but not of human planning. that is more common now but back then that was a voice in the wilderness. >> guest: certainly. >> host: now, tugwell, talk about his trajectory in the new deal. >> guest: well i like tugwell very much because he was honest. he reminds me a little of secretary robert reich, although he is far more left-wing and secretary reich. he knew what he believed and went in government and loved roosevelt and roosevelt loved him. this is also about policy agony. it is about when you go in government and do your best and are not appreciated and the thing produced is not what you planned and nobody cares. he was a columbia professor and got leave to go in government. columbia waved him by a very ostentatiously, come back, we love you. he got there and worked in the agriculture department. he became the head of something

called the resettlement administration where the move people around as in john steinbeck, a lot of poverty, dust bowl and so on and he saw that a lot of the projects were not really working. some worked, maybe fertilizer worked, farms wouldn't have to be sold and foreclosed upon. a lot of it didn't work and he had deep ambivalence. he planned communities, greenbelt maryland, he cozied up to eleanor who also appreciated them. they drank new york state champagne which roosevelt thought was awful and probably was. >> host: i think the market has proven that. ..

and that they had resisted the manager and they wanted milking machines for example which is a completely rational thing to want to get productivity at carmel by the administration of the authority didn't want it because part of the thesis was a this was crating jobs and to stick your head john salvi's fallacies for and everything and tug well saw that and understood the importance of efficiency and he tried to go back to colombia and they would not have him even though he had an apartment on riverside drive so he kind of went around and

the private sector and f and chile did get a reward and became governor of puerto rico where he interest than three from that had two my seven aspects of its preparation for our tastes and then he spent a lot of years been a professor who trying to rewrite the constitution because he concluded looking at the new deal that the problem was the constitution and the only we had a more modern constitution that he was an honest man. >> host: he pops up in a lot of things about a year ago every a book about the monopoly board game and it tugwell is a player in that because his economic ideas are in the use one of their early prototypes. and you mentioned and the constitution, earlier you mentioned in this sector brothers. another said that the book is filled with great characters. talk about two brothers and how the constitution ended up helping them out of the kind of dark place. >> guest: remember the supreme

court was a conservative court what we would call conservative they decided the scottsboro so they were both, they regarded as bigoted and conservative and retrograde and shecter brothers were a small chicken slaughter business, there are kosher jewish pressures in ralph avenue and ever prosecuted under the nra and their the case that was paid to go to the supreme court to approve the constitutionality at the end are a. >> host: it was unclear if it actually fit into the commerce clause. >> guest: the commerce clause limits of the federal government can two in the state's. >> host: has to apply to interstate commerce. >> guest: and it did the nra bridge to that and everyone knew they needed to be a test this of this chicken goodness, in another case it had been interstate commerce and ever prosecuted very nastily. a lot of things, laura prices.

that was illegal. all is a problem. working to many hours. competing and bring you go and look back. >> host: is in a miracle they got a job. >> guest: and what i love about them was there were furious. they realize with the government was saying was wrong and to them since i probably the czarist russia for their family had recently found from an the lawyers kept saying things like you are not an economist and the lawyers talk down you don't have any agricultural economics. i am paraphrasing and they resent i don't have much school and i'm barely speaking english. their english was mocked but when i got to the supreme court the argument went to them because of the logic. they said their lawyer said one of the rules of this nra is the customer may not pick his chicken. america is about consumer choice and he imitated for the justice

how the chickens were selected in the name of efficiency and the justices laughed. then when they laughed. >> host: one of the things the nra forbade was actually looking at a chicken and say i want that one. >> guest: and you could not do that in in a time when there was tuberculosis and not to antibiotics picking you're own chicken was important for health reasons. you don't want a sick chicken and this is known as the sick chicken case and the justices sided with the shecter brothers, what about the commerce clause and so on. and there was a lot of discussion around that. and it was an enormous advantage big test if ms. nra had stood in we would have a kind of intervention that we have in agriculture in business so it it should america forever. the never talk back cap and in the english people saw that right away. nra killed and 20 minutes, in

america there were show star if they did not know what two say and the result was various. >> host: one of the interesting sidelines is and is just making their way that was also over blunt to say the last band of lost america but a big part of the tension in the case seemed to be a kind of old petition america versus an immigrant america and never a lot of class distinctions that played out in that trial and it was interesting that the old court which in many ways was rigid. was 19th century and is up siding on the side of the use, the pigeon english speaking and educated jewish immigrants. >> guest: was a lawyer had mocked as took mass and a routine things about people and a that was also wonderful. they formed the small business and it didn't matter what their ethnicity was. they had been wrong and the supreme court saw that.

she wrote a poem about it and said i am proud began to show my face so i thought this was a wonderful story and we never learned in school because it was against fdr but it was a member of story. >> host: speaking of people who are against fdr and other interesting character in this book is wendell willkie who ended up running against roosevelt in 1940 as a republican candidate for president. top tech -- talk them out with the wealthy because he is maybe the hero of the book really. it and what was his role in all of this and how does the end up. >> guest: when lafont thought he was an informer. he was for democrats. he was for reforming and he was originally in the utility's business so he started out in this business and thereby to have clean utilities. his was not quite to rely fact,

it was going to be clean and wonderful and you build of this utility company very loving way, commonwealth and southern and it was fine to live up the south. >> host: which at that point had virtually no alleges in a. >> guest: that was that was put out so and the tva law was passed, the tennessee valley authority and this is the same power struggle between public sector and private sector and the window met in a room with one of the leaders of the tva and he said the you are in governor in you to come out there you want to be reasonable save you get a job and the private sector. year statute is egregious and it is going to be changed so you won't have money so wide and to cooperate with me and we will strike a deal and you make of power and had this debate are you take one geographic area and

i take another an essentially this is of the cosmos club he said in new you don't understand it is over. a private report directly to resign because the tva did not go to the secretary of the interior. >> host: was in the tva at that point, that must have been the single most largest of the course project. there had always been canals and dams and things like that but in terms of sheer mandate. >> guest: and the magnificence so what they fought for years in court. he fought for, lava and did not want to sign and this was a business growing even in the depression like the internet now. it was business cycle prove more or less. >> host: and utilities, they were regulated in some ways but they were also delivering more jews have lower-priced this. >> guest: the prices were coming down as they serve our

people and he thought it was insane and he got crazier and crazier with rage. when he began to build the buildings for the towns receive a department build the buildings for towns and window realize that was wrong and he finally spoke out later in the second half of the 30's and said that this is not right. the government can have a monopoly in this area and it would be bad for all of us and he sold his company or a good part of it to the tva and everyone wrote so it is soft, the shareholders got money but it wasn't solved because the element of competition was gone and this, when dole was very sad and telegraph his wife and went into politics and that is how we came to know him but he also spoke about the forgotten man in his acceptance speech and that is one reason i called the book this because roosevelt spoke at the beginning in window spokane

and he understood and that the little businessman was a portent for the picture of america. >> host: the tva in the end was very inefficient. >> guest: levine back later it turned out water power was not sufficient power in the displays 15,000 people and there is another author jim powell who has written if you want to have a specific policy questions he has written a wonderful but then he gets into the breach in efficiencies not to mention the polluting with its endorsement of phosphates. >> host: that was a huge thing. >> guest: ever great support and phosphates everywhere with and the idea now it might be a good time to talk about change assumptions economic assumptions most people agree now even attending on the left that one thing that is good and bad decentralize economic activity is it is a discovery process of it for everybody does one thing

one way you kind of figure out how to innovate and what the damages of one process versus another this mathis is an argument for american federalism when the state's do something and you can learn from and to. >> host: it is better to have a bunch of different flowers blooming even if it might not make for a perfectly regimenting garden but in the end it is my. . this is something both of my parents, all my relatives and i always felt like the depression was something that everybody in america understood and has a real connection to. it's clear that isn't the case anymore and will become less and less with time. what does your interested in the topic and what did we must have to gain from setting the depression now particularly a revisionist understanding? >> guest: one thing the heroism of the people, that is not a right wing or left wing and use either brave way they

persevered whether roosevelt people or the opposite. we can now with that is like and in the book i trace bill w., the founder of a a. he founded the modern self-help group, the idea that you sit at a table with people who have the same problem without a clergyman basically and through a network address your problem successfully and this is so much with us today whether on the net or internet else we all have a self-help community of some kind even talking about are binding on the internet and he did this and i trace how he did it. he was also a wall streeters say that was his reaction. >> host: use a better drinker. >> guest: he was a poor while streator more alaska has some interesting ideas. he was an alcoholic and came to the solution and i also talk about harlem called later father divine who taught his own gospel of plenty and got his followers

to buy real-estate for him mostly brazil and they expanded in white neighborhoods and he got a lynching. he wanted in teaching lot and he didn't see how roosevelt could change the face of a thing survivalism and not deal with flinching. and he brought real estate across from roosevelt said to provoke him. so the first thing is the heroes and the second is that you do not need to mess with the economy for it to recover and that messing with its economy can retard recovery. to you do not need to go into a form of or katrina mud when there is a downturn. the economy has a lot of inherent strength and there is plenty of evidence that it would have recovered much sooner maybe 36 have had roosevelt not asked for the man did avifauna unimagined power to change everything in sight for a smack in his inaugural address. >> guest: teeseven we will change everything exponentially

