How the Financial Crisis Broke Politics

Summary

Podcast Summary: Against the Rules: The Big Short Companion

Episode: How the Financial Crisis Broke Politics

Date: November 25, 2025
Host: Michael Lewis with Lidia Jean Kott
Guests: Senator Elizabeth Warren, Steve Bannon

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Episode Overview

This episode explores the profound and lasting impact of the 2008 financial crisis on American politics. Michael Lewis, alongside co-host Lidia Jean Kott, discusses how the crisis catalyzed political careers, particularly those of Senator Elizabeth Warren and Steve Bannon, while fueling a sense of anger and unfairness that continues to shape the political landscape. Through intimate conversations with Warren and Bannon, the episode illustrates how the aftermath of the financial meltdown reverberated through both progressive and populist movements, ultimately breaking the political system in unexpected ways.

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Key Discussion Points and Insights

The Legacy of 2008: Politics Fueled by Anger

• A New Era of Distrust and Outrage (02:34 – 04:58)
  • Michael Lewis recounts the societal shift post-2008, highlighting Occupy Wall Street and rising anger at perceived systemic injustice.
  • Notable Quote:
    “The gist of the anger was this sense of unfairness, this feeling that we sort of sense that the world was rigged, and now we know it's rigged... The people who are the supposed best and brightest... get to take a pass on the harsh side of capitalism... that outrage is still with us.”
    — Michael Lewis (03:23)

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Two Divergent Political Trajectories

Senator Elizabeth Warren: Outrage Transformed into Reform

• Early Warnings and the Road to Crisis (11:18 – 14:46)

  • Warren saw troubling financial trends as early as the 1990s through her work teaching bankruptcy law.
  • She describes her growing frustration watching predatory lending practices build toward disaster.
  • Notable Quote:
    “I end up writing this piece... nowhere in America could you buy a toaster that had a one in five chance of burning... but there were bankers selling home mortgages that had a one in five chance of costing the family their home. And there was nobody to stop them.”
    — Elizabeth Warren (13:08)

• Crisis, Anger, and the Rise to Power (14:46 – 17:48)

  • The 2008 crash and subsequent government response prompted Harry Reid to tap Warren for congressional oversight.
  • She recalls the chaos and urgency of being asked to oversee the $700 billion bailout.

• Building the Consumer Financial Protection Bureau (CFPB) (17:50 – 22:42)

  • Warren led the creation of the CFPB, believing existing laws protecting consumers were scattered and unenforced.
  • Notable Quote:
    “We don't need new laws as much as we need a change in how we enforce those laws... You put it with one agency, you give it the resources... and then you make it the effective cop on the beat.”
    — Elizabeth Warren (20:24)

• Obstacles and a Turn to Electoral Politics (22:42 – 24:31)

  • Despite her central role, Senate Republicans blocked her from being named head of the CFPB, catalyzing her Senate run.

• Reflections on Anger and Anti-Government Sentiment (24:33 – 26:18)

  • Warren contends that the crisis and government failure to hold banks accountable fueled enduring anti-government anger and enabled Trump-era attacks on consumer protections.
  • Notable Quote:
    “Government was the one that didn't hold them accountable... Government was the one that said your hard earned tax dollars are going to go to some billionaire and some company... that cost you your home. You know, I don't blame people for being angry over that.”
    — Elizabeth Warren (25:48)

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Steve Bannon: From Wall Street to Populist Firebrand

• Prison Civics and Teaching the Crisis (29:57 – 31:42)

  • Bannon recounts his time teaching civics in federal prison, highlighting the appetite among inmates to understand the system that led to their incarceration.

• Wall Street Origins and a Disillusioning Crisis (31:42 – 37:00)

  • Describes his time at Goldman Sachs, noting that the restructuring of the economy for decades to come was already underway.
  • Bannon’s personal experience of the crisis—facing losses on property and seeing his father lose faith in the system—was transformative.
  • Notable Quote:
    “If the Marty Bannons of the world are going to get screwed, this system's not going to exist... that financial collapse is what really... made me just a fire-breathing economic populist and economic nationalist.”
    — Steve Bannon (36:00)

• Connecting the Crisis to Trumpism (38:12 – 41:50)

  • Bannon explicitly draws a direct line from the 2008 meltdown to the enthusiasm for Trump.
  • Notable Quotes:
    • “I think it was the 17th of September of 2008, that fuse was lit that went off. It blew up in November 8th of 2016... every financial crisis, you have a populist reaction to it.”
      — Steve Bannon (38:16)
    • “With no financial collapse, you do not [get] Donald Trump.”
      — Steve Bannon (39:04)

• What Could Have Been: Alternate Histories (41:50 – 43:33)

  • Asked if Obama had “brought a hammer” to Wall Street rather than opting for bailouts, Bannon speculates history might have been different, but says political realities made that impossible.

