01/11/13 01/11/13 [captioning made possible by democracy now!] >> from pacifica, this is "democracy now!" >> jack has my complete trust. i know i am not alone in that. in the words of one former senator, having lew on your team as coach, is almost the luxury of putting anyone at any position in knowing he will do well. i hope the senate will confirm him as quickly as possible. >> as president obama taps jack lew to replace timothy geithner as treasury secretary, we look at his time at the top of citigroup which bet on the housing market to collapse and his backing of the deregulation of wall street.

what do you believe the deregulation of wall street pushed by people like alan greenspan contributed significantly to the disaster we saw on wall street several years ago? >> i don't personally know the extent to which deregulation drove it, but i don't believe deregulation was the proximate cause. >> we will speak with former financial regulator william black, author of "the best way to rob a bank is to own one." and matt taibbi with this new piece, the tax secrets and lies of the bella." >> par sabbai the treasury, it is all done by ex wall street people and current wall street people. ordinary people really do not have input into any of this. >> then, haiti. three years after the earthquake that killed over 300,000 people, we speak to jonathan katz,

author of, "the big truck that went by: how the world came to save haiti and left behind a disaster." all of that and more coming up. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman at least 120 people were killed in pakistan thursday in a series of bombing attacks mostly targeting shi'ite muslims and government soldiers. 86 deaths came in a twin bombing in the southern city of quetta, with scores dying in initial blast followed by more deaths when a car bomb struck police and rescuers who arrived at the scene. the band citigroup claimed responsibility for the attack, prompting fears of worsening sectarian violence in pakistan after more than 400 deaths in 2012. thursday's bombings came hours after at least six people were killed in the seventh publicly known u.s. drone strike inside

pakistan in less than two weeks. the obama administration has begun 2013 with a flurry of drone attacks inside pakistan, raising speculation is accelerating the bombings before its capacity to carry them out is diminished with a planned withdrawal from afghanistan by the end of next year. according to a tally by the website long war journal, u.s. drones have already killed as many as 11 civilians and 30 suspected militants in the first 10 days of the year. if confirmed, that would mean a death ratio of more than one civilian for every three suspected militants. it would also already exceed the official civilian death toll for 2012, though that number is likely to small because u.s. policy deems all adult males as militants unless contrary evidence emerges after their deaths. according to the washington post, the future stationing of cia bases that launch the drone strikes will be among the topics discussed by the white house and afghan president karzai during

karzai's current visit to washington. the obama administration has reportedly set its expectations low for passage of a new assault weapons ban in congress despite a change in national consciousness in the aftermath of last month's newtown shooting massacre. the new york times is reporting the white house has decided it will be exceedingly difficult for the ban to make it to president obama's desk, leading administration aides to develop other gun control rules that would draw bi-partisan support. the alternatives include universal background checks, more government research on gun violence. the white house is also reportedly considering a $50 million effort to fund the placement of hundreds of police officers and new surveillance equipment in public schools, a move that would resemble the national rifle association's call for armed guards in every school. news of the proposals comes as vice-president joe biden hosted gun industry representatives at the white house on thursday as part of his ongoing task force on u.s. gun violence.

in his remarks, biden vowed to issue its recommendation to president obama next week. >> with my colleagues, i am putting together a series of recommendations for the president that he will take a look at. there is a really tight window to do this. i committed to him i would have these recommendations to him by tuesday. there is a surprising, so far, is surprising recurrence of suggestions that we have universal background checks. not just closed the gun show loophole, but total universal background checks including private sales. >> the meeting included officials with the nra, who quickly attacked biden's task force in a statement shortly after. the nra said -- a number of states have got to tackle gun violence on their own following the newtown massacre.

in colorado, democratic governor john hickenlooper proposed thursday to require universal background checks on all state gun sales. his plan comes the day after new york governor andrew cuomo called for tightening the state assault weapons ban and limiting high-capacity magazines. all this comes as yet another school shooting occurred thursday, this time in california. a 16-year-old student armed with a shotgun walked into his high school and fired a fellow student, leaving the victim seriously wounded. the shooter fired at another student, but missed his target. the kern county police sheriff said he was carrying multiple rounds of shotgun ammunition. >> there was an active shooter that did not show up for school this morning for first period, then interrupted the class halfway through it, armed with a shotgun. he fired the first run, striking another student. the student is at the hospital in critical condition.