unimagined time who is black is stunning and in today's america that wouldn't go over very well. >> guest: you can even hear al gore are john everett saying it so he said that and a scare them to death and the new yorker cartoons are accurate of the that business man hiding in his salon waiting for the new deal to be over. >> host: but we're also in a kind of post new deal consensus. ronald reagan ran as a new deal democrats are used to say when he ran that he was a new deal democrat, barry goldwater i think was the last republican candidate to question social security. we are clearly living in a kind of a new deal of my be the types of contemporary american politics. even as we have a much better understanding of the economy and idea that interventions have unintended consequences typically -- one, how to explain

this kind of strange amalgam of free-market kind of libertarian economics which is really why and how they into lentil battles but governments spending intervention is actually at higher levels than it was during the depression? >> guest: controversies checkmate which is why i wrote the book, the challenge of the two opposing ideas. the most important thing for our generation is that the new deal will come back to bite our children. when they pay him at higher payroll taxes because we did not dare to reform social security because out of some of filial piety we did not want to have an preceding generations. roosevelt was inspiring. his voice was inspiring fear he was right on over to but just because he was right on world war ii with not have to have false this town for his run by the policies in the third days and we should at the warm our

children to change social secure lauper cheetos to that of the candidates from ronnie to edgars, you don't see daring on social security or medicare. >> host: and serving president bush's attempt to even discuss social security reform and absolutely nowhere early because of his on the fecklessness i think. let me ask you quickly, we heard your her biography earlier, it hovered at "the wall street journal" and the financial times. you are an accountant for bloomberg. what can you define yourself ideologically not a partisan trends but what is your intellectual history and temperaments and how did you arrive at the world we do? >> guest: i am an old-fashioned kind of liberal and a lot of this book is about the death of that kind of liberalism which -- and that old liberal is a free-market liberal in the european sense who cares a lot about the individual, the

reaction man and will emphasize that rather than the group for the aggregate. i very first job is as a new republic where i wrote an article i think about the parents should not know when girls under 18 had abortions. it was called the squeals and it was a liberal in may, it was leave me alone even if i'm i child and if i don't see too much of a disconnection. i have great faith in individual and i think it is time for a reevaluation of the phrase liberal in america. the republicans are wrong to try to scare democrats. ronald reagan was right on that, it is a good word in democrats and republicans should both susan and we should reexamine traditional liberalism and we can. >> host: the you think the end of many people would say we're in the great golden age of individualism and them decentralization season as there are forces that have heavily centralized power of the government and that corporations

because of the internet and the breakdown of traditional social mores, the individual has more freedom of expression of both to say what they want us how little they want. is that true or do you find . >> guest: that is true and that is why the other -- the discussion of liberalism is truly weird now and then there was recently a lecture at hill sale or in professors and barack issues between reagan and worries about. i would say reagan two not have to choose because the demography was on his side. there were plenty of people to pay for social security and at the time is seen the growth would cover the entitlement but we do have issues because to my reason sufficient though not enough people to play the social security and social security is set up as you can fix it with the economy growing. so this is a moment of choice for allyson.

our generation and the of the people. we have to look again at roosevelt and we don't need to do exactly what reagan did. we don't need to be afraid of goldwater. goldwater was a long time ago. >> host: goldwater was mostly right. thank you.

how c-span funded? >> grant funds. >> private contributions. >> honestly i don't know. >> commercials. >> advertise and. >> something from the government. >> how is c-span private practice 30 years ago america's cable companies. is c-span as a public service. a private business initiative, no government mandates and no government money.

>> all this weekend primetime on c-span 2 we are very special booktv programming. first new york times reporter edmund andrews who talks about the decline of the housing market in his book "busted: life inside the great mortgage meltdown". this is almost an hour. >> thank you very much. i would like to start by saying i have sort of been on a kind of media tour for almost two months now. i have been on the today show and 2020 and this is the hardest place to buck so i guess that must mean that the press here is the most elite audience you could possibly imagine. [laughter] it took a long time to get here but i'm glad to get here. thank you for coming and hearing about my book. i will give you kind of an starting with a quick summary of

what the book is about to come up with appointive it is in taught the rest of the things i've learned on the way as well as the reaction to which has been kind of a learning experience in of itself. and then will open up for questions. so as mike said, this book is a highly intimate account of my own serve real dissent into mortgage mania at the height of the house and bob dole. i think it is fair to say that i had a very unique vantage point as a fusion swath of the country was becoming abscessed by this in with your fire opportunities posed by soaring home prices and exotic mortgages and ever more clever ways to bar a lot of money. i am an economic reporter, i had written and to lay about exotic marses' a little bit in early 2004 in the course of covering the federal reserve and macro

economic policy. at that time it seemed to me that we were going to be looking at higher interest rates in early 2004, the fed was getting a raise rates and people were borrowing more and more and more to be able to keep up with housing prices or to drive them even higher. and it just seemed that there was something that was going to cause problems so i wrote a couple of pieces on that. they were kind of cautionary articles, but as you know what a person knows and what a person writes about isn't necessarily translated into what a person --. and in my case i have it on in love with patty who is right here at the front row, falling madly in love perhaps in the way that only a middle-aged man can,

i don't know. but i'm still in love with her -- sorry, you tell me not to say madly in love. she is really sick of hearing that. but that is what happened, i know very much in love. patty and i both have children and my toes and living close by. i was paying huge amounts of shall support and we wanted both to accommodate her children and have room from nine to come over, kind of a house fit into that picture which is a crucial link in making the dream come true so in that environment it turned out that it was really easier to buy a 460 or $500,000 house even in my situation that it was to rent. how bad was my situation? here is how bad. [laughter] and this is sort of the starting point, this is the basic

predicate to the hall of venture. i was not in a position financially to borrow by any normal mortgage lending standards appear that i was paying out more -- about $4,000 a month in child support and alimony which is not to give away the show but more than half of my take-home pay, substantially more. so i had less basically just barely enough to make the mortgage payments on this house that we ended up buying in yet it was the easiest mortgage in the world to get to appear in a really was not hard. i saw this house and talk to my real estate agent who said i will give me the name of a guy who specializes in its accounting situations. she didn't become his name was bob andrews no relation and he basically change one thing really quickly. my press corps. and at that time it was great,

it was a good solid plus 700 credit score and on the basis of that and the fact that i could come up with a 10 percent down payment i was good two go. so that is basically all he wanted to know. i had a job, i could come up with a down payment, illegitimate down payment of 10% and had a good credit score. nothing else mattered, the rest could be worked out and so when i got was a mortgage that was not as you may have occurred in the prepared terming liars loan. it was better than that, it was a don't ask don't tell loan. i did not disclose my income at all. it's amazing. but it was very easy, the whole thing went through quite smoothly and even at that time i was kind of astonished and appalled by the fact that i could do this, and am not trying to defend this on any rational

ground. the whole point here is that it wasn't rational on my part, but you get into this mindset and everybody has their own reasons for going into debt over their head into debt. in my case there really was about love and money to start this new chapter in my life. in any case it was easy for me, too easy to rationalize how this could work. this kind of magical of thinking. it is dicey but patti earnings x amount of money and then we will be okay. i will pay the mortgage and she will pay everything else and it will work out okay. when you're in a feature of any kind you don't want to hear about the obstacles to practical at putting obstacles to wish you are doing, you just what which you want. and this brings me and to a to a passage and that i rode very early in the book. just to give a flavor.

.. emotion that goes into -- went into my own activities here as well as i think the emotions that drive lot of people in other words home bonding is a na@ @ áf@ @ @ @ @ i describe confessing why apply it in 2007 to alan greenspan. i was interviewing him on why he shouldn't be blamed for the

whole mess and he was explaining why he wasn't at all to blame for the mess and one of his arguments was the problem with the mortgage bubblehead largely been about fraud and the fed wasn't equipped as a law enforcement agency and that what made the wrong way. i had not defrauded anybody. i had played by their rules and their rules were stupid but i played by them, and nobody deceive anybody about what was going on and that was an important wind that the system had been corrupted. it had been pervaded with corruption by this point, and crazy things were allowed to be possible for a lot of reasons people at every step in the financial chain were willing to essentially deliver themselves and others. in any case i had just confessed to greenspan and i was in this mess and my question to him was

so should of the government had stopped to the lender from lending to somebody like me who? >> and his answer was -- his question was have you desalted yet? at this point in her 2007, three years into the mortgage i said i haven't defaulted yet but in hanging by my fingernails and he goes well, so, these lenders made a judgment based on the fact that they decided you were the kind of guy who would do anything possible to pay the mortgage and they were right. you are trying to do everything you can to pay that mortgage. bottomline they probably already made money on the use of by his reckoning the system worked, enlightened self-interest still made sense and no need to have the government step in there and stop people like me. immediately after that encounter, you know, in the process of that he asked me, you know, why did you do this?

he was pretty horrified and appalled that he was hearing this from me. we had known each other for a couple of years, reporter, a public official, relationship, and i think it was astonishing to him that somebody like me would have engaged in this kind of malarkey. so the question was why did you do it and here is where i would like to pick up. why did i do it? why did we do it? why did millions of adults to cleave of their common sense and load up on home mortgages they couldn't possibly manage? why do we all jumped off the cliff together? we all had our reasons. some of us were desperate to fulfill the dream of owning our first home and driving in the middle class. of your screen a bigger house, new house, better neighborhood and others were dazzled by the seemingly sure-fire profits in sorting realistic prices.

