Inside Job Page #13

02:
18:31.25

SCOTT TALBOTT:
The board of directors and the compensation committees are the

two bodies best situated to determine the pay packages, uh, for executives.

CHARLES FERGUSON: How do you think they’ve done over the past 10 years?

SCOTT TALBOTT:
Well, I think that, if you look at those, uh, in, I would give about a B.

Because –

CHARLES FERGUSON: A B?

SCOTT TALBOTT:
Yes.

CHARLES FERGUSON: Not an F.

SCOTT TALBOTT:
Not an F, not an F.

02:
18:51.11

NARRATOR:
Stan O'Neal, the CEO of Merrill Lynch, received 90 million dollars in 2006

and 2007 alone. After driving his firm into the ground, Merrill Lynch's board of directors

allowed him to resign; and he collected 161 million dollars in severance.

02:
19:08.05

CHARLES FERGUSON: Instead of being fired, Stan O'Neal is allowed to resign, and

takes away 151 million dollars.

SCOTT TALBOTT:
That's a decision that that board of directors made at that point –

you know –

CHARLES FERGUSON: And what grade do you give that decision?

SCOTT TALBOTT:
Uh, that's a tougher one. I don't know if I would give that one a B as

well.

02:
19:23.24

Inside Job transcript – Sony Pictures – September 2010

58

NARRATOR:
O'Neal's successor, John Thain, was paid 87 million dollars in 2007; and

in December of 2008, two months after Merrill was bailed out by U.S. taxpayers, Thain

and Merrill's board handed out billions in bonuses.

In March of 2008, AIG's Financial Products Division lost 11 billion dollars. Instead of

being fired, Joseph Cassano, the head of AIGFP, was kept on as a consultant – for a

million dollars a month.

02:
19:55.27

MARTIN SULLIVAN:
And you want to make sure that the key players and the key, key

employees, uh, within AIGFP; yeah, we retain that intellectual knowledge.

02:
20:03.18

DOMINIQUE STRAUSS-KAHN: I attended a very interesting, uh, dinner, organized by

Hank Paulson, a little more than one year ago; uh, with some officials and a couple of,

uh, CEOs from the biggest, uh, banks in the U.S. And uh, surprisingly enough, all these

gentlemen were arguing, uh, we were too greedy; so we have part responsibility. Fine.

And then they were turning to the treasurer, to the secretary of the Treasury, and say,

you should regulate more, because we are too greedy, we can't avoid it. The only way

to avoid this is to have more regulation.

02:
20:34.03

CHARLES FERGUSON: I have spoken to many bankers about –

DOMINIQUE STRAUSS-KAHN: Um hm.

CHARLES FERGUSON: – this question, including very senior ones. And uh, this is the

first time that I've ever heard anybody say that they actually wanted their compensation

to be regulated –

DOMINIQUE STRAUSS-KAHN: Yeah, because it was at the moment where they were

afraid. And uh, after, when solution to the crisis began to appear, then probably they,

they changed their mind.

02:
21:00.06

NARRATOR:
In the U.S., the banks are now bigger, more powerful, and more

concentrated than ever before.

Inside Job transcript – Sony Pictures – September 2010

59

MARTIN WOLF:
There are fewer competitors, and a lot of smaller banks have been

taken over by big ones. JP Morgan today is even bigger than it was before.

NOURIEL ROUBINI:
JP Morgan took over first Bear Stearns and then WAMU; Bank of

America took over Countrywide and Merrill Lynch; Wells Fargo took over Wachovia.

02:
21:26.25

NARRATOR:
After the crisis, the financial industry, including the Financial Services

Roundtable, worked harder than ever to fight reform. The financial sector employs 3,000

lobbyists, more than five for each member of Congress.

02:
21:41.04

CHARLES FERGUSON: Do you think the financial services industry has excessive

political influence in the United States?

SCOTT TALBOTT:
No. I think that every person in, in the w-, in the country is

represented here in Washington.

CHARLES FERGUSON: And you think that all segments of American society have

equal and fair access to the system?

SCOTT TALBOTT:
The, you can walk into any hearing room, uh, that you would like.

Yes, I do.

CHARLES FERGUSON: Um, one could walk into any hearing room; one can not

necessarily write the kind of lobbying checks that your industry writes, or engage in the

level of political contributions that your industry engages in.

02:
22:16.28

NARRATOR:
Between 1998 and 2008, the financial industry spent over 5 billion dollars

on lobbying and campaign contributions. And since the crisis, they're spending even

more money.

02:
22:30.07 The financial industry also exerts its influence in a more subtle way; one

that most Americans don't know about. It has corrupted the study of economics itself.

GEORGE SOROS:
Deregulation had tremendous financial and intellectual support.

Because, uh, uh, people argued it for their own benefit. The economics profession was

the main source of that illusion.

02:
22:58.15

Inside Job transcript – Sony Pictures – September 2010

60

NARRATOR:
Since the 1980s, academic economists have been major advocates of

deregulation, and played powerful roles in shaping U.S. government policy. Very few of

these economic experts warned about the crisis. And even after the crisis, many of

them opposed reform.

02:
23:16.20

CHARLES MORRIS:
The guys who taught these things tended to get paid a lot of

money being consultants. Business school professors don't live on a faculty salary.

They do very, very well.

02:
23:32.03

{MARTIN FELDSTEIN

PROFESSOR OF ECONOMICS, HARVARD}

CHARLES FERGUSON: Over the last decade, the financial services industry has made

about 5 billion dollars' worth of political contributions in the United States. Um; that's

kind of a lot of money.

That doesn't bother you?

MARTIN FELDSTEIN: No.

02:
23:47.26

NARRATOR:
Martin Feldstein is 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. And from 1988 until 2009, he was on the board of directors of

both AIG and AIG Financial Products, which paid him millions of dollars.

02:
24:10.05

CHARLES FERGUSON: You have any regrets about having been on AIG's board?

MARTIN FELDSTEIN: I have no comments. No, I have no regrets about being on AIG's

board.

CHARLES FERGUSON: None.

MARTIN FELDSTEIN: That I can s-, absolutely none. Absolutely none.

CHARLES FERGUSON: Okay. Um – you have any regrets about, uh, AIG's decisions?

MARTIN FELDSTEIN: I cannot say anything more about AIG.

Inside Job transcript – Sony Pictures – September 2010

61

02:
24:32.01

{GLENN HUBBARD

CHIEF ECONOMIC ADVISOR, BUSH ADMINISTRATION

DEAN, COLUMBIA BUSINESS SCHOOL}

GLENN HUBBARD:
I've taught at Northwestern and Chicago, Harvard and Columbia.

NARRATOR:
Glenn Hubbard is the dean of Columbia Business School, and was the

chairman of the Council of Economic Advisers under George W. Bush.

02:
24:44.16

CHARLES FERGUSON: Do you think the financial services industry has too much, uh,

political power in the United States?

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