he is stable. he then tried to engage the second student that he named and tried to shoot him and missed. the teacher was trying to get the students out of the classroom and engaged the shooter who had numerous rounds of luggage of shotgun shells in his pockets. and engage the student or the suspect in conversation. >> according to fellow students, the shooter previously had been bullied by other students that have been expelled after was discovered he kept a hit list of people he wanted to target. meanwhile in colorado, a judge a has ordered shooting suspect james holmes to stand trial for killing 12 people and wounding dozens more at an aurora movie theater in july. holmes is set to appear in court today, but is unlikely to issue a plea. his attorneyatsay he is suffering from an unspecified mental illness. evidence emerged a pre-trial hearing this week that holmes took pictures of themselves posing with his firearms before

the attack took place. outside the courtroom, relatives of two of the shooting victims though -- spoke out about seeing holmes in person. >> it was very emotional for a lot of us. i think this whole time he has been detached. he looked very disheveled in court today. he basically looked very disinterested. >> honestly, you sit and look at a person and when you see there is no humanity left anymore? you don't look at him as a person, you really don't i took a glimpse at him. i don't feel hate or anger toward him, a just don't feel anything for him. >> the federal government has unveiled new restrictions on the high-risk home loans that pushed millions into foreclosure and helped spark the financial crisis. the consumer financial protection bureau announced new rules thursday permitting lenders -- forbidding lenders from issuing mortgages to those

ill positioned to repay the loan and preventing inducements for borrowers to take on crushing debt. in a statement, the bureau's director said -- has nominateda another former wall street to become a replacement for to the to the geithner. >> when the history books are written, tim geithner is going to go down as one of our finest secretaries of the treasury. jack has my complete trust. i know i am not alone. in the words of one former senator, having him on your team is equivalent as a coach have in the luxury of putting some of the at almost any position and he will do well. i could not agree more. i hope the senate will confirm him as quickly as possible. >> lew was an executive at citigroup from 2006-2008, at a time the financial crisis, and then along time proponent of

deregulation wall street. more after headlines. the pastor selected to deliver the benediction at president obama is an operation later this month has withdrawn following an uproar over anti-lgbtq comments he made in the 1990's. the rev. had come under opposition after it was revealed he called on christians to fight what he called the lgbtq movements aggressive agenda. the inauguration committee said it was unaware of the pastor's prior stance at the time he was elected. a new study has found up to half of all food worldwide is going to waste. britain's institution of mechanical engineers sayat least 1.2 billion of the 4 billion tons of food produced each year is thrown out due to problems with harvesting, transporting and storage, as well as wasteful behavior from sellers and consumers. the report calls food wastage --

the findings come as nations across the globe continue to grapple with soaring food prices. brendan cox of the group save the children said the soaring food costs threaten to cause more unnecessary deaths. >> there is a new normal of the food crisis. and the last year we have seen wheat increased by 25%. already around 3 million children die every year as a result of malnutrition. what could happen next year could make the situation much worse. >> fears of a spike in food prices have run after a long standing drought prompted the obama administration to declare a natural disaster in large parts of the midwest. conditions in the courtroom and we producing states -- kansas, colorado, oklahoma, and taxes -- continue to be the worst on record.

thousands of people rallied in venezuela thursday to mark what would have been the swearing-in of ailing president hugo chávez. the inauguration has been delayed while he remains in the hospital following his fourth cancer surgery. the vice president adjust the supporters. >-- addressed the supporters. >> 30 days have passed since the operation of our commander hugo chávez, and at this very moment, as you know, he is fighting a battle. we tell him from here, commander, easy, keep up your battle. you have a revolutionary people. >> while the venezuelan supreme court has ruled chávez is still president despite missing his swearing-in, the opposition is calling for a caretaker government to and new elections. two democratic congress members are planning to walmart ceo was f oreallocations supporting the retail expansion of walmart