i had other reasons for taking the plunge, the money was there and i was in love. the fevered for romance and speculative fever to get rich have a lot in common. both are driven by hunger and the allure of once in a lifetime opportunities. both evolved through a series of escalating gambles. the first is small and cautious. a sly flirtation or lowball bid on a condo but every pay off emboldens you to raise the stakes and of the conditions are right you can escalate very quickly from the harmless flirtation to the dinner, the first kiss, the weekend and ultimately put in your future of the line. the same can be said for flipping condos in miami or los vegas, each roll of the dice confirms the strategy and provides more money to raise the stakes. prudence and patients become

dole and petty if you were on a roll it is time for big ideas, bold decisions and her right. it is about adventure, danger and was i ready for that at that point. i think honestly as we look back on the bar was a got in trouble mine that feeling is from having talked to many people that most of them would admit to you they had a feeling that what they were doing was a problem, that it wasn't wise, that they were running high risks. and for whatever reason the decided to override their sense of caution and plunge ahead anyhow. and they will be debating for years if not decades why so many people took the plunge it wasn't human nature that changed in 2004.

it was the financial system. the financial system had channeling and absolutely massive flood of money from r-mo world. it was cheap money and they were looking for slightly higher yield, riskier borrowers, or more profitable are worse and this was the last game in town, so what we had was a financial system encouraging, enticing one, and roping in millions of borrowers who just went ahead. else i say, people have no idea of the true nature of the mortgages they were taking out. i think many new ones had a sense of the risk they were taking and figured they were going to get bailed out by the continuing to rise, the rapid rise of housing prices and then some people were like me who

said this is crazy but i have a plan. it can work. what ever. many different paths but i think the enabling is the key thing that happened in this period and at the end i think you have to place the blame for the catastrophe, the macrocatastrophe on what was going on in the financial institutions and frankly, with our regulators in washington we were asleep at the switch for sure. this book has generated a lot of reaction i would say mixed. i have gotten flooded by e-mails from anbar worse, it troubled homeowners who alt-a me for writing the same sort of opening up because suddenly they didn't feel so alone, so ashamed, so lost in their own travel and that is actually one of the most

i opening experiences for me after the book was published after "the new york times" magazine published an excerpt of it. i suddenly realized the incredible array of people who had gotten in trouble and what kind of people they were because these people writing meet many of them admit of that they had made huge mistakes. some of them had a terrible luck, some of them lost jobs or had medical problems, all kind of reasons but most of them were earnest, hard-working people who felt terrible about what they had done. these were not greedy or self-absorbed yuppie some spending their money snorting cocaine or biting the extra bmw. most of these people were middle class folks may be lower middle class folks who wanted a house

and wanted something for their kids and they either felt that it was possible and true this is the investment they couldn't lose or some of them were afraid if they didn't buy it was granted it even further out of reach, and i guess, you know, my own -- i never asked anybody to have pity on me for my decisions. i knew what i was getting into. i wasn't in any way a victim of anybody but i do think there were a lot of people out there and that behooves us all to go easy a little bit on the judgmental as some when you think about the millions of people who have gotten in trouble because everybody has a story and they are a lot more sympathetic sometimes when you talk to them in person. reaction i have gotten as i said has been mixed.

i will give you a sampling -- i can't -- i didn't -- i didn't give you the long extended rains that have come my way but trust me i had gotten a lot of them directly through e-mail and in the blogosphere. among the names i have been called, loser, lawyer, nebbish, jerk, dufus, fraud, irresponsible, greedy, selfish and the complaint i am getting a lot lately is that i don't show any remorse. i guess they haven't used this word, but not shameless. people are upset that i don't say i am sorry for what i did and they are not saying -- they are arguing i am being accountable for my own decisions and that i should live from st.. my own feeling is i have plenty

of remorse for the decisions that we need. i have had my credit score shot to hell. i have blown my savings. i will have a tough time retiring. i would be happy if i could retire by the age of 70 on any kind of income and we may well lose this house so there is a lot to be sorry about but i don't feel and this is what makes people mad i don't feel like apologizing to the rest of the world for these decisions. i'm sorry. however bad my judgment as a bar was and however bad even the judgment of condo flippers might have been pails, pales in comparison with recklessness that was systematically undertaken by the biggest financial institutions in the country and i have yet to hear stand o'neill of merrill lynch or of citigroup formerly

apologize for recklessness they unleashed. the closer you look at what happened the more outrageous it becomes. how much time do i have? okay. i would like to wrap up here in the remaining minutes. the things i learned in the course of working on this book went beyond my own personal sagas. all of the -- almost all of the public attention and debate about my book has been whether i am a creepo or irresponsible, the idea right, did i do it wrong, those kind of questions. the real question is not whether i made her misjudgments. that is obvious. i did. the question is why did a 10 million people or so at the

same time make horrendous judgments? it is always going to be the case that some people at any given time are going to borrow more than they should and they are going to get in trouble for it but it's never been the case we have this kind of wreckage at one time so many people, so overextended in such a compressed period of time and that couldn't happen without the lenders and wall street firms making all that money available to people regardless of the risks they might entail. the question is what were they thinking? what were they thinking? let's not assume they are who crooks necessarily but what was the rationale? and here is where i learned a lot. what i did with this book is try to report the stories of my own highlanders and to some extent the stories of some of the wall street guys financing them.

and the policy makers here in washington like alan greenspan as much as i would like to dump on washington policy makers, the bush administration and greenspan, and i think they all deserve a good measure of criticism and blame especially the fed i think that the real issues are, you know, what is going on in the financial institutions and what i learned was interesting. in short, two of -- i had three mortgages, have had three mortgages. in two of the three mortgage lenders crashed before i missed my first payment. they went out of business before my first payment went late. and the stories behind the more interesting. the first mortgage lender is the one i would like to dwell on. it is in chapter 3 my blender drinks the kool-aid.

i go into the story. this is a company called american home mortgage started in 1988 by a guy named michael strauss, very bright sort of mortgage broker type. he had built this up from a one-man operation in his apartment by the time i came along a nationwide mortgage lender to make about 40 to $50 billion a year in mortgages. it peaked at about a rate of $60 billion a year and mortgages. they were the tenth biggest malt countrywide but they work -- they viewed themselves as competitors and wanted to chase them. they were also private lenders. they were known in the business as a alt-a linder meaning they were looking for borrowers who had good credit, a but wanted to

stretch, cities were the borrowers who had good credit and were not going to disclose the messy details of finances for example of much that they might have or debt to income ratio. so they were specialists in no doc loans where you get state and income and not document or in the case not even disclose the income at all and just make the loan on the basis of the person's assets and credit score. but we know happened with me. the interesting story about american homes is that as they were growing and write about the time i became a customer in 2004 they made a big shift from being traditional mortgage lenders, kind of normal traditional relatively conservative mortgages to much more exotic alt-a no document stuff and they

also decided it wasn't good enough just to make loans and then resell them to wall street. let me back up for just one second. the conventional wisdom, and it is true to a great extent, what drove this whole media to a great degree was wall street firms buying shoddy mortgages, turning them into securities, mortgage-backed securities and selling them to investors around the world and the rating agencies put bless these securities with aaa ratings zandt so we had enormous machines that god created. all of that is true. but there is more to it because what happened in american mortgage case they decided it's not good enough we are making the loans and selling them for quick profit. we are making a big profit but that isn't good enough. we get these loans worth a lot and so we are going to hold them but the only way they can hold them because they were not

really a bank with lots of assets, the only way they could hold them is to borrow money to hold them. and so what they did starting and 24 is built up a huge leveraged portfolio of their own riskiest loans specifically something called option arms, which are by my reckoning the most evil mortgages created in the entire year boom. they are sometimes known as pickup payment loans. you could pay less than the minimum interest and hold on to your house. what you might or might not know is you are backing up thousands and thousands of dollars every month in additional debt or deferred interest. anyway, american home mortgage decided they loved these loans so much they were aggressive about making them they were going to borrow tons of money in order to be able to hold them so

they had a 15 billion-dollar portfolio of these loans they were holding as an investment and they were leveraged ten to one. no, i'm sorry, more like 15-1 at the height of things when they thought they had really figured out how this stuff worked. so, and august, 2007 rolls around and thus a prime market has begun to input because the rates are resuming in august, 2007 as many of you will remember vividly this is when the credit markets did seize up. this is the beginning of the financial crisis. it happened in fast. the rating agencies basically had acknowledged in late july that they had misread billions and billions of dollars worth of supply and securities backed by

supplying loans and everybody began to panic. it was like the emperor has no clothes and people realized the jig was up so there was widespread panic. american home mortgage was out of business and a week. they didn't get to the point of a losing quarter. they were out of business and a week because they owed an extra billing and collateral because the value was worth a lot less. this is amazing. i thought that what this was all about was smart people figuring they could gain the system, how to get out before the roof fell in and instead it turns out got sucked into the media themselves it's a stunner. the smart money was that smart. it was self-destructive for them and if you think about this, it happened all over the place. merrill lynch and morgan stanley and other firms were buying up

subprime mortgages lenders at top dollar and 2006 come evin 2007. extraordinary. and getting more and more leverage themselves. so, that was an extraordinary thing that i learned and i still to this day cannot decide whether some of these institutions like merrill lynch or citigroup or american home mortgage were corrupted and cricket or just stupid. i go back and forth on this in my own hand but i think it tells something about the nature of the meaning the -- media, that we all like conspiracy theories and we all like to blame the big financial institutions at the top for being the master manipulators.

