Voices of Power: Elizabeth Warren
LOIS ROMANO: Welcome, Elizabeth Warren, Chairman of the Congressional Oversight Committee that is tasked with scrutinizing how the Treasury Department has spent $700 billion to shore up our failing financial institutions. Thanks for joining us today.
ELIZABETH WARREN: Oh, it's a pleasure to be here.
ROMANO: So, the first thing I want to ask you is you are about to become a household name. You are-you are one of the heroines, you're being described of, of Michael Moore's new movie which derides capitalism and goes after our economic structures.
WARREN: Well, I'd have to say, you know, I did an interview with Michael Moore and now I'm just astonished. I never thought I would be in 9 million television commercials, so it's been pretty amazing.
ROMANO: There's a wonderful moment when he asks you where the $700 billion is, and you look at him and you say, "I don't know." So the question is: why don't you know?
WARREN: Well, we don't know where the $700 billion is because the system was initially designed to make sure that we didn't know.
When Secretary Paulson first put this money out into the banks, he didn't ask "what are you going to do with it?" He didn't put any restrictions on it. He didn't put any tabs on where it was going to go; in other words, he didn't ask. And if you don't ask, no one tells. And so we have a system that originally put more than $200 billion into the financial institutions basically saying just take it.
ROMANO: And that money is gone. You have not been able to track where that money is?
WARREN: Well, we don't know where the money went from the financial institutions.
The big conversation at the time was that the credit markets are frozen; if we put money into the financial institutions, they will start lending it because that's what they do when they receive money. And you may remember we tend to have forgotten what the name of the program was initially. It was called the "Healthy Banks Program," because the allegation was Secretary Paulson kept saying, over and over, these are investments in healthy financial institutions, no one needs any subsidy.
And so we put it in on the claim by Secretary Paulson that that money was going to be used in lending to small businesses and consumers and kind of get our whole credit market going again. That didn't happen.
ROMANO: Do you agree with Michael Moore's basic premise that capitalism as it is now has destroyed the country's middle class?