• Broader Critique of Elites and the System (43:33 – 45:52)

  • Bannon critiques the post-crisis concentration of wealth and lack of opportunity, warning of more radical populist moves to come.
  • Notable Quote:
    “People can't be here five generations... and here's what you've got to show for it. Your dick in your hand. You don't own anything. And the average income’s $52,000... the average American has what, under $1,000 in cash? It's not gonna work.”
    — Steve Bannon (43:33)

• Trump, Populism, and What’s Next (43:39 – 45:52)

  • Bannon expresses skepticism that Trumpism is enough to address systemic problems but predicts the political pendulum may swing toward even more radical change.

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Notable Quotes & Memorable Moments (with Timestamps)

• “It's like the Trump phenomenon. Trump is... selling anger, he's selling grievance... the anger as... the chief quality in American political life, that starts here with the financial crisis.”
  — Michael Lewis (04:36)

• “I love the classroom better than anything on God’s green earth... But I was so worried about what's happening to families as I'm watching the buildup to the crisis.”
  — Elizabeth Warren (12:48)

• “You get to see the rules are different for the billionaires. Maybe they always had been. But the 2008 crash and the response to let those guys off the hook just rubbed that ugliness in the face of millions.”
  — Elizabeth Warren (25:26)

• “I go through the whole thing on the bailouts of the financial crisis. One of the young guys in the back... 'Is that actually what happened?'... And they call us the criminals.”
  — Steve Bannon (31:22)

• “If the Marty Bannons of the world are going to get screwed, this system's not going to exist.”
  — Steve Bannon (36:00)

• “The reaction to Obama is going to be...not conservative, it’s not going to be Republican, it’s going to be right wing. And if we play our cards right, it can be even more right wing over time.”
  — Steve Bannon (40:36)

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Important Timestamps

• Financial Crisis and Political Anger Introduced: 02:34 – 04:58
• Elizabeth Warren’s Personal Journey: 11:18 – 17:48
• Creation of CFPB and Warren's Senate Run: 17:50 – 24:31
• Warren on Enduring Anger and Anti-Government Sentiment: 24:33 – 26:18
• Steve Bannon’s Prison Experience and Populist Turn: 29:57 – 37:00
• Bannon on Financial Crisis → Trump: 38:12 – 41:50
• Bannon’s Future of Populism: 43:33 – 45:52
• Reflecting on Unheard Voices (Trump Interview Wish): 46:23 – 46:53

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Tone and Style

The episode maintains Michael Lewis’s trademark conversational, analytical style—probing, occasionally wry, and rooted in storytelling. Warren’s segments are heartfelt and urgent, while Bannon’s are intense and combative, both arguing that the 2008 crisis fundamentally broke trust in institutions—but charting very different responses. The episode flows between policy insight, personal anecdote, and historical reflection, inviting listeners to consider how a single economic disaster continues reshaping American life and politics.

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Conclusion

“How the Financial Crisis Broke Politics” is a compelling closing reflection for The Big Short Companion mini-series. Through the personal stories and philosophies of Elizabeth Warren and Steve Bannon, Michael Lewis demonstrates how one seismic economic event altered careers, reconfigured movements on both the left and right, and left the nation permanently changed. The episode makes clear: to understand today’s political anger (and its agents), you have to reckon with the unresolved trauma and unaddressed inequities of 2008.

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This summary is intended for those who wish to understand the substance and heart of the episode—whether you recall the financial crisis or are, as Lidia Jean Kott puts it, “living in the world it created.”

Transcript

[Lydia Jean Kott]

This is an iHeart podcast.

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[Michael Lewis]

Pushkin. I'm Michael Lewis.

[Lydia Jean Kott]

And I'm Lydia Jean Kott. And we're wrapping up our big short companion series on against the Rules. We've been hearing about the origins and consequences of the 2008 financial crisis, and today we're going to talk about how it changed politics. Yes, in 2011, I was in college in New York, actually, and I remember showing up, I think, to, like, Anthro or something, and half the class was empty because people had gone to protest on Wall Street.

[Steve Bannon]

Occupy Wall street. All day, all week.

[Justin Richmond]

Occupy Wall Street.

[Michael Lewis]

Were you at all kind of tempted?

[Lydia Jean Kott]

I was unfortunately too much of a loser to know that this was, like, what people were doing. So I didn't go, here's your chance.

[Michael Lewis]

To make up for it.

[Lydia Jean Kott]

Why? Why do you think? You know, why were people so angry?

[Michael Lewis]

They were right to be angry. They were angry, but they were angry for different reasons. I think the gist of the anger was this sense of unfairness, this feeling that we sort of sense that the world was rigged, and now we know it's rigged and it's rigged on behalf of elites in finance, in politics, by people in finance, in politics, that the people who are the supposed best and brightest and certainly the most privileged get to take a pass on the harsh side of capitalism. Everybody else, when they fail, they fail. They go out of business, they have to declare bankruptcy, they do things that are illegal, they go to jail. But people who are sitting at the top of the society being paid more than people at the top of the society have ever been paid, screw up the entire society with their financial shenanigans, and nobody goes to jail. And they get their bonuses still, and their banks are saved, even though they should have failed. So it gave rise to a justifiable outrage that the rules did not apply to the people at the very top. And that outrage is still with us. When I think about American politics right now, the first thing that pops into my body is anger. It's like the Trump phenomenon. Trump is. He is selling anger, he's selling grievance. It's why every day he has to have another target to direct the anger. He's directing people's anger, and he's making people feel good about being angry. And the anger as a. As the chief quality in American political life that starts here with the financial crisis.