as early as 2005. two show walmart international's general counsel emails duke and other executives about specific bribes for the opening of a number of stores in november 2005, contradicting walmart claims its top officials were unaware. in a letter, the congress members wrote -- the justice department is currently investigating whether walmart violated the foreign corrupt practices act, which makes it a crime for american corporations to bribe foreign officials. you can go to democracynow.org to see our interview with pulitzer prize-winner david barstow. the entire faculty of the seattle area high school has voted to refuse giving students a standardized test used in teacher evaluations. a unanimous decision that is

like the the first of its kind in the nation, teachers at garfield high school said the math tests are a waste of time, money, and resources that are then unfairly used to grade their performance. >> today is not just about testing in general. it is about a particularly flawed test. >> i just see no use for it at all. so i am not going to do it. >> riding on her website, former bush assistant secretary of education diane ravitch said the vote could have national ramifications for showing teachers -- nominations for the 85th academy awards were unveiled thursday. the documentary category features three films featured on "democracy now!" "the invisible war," "how to survive a plate," and "five broken cameras."

those are some of the headlines. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with juan gonzalez. >> welcome to all our listeners and viewers from around the country and around the world. president obama is facing criticism for nominating another former wall street executive to become treasury secretary. thursday, obama tapped his own chief of staff jack lew to replace timothy geithner air. lew was an executive at citigroup from 2006 to 2008 at the time of the financial crisis. he served as chief operating officer of citigroup's alternative investments unit -- a group that bet on the housing market to collapse. lew has long pushed for the deregulation of wall street. from 1998 to january 2001 he headed the office of management and budget under president clinton. during that time, clinton signed into law two key laws to deregulate wall street -- the

financial services modernization act of 1999 and the commodity futures monitored his asian act of 2000. on thursday, independint senator of vermont bernie sanders criticized the nomination saying -- at a press conference at the white house thursday, president obama praised the record of jack lew. >> jack has the distinction of having worked and succeeded in some of the toughest jobs in washington and private-sector. as a congressional staffer in the 1980's, he helped negotiate the deal between president reagan and tip o'neill to save social security. and president clinton, he presided over three budget surpluses in a row. so for all the talk out there about deficit-reduction, making sure our books are balanced, this is the guy who did it. three times. he helped oversee one of our

nation's finest universities and one of our largest investments. in my administration, his managed operations for the state department and the budget for the entire executive branch. over the past year, i have sought his advice on virtually every decision i've made from economic policy to foreign policy. >> for more on the nomination of jack lew as well as other news about wall street, we're joined by william black, author of "the best way to rob a bank is to own one." he is an associate professor of economics and law. his recent article for the huffington post is called, "jacob lew: another brick in the wall street on the potomac." we're also joined by matt taibbi, contributing editor for rolling stone m sazine. his latest piece, "secrets allies of the bailout," which we will talk about in a bit. he is author of, "griftopia: a story of bankers, politicians, and the most audacious power grab in american hisotry." professor black, your assessment of jack lew? >> on financial matters, jack

lew has been a failure of pretty epic proportions. he gets promoted precisely because he is willing to be a failure, and is a useful to wall street interests. so you have mentioned two of the things in terms of most important and most destructive deregulation under president clinton by statute. but he was also there for much of the regulation by rule and strong proponent of it, and he was there for much of the cutting of staff, for example, the fdic lost three-quarters of its staff and a huge loss began under clinton. and the whole reinventing government, lou was a strong supporter of that. we were taught, instructed by

washington that we were to refer to banks as our clients and our role as regulators, and to think of them as clients. he goes from there to wall street where he was a complete failure. you noted that part of what citicorp did was a bet that housing would fall. that is one of their winning bets. the action made a bunch of losing bets as well. and the unit he was heading would have not been permissible but for the deregulation of getting rid of glass-steagall under president clinton. and you saw as an example of citicorp why we should not be doing this. why would we create a federal subsidy where all of us through the u.s. government are on the hook for citicorp's gambling on financial derivatives for its own account?

running a casino operation. that makes no public policy sense. then he comes in to the obama administration and he was disastrously wrong. he tried very hard to impose austerity on the united states back in 2011, which he wanted european strategy which has pushed the eurozone back into recession. spain, greece, and italy are in great depression levels. -- great depression levels of unemployment this guy is also intellectually dishonest. he will not own up to his role in the regulations role in producing this crisis. not just this crisis, but the enron-era crisis and the savings-and-loan debacle. >> matt taibbi, your reaction to the nomination of jack lew by president obama?

