MSNBC "The Rachel Maddow Show" - Transcript

Interview

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MS. MADDOW: CNBC is reporting that President Obama will tomorrow announce a new rule that will mandate a $500,000 salary cap for executives of companies receiving TARP bailout money. Funny thing about this new rule -- way back in October of last year, when the TARP bill was first passed by Congress, somebody else was waving the red card even then about executive compensation. That somebody was independent Vermont Senator Bernie Sanders, who said this before voting against the bailout.

SEN. SANDERS: (From videotape.) This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.

MS. MADDOW: Ladies and gentlemen, the Cassandra of TARP. Shortly after that prescient speech, Senator Sanders proposed a bill, appropriately dubbed the Stop the Greed on Wall Street Act, that would have capped executive pay for TARP recipient CEOs at $400,000. Now, no one paid a ton of attention to Senator Sanders' proposal back then. It did not change the debate. But now -- well, now the only question is just how effective will the president's version of the Bernie Sanders rule be?

Independent Senator Bernie Sanders of Vermont joins us now.

Sir, thank you very much for coming on the show tonight, Senator.

SEN. SANDERS: My pleasure.

MS. MADDOW: First of all, I have to say congratulations. Way back in the fall, you were the first senator to propose legislation limiting executive pay in the bailout. The new president was apparently listening, or at least he just started listening. Do you feel vindicated here?

SEN. SANDERS: Well, I think it's really a good step forward, Rachel. But we have to go a little bit further. You know, there's no stopping these guys on Wall Street. They really live in their own world, as you just pointed out.

What I worry about is the CEO will resign, become the assistant CEO. The janitor will become the CEO, and the assistant will make, you know, $200 million. What our legislation did is said that anybody who works for a company that received TARP funds could not get more than $400,000. And the reason we said $400,000 is that's what the president of the United States makes.

MS. MADDOW: We are looking closely at this to try to figure out where the loopholes might be here, because we know that these executives have been great at finding those loopholes. CNBC points out that they're not sure if the cap includes bonuses as well.

SEN. SANDERS: Right.

MS. MADDOW: If the bonus issue isn't settled, if the job title issue isn't settled, does that mean that this just won't be effective, or is something better than nothing?

SEN. SANDERS: Well, I think -- it is better than nothing. I think the president is sending a message to Wall Street. I've got to tell you, Rachel, on Sunday I held two town meetings in Vermont. We had 800 people out at the meetings. People are so angry, they are so furious that a handful of Wall Street executives, 10 or 15 major financial institutions, through their greed, through their irresponsibility, and probably through illegal behavior, has caused intense suffering, loss of jobs, for huge numbers of American people and plunged us into a very, very deep recession.

And now, receiving hundreds of billions of dollars in taxpayers' money, they say, "Oh, thank you very much, taxpayers. We really do appreciate it. We're not going to tell you how we're spending the money. And, of course, we're going to continue to give out large bonuses. We're going to buy planes. We're going to have big parties."

The people of this country are outraged up to here. And we need some real fundamental change about the way Wall Street does business.

MS. MADDOW: If this executive pay cap can be done well, can be done without loopholes and it works, what's next on the agenda, do you think, in terms of making sure that the bailout money that is already committed -- because the bailout money is already out flowing -- that it can be used in a less exploitive, less immoral way?

SEN. SANDERS: Well, Rachel, this is -- the problem with this issue is it is so big that nobody can get their hands on it. It is not just $700 billion. As you know, the Fed has lent out $2.5 trillion. The president is probably going to ask for more TARP money. The Fed, we think, is going to lend out trillions more.

So what we need to do, among many other things, is we need to figure out a way that we do more than get back to where we were a couple of years ago by making the financial institutions stable. If the taxpayers of this country are putting such a huge amount of money into financial institutions, we need financial institutions that are going to be beholden to the needs of ordinary Americans and not go back to where we were.

For example, just one example, right now we're bailing out banks which are charging American taxpayers 25 or 30 percent interest rates on their credit card. Does that make sense to anybody? We're giving banks money and they're not telling us how they're spending it. We're trying to loosen up credit in America. They're not doing it. So we've got to tackle this issue in a very fundamental way.

Second of all -- now, we're working on this -- we need a real investigation, a real investigation to find out who was responsible for this crisis. And we need to see if the American criminal justice system -- and I'm not sure that it is -- is really capable of putting in jail these multizillionaires, these masters of the universe, who have caused such an incredible crisis for America. But we need a thorough investigation.

We have proposed that the TARP oversight committee, led by a woman named Elizabeth Warren, who's doing a great job, lead that investigation, get to the root of this problem, find out what has gone on, if there has been illegal behavior, and how we reform the system in a very fundamental way.

MS. MADDOW: Senator Sanders, one last quick question. Your colleagues in the Senate now and President Obama are now on board with what you proposed earlier about capping executive pay. Are you getting any early support now for this call for a perhaps criminal investigation into the causes of this crisis?

SEN. SANDERS: It's going to be a tough one, Rachel, because this really goes to the people who have enormous power on top. Both political parties have been involved in the deregulation efforts. So it's going to be tough, but we're going to push as hard as we can to hold those people accountable who have caused these terrible problems.

MS. MADDOW: You always do. Senator Bernie Sanders of Vermont, thank you so much for your time tonight, sir. I really appreciate it.

SEN. SANDERS: Thank you.

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