[Lydia Jean Kott]

So on today's episode, we're going to talk to two people who took very different lessons or approaches to the financial crisis. The first is Massachusetts Senator Elizabeth Warren.

[Michael Lewis]

Elizabeth Warren, very smartly had been arguing for a long time that this border, this unholy border between the American middle class and high finance needed to be patrolled. That if you let financial institutions at ordinary Americans, without anybody watching them, they're capable of doing lots of bad things to them. And it is amazing how easy it is to pray upon an Ordinary person when the subject is money. People are not their best selves when they're trying to figure out, like whether to repay their credit card debt. And the financial crisis was a catalyst for her ability to create the Consumer Financial Protection Bureau. I mean, she seemed to get what she wanted as a result. And her course own political career took off on the back of it.

[Lydia Jean Kott]

And the second person we're going to talk to, you know, the financial crisis was also a catalyst for him, the former White House advisor, Steve Bannon.

[Michael Lewis]

Yes, this is a strange and convoluted tale. I didn't know this until fairly recently, but my first book about Wall street was called Liars Poker. It was about my own experience working on Wall Street. I don't write the Big Short if I don't write Liars Poker. I thought of the Big Short as kind of the bookend to Liar's Poker, that the world that I was describing back in 1989 had finally come crashing down in 2008. And for reasons that you sort of could see in the pages of Liars Poker, though I never would have predicted it. And Steve Bannon, as it turns out, was in Hollywood when Liar's Poker came out, became obsessed with the book, bought the movie rights to the book with a group of people, set it up at Warner Brothers, and was so involved that he went and wrote his own script of the Liar's Poker movie.

[Lydia Jean Kott]

Has he sent you the script?

[Michael Lewis]

I haven't seen it yet, but I am going to make a point to see it because, God, you know, just.

[Steve Bannon]

What an artifact, right?

[Michael Lewis]

I had to buy it off him. But Bannon, I interviewed him during Trump 1 and it was really clear that although he was probably always pretty volatile person, that he really became hypercharged and politicized because of the financial crisis. And I think he and Elizabeth Warren are not opposites, but obviously their political lives are very different. So I thought we gotta do an episode about the political consequences of this event. And who better to do it with than these two?

[Lydia Jean Kott]

After the break, we're gonna bring together two people who would hate being in the same room together and probably never will be. Elizabeth Warren and Steve Bannon.

[Michael Lewis]

Yeah, let's do this.

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Is Justin Richmond, host of Broken Record. I firmly believe when it comes to the holidays, you fall into one of two camps. Someone who loves holiday music or someone who won't admit they love holiday music. There's something about a voice you love singing that familiar opening phrase. Maybe it's Donny Hathaway. Maybe it's Mariah Carey that just flips a switch and you're instantly back into that warm and cozy headspace only the holidays can bring. For me, that feeling pairs perfectly with a cup of Starbucks Caramel Brulee Latte. That's their signature espresso with steamed milk and a rich caramel brulee flavor topped with whipped cream and a crunchy caramel brulee topping. It's like the sound of the season, but in drink form. And that's really what this season's about. Little moments of pairing, little moments of connection. Sharing a song, sharing a story, sharing a caramel brulee latte. Because this season and every season together is the best place to be. Come together over your holiday favorites.

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[Michael Lewis]

You know so Much craziness was happening in 2008 that we can almost forget that it was a presidential election year. And that was the election that sent Barack Obama to the White House. It sent a few other folks to Washington in the years following, including the person I'm about to chat with, Massachusetts Senator Elizabeth Warren. I think it's fair to say that no politician, even Obama, was catapulted by the financial crisis into political life more directly than she was.

[Elizabeth Warren]

Michael.

[Michael Lewis]

Senator Warren, how are you?

[Elizabeth Warren]

Elizabeth? I'm fine. How are you?

[Michael Lewis]

I don't feel like I can just go there right away. I want to start with you personally. When do you become aware that there is a financial crisis and that this might have some effect on you?

[Elizabeth Warren]

Well, I become aware there's a financial crisis, actually in the late 90s. You can see it brewing because I'm a professor who studies what's happening to America's middle class. And we're starting to see these funny little blips in the data that I was digging in on about home mortgages, credit cards, and it looks like things are getting dicier for Americans. And remember, Michael, I teach bankruptcy. So I'm watching the families who are declaring themselves losers in America's great economic gain, that the people who are head over heels in debt and show up at the bankruptcy court to say, help me wipe out some of my debts and make it back to. To Dead Flat Brook.

[Michael Lewis]

You're seeing from a different perspective what some of the characters in my book saw that people who had been involved in subprime lending or watching the subprime lenders could see that there was this building problem. Connect the financial crisis for me up to your political career. Like, how does it inflame your career?

