Moyers & Company; 127; Banking on Greed

You You This week of warriors and company I review myself as a capitalist. I know that's a bad word these days, but I do believe in capital markets if they're appropriately regulated.

It needs some basic rules and the rules need to make sure that when people do stupid things they suffer the consequences. It's not the taxpayer, not their customer, day and everything begins to seed. The food on our plate. You and me were seed at one point, the little calf that becomes the cow. Seed is the source of life and seed is the source of renewal of life. Funding is provided by Carnegie Corporation of New York, celebrating 100 years of philanthropy and committed to doing real and permanent good in the world. The Colberg Foundation, Independent Production Fund, with support from the Partridge Foundation, a John and PolyGuff Charitable Fund, the Clemens Foundation,

Park Foundation, dedicated to heightening public awareness of critical issues. The Herbalpert Foundation, supporting organizations whose mission is to promote compassion and creativity in our society. The Bernard and Audrey Rapaport Foundation, the John D. and Catherine T. MacArthur Foundation, committed to building a more just, verdant and peaceful world. More information at macfound.org and gummerwits. The Betsy and Jesse Fink Foundation, the HKH Foundation, Barbara G. Flashman, and by our sole corporate sponsor, Mutual of America, designing customized individual and group retirement products. That's why we're your retirement company. Welcome. Every day brings another reminder of the terrible unfairness that besets our country. Here's the latest that leaped out at me. Rolling Stones report on the fallen, the sharp sudden decline of America's middle class. In it, Jeff Teach describes a handful of everyday people made homeless, now living out of their cars and church parking lots in Southern California.

Once upon a time, one of them, Janice Adkins, had a plant nursery business in Utah that grossed $300,000 annually. But two years after the financial meltdown in 2008, sales had dropped by half in the value of her land even more. She tried to refinance, but four banks turned her down flat, four banks. Makes you wonder about all those big-time bankers at the other end of the scale. The ones who came running to the government and taxpayers for bailouts worth hundreds of billions of dollars then scooped up big bonuses and perks for themselves and went back to business as usual. And what a business. You've surely been hearing about the newest scandal in banking, sintering on Barclays Bank in London and on something called LIBOR. That stands for London Interbank Offered Rate. And it involves a group of bankers who set a daily interest rate affecting trillions of dollars of transactions around the world.

Your home mortgage, your college debt, your credit card fees. These could have been affected by LIBOR. It turns out some of those insiders were manipulating the index for their own gain. To make their bank look better off doing the financial crisis, to lower their borrowing cost and raise their profits, picking our pockets, lining theirs. The economist describes it as the rotten heart of finance. Here are some of the emails that have come to life. One banker in on the fix writes another, dude, I owe you big time. Come over one day after work and I'm opening a bottle of volunteer. And another, recruiting a colleague in the fix, wrote, if you know how to keep a secret, I'll bring you in on it. After being asked to falsify information and employee rights, always happy to help. Another trader, jotts down in his calendar, asks for a high six-m fix to remind himself to play with the numbers the next day.

Caught with its hand in the cookie jar, Marcus agreed to pay nearly half a billion dollars in funds to British and American authorities. And as many as 20 other megabanks are now under investigation, including city group and JP Morgan Chase. One MIT authority on finance says this dwarfs by orders of magnitude any financial scams in the history of markets. All this explains why I wanted to talk to Sheila Bear. She's a hero to many of us for her long fight for an honest and accountable banking system. After years working on Capitol Hill at the Treasury Department, the New York Stock Exchange, and the Commodity Futures Trading Commission, she was appointed by President George W. Bush to head the Federal Deposit Insurance Corporation, the FDIC. Now as senior adviser to the Pew Charitable Trust, Sheila Bear has just organized a private group of financial experts called the Systemic Risk Council. Among its members, former Fed chairman Paul Voker, former senators Bill Bradley and Alan Simpson, John Reed, once the chairman of city group, and Brooks Lee Bourne, the former CFTC chairman, who back in the 1990s accurately predicted an economic meltdown.

It's mission to prevent the banking industry from scuttling the reforms created by the Dodd-Frank Act and hopefully prevent another crash. She has a book coming out in late September about the need for reform called Taking the Bull by the Horns. She's also written two books for children about money and entrepreneurship, rock, rock, and the saving shock, and Isabelle's car wash. Sheila Bear, welcome. Thank you. Happy to be here. If you were trying to help some of those young people that you write for, understand this business called LIBOR, how would you begin? What's the once upon a time? I guess I would try to explain to them that when you borrow money, there's something called an interest rate, which is your cost of borrowing money. And there are different mechanisms for setting what that interest rate should be, and one of them is something called LIBOR. And we are discovering now that a lot of unscrupulous people were manipulating that interest rate, apparently, to line their own pockets.

