party network did not perform well. >> as the preliminary election results began to emerge, allegations of voter fraud and violations quickly surfaced. of course there are very widespread reports of violations and all kinds of irregularities with the vote. several of the losing candidates have called on the election commission of egypt to not authenticate these results until a thorough investigation as been held. there numerous reports that hundreds of thousands of government and state employees who were not authorized to vote were given false documents to be allowed to vote in favor of ahmed shafik. other reports that whole villages were given large sums of money to basically vote in a particular way. >> the top three candidates filed appeals, and there were

also severely rejected by the presidential elections commission two days later. the carter center was one of three international organizations accredited to witness the vote. formerly as president jimmy carter said his group was not able to monitor the entire process because of the recently granted the observers permits one week before the vote, and observers were not allowed to witness the aggregation of ballots. >> this is the 90th election in which we have been involved in almost one-quarter of a century. we have had restraints placed on us as witnesses that have never been present before. there is no way we can certify the entire process has been proper. but what we have observed, i would say has been encouraging to me. >> at a press conference, carter pointed out the need aspect of egypt's presidential election.

>> this entire process has been exciting and gratifying, but it is a first time i have ever participated in an election for president of a nation when there were no description of its future duties of the president being elected. across the elections are being held without a constitution in place. entries been ruled on the constitutional declaration issued by the ruling military generals last year and it remains unclear what authorities of the newly elected president will have a military council hands over power to 30 of. further muddying the waters, ahmed shafik almost did not make it into the race at all. the muslim brotherhood dominated parliament passed a law to ban former senior members of the mubarak regime from running, but the presidential elections commission allowed ahmed shafik to take part. >> the presidential election commission makes all decisions regarding the race, decided not

to apply the law in this case. there could be legal reasons, that the law became after the registration period, but it is still puzzling when democracy elected parliament had issued a law and the current authority has approved the law, that it should not be implemented, especially combined that with the facts under the current system, the decisions of the presidential election commission cannot be appealed. >> both morsi and ahmed shafik are looking to pick up supporters from the supporters of the other candidates in the first round. both face an uphill battle. morsi is set to go into a runoff against shafik. the muslim brotherhood is looking to gain support from some of the revolutionary forces and the liberal forces that they distance themselves from over the past year-and-a-half.

>> they had a turnout of roughly 47% in the parliamentary election, but since then we've seen the support that almost by half to only about 24% in the presidential election. i think how they make that is critical. the reason for the drop has been the perception, widespread among all of the revolutionaries, all the different movements within the revolution, that the muslim brotherhood has really been looking out for its own interests. at certain times when it suited the organization and its political wing, that it has cooperated with the government at the expense of the revolutionaries. and other moments when its own personal interests were being threatened, they then joined with the revolution against the government. >> this is a member of parliament. he briefly served as culture minister in shafik's cabinet,

but says he will vote for morrissey vote forshafik from winning the presidency. >> it is my life's dream to get rid of a state that is run by military people. i am not ready to keep on living in a state that is a military state. >> the voters face a choice. the brotherhood candidates are member of the old regime. it has become a polarizing question that has deepened divisions. this is a protester who boycotted the first round of votes and is boycotting the runoff. >> the revolution should have known from day one we should not elections at the ballot box will not make the revolution. it will topple the revolution in each. [unintelligible]

the president is being returned to the same old ways. everything is in the hands of the military council. mubarak was the weakest link in the chain. the regime is still there and performing. the only difference is we will change from mubarak to shafik or morsi. [chanting] >> the presidential election was supposed to mark the final step in egypt turbulent transition. but the outcome of the first- round has only sparked outrage and brought protesters once again to the streets of cairo and elsewhere. just weeks in the hand over power, the future of egypt is as uncertain as ever. i am sharif abdel kouddous in cairo, egypt for "democracy now!" >> in a moment, sharif interviews president jimmy carter. ♪ [music break] ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. the carter center was one of three international organizations accredited to witness egypt's historic presidential election last week. its mission was led by former