[Elizabeth Warren]

So I understand. All I've ever wanted to be was a teacher. I started out as a public school teacher. I end up going to law school. When I go to law school, I come out and I teach. That's what I love doing. I love the classroom better than anything on God's green earth. So I, though, am so worried about what's happening to families as I'm watching the buildup to the crisis. So now it's 2002, it's 2003, it's 2004, it's 2005, and the only response in Washington is to make it harder for people to declare bankruptcy. This is just nuts, right? You can see that the problems are building, that more and more people are getting cheated, tricked, trapped. And so I end up writing this piece in which I'm so frustrated because I point out that nowhere in America could you buy a toaster that had a one in five chance of burning, bursting into flames and burning down your house. But that right now in America, there were bankers selling home mortgages that had a one in five chance of costing the family their home. And there was nobody to stop them. And they didn't even have to warn you. So I put this out, and I keep getting deeper and deeper in the fight against what feels like a storm that is man made. It is made by these giant institutions and these financial geniuses. At least that's how they describe themselves, you know, who have their hands on the levers. It's like they're just sucking up families across America like they're some giant mower and then just chopping them up financially and spitting out the buns.

[Michael Lewis]

So you're getting angrier.

[Elizabeth Warren]

Oh, man. Yes.

[Michael Lewis]

I feel like I'm watching it in real time. All right, so you're getting angrier.

[Elizabeth Warren]

Oh, I'm getting angrier.

[Michael Lewis]

So now connect it to your political career.

[Elizabeth Warren]

Okay, so then the crash of 2008 hits. All of a sudden, now we're In September of 2008, the markets are falling. And, oh, now that the markets are falling, this is worth paying attention to, right? It's all tumbling. Congress is being called on to bail out the banks and everyone else. I'm at home still doing my work, I'm madder than hell. And I get a phone call one night and this very soft voice says, this is Harry Reid. And I said, who? I am so not tied in to Congress. I do not realize that he is the Senate Majority Leader.

[Michael Lewis]

You didn't even know that?

[Elizabeth Warren]

Nope. I mean, I mean, I guess I. Maybe if I'd seen it in context. And he said, we're going to have to do this bailout. And he said, we need an oversight panel and I want it to be you. And I said, what? It was like getting a call in the middle of a war. The markets are in turmoil. People are literally wondering if our economy is just going to go back to the Stone Age, right? If everything is going to collapse. And this call is like, your country needs you. And I said, what do you want me to do? And he said, I want you to lead this Congressional oversight panel. I had no idea what this thing was. And I said, well, let me look. And he said, no, I need an answer. And I said, yes. And frankly, if I'd found out that somehow mopping the floors was gonna help, I would go mop the Floors. The call happens, by the way, I'm having a bunch of students over for dinner, and the guy who's delivering the barbecue is at the front door. And I'm trying to pay for it. And I'm trying to talk to this guy named Harry Reid on the phone, who talks softly, and he's asking me to do this thing. And our golden retriever is like racing circles around my legs because of the barbecue. So that's how I end up in my first political job. I just say yes. So later that night, my husband, who's out of town, I'm telling him about it. I said, oh, yeah? I said, I got this call earlier, and Harry Reid wants me to head up some oversight thing for Congress. And my husband said, okay, well, what does it do? And I said, I don't know. I wonder how I could find out. So I look it up and find out. Part of the compromise is they will have an oversight panel, and the Democrats will appoint three people. The Republicans will appoint two. And I'm Harry Reid's appointee.

[Michael Lewis]

And what's this panel supposed to do?

[Elizabeth Warren]

We're supposed to oversee the $700 billion bailout. And that is literally the first thing I ever do in Washington. I pull this panel together and look, I am guessing a lot of people thought, fig leaf, that there'll be some oversight, but the banks are getting their 700 billion, and the world is all going to work just fine. But I was naive enough to think somebody was serious about the oversight. So we put out a report every 30 days about who was getting the money, how it was being spent, what the authorization was for it, and whether it was flowing down to help people who were in trouble on these horrible mortgages and other financial products. So we get this thing up and running, and Obama's now president, and everybody realizes there's going to be a change in the law. And that change is what we now refer to as the Dodd Frank law. Back then was just, we're gonna have to do something. We've gotta rewrite the laws coming out of this. Cause people are just madder than hell about what's happened. So we're gonna put better oversight in place. And that's when I said, okay. It looks like to me, the door has opened just a crack. I want to argue for a consumer agency to make sure that never again do we build this much risk into the system by cheating people on mortgages and credit cards and other financial products. Now, back when I had first thought about that, I would say, we need this New agency and people would just. They would do eyeball rolls that truly must have hurt their skulls.

[Michael Lewis]

This is a. It's interesting to me. When did you first conceive that it needed to be a new agency as opposed to, oh, the SEC can do.

[Elizabeth Warren]

This, maybe a year or two before the crash.

[Michael Lewis]

I think your insight is profound, that there is this border between ordinary Americans and finance that's toxic. People are easily fooled on this subject and buffaloed, and it has disastrous life consequences for people. That border needs to be policed. But the idea there had to be a new agency, that surprises me.