they are, but they can't become victims of their own what chicanery and in this case they did. they bought their own propaganda and obviously it has paid mightily. the other startling experience for me in reporting the story was not about me perce, it was i felt i need to look at the question of how minorities and low-income people were targeted by lenders because it was pretty clear that when a person had gone aggressively after his genex and low-income black families as borrowers particularly toward the latter days of the housing double and they had been written to disproportionate share of bad

stuff. but i did is mined out right here in the washington area to manassas virginia many of you may know is a hot spot, sort of ground zero in our area for foreclosure, various -- has had a huge hispanic migration end and the foreclosures were all over the place by 2007, 2008. i interviewed families. i just could not believe what i was seeing. families -- one family in particular i met just as they were signing the papers to lose their house, they were short sale. it was an el salvadoran family, a naturalized citizens had owned the house already come had made a 200,000-dollar or so profit on that house and was persuaded to sell it and buy a 700,000-dollar mansion with one of these up an

arm loans not knowing how they worked. and when i met them, they were not only giving up the house, they had lost $70,000 down payment they had made and all of their life savings and they had to start over from scratch and moved into a tiny little two-bedroom cottage and downtown manassas and they were trying to recoup from there. it turned out that there were lots of stories like that. there and countless other communities. it is a story we know but when you get up close and personal, it is still shocking how horrendous this was coming and it was lenders recruiting in this case spanish-speaking brokers great incentives for crazy loans and on and on that it was very systematic and it

turns out when you look into the academic literature or government literature about the pattern of supply and lending not just in the last couple of years but since the late 1990's, study after study after study has shown any income level for example, blacks are two to three times more likely than whites to be in subprimal loans. maybe some of that is about credit scores, but there are too many studies coming up with the same results to let you believe that there wasn't something really nasty and concerted about breaking on the most -- preying on people who were not in the position to evaluate some of these mortgages while. people were struggling with the english language maybe didn't have college education, whatever.

but the data on the disproportionate patterns and some prime lending which is the easiest thing to measure, not the only kind of bad loans, the date on the disproportionate percentage of loan outside the mainstream and vulnerable is shocking and it was ignored. it was ignored for years. people in the housing communities advocacy groups have been complaining about this for years. it really wasn't a secret and it was ignored and i just think that's really a joy at full shocking and shameful piece of business i hope we deal with. just ran out of time so please let me open up for questions. "the forgotten man" i have to,

one is the past one is the future. the one about the past is i don't understand how the federal government missed this for so long. we bought our first and only house in 1980. it was a development in the world were to come 1800 sq. feet, small, not well done, small lot, well located. we paid $150,000 i thought that was the absolute top of the market. five years before that it had been $70,000, 1940 was 17. when it was assessed, not a crazed, assessed for $850,000.1800 sq. feet small brick house on a little plot that was crazy. housing prices were going like this and incomes were absolutely flat. so at some point there were not enough people to afford the houses that were out there at the prices that were there and

the prices will continue to drop until there are enough people who can afford to buy them. the big question i have is for the future and that is all of this capital, the best use that could be found was to invest in the subprime mortgages basically non-productive asset when there are jobless people and poor people in the world this was the best thing the system could find to invest in? that capital should have been going somewhere else. >> we were the best investment for the world to invest pity it wasn't just american institutions. this money was flowing in from around the world from china they were begging for some place to earn a slightly higher return and this was the seemingly perfect game off secured lending have a slightly higher yield. it was a figment of our imagination. >> doesn't that suggest their

something wrong with our capital allocation system, that is a quote on quote free capital market? that is where the capitol ends up? it doesn't produce anything. >> clearly we had a huge problem and capital allocation in the country. how you can try to fix that is over my pay grade. [laughter] it is a hugely important question and i will say that also has struck home with me and something that to get me in the course of doing this which is that by a lot historical statistical measures, housing prices were getting way out of line with historical relationship to income starting in about 1998. by 2003, 2004, i think by 2004 shortly housing prices on average had risen about 40%

beyond inflation, and as you say, family income for the most part were flat through the period. so you have families being stretched more and housing prices going up. it couldn't go on, couldn't possibly and there were lots of people pointing this out. merrill lynch, god help them, the north american economist david rosenberg published a series of pamphlets in 2004 and maybe even as early as 2003. one had a picture of a house with bubbles coming up in front of it and he made the case statistically this is a bubble in 2004. .. did nelly bubble until it burst, he didn't want to second-guess the investors and anyway, it would be easier to clean up the mess afterwards then to try to

stop the excessive behavior in the course. i think we have now learned that was it that calculation and i am guessing that chairman bernanke is revisiting it quite aggressively. in fact, i think he said that. but, one of the astonishing things is, on some levels it was perfectly obvious that there was the housing bubble, which meant that this could only end in tears and it was ignored. >> thank you. thank you for the candor in the book, that is what makes this so from time for some mayors. i have a question about the future and at about regulation. in this country or to talk about mortgages where basically talk about consumer protection. the sort of ralph nader air bags and smoking kills you but everyone keeps doing it sort of

sort of stuff. a lot of politicians in this country seem to enjoy a mocking are demonizing one thing call the european welfare state within a state to put it more six insulate. european and temps to protect consumers seem to be wild mess of a temporary much more thorough than a great deal of regulation this country regards consumers from my amateur knowledge of this topic. i know your background is in germany covering macro -- a policy of the times and then when and if you had a sense of whether america and europe are in fundamentally on different paths in consumer protection and rather if that is true of the past the every day dan? does america have a future as a world leader in consumer protection? >> [laughter] >> i wish appear to have

that have to admit to akin to draw a good accurate comparison between our intent south or lack of a tent and consumer regulation and what germany or other european countries are doing. germany did not have the european bubble when i did not think it was mortgages than ours was. in my view is that i am not bay of financial education. there's a lot of talk about the need for greater initial education that if people were more literate about the mortgages never taking out we wouldn't have these problems and and think that is wishful thinking. i think most people of, it is not rocket science to understand the basic nature of a normal mortgage and andrew a. think that most people of have a rough idea of what was fun on with their mortgage may be engaging in wishful thinking about what's

happening here this and think about emotional excess from a speculative euphoria and things like that that if it have on them to literacy in the world and did not care. they were just going to go for it so what i think is the lesson of this is you just have to have the government be in there proactively to say certain kinds of practices aren't allowed. there are just too dangerous and we don't care if you are an insult or not. and there are certain products that should not be allowed when and i don't think it's that hard to draw the line on these things. there is a lot of the convention name among the provincial regulators whether it was during the bubble. fifth nonsense. if the bet wrong principle, one key one is with you do not lend money to a bar work without a demonstrated kind of realistic

tabulation of that person's ability to repay the loan and a lot of ways we just completely jettisoned in fact, the evidence. it was not just that if you get a loan without document to your income. though subject of five for an outrageously big loan faced by the teaser rates among the low teaser rates you'd pay for this two years. that's nuts. you know those kind of loans that you're real monthly payment is fine to get very high after a couple of years an option on terms. i visited in manassas, virginia where they were paying $2,000 a month, the minimum payment and the wrecking of $3,000 a month in different interests. this is in the call side of that loan on the basis of that the initial minimum payments. in this is inexcusable nonsense and it is very easy to just put

a stop to it. and so i think that there is a common-sense element in this that we ought to remember that there just that one principle ability to repay with invoking that principle would have prevented an awful lot of this nightmare. it doesn't mean that you really put into it identified what this and are working repave but you have some rough guidelines that are pretty valid. there are conservative in that the harmony because by lost opportunities and financial innovation is small compared to the harm that would be done by millions of people going bankrupt as a result. so i think we're are going to go down that road. what they have gone a long way toward putting the cabochon

days. you can't get one, if you want one and eventually it will be possible and we have to address that issue. i sure hope that we get away from this notion that we don't interfere with consenting adults. i think we have two. >> hello, i have a question, you said you interviewed alan greenspan. >> yes. >> allies to pick we raised the question since he said he did not expect the fall for anything going on right now because basically the way i want to frame this is a housing prices are in motion of your salary and the interest rates and here is a van that controls both of those things. so then it means and i'm sure every ready hazard that they meet and can pump up a point in interest rates and the market reacts to that some of the controls the interest rates and the money supply and i think he

has been quoted as saying as gravity of swaps actually decrease the risk to the market and he admitted -- >> alan greenspan said spread a false swaps and those kind of derivatives should have been regulated and they need to be regulated and he admitted in a very heartfelt way i thought a house committee that what he thought was kind of an unshakable truth that kind of rational self-interest will keep things in line and prove him wrong at at least in that kind of context. but to answer your question again alan greenspan does not believe that he or and then it should be blamed for much of the catastrophe. there are two lines of criticism, one is that during his tenure left interest rates

way to go too long there were fewer and more of the house and bubble and rising house prices and the other is that the event had the authority already to rein in it and even panic mortgage practices that have considered to be unfair or this tivo and did absolutely having the authority to block the kind of loans i'm talking about here and the proof of that of prices they proceeded to do that have been a catastrophe had already happened. >> so basically he just said that i'm guessing here is that basically this of interest does not work but he and it's none of that. >> in the narrow context. i still don't think that mr. greenspan is in any way at the end of regulation and i thank you would have avoided in most cases. that is a debate we're going to

have fallen for the. >> thank you. >> we have time for three more. >> you are to be congratulated coming for the high office. you should run for president. [laughter] >> there is a good idea of. >> in the reason i say that is you haven't mentioned the business schools and we have a president who had a business school education and that didn't seem to help. what advice would you give to people in the business schools to prevent something like this from happening iraq's. >> it is why you should ask that come about a month and a half ago i was invited to speak to a conference, a business school dean. [laughter] ended dean of the school at dartmouth who is the one who invited me got up there and he said the problem isn't that we were teasing them the wrong