u.s. president jimmy carter. two days before the election results were announced, "democracy now!" correspond sharif abdel kouddous into the president carter and her about the landmark vote, the role of the military in post mubarak egypt, the camp david accords and much more. >> welcome to "democracy now!" what is your assessment on the first round of presidential elections in egypt? >> cannot make a final judgment because our role has been limited. we could not make comments to the press, did that it a chance to see the preparation of the ballots -- did not get a chance to see the preparation of the balance or qualification of candidates. but we did see the voting days in the counting of ballots in the polling stations. we were also deprived to witness the final tabulation in cairo when all of the ballots were brought together. with that limitation, i think

the egyptian people would agree with us that basically, it was a good process and there is no allegation, that i have heard, that any problems in the voting was designed to hurt one candidate or help another candidate. overall, we are pleased critics do you think you can have a freely elected government under military rule? some of the young revolutionaries have boycotted >> i met with some of those leaders after the election day was over. i think they are preparing to listen to the two candidates, whoever they might be in the final count, and to try to present their demands or their requests to the candidates and then decide whether to participate in the runoff election, and which candidate to support. my guess is, no matter who the final two candidates are, both of those candidates will be eager to have the support of

people who did not support them in the past. women's groups, liberal groups, christians, young people, and so forth. it will be a good process. >> you met with the generals. are you confident the military will hand over full authority to a civilian president? >> i think they will have some demands. i recommended they might look at america and see what we do and to the military that way with the elected officials, that is president and congress having domination over the military. but the military treated with respect, which we do in my country. i myself was in the military for 12 years. and budget and laws that relate to the military, and foreign policy established by others, not by the military, so those kinds of things i think will be

orchestrated, if not immediately, then over period a few months or years but >> the u.s. backed the mubarak regime for years. last year, congress added a restriction on the aid the condition of the state department certifying the chips military rulers are making a successful transition to democracy. earlier this year, the obama administration issued a national-security waiver to bypass that restriction and to continue military aid to egypt. this came in the wake of the ngo crisis in which u.s. ngo's were rated. it came in the wake of continued crackdowns on protests that left protesters killed and many more wounded. thousands of civilians were put on military trial. what are your thoughts of the continued u.s. policy of funding, providing military funding to the egyptian government despite these kinds

of abuses? >> i believe the human-rights violations that occurred in the past will be alleviated in the future. i would guess the u.s. would look with favor on the new government in egypt as honoring jim wright's more than in the past. i would like to see the u.s. and europe and arab countries and the world bank and imf be generous with the grants and loans to egypt. egypt has suffered a lot during this revolutionary. . there is a loss of tourism in that type of thing. i think would be in the best interest of the world to see egypt have a strong economic system. >> the muslim brotherhood candidate mohamed morsi has said he would reexamine the camp david accords that you brokered in 1978 and saying israel is not fully respected the agreement. what are your thoughts?

>> i have talked him and length about this. there are two parts to the camp david accords. one was a peace treaty between israel and egypt. that cannot be changed without approval or agreement with israel. i don't think that will happen. i don't think that will be violated. the second part was the rights of the palestinians. and the rights of the palestinians have not been honored. as agreed by israel, sadat in egypt, and me in the united states. in the past, i think president mubarak has been willing to accept this attitude by the israelis and americans that is not to give the palestinians full honor of their rights. i would guess in the next egyptian government, both the president and parliament, that they be much more attuned to palestinian rights.

so the peace treaty will be kept intact. the will be more attention might egypt on palestinian rights. >> you met with a leader here in egypt yesterday and discussed the reconciliation and was reported he brought up the was continuing to block reconciliation talks. what are your thoughts on u.s. policy toward the reconciliation? >> i think in the last few years, the u.s. basically has deferred to egypt to negotiate between hamas and fatah. i presume this is a situation that will continue. the carter center is not bound by the restraints. we need with whom we choose, and we choose to me with fatah and hamas, and lebanon, and syria -- everybody involved in the future peace for israel and its neighbors.

in my opinion, it is good to see hamas and fattal come to gather. they plan to form ad technocratic government. they will not comprise representatives of fatah or hamas. and i think that government would prepare the palestinian community for future elections. >> bosra has been under siege for many years now by israel, but also by egypt. last year, the foreign minister of egypt said he would open the rafah crossing. it was reopened somewhat, but not fully. what are your thoughts on the dips policy towards bosnia? >> in the past it has been too restrictive and my hope is it will be opened in the future so there's easy access to and from gaza from egypt critics president carter, de of hope things can change in egypt?