>> i agree with everything professor black said. the symbolism of this choice i think it's important for people. just the mere fact of picking somebody from citigroup and from the same nexus that timothy geithner came from. you heard barack obama as he was introducing jack lew, praising timothy geithner as someone who will go down in history as one of the great treasure secretaries of all time. i think what this tells everybody is jack lew was one represent absolute continuity with the previous treasury secretary who had a very specific agenda when it came to wall street's. i think we're going to expect more of the same, more of the same really being over and covert backing of these institutions that were too big to fail. citigroup being the worst ous example.

>> in 2010, jack lew appeared before the senate. during the hearing, he was questioned by senator bernie sanders. >> do you believe the regulation of wall street pushed by people like alan greenspan contributed significantly to the disaster we saw on wall street several years ago? >> senator, when we discussed, i mentioned i don't consider myself an expert in some of these aspects of the financial industry. i have been a manager, not an investment adviser. my sense is as someone who has generally been familiar with these trends is that the problems in the financial industry receded deregulation. there was an increasing

emphasis on highly abstract derivative products that got us to the point that in the time frame leading up to the financial crisis, risks were taken, were not fully embraced were well understood. i don't personally not know the extent to which the regulation drove it, but ion't believe the regulation was the proximate cause. i would refer to others who are more expert about it. >> that is jack the responding to bernie sanders when president obama announced his nomination of treasury secretary or to treasury secretary of jack lew, senator sanders said we don't need a treasury secretary that things wall street deregulation was not responsible for the the financial crisis. >> >> well, we can agree that he lacks expertise in the area, but he was supposed to have expertise. this was supposed to be his area of expertise, both in his role

as omb head under clinton, and then of course as being in the industry and actually implementing the fruits of this deregulation. he has the history in one sense correct. he says the problem arose before deregulation. that is true that derivatives were already a problem before deregulation. so it was proposed to deal with the problem by having a regulation to do with credit default swaps. the clinton administration in league with greenspan, in league with phil gramm and with one of the important architects of all of this being jack lew, squashes berkeley born to destroy the proposed regulation and pass something, talk about a dishonest phrase, that not only

said you cannot go forward with this particular regulation, but the statute actually said, we hereby withdrawn all regulatory powers to protect the nation period. from the federal government, state and local government. we exempt you from the gambling laws. we exempt you from the boiler room laws to prevent fraudulent operations. it is one of the most extraordinary of use of things in the world, -- of these things in the world. not just the disaster of aig, but of the ceo's. they blew up a larger portion of the world. those ceo's would not have been possible without these credit default swaps. this is a guy who designed the disaster, participated in the disaster on wall street, was made rich by ed -- we of not

talked about the fact he got a bonus. he got it through the bailout of citicorp by the u.s. government. so he produces disaster profits, we pay him bonuses for causing the disaster, and then we have the absurdity -- the president saying this is the man with a track record of unmitigated success. it is exactly the opposite in terms of finance. he is a worthy successor to tim geithner and that he has screwed up everything substantively he has ever touched. >> william black, a want to ask about another aspect of lew's portfolio. his stance on austerity? you have raised questions in terms of his continued support of austerity measures as opposed to efforts by the government to stimulate the economy.

could you talk about that? >> this is an army as well in terms of the political aspects and obama. under lew and his new incarnation of a while back as omb head for obama, i have a piece that talks about how omb under obama sounds almost exactly like the tea party. it adopts all of their rubric about these terrible social programs, these terrible safety net, and how it is going to imperil our nation and what we need to do is be balancing the budget. in other words, austerity. had obama succeeded in following lew's recommendation in july 2011 when there were trying to negotiate the so-called grand bargain, which is really the grand the trail of the safety net, unemployment in july 2011

was 9.1%. austerity in the united states would have done just what it did in europe. unemployment would have surged. all through 2012, the election year, unemployment would have been going up well above 10%, quite possibly into the 11% or 12% range, which is where it is in europe. obama would have been toast. he would have been crushed in the election. the democrats would have lost control of the senate and such. and these folks, even today, are climbing the failure to achieve the grand the trail -- the trail and safety net is the great disappointment. they not only tried to destroy themselves and the country, they are continuing to do that, indeed, but for harry reid, literally throwing the obama administration's suggestion that