balls for all of these figures as asians and risks practices. the problem is they weren't understanding or are models were all about. [laughter] two rich and i'm sorry i like the man a lot, i think that is baloney. the business schools were absolutely crucial in developing al-awja but there really squirrely models that reviews, and to structure sometime back mortgage securities and it was interesting in that experience. i was just shaking my head again and denial of responsibility. i guess we all do that and a lot of people accuse me of denying responsibility so whenever. but point well taken. i think that made to think about it. the point isn't that all these

clever tactics they develop in business calls are bad, but there is an assumption would quantitative sap has a sort of certainty to it that it doesn't end the hostage to caution whenever -- everything about teaching and i think was gravitating toward the idea that we can come up with rave ideas and there are great enough so much attention to limitations. >> thank you. >> i wanted to touch on the issue you just mentioned, a little bit about the dingell of looking and the responsibility in the country. is that a lot of readers are a restaurant with you and are coming to -- lee and i think one of the issues that's part that is that with respect to your story there are other spending decisions that you mentioned yourself and you yourself said

are responsible and there is a trip to a beach house or something like that and it indicated you enter wife went right on the same page about the seriousness of the problem at one point. i guess you're bothered about money into whistling stop bothering me about the money questions and so the question comes to my being -- we see easy credit everywhere and reseeded being manipulated by burris and a lot of cases and receive a sense received of entitlement by giving up the firm money with and receive that with cars, we can borrow at best bank 90% of cars are bought on financing now and a lot of times of very bad terms for the borrower is simply because you can make the payment. we have achieved in indebtedness that rivals that of the great depression fear imposing you're own circumstance and as our workers shouldn't maybe 20 f. engeljohn shift that we need to

make. as consumers should we be chasing for a more responsibility. >> i couldn't agree more. my feeling is that this crisis will with was not an isolated event. this is the culmination of a trend that had been under way for 25 years toward ever more clever and extensive borrowing and higher and higher indebtedness in it is not to say that borrowing is bad per say were in debt is bad% we have become more and more convincing evidence. the country in institutions or marketing more ways to borrow so as a country we have clearly over extended the. in here is where i would agree probably with alan greenspan that the solution is probably in the problem itself that having been through this we know right

now they have a shot of to levels we haven't seen and longtime and if they might go higher for a while. so having been through this i think we're in the midst of it will show a shift rendell and that is a good thing in the long haul. a very good thing it much-needed. it is a bad thing in the short term. i think we're going to have a very troubled economy because consumers really are retrenching, rebuilding, repenting. >> thank you. >> hi, i want to thank you rear can in this in the book in being so open about appear in and now having written about the economy and having experienced it yourself, there is a lot of frustration among people about the fact that the people where of fixing the problem for some of the people who got us into

the problem and there's a lot of giving competing theories from people kind of in academia, paul friedman, and you have people of have been in the field for many years may not have a nobel prize in economic for pc but have been experts and there's a lot of that sort of why did the man versus experience question and they know what i mean from not which side you on price if you feel like people who have been doing the research and have gone the education that they are more expert than they should come in and fix this or is this the responsibility of the people who really know how diverse than that you have experienced it yourself and people who have had their hands in the trenches of his big? does that make sense? >> it is a hard question because you are exactly right then and

the people all that are trying to deal with a crisis right now and fix the problems were deeply involved in creating the crisis in the press plays and other experts. they know of the bodies are buried in how these things work and so you've got to have someone who understands. it is in her problem to get out of, it is complicated on a really granular level of the securities work in staff but the basic issues in them to have to renounce the public is and the more you look at how the rating agencies, to the praise for these mortgages you realize that the conceptual errors for ones that once you realize when they were a sixth grader with a understand them.

so i think the government and public a institutions because sometimes you have a history institutions and the accounting board and people like that don't need to be so timid about questioning what it is the industry is doing and i think that public officials will and no question about it to be a lot more independent and the rigorous was and maybe even combative in questioning some of the schemes coming apart at and to tell you that one of the things that might be a bad indicator here is that the banking industry is i think having a lot of success from too much regulation and i am not

against financial derivatives risk you how to hedge risk and so forth. but these products to make them as a lot worse than they were a religious women and islander said what was gonna on with a credit the walls of like aig insurance. so what i've done it a little troubling is that as in name and at least but an informed layman i raised the question and coming as it is very clear that credit to all swaps and other derivatives provide a valuable service in defraying the risk of things to happen, but is it the benefit of that really greater than in the potential catastrophes or costs that come

from having the risk of spread out in some way places nobody what is going on in it in picks system and there something about we think we become so clever about channeling rest of dispersing a risk the summit in different places that we are all covered but obviously we weren't in this last crisis. and the result was the greater risk because it in good upington's as concentrated as people have. what would be the case of the wise and nobody knew what it was of the thir levels are higher than otherwise because everybody knew it was a huge problem but did not know whether you could lead to somebody any more in congress because bank to bank and the thir levels were legitimately escalating way beyond what they would have been otherwise. i don't hear anybody asking.

i hear a relatively few people asking questions on a more basic level, with a second, they give credit defaults swaps, do we really need them that much. is it the benefit really that much greater than the potential cost down the road? i don't have the answer but i don't hear it being asked and that. in thank you very much. [applause]

our special book tv programming continues with martha sandweiss on her book, "passing strange". the book details the life of a 19th century geologist and survey year clarence king who lived a double life as a black woman porter and steelworker in the order to marry his african-american wife. this is 45 minutes. >> thank you all for coming out this afternoon. i thought i would introduce you to my story by reading to you from the beginning of the book. in i began my book with a tail that antley takes you to the middle of my story so let me try this for you, this is how i introduce my readers to my story and i think they will do with my listeners as well. "passing strange", a prologue

in: invented live. edward brown, the census taker moved slowly down north prince street, knocking on each and every door as a slashing -- queens. it was june 5th, 1900, a mouth and 70 in the press spring of a new century. and as federal says his agents had done was ejected from month and a hundred years he was counting americans. compiling a mosaic portrait of the nation who lives here he asked each residence. and what is their color of skin? their sex, their marital status, their age? where every person residing in the house he recorded a birthplaces willis the birthplaces of their parents and for the lamborn he noted when they emigrated to the u.s. parent and whether they were citizens. he wrote down every once occupation, asked whether they could read or write a separate of the renters and borders from homeowners. and if carol neves handed a

brown to lee reported the data on the pit incenses sheets that would eventually find their way to washington and become part of the official 12 senses of the u.s. parent queens essence is what show was much like the more densely settled committed two ever been to the west. it was overwhelmingly white, about 98% with close to a corner of the white residents foreign-born. as he made his way down with prince street he encountered immigrants from germany, england, ireland and poland, the family supported by men who worked as a policeman, machinists and clerks. i've never lived he meant mary chase's the road would of remote island. a small boarding house and took note of her black housekeeper the widowed debra peterson. he had caddis some seven to white residents on the street thus far and peterson who descended from an african-american family long residence in new york was the first black person he encountered. but then he walked next door and he not for the large and

comfortable home and 48 north ping street. two black servants live here. the be mine was a 33 year-old widow and farina eldridge 14 with scarce it with the children to have been hired to watch. it was afternoon and it grace age nine, aged 88, and sidney h. six more home from school perhaps playing with a three year-old brother wallace. whoever answer the door probably in private the census taker into the parlor than the the servants of the children could have answered his long list of questions about the family. and so edward brown entered the home to talk to ada todd, the lady of the house. her husband in james was away she said the son mrs. todd said down to into the senses ages long list of questions herself. brown hardly needed to ask her race. with a glass of her dark complexion and wavy black hair

he noted her color of skin is black. mrs. todd reported that her parents came from georgia and she had told him he could read and write. she said that she was born in georgia in december 1862 and if brown remembered his history he might have wondered if ada todd had been born a slave that question was not on his list though and he would not have asked mrs. continental this is his man about her husband. in g said that she had married her husband james 18 years earlier in 1882. he was a black man, 20 years older than her parents born in the west indies he had come to the u.s. and 1870 and later became a naturalized citizen now she said he had a job as a traveling steelworker. brown perhaps noted that the house seem to prove mr. todd had done about himself in his job often kept him away from his

home and children. mrs. todd explained there have been private. the four still at home and it shall who had died as a toddler. edward brown took pride in the accuracy of his records and that in any way in which he filled in the 1,350 plank boxes in each of the senses sheets reporting into being in a portrait of the neighborhood's been up in the sparsely settled borough of queens. and so he would have been stunned to and that almost nothing mrs. todd told him was true. to begin with she had not to your software age, a gesture of vanity perhaps a share in her husband had been married for 12 years, not 18. in fact, that which she was surely aware and it seems hard to fathom says the josias age is no question about the legitimacy. but the other untruths for even more and standing -- more

stunning. for has been it was not black. he was not from the west indies, he was not a steel worker. even his name, james todd, was alive. ada todd was an eye to married to clarence king, is celebrated public a. a person the american secretary of state john hayes was call the person who was the best and brightest of his generation king was a larger-than-life character from a western explored phraseologist an accomplished writer and storyteller. he hobnobbed with presidents and congressman, can to some of the nation's most distinguished writers and artists of his closest friends. his physical agility and bravery combined with his keen intellect and wit commandery air -- near reverence for those who knew him best. with king and the historian henry adams roach, men were shipped not so much as the ideal american and they all wanted to be.