this has been a badly mismanaged transition. many say we put the carriage before the horse there been a lot of abuses over this transitional period. do you think things will change for the better question marks yes, i do. -- do you think things will change for the better? >> yes, i do. the first constitution of assembly was not constituted fairly. it was not representative of the egyptian public. the parliament and others decide we need to make a new list of the hundred people the right and the constitution. so it will be done after the presidential election. i do not see this as a fatal mistake. it is a president did -- it is a presidential to have a president elected before the duties are defined, but i think it can be done successfully and i think it well. the carter center, we intend to be here for the riding of the

constitution and even for the referendum or the egyptian people can decide to approve or disapprove the draft of the constitution. >> president carter, thank you very much critics former president jimmy carter in cairo with the carter center observing edom's first-ever competitive presidential election speaking with sharif abdel kouddous of "democracy now!" when we come back, "predator nation: corporate criminals, political corruption, and the hijacking of america." stay with us. ♪ [music break] ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. with the election season heating up in the u.s., the economy remains a crucial focus of the presidential campaign. the justice department opened a criminal probe into a $3 billion trading loss in risky derivatives at financial giant jpmorgan chase, the nation's largest bank, earlier this month. investors have launched a class- action lawsuit against facebook, morgan stanley, and other banks that underwrote the tech giant's public offering, claiming the companies misstated facts and concealed relevant information about facebook's potential prospects. plaintiffs say they lost more than $2.5 billion as facebook shares plunged in the days after

the company went public. another lawsuit has reportedly been filed in california. regulators including the securities and exchange commission said they plan to probe issues we did to the offering. an attorney for a plan to said investors were misled. >> when you raise money in the market, you're required to disclose material information. what apparently happened here, what is being discussed, is there was information that was a vague and separately, people at facebook allegedly were talking to morgan stanley and the other room underwriters, giving them more information, and that is what these cases are about. >> our next guest asks why so little has changed in the nearly four years after the global economic crisis of 2008. director charles ferguson first examined network of academics, financial and political players who contributed to the nation's financial crisis in his documentary, "inside job." charles ferguson has a new book

out called, "predator nation: corporate criminals, political corruption, and the hijacking of america." it is based on newly released court filings that reveal how major players contributed to the financial crisis. jpmorgan chase, facebook -- talk about these latest developments in the context of the creditor nation. >> i think there is an indication centum of the fact the sector in the u.s. remains at of control and not sufficiently regulated. and also, not sufficiently, not at all almost, subject to criminal prosecution and it violates the law. i think we unfortunately, expect to see a continuation of this kind of behavior. >> talk about what is so fascinating in your book, it is looking at the academic part of

the network that you talk about misleading us, the ivory tower. >> yes, this is a problem that i think many americans remain unaware of. i was quite struck when my film was released that most people who saw the film and spoke with me afterwards commented the section and the economics discipline was the most surprising and shocking to them. what has happened is that over the same period of time, roughly the last 30 years, the money has become so important in american politics, also more important american academia. the same interest groups, industries, companies that began contributing to political campaigns and building up lobbying organizations and engaging in revolving door hiring in the political sphere also began during the same thing in the american academia

to the point that now there is actually an industry that is probably a couple of billion dollars a year of selling academic expertise for people who have public policy, legal, our law-enforcement problems. >> let's go to a clip of "inside job" that deals with the links between academics at elite institutions in the u.s. and financial industry. hear you talk to an economics professor at columbia and harvard. >> are the last decade, the financial-services industry has made about $5 billion worth of political contributions in the u.s.. that is kind of a lot of money. that does not bother you? >> no. >> he's a professor at harvard and one of the world's most prominent economists. as president reagan's chief economic advisor, he was a major architect of deregulation.

from 1988 until 2009, he was on the board of directors of both aig and aig financial products, which paid him millions of dollars. do you have any regrets about having been on the board of aig? >> i've no comment know, at no regret of being on the board. -- no, and now regretting on the board of aig >> d had any regrets about the decisions of aig? >> i can say no more about aig >> this is the dean of columbia business school and the chairman of the council of economic advisers under george w. bush critic likes to think the financial services industry has too much political power in the u.s.? >> i don't think so, no. you certainly would not get that impression from washington.