[Elizabeth Warren]

Okay, so think of it this way. While all this risk is building up, while people are losing their homes that they have poured their lifeblood into, there are laws on the books, federal laws that would have stopped that. There were disclosure laws, there were all kinds of laws, but those laws were scattered among seven different federal agencies. And they were nobody's first job. The FTC and the OCC and the OTS and the fdic, can we do all the letters of the Alphabet? You know, and the Fed, all of them had parts of the law. Nobody had any real expertise, and nobody would allocate resources to actually enforce those laws. And so my idea was to say we don't need new laws as much as we need a change in how we enforce those laws. So the idea behind the consumer agency was you scoop those laws up from the other agencies that weren't using them anyway. You put it with one agency, you give it the resources, you tell it to develop the expertise, and then you make it the effective cop on the beat.

[Michael Lewis]

How does it enter your head?

[Elizabeth Warren]

I'm running for office, so I love that agency. And President Obama appointed me to come set it up and we got a higher up and be ready to hit the ground running on behalf of American consumers. I spend months doing this in Washington. I love this work. I understand what this agency can do. And oh, I want to be the new director of the agency. Right. I'm just the temp who's setting it up. I so want to be the head of the agency. And the Republicans send a letter to President Obama and say, you want to get that agency set up. That woman will never be confirmed to be the head of the agency, ever. We are telling you right now, we will block her until hell freezes over. I don't think those were their exact line words, but that was it.

[Michael Lewis]

Did that surprise you?

[Elizabeth Warren]

Actually, it kind of did. I was doing a good job. You know, I was going to make this agency work.

[Michael Lewis]

You didn't personally offend anybody?

[Elizabeth Warren]

No, no, not that I knew of. Nope. Nope.

[Michael Lewis]

So you just became non grata in their minds.

[Ryan Seacrest]

Exactly.

[Elizabeth Warren]

So Obama says to me, you're not going to be the head of the agency. And, okay, I'll go back. It's okay. I love teaching. I'm going back to Massachusetts to teach. And Obama says to me, no, go back to Massachusetts and run for the Senate. Oh, yep. Remember, there is a Republican representing Massachusetts at this point, guy named Scott Brown, and he's coming up for reelection in 2012. So here it is, 2011. Take him on. And I'm like, run for Senate. I mean, I don't. That's not one. I've never thought about running for office. On the other hand, who's going to defend that agency if I don't get in there and do that? So I go back to Massachusetts and I get a bunch of phone calls from people saying, elizabeth, you should run for the United States Senate. And then they say things like, you won't win, but you should run. And I would say, look, Democrats get a better sales pitch. So I end up getting in the race, and I start out, like, 45 points behind or something. I mean, it's nuts. I've never run for office before. I just keep getting there and punching on family economic issues, on costs going up, on getting cheated and how it's just not right.

[Michael Lewis]

You are a political consequence of the financial crisis.

[Elizabeth Warren]

Yeah.

[Michael Lewis]

I want you to just quickly, before we have to wrap, quickly explain to me why the anger that generates the Consumer Financial Protection Bureau has sort of metastasized into this anger against government that has enabled Trump to gut it or to disable it.

[Elizabeth Warren]

People saw 2008 as the banks got bailed out, that not only did nobody go to jail for having wrecked our economy, hell, those guys didn't even lose their jobs. They got bonuses. Meanwhile, 10 million Americans lost their homes. And I think a lot of folks understand that, you know, things can be tough, but surely we're all playing by the same set of rules. And 2008 proved. No, we're not. The rules are different for the billionaires. Maybe they always had been. But the 2008 crash and the response to let those guys off the hook just rubbed that ugliness in the face of millions of people.

[Michael Lewis]

Where is that feeling gone, though? Why is it not still there to sustain the institution?

[Elizabeth Warren]

Remember, government was the one that didn't hold them accountable. Government was the one that didn't fight for the American people. Government was the one that said your hard earned tax dollars are going to go to some billionaire and some company damn some bank that is actually the bank that cost you your home. You know, I don't blame people for being angry over that.

[Michael Lewis]

Thank you so much. And it's good to see your face.

[Elizabeth Warren]

Happy to do it. You know I'm always happy to talk to you.

[Michael Lewis]

Bye Bye. Elizabeth I want to thank Massachusetts Senator Elizabeth Warren for taking the time to speak with me again. I say again because she actually shows up in our first season of against the Rules. That was in an episode called the 7 Minute Rule. We spoke back then about the Consumer Financial Protection Bureau and how the first Trump administration was trying to defang it. Now the second Trump administration has moved from defanging to destroying the cfpb. When we come back from the break, we're going to hear from a very different type of political figure who rose to power after the financial crisis. Steve Bannon.

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[Michael Lewis]

Steve Bannon has been many things a naval officer, a media executive, an investment banker, a political gadfly, a campaign and White House advisor, and a prisoner. In 2022, he was convicted of two counts of contempt of Congress for failing to comply with a subpoena to testify about the January 6th Capitol insurrection. He spent four months at the Low Security Federal Prison in Danbury, Connecticut. When I called him up, we spent some time talking about that time.