And that is something that should be severely punished. Is there one thing in particular you've learned so far that caused you to hold your breath? Well, this one hobbies all my breath. I mean, I, you know, LIBOR always troubled me. There's always been judgment associated with what some people call a fudge factor. There's always been judgment associated with LIBOR, the LIBOR survey. You are supposed to look at various factors, which are recent transactions, or what other transactions are, what the market conditions are. You can use judgment. You don't have to tag it exactly to a transaction, but using judgment and have a potential bias in judgment is profoundly different from open collusion with other banks to low ball or high ball the rates to profit. I mean, these emails quite acknowledged that they were trying to manipulate the rate to benefit their trading position. And what's ironic is the trading desk of these banks were properly hurting the part of the bank that does the bread and butter lending. Because if they were lowering their interest rate, that would reduce the interest rate on loans, a lot of loans, that the lending part of the bank conducts to benefit the trading desk.

So they were even hurting themselves internally by doing this. So they're real world consequences to this? Yes, there are. Absolutely. According, as unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city's troubles were aggravated by banker's manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed. So there are real world consequences to this. There are counter parties to all these swap transactions, which is what they were trying to manipulate. And those counter parties were being hurt by it. Absolutely. It's shocking. It should be punished very severely. And I think there probably is going to be more information coming out of it before. So I think it's just starting. I think it's over. You say they should be punished, but the Justice Department the other day, and this settlement with Barclays, let the bank off if it paid the fund. Well, that doesn't suggest severe punishment, does it?

Another thing that troubles me about all the enforcement actions that are brought, and there haven't been enough of them. But they generally just tag the shareholders, right? So Barclays back, the shareholders ultimately pay this. There should be punishment of these traders, and higher up in management depending on how high it went. There should be not only cloth acts of compensation, but severe civil monetary penalties against the individual traders. Make them pay out of their own pocket. It's not much of a deterrent for them. If they're banks paying for it, they're consequences of their mistakes, not them personally. So I hope there is more of that. There should be certainly be more civil actions against the individuals, and there may be criminal activity involved here too. Let me play for you. Something said the other day by the former regulator Bill Black, who you may know. He's a hawk on holding banks, bringing banks to the bar of judgment. Take a listen. What you've just seen is a cartel in operation, which did exist and did distort live war for the benefit of the largest banks in the cartel. It is the largest rigging of prices in the history of the world by many orders of magnitude.

That's quite an indictment. Barkley, and possibly he says a dozen other banks operated as a price fixing cartel for their own financial benefit. What does that tell us about our financial system? Well, I don't think we know all the facts yet, but certainly we do know that from 2005 to 2008, there were documented instances of Barkley, according to Barkley's traders, including with other banks to influence the live war rate. I think just that by itself shows a culture of greed, of people feeling they're above the law, above ethical standards, basically justifying anything to make a buck. I don't think, I don't want the government setting interest rates. I don't want that at all, but I do want government regulation of how the market sets interest rates. There are red flags about live war back in 2008, and then the simple fix would have been to say that if you submit a rate to live war, it has to be based on an actual transaction. That you actually borrowed money at that rate, not your best guest today, what am I going to pay?

Because the process itself opened itself up to abuse, and then it completely spiraled out of control. That's one of the many things that was frustrating about this crisis. So many of the problems, the fixes were so obvious, and we just didn't have the political will in fortitude to just tell the banks you've got to stop doing this way. You've got to start basing this on an actual transaction. The fix is not hard, it was just never done. So, humor me for a moment. I'm the proverbial martian coming to earth, sent by martian control to report back home on what I can learn about this banking and political culture down here on this weird planet. And I come to you for help because you have this interstellar reputation for telling it as it is. How would you sum up this financial and political culture so that I can give a believable report back up there? Well, I think we lost our way in the mid-2000s between free markets and free for all markets. We forgot that you need some basic rules and standards to regulate financial markets. We defer too much to bank judgment. Libor is one example where we left it to banks to themselves to set important benchmarks.

So, we need to rein that back in. And the thing that worries me is that Washington, even notwithstanding all of this, we still end this horrible crisis in the horrible economic devastation that it has wreaked on so many individuals. We still don't have the political will and fortitude to get tough and say, you can't do this way anymore. I'm sorry if you're making money this way, but this is not a good safe way to make money. You need to stop these types of activities. All the reform is still just around the edges. We just don't seem to have the fortitude to stand up at these banks and tell them they need to start doing business differently, profoundly differently. Where is the indignation index in this country? Where's the anger that's right? I know. I think I worry that the public is getting cynical. I think there's been one of the reasons I started the Systemic Risk Council. Is I feel the special interest lobbying is in a calculated way trying to slow down reform, complicate reform, water reform down. And the public loses of interest. They become cynical about whether the regulators in Washington index any of this. And they don't exert counter political pressure to get meaningful reforms in place.