>> many prominent academics have the financial industry shape public debate and government policy. the analysis group, charles river associates, compass lexicon, and a lot consulting group managed a multibillion- dollar industry. two bankers or ralph and matthew. bear stearns had fund managers prosecuted for securities fraud. after hearing the analysis group, both were acquitted. glenn hubbard was paid $100,000 to testify in their defense. >> do you think the economics discipline has a conflict of interest problem? >> i am not sure i know what you mean >> do you think a significant number of financial economists have a conflict of interest that in some ways my call into question --

>> i see what you're saying. i doubt it. most are not wealthy business people. >> glenn hubbard makes $250,000 a year as a board member of metlife and was formerly on the board of capmark. it went bankrupt in 2009. he has also advised numerous securities, and many financial firms. >> that was a clip of the oscar- winning documentary "inside job." it was decorated by matt damon. our guest is charles ferguson, author of, "predator nation: corporate criminals, political corruption, and the hijacking of america." any talk about these academics, who have also become pundits on television, which is how many people have come understand financial issues, or profiting from the downfall? and bring in larry summers, formerly the president of harvard. >> unfortunately, larry summers,

who i've known for very long time, it's kind of exhibit a with regard to this phenomenon. now there is the revolving door which is a three-way or triangular way of involving academia, politics, and policy positions and major industries and financial-services, which is probably the most important of them, slightly behind would be energy and telecommunications. larry summers, first as an academic and then as a senior government official, but this point has held almost every senior policy position in economics -- by this point, he has held almost every senior policy position in economics. he participated in the deregulation of the american services industry and a heavyweight, after he left the

clinton administration were the invention became secretary of treasury, then became president of harvard -- where he became the secretary treasury, the become president of harvard. he also began consulting for hedge funds. after he was forced out as president of harvard, he increased his consulting activities earning $5 million a year for one day a week of work hedge fund, and making over $1 million year giving speeches to financial organizations. at the same time, he continued to participate in policy debates. most famously, in 2005, he was president at the jackson hold conference, the -- jackson hole conference. at that conference, the then

very famous economist that was the chief economist at the imf, delivered a paper in which he warned about the growth of risk in the financial-services industry and the potential for the catastrophic economic meltdown as a result of increased risk taking and finance. and larry summers at the end of the presentation, stood up and the very, very brutally criticized him and dismissed all of his concerns. there have been many other examples of people who engaged in similar behavior. glenn hubbard is certainly not one but he is now senior economic advisor to the romney campaign. it unfortunately has become a completely bipartisan issue. very strong financial ties to the financial services industries on both sides.

>> you make a critical point when you won the oscar at the 83rd annual academy awards. you won it for "inside job." in your acceptance speech, he drew applause after calling for the jailing of financial executives. >> forgive me. i must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail and that is wrong. [applause] >> what crimes were committed, charles ferguson? what should executives be put in jail for? >> it is a very long list. serve at the top of the list would be securities fraud, accounting fraud and violations. securities fraud is precisely what the name implies. if you sell a security but lie about it or omit information,

that is a crime. we know a very high fraction of securities during the housing bubble that led to the financial crisis were in fact sold fraudulently. the mortgage lenders and investment banks created, structured, and sold them did not tell the truth when doing so. and those were very, very significant lies and misrepresentations. and late in the bubble, a number of banks and investment banks began not only selling fraudulent securities, but creating and selling securities for the purpose of betting against them like profiting on their failure. that also involved a great deal of dishonesty. there is not in a single criminal prosecution with regard to that kind of. following that with the accounting fraud. we know now that many of the

lenders and investment banks were dishonest about their own financial positions, a concealed the potential size of their losses. the housing bubble in effect was a ponzi scheme. it eventually had to end, like all ponzi schemes. when it did, we saw the results of the 2008 crisis. it is clear many people knew it was going to in that way. their own firms, they knew there would be catastrophically affected and lied about it to the public. and third, a law that requires the ceo's chief financial officers of all banks and public companies to certify their financial reports and also the adequacy of their internal financial controls. we have extensive evidence now that the senior management, a number of the bank's, were

