George Soros on the financial crisis

Excerpts from an interview with George Soros by Bill Moyers. The Big Picture has the full written transcript. Read the whole thing. Video on PBS

How to revitalize the world economy

GEORGE SOROS: You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.

This idea is increasingly being championed by business as well as greens. Upgrade the grid. Make it smart. Go to renewable energy. Long run, it will save money and create a multitude of new jobs in the process.

On neocons and socialism. (Soros lived under both fascism and communism and has little use for ideologies, including those of the free marketers.)

GEORGE SOROS: These market fundamentalists are making the same mistake as Marx did. You see, socialism would have worked very well if the rulers had the interests of the people really at heart. But they were pursuing their self-interests. Now, in the housing market, the people who originated the houses earned the fee.

And the people who then owned the mortgages their interests were not actually looked after by the agents that were selling them the mortgages. So you have a, what is called an agent principle problem in socialism. And you have the same agent principle problem in this free market fundamentalism.

BILL MOYERS: The agent is concerned only with his own interests.

GEORGE SOROS: That’s right.

So how do we protect against a small entrenched minority running countries based primarily on their own narrow self-interest? It happened in the USSR, and is happening now in the US and China.