There is a group at Treasury, supposed to be doing this. Financial stability oversight council led by Timothy Geithner. And wasn't JP Morgan losing billions of dollars on its risk under the eye of the office of the comptroller of the currency? I mean, if they're regulation, they're oversight fail. What makes you think outsiders can have? Well, I think that's a very good question. I think there's a real problem with OCC. They are the main regulator for the largest banks. I think there's a very difficult cultural issue at the office of the comptroller of the currency in terms of whether they protect the public or whether they protect the banks. If they're trying to protect the banks, they're going to miss things because their perspective is going to be wrong. If they're in, you know, and these banks have huge government exposure with all their insured deposits. The OCC in particular has a fiduciary obligation to protect the government purse, to protect the government exposure from these insured deposits and the JP Morgan Chase trading. That was being done with excess deposits. They were playing around with it with insured deposit money.

And yes, they have enough shareholder capital to absorb the losses. So this is not going to be an event that costs the government money. But it's problematic because these are clearly inappropriate risks that were taken with government backed funds that should never have happened. Never should have happened in the bank. And OCC should not have let it happen. Given how egregious and consistent and repetitive all these scandals are, how can we say there's no political will? Why is there no political will? I think the political money is corrupted. But Congress, I think in fairness to regulators, when regulators try to get too assertive, they frequently get batted down by Congress. We're seeing it now with the CFTC and the derivatives regulator that is the one that an earth, this Libor scandal, and is working very hard to tame the derivatives market, which is a terrible source of systemic risk. And the House is trying to whack back their funding, whack back their appropriations so they won't have enough money to carry out their responsibilities. I don't understand it. I don't understand it. I think in Dodd-Frank, one of the chapters of my book is called The Orwellian Debate.

It's about the way financial reforms, the discussion about financial reforms were turned completely upside down. So things that would help stabilize the system were transformed into things that would hurt people when it was just the opposite. You get this now trying to raise capital standards. Banks need to put more of their own money at risk. That would help tame risk taking if they stopped using so much borrowed money and used more of their own money in their operations. So it's raising capital is all about. But the banks say, oh, you raise capital. It'll hurt our ability to live. It's going to raise cost for your mortgage or whatever. It's nonsense. But, you know, say it often enough and becomes true. So I think there's been a calculated effort to confuse the dialogue, to confuse the public about what is in their interest to do. And people who know and understand these markets really need to stand up and speak the truth and let people know what needs to be done. Despite all of this, there are still in Washington some politicians who cling to the free market ideology. If I were one of them and I was sitting here with you, how would you try to walk me back to earth?

Well, we did not have a free market in 2008. I am sorry, but we had chronic capitalism in 2008 and 2009. We build out basically anybody over a hundred billion dollars. We said the taxpayers are going to make sure you don't fail no matter how stupid you were. So that's not a free marketism. And I think as a Republican, I view myself as a markets oriented person. I don't ever want to go back to that kind of situation again. There are important new authorities in Dodd-Frank that will make sure we don't do bailouts again. The mismanaged banks do go into a bankruptcy-like process where they and their shareholders and their creditors take the losses, where their boards lose their job, their managers lose their job, their salaries are clawed back. That is all in Dodd-Frank. And so for people to say I'm a market oriented person, but not want the market to punish mismanaged institutions. Again, that's our willing. That's just upside down. That's not a market. Do you have to suffer the consequences of your mistake if they have a market?

I think we're at some kind of dysfunctional crisis here. A Gallup survey done last year reported that Americans trust in banks is down to an all-time low of 18%. And a recent pure research survey reports only 22% of Americans have faith in the government, in other words, to do this. People don't trust the financial industry and they don't trust the government to do the right thing in regulating the industry. Isn't that a recipe for paralysis and eventual decay? It is. It saddens me greatly and I don't blame them for being cynical. I really don't. I fought for five years, made a lot of enemies. But I did what I thought was right and we did make a difference in a number of areas, not as much as I would have liked, but we did stop a lot of bad things from occurring. This is really why I wanted to talk to you because you never really got your due. You wanted to break up the big banks, some of them. You resisted bailing all of them out. You tried to warn everyone about the abuse of subprime mortgages. You saw the impending housing crisis and sounded the alarm. You tried to put a stop to predator lending. You were, if I may say so, the champion of ordinary people. And over and over again, you were right and you lost.

And people say, what can we do? What do we do with it? Take to the streets, do we? We can put people in who are independent of the financial sector. And I do want to say it's not all banks. I hope people do differentiate. There are smaller banks out there, not all the big banks are completely complicit in all of this. So I think people should differentiate. But there is a cultural problem, no doubt. And I think it's more in the trading side and the security side of these very large financial organization and the traditional commercial banking side. Is Dodd Frank a good thing? We are better off having it than not having it. We are absolutely are. There are things I don't like about Dodd Frank. Like any piece of legislation, it's a compromise. I worked on the Hill. They say legislations like sausage. So you get a lot of stuff in there. But we are better off having it than not having it. A lot of it is up to the regulators in terms of how they implement it. I think there have been some strengths and weaknesses. There's not been enough coordination. I think the financial stability oversight council, which is comprised of all the individual regulators needs to exercise more leadership in coordinating these role makings and prioritizing them.

