The Latest Episode Of ‘This American Life’ May Be ‘The Ray Rice Video For The Financial Sector’

It’s not often that Ira Glass’ twee-as-f*ck This American Life podcast manages to resonate far beyond the literary/hipster crowd, but the episode that went live today may just do that. Titled, “The Secret Recordings of Carmen Segarra,” it tells the tale of Federal Reserve regulator who became so shocked and flabbergasted by what she was witnessing at work that she bought a tiny recorder and began making secret recordings of meetings in the Fed. As Glass puts it in the show’s opening minutes, “For over 100 years the Fed has done whatever it could to keep its behind-the-scenes interactions with banks from being seen by the public, but what Carmen Segarra witnessed going on at the Fed was so alarming, she started secretly making recordings of what she experienced as a bank examiner.”

The whole thing is so jaw-dropping and and fairly easy for the average brain to wrap itself around that Michael Lewis — arguably the country’s most prominent writer on all things concerning finance and banking — billed the episode and the recordings it contains as “the Ray Rice video for the financial sector” in a Bloomberg column this morning.

He goes on to explain

I’ve never met Segarra, but she comes across on the broadcast as a likable combination of good-humored and principled. “This American Life” also interviewed people who had worked with her, before she arrived at the Fed, who describe her as smart and occasionally blunt, but never unprofessional. She is obviously bright and inquisitive: speaks four languages, holds degrees from Harvard, Cornell and Columbia. She is also obviously knowledgeable: Before going to work at the Fed, she worked directly, and successfully, for the legal and compliance departments of big banks. She went to work for the Fed after the financial crisis, she says, only because she thought she had the ability to help the Fed to fix the system.

In early 2012, Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (The people who regulate banks for the Fed are physically stationed inside the banks.)

The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that “once clients are wealthy enough certain consumer laws don’t apply to them.” After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, “You didn’t hear that.”

Many have speculated that the people charged with regulating the financial industry serve largely as pawns for the industry they regulate. Today’s This American Life podcast pretty much confirms that notion once and for all. Listen to it and/or download it here. All thanks to Carmen Segarra.