[Steve Bannon]

At Danbury. My job was they gave me a job in the Education Department. I said okay. I said fine. He says, we just had a guy leave a couple weeks ago and can you fill in for his course? I go fine, what is it? And they go civics. And I go, oh my God, Nancy Pelosi must have put him up to this, right? Steve Bannon's in prison for insurrection. He's teaching civics. And I would talk to 2008 crash and deficits and how it was, bailed out, the pandemic, the whole thing. Boom, boom boom. And I had super oversubscribed classes, you know, principally black and Hispanic, principally young guys are there on these drug, nonviolent drug charges. And I tell people the thirst that they have to want to learn is unbelievable. They want to figure out how the system works because nobody Teaches it to them. And so I go through the whole thing on the bailouts of the financial crisis. And I go. And one of the young guys in the back goes, hey, Mr. Bannon, could you. On the way, could you do that again and slower this time? I go, fine. So I go back up, do it again. And he goes. He says, Mr. Bennett, is that actually what happened? I go as close as possible. That's. Yes, that's basically what happened. And he goes. And they call us the criminals.

[Michael Lewis]

If I'd met you in 1987 or whenever you were at Goldman Sachs and we had had a beer and I was asking you just what your politics were, what would I have come away thinking?

[Steve Bannon]

Goldman was very interesting because Goldman had a policy of no hostile takeovers. No raids. No hostile raids. We were defense. I probably work on 20 raid defenses against Mike Milken and Drexel. Coming at these companies that you go out to Toledo, Ohio, or to Wisconsin or Michigan, and they were very stodgy, right? The management practices, it was still very much Mad Men, right? The executives were still going out for the two martini lunches. I mean, it was quite sleepy. And Milken was coming in and ripping and getting into these companies and taking the pension funds and getting annuities and taking the excess and the pension funds because the stocks had gone up. It was brutally. I remember one of the guys, guy named Matt Keller from Harvard Law, that was one of the VPs, was a brilliant guy, and he said, the river of history runs very deep through this department. I was at 85 broad in the merger department. And he said, the river of history is running very deep here. And I go, what do you mean? He said, because we're essentially restructuring the American economy and therefore the global economy. And this is gonna have a massive impact on the country for decades to come.

[Michael Lewis]

So I wanna flash you forward now. You then went out to Hollywood, and by the way, let me just. Brief pause. In Hollywood, you mentioned that you had something to do with the movie rights of Liars Poker.

[Steve Bannon]

We optioned.

[Michael Lewis]

Who's.

[Steve Bannon]

I wrote a script.

[Michael Lewis]

I had no idea. You wrote a script.

[Steve Bannon]

Script of Liars Poker. I actually. With John Valenti thing. Valenti's son. He and I went away for two weeks. I actually. I have to. I think I still got it some. I actually wrote a script. I thought it was pretty damn good. Yeah. First script I ever wrote.

[Michael Lewis]

One day, I would love to see that.

[Steve Bannon]

No, no, I gotta. I'm gonna go dig it up now.

[Michael Lewis]

I. I don't want to. I want to get to the. The thing I wanted to talk to you about now, and that is tell me where you are and in your life and what the consequences for you in your life are of the financial crisis.

[Steve Bannon]

I had bought a condo or co op down at 15 broad, right across from the stock exchange. I bought it in like 2006 or something. And I noticed every time I started coming in, because I was spending time in a lot of time in China, a lot of time internationally, building businesses, financing stuff. I came back, I noticed all the time now the whole building was like foreigners. And I said, this is interesting what's happening here. So I put it on the market in April of 2008. And the broker at the time said, this will not even get to the brokers. This will sell. This will sell pre broker, till you go thing. This is a hot property. This is hot. In July, I had had one nibble. Everybody had passed. And I said, hey, somebody knows something. This thing's getting wobbly. And then the financial crisis strikes. And I noticed that when they put Lehman Brothers into bankruptcy that they're not thinking about the commercial paper market. They kick Lehman Brothers into bankruptcy, I think at midnight in New York for dawn the next day. And in London, they've already kicked it into bankruptcy. The commercial paper market freezes up the next day or Monday. I think it was Friday. Kramer's on, not just cnbc. I think he goes on NBC. That's. He gives the famous. If you need cash in the next five years, you got to get your cash. My dad sells his AT&T stock, which you had the Catholic Church and the phone company that was. And they were about equal. Okay. My dad was very religious. You know, he's a weekly communicant. Go to Mass daily a lot. A very super religious guy.

[Justin Richmond]

Boom.

[Steve Bannon]

He blows out because of Kramer. And I go, oh, my God, these companies are all filing bankrupt. And then you start to see the bailouts and you realize they socialize the risk, make taxpayers pay for it. And the little guys like Marty Bennett and I really started thinking about that. I go, good Lord, this guy has bought into the system. He's a systems player. When a guy. My dad, 100% with the system, right? He just. He's a good householder. He's a proverbial little guy, right? But he puts his money away. He buys the company stock. He believes in equities. He just believes what the company tells you. He believes what the government tells you. He is the backbone of the country. And I see that that guy gets screwed for Playing by the rules. All the other people that were supposed to be the elites were all freebooters. You're supposed to be the elites for a reason. You get a better deal because you're the manager of the system. They all fucked everybody, right? And the devil catched the hindmost. And that's what. It had a huge impact on me because I said if the Marty Bannons of the world are going to get screwed, this system's not going to exist. The wars I'd been anti the Iraq war and Afghanistan war big time. Because I just saw from my experience as a very junior grundoon, I just said these wars are wrong, you can't win them, et cetera. But then that financial collapse is what really. And then I became just a heart of a fire breathing economic populace and economic nationalist.