this, of for husbands tried kennedy and even his real family genealogy through the memories of his friends, through his letters, his published writings, through the records of the government agencies which he

served as an administrator. his race, social status, education, his professional career let us know much more about him than we know about most americans born in 1842 and the basic outline of his life as easily told. king was born in rhode port or by live in 1842 to a distinguished family the could trace its ancestry back to the back jakarta. his great-grandfather was a senator and helped establish the smithsonian institution. his grandmother was an abolitionist whose work was admired by her friend, the great frederick douglass. his father was a china trader often gone from home and john clearance scarcely knew his father died when he was a young boy. preclearance was raised by his mother a woman who had been only 16 when he was born and they were very close. his mother made tremendous sacrifices to get him the best possible education. they moved from town to town from boarding school to boarding school and eventually he and

will not deal in 1860 where he received what is the best scientific education anybody could have received in america. when he leaves deal after two years the civil war is raging but king has no desire to fight instead of going south he decides to go west. he takes the train as far west as he can go to st. joseph missouri and blocks the rest of the way across the continent to california. he gets to california and meets with the men of the california state geological survey and he spends the next two years getting a scientific education no class from could have provided. he becomes one of the first explorers in yosemite and later write a best-selling book mountaineering in the nevada about his adventures in california. in january of 1867 when clarence king is scarcely 25-years-old, he goes to washington, the civil war is over and he walks into

the office of secretary of state and when stanton and says i have a plan to map the west. and king by all accounts was witty, smart, persuasive and charming, and i would guess so because he persuaded the secretary of the war to put him in charge of something called for 40 parallel which is one of the surveys that went out west after the civil war with botanists, cartographers, artists to begin to map the little known territory of the west. and kings survey becomes the model for the others including the one taken by john wesley powell, the colorado river. enjoyably in 1879 he becomes the first director of the united states geological survey. in 1881 he leaves to become an independent mining consultant and then in manhattan and 1887 or 1888 he meets an african woman, african-american woman on the street and he tells her that his name is james todd.

conversely, conversely the very outline of ada copeland's life is hard to discern. to help us know we have no private letters, no published writing, no at miring memoir, no newspaper accounts and so we know little. she was born a slave near west point georgia months before seceded from the union and civil war broke out. she lived her earliest years and a chaotic war-torn world and came of age during reconstruction. some where she learned to read and write perhaps one of the freed men below schools that sprang up in georgia after the war and then what indicates to me shebas' an extraordinary person is this somehow and 1880s which is a young woman in her early 20s she moves north to new york i believe by herself. this was extraordinarily rare at this time. very few african-american people

from the area from georgia were moving north during this work and very few single women work. somehow in new york she gets a job as the nursemaid which meant she was probably living in the home of her white employers and some wear on the street and 1887 or 1888 she met a man named james todd who told her at the time he was a pullman porter. to reconstruct, ada copeland todd's life we have only this, the information to give the doctors who filled out her children's birth certificates, the information she gave the people who compiled the city directories and the stories she told the census man. not until 1933 more than three decades after king's death, do we get, the she leave a faint trace in the historical record when she goes to court to claim the money she believed he had. so what little we know to reconstruct her life we need to work through indirection.

we can talk about her childhood by trying to understand what life was like for other children born into slavery and georgia during this period and much of our understanding of her life as a married woman comes through inference as well for example we can't know what she thought on a particular day but we can know, hot summer day when she opened her windows she would smile the odor from the slaughterhouse across the street. we can no on a cold winter day when a blizzard failed all the utility lines her apartment would have been cold and dark. but her public stories about her marriage, the tails she told the census takers are much more easily known than the private stories she pulled herself. so if the inequities and the historical record make this a difficult tale to tell, so to do this violences that surround the story. clarence king fought to ensure no paper trail of his secret

life with access to. no pictures of him with his wife excessed. no piece of paper there's both his signature, either one, and hers. they married in a private religious ceremony conducted by ada's minister from the episcopal church, but king never went to the city hall to write his name on an offical marriage license and he made sure the beautiful gold wedding band he gave to her would not be inscribed on the inside he was a celebrated storyteller but trust me he left behind no stories about his secret life. his well-to-do friends in newport and manhattan felt him the of the eligible bachelor in all of new york. they never knew about ada and she of course never knew about his public life as clarence king. separately story like this presents a particular challenge to a historian. trust me many times while i was working on the story i wanted to be a novelist.

i wanted to be -- i wanted to know what was going on in their head. i wanted to be able to say everything. but i don't have that kind of knowledge and i don't have the self-confidence to be in of list. ariana historian and i live and die by my footnote's so this is a historical tale. i tried to lay out what i know and i tried to signal to you my readers when making inference from something i know. when i can't be the narrator i wish i could be. so you will find when you read this book that i sometimes use engaged informed speculation. i might say she might have wondered, perhaps, he recalled, they would have gone. you can't tell when you read this book when i know something and when i am speculating. i might also add i am not a cycle biographer. it's not the story and i am. i put everything in this book i

can and if some of you are cycle biographer's you can have a heyday with. [laughter] at me speak a moment to the larger story is i think this tale tells. one of them is a story how privacy functioned in a different way in the late 19th century than it does now. in all honesty one of the things that got me thinking about doing this because the clinton scandals. here was a story about a public figure who committed an indiscretion in the privacy of his own office that last what, 30 minutes and the story went to around the world. but here, the book i was riding was about a man who lived a double life for 13 years and no one ever called him out. what was different about the late 19th century? no retial, the television, and the computers. there were daily newspapers but there were almost never was treated. during the period of his marriage there were stories about clarence king but never with a photograph that his wife might have recognized. it is a story i think could have

happened perhaps only in new york city of american cities. a city that was large but had a distinct neighborhoods, very distinct african-american neighborhoods at that particular moment. it's a city that have lots of public transportation, the story unfolds before the subway is constructed there are trolleys people move back and forth between one part of the city and another and the king's life was enabled by two institutions. one private gentleman's clubs and number two, residential hotels. king a collective memberships like calling cards. he wanted ten or 12 clubs and this is where he met his business friends and entertained. this is even where he received his mail and he rented a suite of rooms and residential hotels. now in the late 19th century these were respectable places for upper middle class people to live. you could live well without having to hire servants of your

own but what this meant was he could disappear and nobody would know it. the male would be in the glow, nobody would notice the lights were not on in the hotel room. the friends he entertained at launch didn't know where he went next. many other cities didn't have the structure that enabled him to have the sort of secret double life. certainly the book is also a story about how race works in america. when king and copeland married in 188018 new york city there were no laws on the book that said it was illegal for a black person to marry a white person. but clarence king i don't believe could face up to the social center that would have been his. he loved his life of privilege. he was attached to his well-to-do friends and honestly, the only way he could be the black man named james todd was to be the white man named clarence cain. on the clearance came could go in the world to earn the money to bring home to his wife and

children. clarence king was a man who couldn't afford scandal. his work depended on his good reputation. so king had his own reasons for wanting to keep the two lives private. why did he tell ada todd he was a black man? in a peculiar way i think he was trying to protect her. if she believed she was married to a white man, her life was a little complicated. if she believed she was married to a light skinned man of african-american descent she was moving up the social ladder a little bit and life was a lot easier for her so there is a kind of tender protective jester in what he did. but how could he pass across the color line? clarence king had sandy blond brown hair, a very light complexion and he had lies -- blue eyes that he married ada aa

copeland and as many of you know after reconstruction a host of small spring up particularly in the southern states that attempted to define what grace was and these said if one of your eight great-grandparent's was black, you were illegally black and white in the jim crow car. so your racial identity didn't hinge upon what you look like so much as it might also depend on your ancestry or context of your life. all pullman porters were black and if he said he was a pullman porter and wore a pullman porter coat he probably was a black man. and i sometimes think that his weakness was the best proof he could be a black man because honestly if you look like that, why would you say you were black? unless you really were. [laughter] the shifting meanings of race in american life haunted this family for another three generations.

king's daughters married in 1913 and leaving their dark complected mother at home they went to the city hall and new york city each swearing for the other illegal marriage form the bride was a white girl. two years later the brothers registered for the draft in world war i and they were assigned jim-crow regiments as black soldiers. eight the king raised her grandchildren, granddaughter and a black world. the girl was light complected. she grew up to move into a white world and married a white man and in the 1950's she was afraid to have a baby because the human stain. afraid her african american ancestry might make itself visible in the face of her child she adopted to white infants and those are the only descendants of this family alive today. so the story offers instructive tale about the meanings of race in american life. i think it also offers a story about the ways in which stories are told and all told in american history.

in the early 1950's a professor at columbia named thurmond wilkins wrote a tremendous biography king it is an extraordinary book. i could never begin to replicate the sort of research he did on this project. but he shared the dilemma of many biographers whose deep loyalty to a subject precludes careful analysis of the more problematic parts of the subject's life. a biography of some 400 pages, four or five pages elude to the fact king had a relationship with an african-american woman that lasted 13 years. indeed he had. and indeed if this biographer had donned a little bit more homework he could have taken the subway to queens and interviewed ada king. ada king lived on till 1964. she lived to be 103 which made her one of the last americans to have been born into slavery.