I had actually suggested the financial stability oversight council when I first testified on Dodd Frank before it became law. I had envisioned an independently cheered council that had its own rewriting authority to write system-wide rules. So you end this interagency negotiation that the industry frankly exploits. They will try to play one regulator off of another. So that's one of the things that Dodd Frank I'd like to see changed. But notwithstanding that, FSOC, this council does have significant powers and they need to exercise leadership and get any rules done. Is it even possible to regulate these big banks now? Well, that's a good question. I think they are too complex. I think the complexity is more of a problem in this size. A bank, even a very large bank that takes deposits and make loans, I really don't worry that much about them. But a bank that's into investment banking and securities trading and derivatives market making and insurance in addition to doing the bread and butter commercial banking, I think those are too complex to manage. At a minimum, I think there's a regulatory authority to get this high risk activity outside of the insured bank, the bank where there's direct government exposure with insured deposits.

It's called ring fencing, but I wish for insured banks we would just keep their business to making loans. Payment processing is legitimate, trust activities. Those are the kinds of traditional things that commercial banks do. These derivatives market making, securities trading, investment banking, all of that should not be done inside of an insured bank and insured deposits should not be used for that activity. Whether that activity has economic worth or not, we can debate another day, but at least make people who want to do those types of high risk activities. Go to the market, convince private investors to fund it. Don't use insured deposits that are government backed and there's no market discipline whatsoever in that. Don't use those types of government backed funds to take these kinds of risks. So is your new group going to try to advocate for these changes? Well, I hope so. We're certainly going to, we'll be presenting these issues. I mean, too big to fail is front and center. And again, I think Dodd-Frank is just so we don't go too far into despair.

I think Dodd-Frank has started making progress and ending too big to fail. The funding costs, that the cost to these very large institutions of issuing debt, funding themselves, those costs have gone up. The credit ratings have gone down. The credit rating agencies as well as bond investors are starting to recognize that there's a reduced likelihood that they would get bailed out if there's another problem. So that's a positive sign. If you increase their funding cost, you're going to constrain their growth right there. But there's certainly additional measures that can and should be considered. And there are a lot of good proposals out. I'm on the hill. Senator McCain has one. Tom Onig at the FDIC has one. Senator Brown has one. And so I think we'll certainly will be discussing all of those. And hopefully taking a position on that. Yes. How do you break up these big banks when they're down to just six banks controlling so many of us, so much of our... Well, that's a real problem. And I think one thing that regulators could do is part of the, one of the things Dodd-Frank required is for these large banks to submit what we call living will. So they basically bake up plans. So if you get into trouble, how can the government break you up and sell you off in an orderly way without broader systemic ramifications?

The problem is these banks have thousands of legal entities. Their organizational structure itself is so complex. I've heard people call it a poison pill. How can you break them up? You can't even figure out how they're organized or structured. So simplifying those legal structures and dividing up the legal structures and accordance with business lines to facilitate a breakup. I think it would be very good market information to get out there. Because I think shareholders, that's another possible pressure point on this. Shareholders are getting frustrated. The mega banks do not deliver good returns at all. And they may well be, I think they are worth a lot more. They're broken up into pieces. But again, shareholders cannot be empowered to break them up. If they can't figure out what the organizational structure, how to do it? The shareholders in Barclays and any other complicit banks are going to be paying for this, right? Because they're going to lose millions of dollars. That's exactly right. This is going to be a terrible consequence for Barclays shareholders. I can only assume. And again, the risk management controls, the internal controls are so much more challenging when you're dealing with an institution of this size and complexity. Break them up. You know, have a commercial bank, have an investment bank, have a broker dealer. This is a lot easier to manage.

Why do you keep going? Well, I care about it. I mean, I think the human face of this tragedy was something that still troubles me. And the fact that we never really dealt with root cause of the problem, the mortgages. And we still have so many issues there. The interface between this risk taking and the real world consequences that it had for mainstream folks is something that I find very troubling. And maybe I view myself as a capitalist. I know that's a bad word these days, but I do believe in capital markets. If they're appropriately regulated, you need some basic rules. And the rules need to make sure that when people do stupid things, they suffer the consequences. It's not the taxpayer, not their customer. They suffer the consequences. And that's the kind of system I would like for us to have again. And I do care about that deeply. I care about our markets. And I want them to function correctly again, but they're not functioning correctly now. Do you see the increasing and vast inequality that's opened up between the top and the bottom in America and between the top and everybody else?