[Michael Lewis]

What was the effect on your dad of this?

[Steve Bannon]

Never. It's interesting, fascinating. Never trusted the system ever again. Would watch TV and just would sit there. One time, I remember he told me during the height of the Internet thing, I think his AT&T stock, all of it combined with the house of. We bought the house like 5,000 bucks right in. In 57. I think it was all of his stuff combined. He actually became a millionaire on paper for a moment in time of just a guy that was a, you know, a blue collar guy that became a lower white collar, you know.

[Michael Lewis]

And then it went away.

[Steve Bannon]

He sold it. It was still worth, you know, hundreds of thousands of dollars. So he wasn't wiped out, but from the peak and then from. It really won. The collapse started. He left a ton of money on the table. If he just seen it through. Right. My dad, after that everything was a very jaundice. He became one of the early Trump guys. My dad died over a hundred at over 100 years old, but he was one of the very first guys to come on the Trump train. And the reason was he said Trump will break things. He will, he will get this. He will totally turn this system around because you can't. The little guy's always going to get strong screwed here.

[Michael Lewis]

So draw me the line between the financial crisis and Trump's rise.

[Steve Bannon]

I think it was the 17th of September of 2008, that fuse was lit that went off. It blew up in November 8th of 2016. My study history shows every financial crisis you have a populist reaction to it. And the elites don't know how to deal with it. Right. Because they're still in the old model. And quite frankly they protected themselves in that old model to still Kind of make, you know, still kind of make a run at it. And it was pretty obvious to me that people had had a belly full of this. And so from that time on, I thought that Trump, I thought Trump was not just going to be the nominee, but I saw a President of the United States there.

[Michael Lewis]

Did you think he was? His rise was directly a result of the anger that was generated by the financial crisis.

[Steve Bannon]

1,000 million percent. Two things. The financial crisis coupled with, you're now in the 16th or 17th year of the wars. They don't end, they just don't end. What the financial crisis did is I think brought to the forefront the corruption of the neoliberal neoconservative model. It just doesn't work. People are American, people are not dumb. Eventually they will think it through and go, hey, I'm getting fucked. If we had not had a financial crisis and dude, I was at Goldman Sachs, if you had done these bailouts and if Goldman Sachs had done it, you walk in, you zero out management, you crush everything, right? Management will get like 10%, maybe earn into 20%. Did the American people get warrants? Did they get options? Their tax money went to the bailout and we got what, 8% back in interest is bullshit. Nothing changed, right? You changed the management, but you didn't change the incentive structure. So no, with no financial collapse, you do not Donald Trump. And really overall Trump kind of broke the mold. People were so afraid of what they said, right? And so precise and talked in this thing that didn't hit people in the solar plexus. Cuz politics is still 90% emotional, right? It's 10% logic and rationality, not the policies. But I'm saying the way it's presented and Trump was, he was just perfect. And this I said at the time, the reaction to Obama is going to be not conservative, it's not going to be Republican, it's going to be right wing. And if we play our cards right, it can be even more right wing over time.

[Michael Lewis]

If Obama had instead brought a hammer to it and attacked the system as opposed to bail it out, if he let the system fail, where do you think, how does he.

[Steve Bannon]

Number one, Number one. And this is why he's a tragic figure. You've got every person in the world telling you the American financial system is going to collapse and the world financial system is going to collapse afterwards. It's going to be anarchy and chaos and it'll take you 50 years to dig out of this. Who's got the balls to do that? Who's got the stones to do, who's got the wisdom, the confidence in themselves. Everybody around him said it had to be bailed. If he had done it, obviously he had been a world hero and deserved the Nobel Prize and deserved praises of his countrymen. But it's not going to happen. Marty Bannon's stock's not going to go. It's not going to be worth a couple hundred thousand dollars. It's going to be worth zero. Right? And then you, and then you explain to him how you got a plan to build it back up. It was the system saved itself. Now you look at what happened and this is why people say some progressive Obamacare. I said, do you understand that's a sideshow. The main event is that the elites protected themselves. And it also shows you something about our elites.

[Michael Lewis]

How would your path have been different? This is counterfactual. If there had not been a financial.

[Steve Bannon]

Crisis, I would have gone. I would have been doing finance, buying and selling companies, not involved in politics at all. On a yacht right now with, I don't know, 30 bimbos.

[Michael Lewis]

I'm saying you've come quite a long way from being an M and A guy at Goldman Sachs. You don't sound like an M and a guy at Goldman Sachs anymore. Do you have any kind of relationship with your old financial life? Do you still see Wall street people?