they do cuts to the safety net in the fireplace and burning it up, they would have gotten it as part of this interim austerity deal that was just done about eight days ago. >> we're going to take a break and come back to this discussion with william black, professor and matt taibbi, rolling stone editor. we will be back in a moment. ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with juan gonzalez. >> we turn to look at the state of wall street for years after the massive bailout and the news of this week's mortgage settlement with the major banks. matt taibbi has just written a new piece for rolling stones titled, "secrets and lies of the

bailout." also still with us is william black. he is and is as a professor of economics and law at the university of missouri kansas city. matt taibbi, the latest announcement of the agreement for some of the banks that pay several billion dollars now to supposedly to homeowners who were cheated and one where another into the foreclosure crisis? >> i think this is just -- jamaica on the most significant aspect is it speaks to the failure of the government to address the foreclosure process still four and five years after the financial crisis. one of the points i make in the piece i just wrote is that foreclosure relief was originally written into the statute, the tarp statute as a primary function of the original bailout. it is in black and white that tarp was supposed to provide a massive program for foreclosure

released and never got around to it. the only bailout program that never provided any foreclosure relief was ham, and the only spent about $3 billion for $4 billion out of all of that program. through litigation, there are these sediments that are starting to trickle in, but it is too little, too late. if you contrast that from the beginning of the bailout of the banks and financial companies were instantly handed hundreds of billions, in trillions of dollars in relief, and i think that dichotomy is in for for people to recognize that relief for ordinary people is still coming slowly and insufficiently years later, were as relief for wall street can instantaneously and was successive. >> the latest is about aig, the board is decided not to sue the american people for not bailing them out enough, not joining the former ceo. >> "saturday night live" routine. >> can you talk about the

significance and what is going on? greenberg, the former ceo. >> this is a longstanding dispute between the former ceo of aig, hank greenberg, and the government. if you actually read greenberg's sue, there are some points that have a little validity. it is a preposterous that greenberg, who in a way was, like a patient zero of the financial crisis because the scandal he started at aig back in the early 2000's, where he was artificially inflating the balance sheet of aig, that led to a downgrade of aig which led to the catastropat of 2008 when the company employed it. that subsequently caused the entire financial crisis. you can really point to hank greenberg as maybe the guy who cause the financial crisis and here he is suing the american government over the bailout. one thing he says in the

lawsuits, the bailout of aig was not really a bailout of aig but the companies that were owed money by aig because they give 100 cents on the dollars to all of the counterparties aig bac goldman sachs and deutsche bank and barclays. and if he were in a position, he would have negotiated a much tougher deal. that is probably true. there is some validity to that point that there is no way under any rational circumstances that those companies should have gotten 100 sense of a dollar for the money there were owed by aig. >> william black, i want to ask about this whole issue of a march -- for its settlement. to me it is amazingly scandalous that years later justice has not been forthcoming for all of these homeowners who lost their homes. i think the settlement calls for about $3.5 billion in cash to some 3 million homeowners?

that works out to maybe $1,000 per homeowner. here we had instances of banks with massive robosignings, evicting people from homes they did not legally own at the time. it became such a mess that the government review ended up wasting about $1 billion just on the consultants hired to review all of the bank foreclosures. what do you make of this settlement? >> so the first thing is, this is more of white matt and people like me have been writing about for years. the complete immunity of the elite wall street folks who caused this crisis through fraud, who became wealthy because of those frauds, then bailed out as a result of their frauds, and none of them are being prosecuted. we have in missions -- by the way, this would have continued

but for the discovery of this fraud. in other words, the banks for not stopping it on their own. the robosigning, that means what they were doing was lying systematically to the tune typically at the large places of 10,000 times a month. so over 100,000 times a year. committing felonies that would lead to people being made homeless in america in many cases. it is just astonishing aspect that nobody has gone to prison for all of this, and that they gave them one of the largest grants of immunity you'll ever see. the second thing, the money in the press reports is grossly inflated. there is only about $3 billion in cash. you're correct that works out to less than $1,000 per victim.