Do you sit connected to what we've been talking about to the bank? Yes, I do. I think with the inequality in income, you've also seen inequality in debt. So the higher income people have much lower debt lobes than lower middle income folks. So again, this is something that needs to be corrected. We need to reinstate a culture of savings and wealth accumulation and have a financial services industry that supports wealth accumulation, not wealth stripping. Some of us in the tax code, though, too. I think there do need to be the favorable treatment for capital gains. I don't think we need it. I think people who work for living, what they do is just as valuable as people who invest for a living. And why should, if you're a hedge fund operator, pay 15% and if you're a young person discovering the cure for cancer, you're paying 35% on your income. I don't get that. So I think equalizing making the capital gains on purity with income, income produced from work is something that could also help adjust this income inequality. I grew up surrounded by Republicans like you. You may be the last one spending.

Well, Reagan, 86 we got rid of it of the preferential treatment for capital gains. There needs to be some transition. But there's really no, I've looked at this a lot. There's no credible economic literature that says that the slower capital gains tax produces jobs. It's just not there. And it does produce a terrible income inequality and it's skews incentive. So what do you want to do? Do you want to go, you know, be a professional investor and get your 15% rate or do you want to work for a living? I mean, why do we want to incentivize? We have too much investment dollars out there, frankly, already. And we don't have enough work. So I think realigning these taxes are very important. And I think that's a more direct way. You know, the millionaires taxes that just adds more complexity to the tax system. And I just, the problem is the capital gains preferential treatment. Many years ago, when I was in Washington, we worked effectively with modern Republicans. And you can't find many like you know, what do you think has happened to your party? You know, I think they're still there. I do think they're still there. It's, but it does trouble me. You know, I worked for the Senate in the 80s for Bob Dole.

And I looked back at what we did during that time period. We did the 81 tax cuts, the deficit reduction act, the 83 Social Security Compromise, the 86 Tax Reform Act, so much gut done. So I look at then and I look at now and I scratch my head. I think in, in Franklis' both parties, I think there's just this rampant short termism that's kind of taken over a decision making. And people are worried about their election cycle and not making their mark on history, not being statesman, not governing the country. There's this wonderful line in the Iron Lady movie, when Margaret Thatcher, Natalie Margaret Thatcher is approached by a young woman and thanks her for the great role model she was. The elderly character played by Meryl Streep says, well, you know, back then it was about doing. Now it's about being. And it does. It seems to be about having the job, having the title, having the office, but not about doing anything with those government responsibilities that you're entrusted. And I think that's that is on both sides of the aisle, unfortunately.

But Bob Dole and even Ronald Reagan believe that government policy made a difference in people. And if you have taxes, he raised taxes. That's gold. He did the right way. He took away loopholes and in special interest provisions, which is exactly what we should be raising revenue through closing loopholes, I think. And everybody says this is what needs to be done, but getting the people to make the decisions and take on the special interest and know I'm sorry you're going to lose your special tax break, but everybody else is too. Nobody's willing to show that kind of courage and say this is what's best for the country and this is what we're going to do. And my viewers follow your work. You go to the pewtrust.org website. You can find the link to the SRC. It's the systemic risk council. And we will be putting there are call to action and our press release and our members and our call to action is all on the website. We'll be making additional pronouncements over the coming weeks and those will all be publicly released and go on our website as well. So I hope we can be a source of information too for people who are confused about what we believe or the reforms that need to get done. Reforms that will help them. And I think the public education function of this group is going to be very important.

Sheila Bear, will you come back when your group is up and running in full steam and let's talk about what's happening? I would be happy to do that. That would be great. It's been a pleasure to have you. We turn now from one champion of the public interest to another from Sheila Bear fighting for greater oversight of the big banks to a global advocate for social justice named Bonanashiva. We need a new paradigm for living on the earth because the old one is clearly not working. The last time we spoke with her, she was battling Coca-Cola and other multinational giants over the privatization of water in her native India including the waters of the sacred river Ganges. Since then Bonanashiva has become a rock star in the worldwide battle over genetically modified seeds. Those of seeds aggressively marketed around the world by big companies like Monsanto to not only increase but also to monopolize food production and profits. Opponents challenge their safety, claim they harm the environment or more costly and leave local farmers deep in debt and dependent on suppliers.

Following Europe's example, many American consumers are demanding that food products made from genetically modified seeds be labeled. Monsanto, the world's largest supplier, claims intellectual property rights over its seeds and usually wins when it takes farmers to court for patent infringement. But in India, Monsanto claimed its seeds would produce boundiful crops and when the results fell short, many bankrupted farmers reported the kill themselves. Bonanashiva founded India's Nadanya movement to promote the use of native seeds and she's become a formidable figure in all these battles. Trained in physics, she's an activist and prolific author whose books include earth democracy, soil, not oil, water wars and her latest making peace with the earth. I talked with her again recently when she came to New York to be honored by Union Theological Seminary. Welcome back. Wonderful to be back with you.

It's an uphill battle you're waging. How do you keep doing it? What drives you really? You know, we have this very beautiful text in India, the Bhagwat Gita and there's a very simple lesson that Krishna gives that you do not measure the fruit of your action. You have to measure your obligation for action. You have to find out what's the right thing to do. That is your duty. Whether you win or lose is not the issue. The obligation to do the right thing. For me, you know, I've grown up as an ecologist in a nature level from my very childhood. And for me, the diversity of species, their intrinsic value, their integrity is vital. The rights of our farmers to be able to have seed. The most fundamental source of a livelihood in a poor country. 80% of the food of the world is even today produced by those small farmers of the kind that we have in India.