[Steve Bannon]

I still see and talk to a lot of the guys from Goldman. If you get, look, the smartest guys on Wall street and those Goldman guys, they understand something. The system has to change. The elites in this country have a total choice. We need to go down the path where the country is and you're going to get to Luigi or Mandami. Okay? That's where you're going. Or we can start to have basic fundamental change here and avoid that and actually try to get the country back on track and prosper together. Stopping the wars, having a more equitable, not just distribution of income, of work and effort, but eventually equity. We have to set up a system that the little guy thinks he gets a piece of the action. People can't be here five generations. I don't care what your race is, what your ethnicity is, what your religion is. I don't care. You've built the churches, you've created civic society, you've coached the little leagues, you've served in the wars, you've done everything you've been asked to do and more that you volunteered for. And here's what you got to show for it. Your dick in your hand. You don't own anything. And the average income's 52,000 bucks. And the average American has what, under $1,000 in cash. It's not gonna work.

[Michael Lewis]

Trump doesn't seem to be doing anything about it. When you lay this on Trump, what does he say?

[Steve Bannon]

We're working on it. I think he's going through the tax thing first, the big beautiful bill. But I think you're going to get his look, the supply side model with Besson, those guys believed and I think the theory, the case, your last chance for a supply side tax cut was that. So you incentivize people both with tariffs and with economic incentives to bring, you know, capital equipment, capital investment. You get to depreciate it right away. Those people. And this is why President Trump's more focused, I think, on getting investments here in the country from around the world. Right. Which I, I'll be honest, I'm not crazy about. But President Trump, in his own way, I think has a plan. You can see he's executing on it, right? And that plan I think has to play out before you go to the next phase. And something that I think could be more radical and I tell people more radicals coming. The one thing President Trump is doing, it's a full on assault on the administrative in the deep state. When you have Scott Bessant, who as you know, was our candidate and this is where Elon and I got in that huge another fight. Because Scott's a safe pair of hands on capital markets. He's one of the contributors at the War room for years. When Scott Besant writes a piece in the Wall Street Journal that talks about literally breaking apart the Federal Reserve and giving out most of its functions to other institutions and leave it just incur inflation. I say that brothers joined the revolution, okay? Because this is going after the major power, you know, the CIA, the Federal Reserve, centcom, the major power institutions in the imperial capital. So I think people should understand now this is what I tell people all the time. The left at Orange man, bad and hate him and you know, MSNBC all night long, it's just Trump and Trump, Trump. They're going to wish that Trump was still around in the future. They're gonna wish Trump was still around. Trump is a kind of, he's a conservative, but he's kind of a moderate. He's a New York City guy. He's a very people person. He's got a big heart, he likes rich people. But there's a lot harder to come after Trump. And I think that's hopefully where we go.

[Michael Lewis]

That was Steve Bannon, now host of the War Room Podcast. And that about brings us to the end of this special mini season on the aftermath of the Big Short. Thanks so much for listening. I'll be back in this feed from time to time, but for now I'm off to work on my next book.

[Lydia Jean Kott]

Do you have any last thoughts before we say goodbye to the Big Short, Michael?

[Michael Lewis]

I do, actually.

[Lydia Jean Kott]

Yeah.

[Michael Lewis]

My last thought is, you know what? There's an interview I wish I could have done and we didn't do.

[Lydia Jean Kott]

Okay, who?

[Michael Lewis]

Donald Trump. Oh, yeah, that. I want to talk to Donald Trump. Donald Trump, creature of Wall street, financially irresponsible, all the rest. To what extent is he aware that he does not exist as a political figure? Without that event, I feel like we're surfacing something that other people can run with. It's that this is a really big subject and it should be alive and present in people's imagination.

[Lydia Jean Kott]

Yeah, I missed the 2008 financial crisis when it happened and I thought it was like, no problem. I never need to know about it, but I'm glad I learned about it.

[Michael Lewis]

I mean, you're living in its world. You're living in the world it created. It sounds hyperbolic, but it's not.

[Lydia Jean Kott]

Against the rules. The Big Short Companion is hosted by Michael Lewis. It's produced by me, Lydia Jean Kot, and Katharine Girardell. Our editor is Julia Barton, our theme was composed by Nick Bertel, and our engineer is Hans Dael Schee. Special thanks to Nicole Opton Bosch, Jasmine Faustino, Pamela Lawrence, and the rest of the Pushkin Audiobooks team. Plus to a few more people who made this season possible, Greta Cohn, Jacob Weisberg, Sarah Nix, Christina Sullivan, Eric Sandler, Morgan Ratner, Kira Posey, Jordan McMillan, Jake Flanagan, Owen Miller, Farrah Dagrunge, and Sarah Bruguer. Against the Rules is a production of Pushkin Industries. To find more Pushkin Podcasts, listen on the iHeartRadio app, Apple Podcasts or wherever you listen to podcasts. And if you'd like to listen ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin plus subscription at Pushkin FM plus or on our Apple show page. And you can get the Big Short now at Pushkin FM Audiobooks or wherever audiobooks are sold.

[Michael Lewis]

Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half price, not half the service. Mint is still premium unlimited wireless for a great price, so that means half day. Yeah, give it a [e-mail] switch upfront.

[Elizabeth Warren]

Payment $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of network busy taxes and fees extra.

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[Ryan Seacrest]

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[Lydia Jean Kott]

This is an iHeart podcast. Guaranteed Human.