so it is exactly what ross key quotes with geithner as saying, that these housing programs were not designed for the victims. they were designed to "foment the runways for the banks closed which reduce their loss exposure. said the rest of this oppose it $5 billion in settlement is really just in the commercial world recall troubled debt restructuring, which are the things he would do anyway if the government did not exist because in most cases, it is better for the bank not to have the default to instead reduce the principal slightly. none of that is actually bailout. none of it is actually settlement. it is just the banks doing that which will profit maximize for the banks anyway. >> when jpmorgan chase jamie dimon testified, this is oregon

democratic senator questioning him. >> in 2009, your company benefited from half a trillion dollars in low-cost federal loans, $25 billion and tarp loans, tarp funds, untold billions indirectly through the bailout of aig that helped address your massive exposure in repurchase agreements and derivatives. with all of that in mind, wouldn't jpmorgan have gone down without the massive federal intervention both directly and indirectly in 2008 or 2009? >> i think you were misinformed. i think that is leading to a lot of problems you're having today. jpmorgan took tarp is was asked to buy the secretary-treasurer of the united states of america. the fdic in the room, tim geithner, chairman ben bernanke. we did not at that point need tarp. we were asked to, because we were told incorrectly, if nine

banks take this tarp, we can stop the sysm from going down. we did not borrow from the federal reserve except when they ask us to. they said, please use these facilities. it makes it easier. we were not bailed out by aig. we may be would of had a direct loss of $1 billion or $2 billion if aig went down. >> you have a difference of opinion of many analyy s who felt the aig bailout did benefit you enormously. i'm not going into this. this is not your hearing. i'm asking you to respond to questions. i only have five minutes. >> that was oregon democratic senator questioning jamie dimon from jpmorgan. the significance? >> one thing that is interesting is this is what the about inspector calls -- calls for original sin. the moment in time went right after tarp was passed and the

government elected to call companies that were unhealthy and insolvent, healthy and solvent. when they scrapped the plan to buy out troubled assets, tarp is the troubled asset relief program, they scrapped the idea of the days after the bill was passed and decided to dump a whole bunch of money on to the balance sheets of these banks. this was called the capital purchase program. they spent $125 billion off the bat on nine companies, and onene thing they said was, all of these companies are healthy and viable. it turned out later, according to numerous sources including all the tarp reports and barofsky and others, they did not even check to see if the companies were solvent at the time. they had no interest in discovering that one way or the other. many of these companies were on the brink of failure at the time. barofsky was told they there

were on the brink of disaster when there were given this money. it is interesting jamie dimon talks about how his company did not need the fed money. it came out in bloomberg costs freedom of information request when they got all the data from the audit from the federal reserve, came out his company at that time in late 2008 had a $50 billion or $60 billion line of credit with the fed on top of all of the money they were getting through the tarp bailout, to the bailout of bear stearns and other facilities. apparently, they did not need that $100 billion or whatever it was they got from the federal government, they were just taking it because they were being polite and asked to run the federal government. this fiction that they did not need the money, that they were healthy all the time, the government -- when not only give them money, but we vouched for them. now we're stuck of vouching for them basically forever. that is the ongoing bailout that

has become the real problem. >> i want to ask william black, in the deal the obama administration reached on taxes recently with the house republicans, there is stopping a lot of attention to the issue of what happened -- there has not been a lot of attention to what happened with carried interest. the hedge fund moguls of the world were most concerned about that. having their payments as capital gains instead of actual fees and salaries. can you talk about what the obama administration did there? >> let me mention one thing, though, that fits to his point. they also change the accounting rules so the banks did not have to recognize their losses so that they could hide them and pretend to be healthy. so that is a huge part of that story. as to taxes, you know, this was a classic example of the obama

administration snatching defeat from the jaws of victory where it had all the leverage and negotiated against itself once again. yes, the wealthiest folks -- and this is the irony, we're talking about the george rodneys of the world rid i'm sorry, the mitt romneys of the world. there the principal beneficiary through something that is completely unsupportable on any policy ground, which is this a carried interest. which simply treats and, as if it were not in, any more for the wealthiest americans who received their money from running hedge funds. and that is continued. >> let's in with the legacy of the outgoing legacy of the timothy geithner air. president obama praised his time in office. >> thanks to his steady hand,