Our small farmers are feeding 1.2 billion Indians. We forget the scale of what smallness means, multiplied many times. Because we've got used to the dinosaur mentality. We only see the big. We forget that dinosaurs go extinct. You have obviously seen things differently because you studied nuclear physics, right? I say nuclear physics, but I also studied quantum theory. My thesis was on non-separability and non-locality in quantum theory. Which basically means everything is connected. Because, you know, the industrial revolution and the scientific revolution gave us a very mechanistic idea of the universe. First, we were told nature's dead. There's no living earth. How can you even imagine the earth lives? How can other species? They're just inferior creatures of God and you're going to have man's empire over God, over the earth.

The idea that everything is these hard matter unrelated to each other is still guiding a lot of science. The genetic engineering is based on that hard matter, genes in isolation, you know, genes determine everything. There's a master molecule that gives orders, old patriarchal stuff, the real science. The real science is the science of interconnection. Whether it's quantum of interconnectedness, of non-separation, that everything is related. Farming, for example, you must see the soil, the plants, the pollinators, the food that's produced, all of it in the whole. Let's take that into the system of economics because some people have said that globalization, the movement of ideas of people, of money, across arbitrary boundaries, as if they didn't exist, also reflects the interconnectedness of everything. That globalization is an economic equivalent of what happens in the world of nature, and that everything is connected, and you can't stop it by the nashiva.

This is the way the world rocks. But first of all, this is not interconnectedness at the ecological level. This is extremely artificial, corporate rule on a planetary scale. Some corporations get to control the world, and then all that's flowing around is commodities. Commodities that don't have to be moving. It's still the old hard-billion-born model. You know, you load the ships from China for cheap consumer products in Walmart here. That is not a world of interconnectedness. The world of interconnectedness would recognize that the rivers of China need to flow clean and free. It would recognize that the people of China need to exercise in work, in freedom, not a slave labor, in factories to produce cheap goods. This corporate globalization, based on a higher, a deeper reach of corporations and spheres where they had no role, food, water, the air, or into commodities, you know, transforming the earth into commodities, that flow is not a flow of interconnectedness.

And in fact, it is leading to a disconnection. If you look at the violence that be being perpetrated, the reason I've written my new book, making peace with the earth, is because I'm watching every day. I get calls every day from remote areas. Please come down, they're shooting us. They're trying to tear down our sacred mountain of Niem Gory, which has boxed it for aluminium. We have an iron ore in our mountains, displacing us. Every day there's a land war. Every day there's a water war because of the appetite of this global commodity producing consumption based interconnection. And I often say that what we have is a interconnectedness of the world through greed, which is not how nature works, which is not how humanity works, and an exclusion of people, a killing of their humanity.

It is not an accident that with the rise of corporate globalization and economic globalization, we have seen the rise of religious conflict, ethnic conflicts, where people get divided more and more and more. So we are seeing human divisions, you're seeing a deeper division between human beings, and the earth, and all you see is a global reach. We are seeing a drop in our sense of a common humanity, and definitely a collapse in the planetary consciousness that we need to have. For me, those are the two elements of making peace with the earth, reclaiming our common humanity, and reclaiming our recognition that we are earth citizens. The last time you were here, you were fighting Coca-Cola in India over the privatization of water. Now your bulls eye is on Monsetto. Why is Monsetto so crucial to this fight overseas?

Monsanto is crucial to this fight because they are the biggest seed company now. Monsanto is privatizing the seed, they control 95% of the cotton in India, 90% of the soil in this country, if taken over most of the seed companies of the world. They say it's all about seeds, and that it comes down to corporations wanting to patent seeds. How does that work? What do you mean it comes down to seeds? Well, it comes down to seed for the simple reason everything begins to seed. The food on our plate. You and me were seed at one point, the little calf that becomes the cow. Seed is the source of life, and seed is the source of renewal of life. That is where life gets renewed in perpetuity. What does that mean when a corporation patent a seed? The first thing it means is a lie that I have created it. I have created life. The corporations claim that, and we joke and say, a GMO, a genetically modified organism, which was the path to get patenting on seeds.

I sat at meetings when the corporation said, the reason we've got to do genetically modified organisms is because the only way we can claim a patent, a patent is a claim to invention, a claim to creation. And it brings with it an exclusive right to exclude anyone else from using, having, distributing the patented product. What's the claim to speak from their side? What are they claiming? They're claiming intellectual property, and they change the language. They say the seed is no more a seed. It's an intellectual property. They make the society shift its thinking of what is at stake. Seed is the first link in the food chain. And therefore, when you control seed, you control food. You say that corporations have hijacked our food system. How so? Well, I come from a country where there were no corporations in the food system till 20 years ago.