ada king live from civil war to civil rights and lived the last 63 years of her life in a home that had been secretly bought by clarence king's good friend who had been abraham lincoln's secretary and stood by lincoln's site when he signed the emancipation proclamation. to bring you up-to-date on the rest of the story king died in 1901. ada todd reclaims her husband's name. she starts calling herself ada king. she changes her children's names. every month for 32 years she gets a check in the mail and she understands this check will be leaves this check comes from the trust fund her husband set up for her but she's getting to be an elderly woman and once the body of this trust fund. she doesn't need the money month after month after month. she works with six lawyers,

seven lawyers, eight lawyers trying to get her day in court and it takes her 32 years to get there. finally in 1933 she goes to court in new york city and reads her husband's love letters out loud and the new york city courtroom. the black press is all over it. the white press is all over it and it is an extraordinary story of not a scandal. but the judge rules correctly i believe clarence king was broke when he died. he never did provide for his wife and children and it turns out the money that supported this family for 32 years came from his good friend, john hayes secretary of state at the time of his death and then his widow and then their children. it was charity and hoesch money and men to protect the reputation of their friend and keep the story from coming to light. so since 1933 scholars have known clarence king did marry this woman, they had a life

together they hadn't known very much about that and they haven't asked very many questions. much of the work done on picking up to now has focused on his scientific career and asks questions about an exporter as a geologist. but right with the concerns of the present uppermost in mind and i began this book several years before i could imagine we would have an african-american president but i did begin this look at the moment americans were beginning to talk about race and were beginning to feel more open to address these particular issues so i turned to clarence king's life prepared to ask different questions and i am the first person to uncover the fact he did try to live a secret life as a black man himself. in the end, i think american story. this is a story that could take root only in a society where once racial identity determined

once legal rights and social opportunities. and in the and this is a story that exposes the deep fissures of race and class that cut through the landscape of american life. cracks as deep and enduring as the geological features the explore he once snapped across the continent. riffs that are in the end even harder to explain. so i think i am going to stop there and i think a lot of you have questions and i can't wait to answer them. if you have questions just step up to the microphone

was that normal for the time, but the family some were i fink it was rather unusual this woman who was 103 is looking in the house with her children than in their 80s. it was a close family. >> so that is not [inaudible] >> i'm sure it happened with many families. i don't think most american families live that way.

>> fascinating story. in some of the more recent works on clarence king i think of patricia o'toole's book the five parts about the relationship of king and john hayes and his wife, henry adams and his wife. o'toole tries to get to some of king's predilection is in terms of his few of race and the attractiveness of women of color. i realize you don't want to spend a lot of time psychoanalyzing, but do you have any feeling as to what some of the drivers might have been for king taking the step? >> good question. we can say two things.

one is you could say that king is a racial romantic. he romanticizes women of color. his friends and manhattan consider him the most eligible bachelor around and are always trying to set him up at dinner parties at elite clubs and nice homes and king has no interest in these women. he imagines that women of color and he's attracted a different moments to indian women in california to native hawaiian women in hawaii to women he meets in cuba. he sees these people was more spontaneous, more natural, as closer to nature and i will leave it to the cycle biographers to deal with the fact they are different from his mother. [laughter] his mother was a hypochondriac who became dependent on him and he was quite attracted in part to ada copeland because see was

so self-sufficient and independent. but if that exposes a kind of romantic side of king's character it is fair to say he had extremely radical views about race. his views about race or so radical his friends dismissed them as a joke. he once told a friend that miscegenation is the future of america. the friend laughed off but king had five children so he was doing his best here. [laughter] but he also wrote an extraordinary essay of american race relations and he was reviewing the plans that different architects such but it for a new monument to president grant that was going to be built, the new grant tomb to be built in new york and everybody said we really need an american style architecture. and king wrote an extraordinary speed and said there can be no american-style until there is an american race until there is no more german and english, white

and negro. he imagined the future of america was the multi-cultural world we are actually becoming today. so in a sense he is a backwards looking willimantic and on the other hand you can imagine him as a forward looking radical in terms of his ideas about racial mixing. >> but got you started pursuing this story? >> i've read the biography of king years ago in graduate school and its stock with me. it bothered me that someone would write a bill of ravee of some one and dismiss a 13 year long married relationship, a wife with whom he had five children, would dismiss that and for pages. it had to be more important part of his life. a few years ago i decided just to see what i could find and as

some of you may know a few years ago various companies began digitizing the american census records and all of the census data collected in the united states out for 1930 is digitized and accessible on your computers. it's extraordinary. can tell from my opening anecdote what i did with that kind of information. so i decided to look up this family and see what i could find and in about five minutes, i found the census record of king living under his pseudonym calling himself a black man and at that moment i knew i had to write this story. it was like being struck by lightning. i had to sort out how this could happen. >> did you ever find out why she changed the date of the marriage? she told the census taker something different.

>> i don't really know but you are getting at an important question here which is what did she know and when did she know it? when king met ada copeland he told her that he was a pullman porter. this was. pullman porters were always black, it was an elite profession for black men and could explain his worldliness and why he had a little bit of money and best of all explained why he was gone from home all the time. he told her he was born in baltimore. and every time she filled out the birth certificates for her children she explained her husband was a pullman porter born in baltimore. in 1900 when the census taker came to her house and she tells these lies she says her husband is a traveling steelworker. that's okay. people can take the lead coaching jobs. but she also told the census and he was from the west indies and you cannot be born both in baltimore and the west indies so

what was that about? life. about -- i have a couple of theories here. ada king had to wonder why she never met her husband's family. she had to wonder why she never met his friends and she had to wonder why she never went out into the world into his place is although he always came back to her world in brooklyn and later flashing. she might have imagined her light speed husband was passing for white in the workplace and therefore she shouldn't be seen around him to much. we don't really know. but the west indian life, colored west indians often shadegg words witness. if you are a person of mixed ancestry from the west indies, you lived in a different space in new york city and people who were american-born african-americans. and i sometimes think the invented that together so they

could move into flashing which was quite nice neighborhood. there were not that many black people living there then and it was easier to explain to the person for whom they were venting their house they were both black people and the reason he looked very is he was from the west indies and perhaps it was easier for them to move into the neighborhood that way. so she was complicity to a certain degree what was going on but when king is on his deathbed and writes a letter he says my name is not james todd, it is clarence king. then he says an extraordinary thing. write this in the family bible in case you forget. how could you forget such a stunning revelation? [laughter] and he directs his wife to change the children's names. so that is proof to me that she didn't know what was going on. and if i can share one other anecdote about her which suggests to me she thought she was married to a black man. one of my great frustrations writing this book is that it's been impossible to find the new york city this wonderful black

newspaper called the new york age for the 1890's all the copies of the paper for the decade or disappeared and scholars have not been able to find and but i was able to find one copy from 1900 and so fortuitously for me in the gossip column in the flashing gossip column is a story about ada copeland and the story is on new york de -- new year's day she was to the party at her house to welcome the new century and not being a novelist i swear i could never have invented this but it's true, it was a masquerade party. [laughter] but her willingness to invite a black society reporter to cover her party suggests to me she felt she was a black male woman married to a light skinned black man and was ready to step out into the world. >> how did you recognize from the census data other than birth dates that the man he found was the same person? >> because of who he was married to, because the children's names, because i have other

verification the lifted this particular address durham city directories and so forth. >> why would the children never released their story? how active was the kkk in queens where they reside with their mother? and les hayes said the straight forward in this matter or what was -- list any -- i am sure pullman hayes had a story. i just get a feeling. .. double game he was doing, a man named james gardner, a geologist involved in some of the western surveys with king. they had been a boy who befriends, and gardiner kind of doesn't know what to do when his friend dies. carter has money but he isn't a

terribly wealthy man and what is he supposed to do with this woman who comes to his office saying i want my husband's trust funds so gardiner goes to john hayes secretary of state at the time and had married a wealthy woman and he had posted limitless financial resources and says you need to help me out and you ask a question about the children as well. i have found the great granddaughter, issues about my age and in the primary thing is to try remembers ada copeland tied the king and it is a remarkable thing to sit down and have lunch with somebody remembers going and how spending every holiday with a woman born into slavery so i feel so lucky to have come that close to the stories that when clarence king died his four surviving children are of the age of 10 of the children didn't grow up with strong memories of their father they could hand down.

>> [inaudible] >> i think that is well-to-do white friend simply could not deal of the story coming out. one, they wanted to protect their friends reputation but the other thing is if you to discover that you're closest friend has such a pair of a secret and you had never known it reflects poorly on your french up. he did not know its other as well as you thought you did so i think his friends responded the best way they could by saying we will take care of the damage that we don't want to talk about. they did the honorable thing i actually think. >> when he wrote the letter to her and said change the name and put the name in the bible and changed the children's name, does she have any idea who clarence king was? >> ticket except the guy has been was named it clarence king

by that name might not have necessarily 70 bills for her. it might not have signals use a man who had dinner at the white house who is best friends with a leading writers and artists of the day. i don't know how she learned that but over the years as she began pursuing this lawsuit and its initial run their story in and of itself. and she comes in contact with amazing lawyers and at one point she hires the first black man who was of the supreme court and another lawyer who was the best friend of the writer hereof to the autobiography of an ex-con a man who was a great book about passing american life and her husband was the model for the x colored man in that book. the harder she plans to get her money and the more she has to be realizing for has been has some powerful white friends who are trying not to let this come out in public so i think she's sort

of things that on the way it pretty well. she was a very tough resourceful person. >> one of the things in the 1920's and '30's, one of the things that really stymied me is how a black man in new york city in harlem didn't have a chance. but black women or any woman -- i was irish -- my mother could get a job in the third days a helluva lot easier than my father. and my background, my father had a little bit of his family with a lot of the people around me in the third is that are very unschooled. another words in that the

financial cities where men were white or black to come there without a lot of schooling or a financial sitting and other words there was a great deal of of i think everybody at home whoever the hell they were, irish jewish or black, there is a lot of sympathy for its other. and radio because they have lots of trouble and in the financial city the old this channel will of what the people of whom had been a blast like the dynasty family and all kinds, and the rents they were generally it tormentor's on all kinds of levels. >> it is difficult to move to a place like new york when you don't have marketable skills and

many conditions and that's what i think makes ada copeland so remarkable. she found her feet ever have a job and that has been without a middle-class life she never could have imagined as a girl. >> women were more resilience than men were at the marketplace was so much more to be very well educated and irrepressible and not come from an agrarian were a farm background. and if we all sympathize with each other. >> that's an excellent point. >> one thing that's not completely clear to me is david ada copeland work for -- did

this before i work for the railroad or was that a cover story? >> a cover story but there was a great moment either get one year when there was a pullman strike and that clarence king was out west and actually cannot get to where he was supposed to be so it was one moment where james todd and clarence king have the same excuse for not being home so it was perfect. [laughter] anymore questions? >> [inaudible] >> i'm not ready to say. i'm playing around with a few ideas. >> even this has been out that long but have you had any strong reactions to the book either positive or negative because race is still premature an issue in this country.