our economy has been growing again for the past three years, our businesses have created nearly 6 million new jobs. the money we spend to save the financial system has largely been paid back. we put in place rules to prevent that kind of financial meltdown from ever happening again. an auto industry was saved. we made sure taxpayers are not on the hook if the biggest firms bail again. we have taken steps to help underwater homeowners come up for air and open new markets to sell american goods overseas. and we have begun to reduce our deficit through a balanced mix of spending cuts and reforms to a tax code that at the time we both came in, was too skewed in favor of the wealthy at the expense of middle-class americans. so when the history books are written, tim geithner is going

to go down as one of our finest secretaries of the treasury. >> that was president obama. professor black? >> first, geithner is a principled person who caused the crisis. he was opposed to the top regulator preventing it in new york and did nothing. second, he is greeted crony capitalism american style. third, those regulations in fact will not prevent future crises and were designed to make sure they were not. i agree strongly with matt, the choice of jack lew is to not only produce continuity with geithner's disasters failed policies, but to signal the administration's desire to continue the bailout of wall street. >> i think the legacy of tim geithner is simple. he is the arctic -- architect of too big to fail when this all blows up, and it will blow up because things cannot continue

the way they are right now, people are going to look back in history and say, who was to blame for this? timothy geithner will be the guy who designed this entire system. >> will always be remembered as a for secretary-treasurer who neglected to pay his own taxes. >> there is that, too. thank you for being with us, matt taibbi, his latest pieces "secrets allies of the bailout." we will have a link on democracynow.org. william black, professor of economics and law. we will be back in a moment rid this anniversary of the earthquake in haiti. ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with juan gonzalez.nz >> we turn now to haiti, where almost three years since the 7.0 earthquake devastated the country rebuilding has barely begun. almost 400,000 people are still living in crowded camps. a new report by amnesty international says the housing situation in haiti is nothing short of catastrophic. the earthquake on january 12, 2010 killed roughly 300,000 people and left more than one. finely people homeless and was already the poorest country in western hemisphere. a cholera epidemic, widely blamed on international u.n. troops, spread shortly after the earthquake and killed nearly 8000 people. according to reports, only about half the $5.3 billion in promised funding from

international donors has been paid out. critics point out even if the money that has been delivered, very little has made it directly to the haitian people the going to international non- governmental organizations, private companies involved in the relief effort. to talk more about the situation, we're joined by author and journalist jonathan katz, the only full-time american reporter in haiti when the earthquake struck port of prince. his new book is called, "the big truck that went by: how the world came to save haiti and left behind a disaster." explains where the massive international relief effort in haiti went wrong. we welcome you to "democracy now!" you were there that day of the earthquake. describe the scene and then what happened, how we have come to this 0.3 years later we're haiti continues to be such a catastrophe. >> i say this as a right to having just tried to write a book, it is almost indescribable. i was in the associated press house which cracked and fell

down around me but did not pancake on top of me, fortunately. the neighborhood behind my house was gone. swaths of the city were eviscerated. the conditions in the country now are nothing like that day, but unfortunately, it is very much like that afternoon before the earthquake struck. the country is as vulnerable now as it was then. despite a lot of big promises made in the reconstruction effort, on the whole, the situation has not improved. >> the world saw all the images of this enormous relief effort that appeared suddenly in haiti with promises. what are you most struck by in terms of the sheer waste of money that occurred? >> i would say there were some very expensive band-aids purchased. a lot of the money spent in the

wake of any natural disaster, but especially in a foreign aid context, kind of goes in circles. you're looking at a lot of money literally burned off for jet fuel or spent on hotel rooms for aid workers and officials who were on their way down. even things that really did ultimately buy things that got into the hands of people in haiti, you know, if you donated money to an organization that specializes in providing tarps for shelter and bags of rice for people to eat, afterward, people are left with a tarp and an empty bag of rice. what strikes when you look at it, there was a lack of permanence and durability. >> let's talk specifically about the big ngo's, the foundations, the countries that payton did not pay. i remember being in haiti when president clinton was there behind the kremlin palace and