They weren't allowed to be. Our rule said food was too precious. It was important source of livelihood, so we had to protect our small farmers. Every law protected the small farmer. Land rights, markets, prices, everything works, so a small farmer could have a living. Food processing stayed in what we call the cottage sector, the small scale sector. That's why we didn't have junk food and processed food. Globalization changes the rules. An agricultural agreement is written by an official of Cargill deputed to represent the US public through the US government is the world's biggest grain trade. The second is the intellectual property treaty controlled and written by a Monsanto. And then you have so-called food safety agreement called the sanitary and phytosanitary agreement. Every one of these are very highly complex names. Trade-related intellectual property rights, sanitary and phytosanitary, all of them are basically saying, let there be a monopoly of a corporation to have, to write the rules so that only they can be players in the food system.

And the final step is the retail where food reaches our table, Walmart, wanting to have foreign direct investment in retail, a big issue in India's parliament, a very big issue on the streets of India. So from the seed to the table, corporations are saying, we want to be the only players, five in seed, five in grain trade, five in processing and five in retail. That is a corporate hijack of our food and a corporate dictatorship over our food system. But here's what you're up against. Several activist organizations, some seed businesses, some farmers, organizations like yours, filed a suit here in New York, challenging Monsanto's seed patents. And the U.S. District Judge here in New York threw it out saying it was a transparent effort to create a controversy where none exists. Yes, that case has been a sad ruling, a very sad ruling. In my view, it's the same kind of status that says corporations have freedom of speech and therefore they can hijack our democracy, let them spend as much money as they can to literally buy elections.

But for every case of this kind, there are other cases being won. We have won cases against Monsanto in India. But if something like this is as bad as you describe it, if it's a monster roaming the countryside, how is it getting away with it? Well, it's getting away for two reasons. First, freedom, democracy and choice is taken away. It's taken away from the farmer by not allowing them to have their seed. It's taken away from the consumer by not letting them have labeling to say what they're eating if there was labeling of GM foods, no one would eat it. Genetically modified foods. The second deeper tragedy, which is why I linked this always to democracy, is the fact that governments are being hijacked and governments are being influenced. We stopped a whole agreement in Nepal by building a movement. Haitian farmers said we don't want this stuff when they took it after the earthquake.

The French have said we don't want this stuff. And the WikiLeaks show the ambassador saying we need retaliation. This is a seed war. This is a war. President Bush and our Prime Minister signed an agreement on agriculture, on the board of which sit Monsanto and Walmart in ATM. And they then sit and dictate the policies. That means that much more work for us to reclaim our democracy and our freedom. So they're getting away because they're using governments to shut down alternatives and push seed against the will of people. And President Bush is on record in a film called The World According to Monsanto, senior President Bush. Asking Monsanto, what do you want us to do? In India, Monsanto in effect controls our agriculture ministry and our Prime Minister's office. And so very, very often we have to work very closely with our state governments, which are our regional governments, to defend our constitutional rights.

Why should we be force fed a genetically engineered BT egg plant? When we have the most delicious egg plants, 4,000 varieties, it took a movement, 13 governments, seven public hearings to put a moratorium. The advisors from here flew in to try and undo that moratorium. What are your advisors? US government advisors. On the side of Monsanto? On the side of the White House, the USDA and the Department of Agriculture and the FDA all have a revolving dough with Monsanto. And this is all on record. So on the top, there's Monsanto hijacking all our governments and through that trying to hijack our food supply. And from the ground, farmers, consumers, regional governments saying, we want a Monsanto free food system. We want Monsanto free GM, free patent, free seed.

On the other side of the argument is made by people like Bill Gates. Bill Gates says that genetically modified seeds are necessary to prevent starvation in poor countries because they enable farmers to double and triple their productivity. Unfortunately, he's so totally wrong on the assumption that genetically modified seeds produce more. In India, Monsanto came in with the claim of 1,500 kilograms of cotton per acre with their genetically engineered cotton. The average yields are 400 kilograms. Our studies show that the government studies confirm this. When you grow just a genetically modified cotton, you destroy all the associated crops that were feeding the poor families. So actually lead to less food. When you spray round up and kill the greens that are necessary for women to have iron for children to have vitamin A, you're creating hunger, you're creating disease. Superweeds taking over your fields are a recipe for hunger. Pests overtaking your fields are a recipe for hunger. But worse, seed patents are a way of getting money out of poor people.

This is not a solution to hunger and poverty. This is aggravating the crisis for people already faced. You know, many people will hear you as they have the others who come on this at the table and describe what's going wrong in the world. And they often write me on the web or stop me on the street and say, I heard that diagnosis. But what can I do? I think the first thing is each of us has to daily ask a question, where am I complicit in a war against the earth? Where are my daily actions part of a devastation of the planet and with it a devastation of the lives of people because the two go hand in hand. A war against the earth is a war against people. Peace with the earth is peace among people getting rid of the inequalities, the violence, the exclusions. And I realise that food is a place where we can all begin. Food is a place which is so loaded with dishonesty. And it's what keeps a false economy of food alive, the subsidies that go to industrial agriculture.