extremely, explicitly warned the financial controls were inadequate and they're counting was fraudulent, yet they continue to certify their financial reports. there is done a single criminal prosecution. -- there were saying it was not illegal. this is a clip of president obama speaking at a white house does conference in october. >> first on the issue of prosecutions on wall street, one of the biggest problems about the collapse of lehman and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff was not necessarily illegal, it was just immoral or

inappropriate or reckless. that is exactly why we needed to pass dodd-frank, to prohibit some of these practices. the financial sector is very creative and always looking for ways to make money. that is their job. if there are loopholes and rules that can be bent and arbor charged to be had, they will take advantage of it. without commenting on particular prosecutions -- obviously, that is not my job but that of the attorney general's -- i think part of people's frustrations, part of my frustration was a lot of practices that should not allowed or not necessarily against the law, but they have a huge destructive impact. >> charles ferguson, your response to president obama? >> president obama is wrong. at this point, it is very believet for me to it nto

that he does not know. we have evidence that there was extensive and highly illegal conduct in the housing bubble in the financial crisis. >> explain further. >> well, as i mentioned a couple of minutes ago, we know now there was extensive securities fraud and accounting fraud. we know there were violations -- just one example among many, and may of 2008, a man by the name of matthew lee was senior vice president at lehman brothers, hand delivered to four senior executives of lehman a memo, which i quoted in my book which is available on the web. if you kugel matthew lee lehman, you will find it read in which he says -- i feel it is my ethical and legal responsibility

to point out to you there are billions of dollars in unjustified assets on our balance sheet. he goes on to say in some detail in this memo that his concerns are very serious. and that he feels that he absolutely must bring them to the attention of senior executives. he also says he had been a loyal lehman employees since 1984, which he had been. that is one example. cfo and ceo continue to certify the financial statements of before until a few days lehman went bankrupt did they have not been prosecuted. neither has anybody else. there is publicly available information from lawsuits and depositions, subpoenas, etc. that makes it extremely clear there is overwhelming evidence

of criminal behavior and there is not in a single prosecution critics deride a predator has taken over this country. how have they done so? >> luckily, i think it is too strong to say they've taken of the country, but they certainly have taken over significant portions of economic policy and the political system and, unfortunately, major portions of the economic discipline i think it has its roots in the late 1970's and early 1980's when america first began to encounter economic difficulties and when deregulation first started in earnest. since that time, we have seen a steady and dramatic growth in the use of money to influence politics and also academia.

the cost of running for president now and the cost of running for senate or the house has gone up by a factor of 20 since late 1970's. this is now many billions of dollars every election cycle. when you combine that with other similar trends are the last 30 years, the growing divergence between public sectors and government salaries, the growing use of revolving door hiring, the growth of lobbing sector, all of which exploded over the same time frame, you get to a situation in which the public sector and public interest are outspent by a very specific private interests, especially in the financial sector, but literally probably 50 or 100 to 1. >> you write not only about the corruption, the lawbreaking,

creditor elite, but also have to take the country back. interestingly, you say the road financial sector is sears the dangerous to the economy of america right now. how do you challenge this? >> well, a lot of hard work. at this point, it is going to have to come from below, from the american people. i think is going to have to resemble a movement similar like say the environmental movement for civil rights movement, the women's movement in the sense that it is not going to come from the highest levels of the policy system and it is not when it comes from the highest levels of electoral politics. to a great extent, they have been captured and neutralized by the financial sector and other narrow financially powerful

interest groups. >> and the significance of occupy rising under president obama? >> i hope it is the first that in what will have to be probably a long and difficult process of forcing our leaders to pay attention and changed. >> finally, charles ferguson, he right -- the united states so long a beacon of opportunity for the ambitious pour has become the world's most unequal societies. >> unfortunately, true. the american dream is dying as we watch it. and now you are better off being poor in asia or europe than in the united states critics charles ferguson, academy award winning director of "inside job." his new book is called, "predator nation: corporate criminals, political corruption, and the hijacking of america."

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