there was a ceremony. he said the only two things i care about our my daughter's wedding, which also was about to get married, and haiti, restoring haiti. what happened? the clinton foundation was he here. he was the co-chair of the prime minister of rebuilding haiti. >> clinton were so many hats that it would take all our time to discuss his different individual roles. i would say largely bill clinton probably was doing what he thought was best in many circumstances. clinton had become the u.n. special envoy for haiti the year before the earthquake. his priorities are very particular. he came down with a name, for instance, to revitalize the garment sector, which some people call sweat shops, low- wage assembly factories. in some ways, those projects were successful in the sense

that they accomplished the goals they had set out, the goal of opening these factories back up. the question is, is that a long- term benefit for haiti? many say it is not. >> one of the role of the haitian government? whether it is from the perspective of sovereignty of running its own country or terms of confidence in being able to handle the situation? how did you assess the role of the haitian government? >> it is another mixed bag. you're talking about two governments over the last three years. rene preval at the time of the electioearthquake and then thern election that resulted in martelly as presidenpr the problem throughout has been the problem again that affects foreign aid all over the world in which donor countries avoid local governments, local institutions, fund through your

own agencies and ngo's their own military. that weakens institutions. as a result, the institutions were already weak coming into the earthquake, so they had a very hard time responding on their own. the present at that time, rene preval, was absent from the public eye even though apparently he was around town on a motorcycle on his own. since then, there has been in the election. it was a bit of a mess. there is a very heavy hand of the international community. president martelly has been extremely different governing style. but the institutions are no stronger than they were before. that is really the problem. >> jonathan katz last month the u.s. launched a $2.2 billion campaign to wipe out cholera over the next decade in haiti. the epidemic was widely blamed on u.n. troops and killed thousands of people. this is the u.n. humanitarian coordinator. >> the latest is since october

2010, we have heard about 620,000 infections and about 7700 deaths. it is an incredible academic. it is a terrible tragedy for every haitian family who has lost members. if there is a point of encouragement to be taken, is that this year in 2012, we've seen a real drop-off in the rate of infections and the rate -- the mortality rate. for example, this year we have had 117,000 cases, which is effectively to say, up until the end of last year, with the equivalent of 25,000 cases a week. this year, it has come down to about 2500 cases a week. 10%. and the number of deaths is about 12% of the total. >> that was the humanitarian coordinator on cholera. >> once again, with the u.n.

this is the situation of this and that, how was the play, mrs. lincoln? there was a lot of important work done by ngo's and u.n. agencies after the caller epidemic to stem its flow and prevent it from being even worse than it was. but all evidence shows the united nations peacekeepers brought the epidemic in the first place. in some ways, more grossly negligent, the u.n. has done a very good job of avoiding accountability over the last two and a half years. the newest initiative the u.n. has put forward, eradication is the good and lofty goal, but this project does not releasing to be able to do that. it is emotionally shuffling around existing money -- is mostly shuffling around existing money.

the united nations itself is putting in very little money, especially in light of all of the evidence. it is really a mountain of uncontradicted evidence the u.n. is responsible for the worst cholera outbreak in their history. >> what about the whole issue of the united nations peacekeepers? this long term a occupation in essence of haiti by the u.n.? what has been the relationship between the u.n. and the haitian people? rex it changes and depends on who you talk to at one time. they're definitely have been moments i was living in haiti and a talk to people even in areas where people have suffered quite a bit from the presence of the nation's troops in terms of collateral damage. children being killed in crossfire by you and bullets who were still even praising them being there because they felt they were driving down crime. there is a lot of resentment to the presence of the peacekeepers. what we're dealing with is

mission creep. they've been there since 2004. the mission now without some have anything to do with what the mission was originally and it is really not clear the most haitians why these foreign trips are on their soil. >> let's and with the words of edwidge danticat, the haitian author. >> their trade by has of receivers -- l they need is the opportunity by those both inside haiti and outside haiti who control the purse strings of six country. they have to remember that these men and women need to be able and want to and are willing to rebuild their country if they're given the opportunity to do so. >> that was haitian author edwidge danticat. that does it for today's show. democracynow.org for part two of our conversation with jonathan

katz, his new book, "the big truck that went by: how the world came to save haiti and left behind a disaster." democracy now! is looking for feedback from people who appreciate the closed captioning. e-mail your comments to