Subsidies, tax payers. Tax payers pay. A high cost system which uses a lot of wealth of society then uses our wealth to cheat on the prices and make costly food look cheap. So our choices are distorted. We go and eat junk food that then creates the high cost of disease, the high cost of obesity, the high cost of diabetes at an early stage, the high cost of environmental devastation. And so we need an honest system and we can begin by creating that honesty and that peace by relating more directly to the food we eat, to the people who grow our food. To me, the beauty is every time I come back to this country, there are more farmers markets, there is more commitment to local food supply. Even in the city of New York, people are saying we'll make local food, we'll grow local food. It is an easy step, but it is a very far reaching step.

You spent time in this country, you know that in inner cities, it's almost impossible to buy fresh fruits and fresh vegetables. That's the challenge we have. It's not that there isn't a food stamps system. Public money is being spent on feeding the poor, but then it's ensuring that the only access the poor have with the money they get again from public money is to bad food. We could divert this to good food. There's no rule in the books that says healthy food should be a luxury for the rich. Healthy food is a right for all. For the last 20 years, we've heard in red report after report of progress in India, of the creation of a middle class enjoying its new prosperity. At the same time, we read and hear and see stories of people deprived of their livelihood and their homes from huge environmental projects, big dams, big mines, big infrastructure. I mean, it's always been a lot of poverty there, but is that great golf becoming a permanent feature of India in this modern world?

Well, you know, my small effort is to not allow it to become a permanent feature. But it's not that these are two separate words. They're separated in terms of the status of people. They're dignity, they're rights. And they're deeply connected at the levels of the earth's resources. The reason you have a few families joining the 10 richest billionaires of the world in the Forbes list is because they've grabbed the land, the electricity, the resources, the all. And that is what has left the other India poorer. It wasn't that the other India was left out. They've been pushed out. And that's why while we have some of the highest growth rates in the conventional measure of economic progress, which in my view is not a very reliable measure, we also have two of the most outrageous indicators that are linked to that model. Now, the first is the quarter million farm suicides. If a quarter million farmers, this is government of India data. This is not our data. It's official statistics. And you can do an overlay.

And the highest rates of suicides are in the cotton belt. 95% of the cotton today is Monsanto's cotton. So there is a link. Today, every fourth Indian is hungry. And every second Indian child is wasted, not stunted, which in effect means that half of India is being robbed of its future. And to me, this is not acceptable. That's why we try and build a kind of agriculture that allows farmers to have a livelihood. For the poorest child and the poorest household to have nutritious food, it is not easy because the whole system is weighed against alternatives that would work for everyone. It's partly because of the pressure of the corporations, partly because of not thinking, of just being blind, of having been so fed by what I have called monocultures of the mind, you know, just turning to recipes from somewhere else. And of course, the chemical industry will tell you only chemicals grow food. Chemicals grow toxic. Chemicals don't grow food.

That only Monsanto seeds will be able to remove hunger. And all of this new mythology becomes part of the policy framework. But I am deeply committed to make sure that this terrible brainwashing that is robbing up our present generation and our future generations, that we are able to collectively to change it. Because while in your parents generation, your generation, even my generation, the doors of a growing economy were constantly opening up. Today we are in a period where for the majority of the doors are shutting down. I work with people in Spain, with people in Italy, I advise the governments, they work with the movements, they are all Greece, or they occupy a movement right here. They are realizing that what has been created is not going to provide opportunities for all. As you talk, I remember reading somewhere that Einstein had a big influence on you.

I became a physicist because of him. I mean, even as children you get to, you know, if you're reuniting Yale, you want to be a doctor or a nurse, I read stuff, Einstein wrote, and he wrote simple stuff that you could read it. That's why I wanted to be a physicist. He said once, I'm paraphrasing it, but unless an idea is at first absurd, it has no chance of success. Absolutely. He also said that you cannot sell the problems you face through the same mindset that caused those problems. Bonne de Shiva, thank you very much for being with me again. Thank you Bill, it's all with such a pleasure. That's all for this week. At our website, billmorears.com, there's more about the subjects we've discussed, making reform hunger and genetically modified food. Also, Woody Guthrie would have turned 100 years old this weekend, but his songs are his final is ever.

Revisit my video essay about what Woody still can teach us about fat cats, bureaucrats, and what a democracy made for you and me should be, all at billmorears.com. I'll see you there and see you here next time. Don't wait a week to get more moyers. Visit billmoyars.com for exclusive blogs, essays, and video features. This episode of Moyers & Company is available on DVD for 1995 to order, call 1-800-336-1917 or write to the address on your screen. Funding is provided by Carnegie Corporation of New York, celebrating 100 years of philanthropy and committed to doing real and permanent good in the world.

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