even whether our amazing progress in terms of the election i thank you probably wouldn't have had as good a chance had he not been have quite. and another thing that comes up people are still struggling with us within am wondering if i know of any and of his family is alive but having had any kind of service will reactions to your book is neither directions? >> i would say it has been positive but i resent to raising stories from people. i heard from one person identified herself as being an issue said the rumor and my family always was my great grandfather was really a white man but he told everyone he was black because he wanted to marry my great-grandmother and now hearing a story i think our family story is probably true. i have heard from to descendants of james garner, kings good friend who helped the family

never money after his death and i have certainly heard from lots of african-american people were reminded that passing is a very, story in american history but, of course, it's mostly passing going the other direction and the idea of passing is to move toward privilege and king moving from a white to black is passing away from privileged and that certainly is what makes the stories are remarkable. thank you so much for coming out tonight. [applause]

>> amity shlaes and examines the history of the great depression and critiques the new deal in her book "the forgotten man: a new history of the great depression". the author argues it was the fortitude of the individual citizen and not president roosevelt's economic plan that sustain people from of the depression era she recounts the lives of these individuals as well as the proponents and critics of the new deal. she discusses her book with nick gillespie, editor in chief of reason magazine. >> host: in your great new book "the forgotten man: a new history of the great depression" you talk up the need it and did not osmond for a new history of oppression existing accounts as you point out in your in tradition 10 to fall into one of the following accounts and those are the people who generally supports fdr and his and hoover's interventions in the

economy and society as staving off fascism and communism after the stock market crash and the 29 and the depression kicking in a few years later and additionally about how people in the support of what we might call talking about the '30's interventions kind of corrective a morally corrupt 1920's economic boom which was widespread in and then that critics tend to fall into another camp that federal response is by hoover early on tightening the money supply by the federal reserve and and the terror for to block american it train from doing matched and to a cause of the depression which was then expanded and exacerbated by speak so of your book is the subtitle a history of the great depression, how does your book written to these arguments and then what you are you bringing to the understanding of the depression? >> guest: one of the important

things is that it is all about he's innocent and leather garments spending and sure the economy went in this bill and then scholars of a look because of uncertainty webb recalled an unknown in the economy and because both administrations especially the roosevelt was so unpredictable that her the economy. when i went back and looked and saw the extent i was astounded and so on certainty is a factor that i thought need to be explored and people listen i will not invest until i know what's fun two have been. >> host: and is not just the economy but what the government will do. >> guest: the government is very unpredictable and everyone overlooked the cost. but then all the experimentation in the event that was good and somebody had to do something but when i'm unpack especially the second half of the depression was enormous cost and the second thing to which is there is a

school of economics called public choice theory that says simply government is no better or worse, is a competitor. >> host: it doesn't have moral high rampancy sumacs allies what it controls or its market share. >> guest: and sometimes on the radio use the crustacean image. it bullied anything it wants to survive and will compete with anything and can be a cannon ball so when you look at the third is what you discover if you use the public choice is the extent it wasn't about a rich was government but rather about people in office using that to compete with the private sector for power and much of the struggle literally there's something about power that attacks on people and you'll see in the book the government wins in the private company loses.

>> host: i want to get a potopourri talk about wendel wilkie is the ridges as an unlikely hero in the book and who was a power utility executive who fought with the tva. two things quickly, what public choice economics and public choice analysis did not really exist certainly during the 30's and '40's, like to give a quick intelligence history of where it comes from whites. >> guest: and not good at that but i would say some of it comes from the left, there was an italian who wrote about it will influence through much our american public choice star father inventor of modern public choice james buchanan's the nobel prize winner. so you've been invited among the marxists so the powers in colonial power, the government is problematic and can hurt the the low man and talking in the

aggregates whether free marketeer or an marra state oriented person this destructive because life isn't about aga is a managing economy but also about where the individual empress is with a small man and a thing of which place the focus is on that as well. >> host: and m1 to have to explain your title one of the things that's striking about checkbook and reminds me of another great depression document usa two really g8 review we've been a lot of stories people of the highest level of power whether talking about in tromellin where franklin roosevelt and members of his cabinet in brains trust and then poor people as well as working class people with us together nicely. and by focusing on that obviously is one of the things her brain to run an understanding of the depression impact on day-to-day life and individuals.

talk about whether for non man comes from as a title. >> guest: is a phrase we know from roosevelt. in 1932 on the lucky strike our he gave a speech that was written in part by ray moley, his adviser and he was a man you'd want to have it your dinner table today. one of all man and in that speech roosevelt spoke about ever gone man of the bottom of the economic pyramid and moley wrote to his sister that he wasn't quite sure where he had gone the phrase but was in the air because there was a providence whenever children in the '80s and '90s with a famous book collection of essays called the oregon man and les miserables individual ledger, the forgotten man in the office of that was a young professor, william graham sumner. sumner had a quite different forgotten man. he put an algebraic way. he said in a once to help ex, that is our philanthropic

impulse to help ex of being the man at the bottom and be wants to help ex. there's nothing wrong, we'll have that impulse with a charity or a live debate becomes a problem when a and b get together and pass a dubious law that covers is see into funding there may be good projects were axed. see is the forgotten man and the man who pays, the man who praise and the man who is not thought of. and that's all rang a bell with me because i think it also has to do with a bang when we talk about this when you look at the election and use a great powerhouses the democratic powerhouse during, the republican powerhouse may be mccain are maybe someone else and the individual voter's is where do i fit into this. i feel like a profound man and a something of fun about the selection beginning to unfold and also given on entitlement challenges the forgotten man in the future will be the next

generation who will pay for web roosevelt creative in this book. >> host: the third and man i thought of it which obviously was pulling off of roosevelt space there is the 36 powell movie with carole lombard were william howell plays a mama who gets taken in by a socialist in becomes their manservant and then at one point in the very least ranking representation of poverty takes care of lumber into a hooverville or hobos town in new york and there is a lot of discussion of the four -- man in that. >> guest: is a wonderful movie and i recommend it. it is sort of a joke. they have defined in the game a forgotten man. a scavenger hunt and she goes to the very sad hooverville in new york which really did exist where there was this terrible poverty in this time and the reforms the family because there are lost in their wealth and the

message of this film is not one iota agree with. it is that wealth perhaps and maybe that is true, but that there is something intensely rich u.s. about of the property of a very poor man and that is superior to the wealthy man and we have that in their religions but i'm not sure it is so entirely too. the message is the forgotten man is great and i think somehow transcends and economics is bad because i demonstrated in the wealth of that family not to analyze the movie to match. economics isn't bad, economics is good especially for the oregon man who can come out of the real but it is a very wonderful movie and there's also a song to this is something that meant a lot to people of the time and when the roosevelt people debated hoover people or other right-wing people they were all familiar with william graham sumner.

so they said you have the wrong profession man, he is the man waiting for the recovery you and not delivering or that you are preventing and i like that because the place all the way to the book and is all the way things in history. one of the things you talk about in the beginning sections of the book is that the mover and roosevelt are not that different. obviously one is much more successful and the other is a politician but they share certain types of mentalities and also shared certain types of policies. you talk about what hoover did with it over administration did that was wrong and then how fdr and adapted it or just kind of gone on to read this mack is amazing how much temperament matters and it roosevelt was said to have a press class temperament. in what does that mean? i will get to that but in the risk is he was a good man and he was collecting him was like a laughing bill gates were collecting my bloomberg were

collecting some other maybe ross perot or capital as figured. the country's henry what a businessman and the was nothing wrong some aspects of that this meant he was also an engineer. >> guest: but he was a control freak and those that have berman problem so the hoover would rather have control collectively as president and do what was right at the harsh thing to say but to see it happening over and over again. it he also. >> host: people wanted that in 1928 so does that make sense to control after everything goes to hell? but why ever in 1920 people looking for an engineer who could control things who is famous for helping flood victims in the creating of large-scale.

>> i think they thought he was let's get that private-sector something that he has then be in gates has been were the google founders have. but somehow make that happen in government who smacked mitt romney? >> guest: a little paranoid that somehow move that thing over here without realizing it doesn't go over. government is a different animal and he did have this enormous talent to organize a humanitarian effort and we have our reasons in our minds. there was analogous plug in 1927 which to read manage so that helped to elect and pushed him over and he was commerce secretary. but when the crash happened he did some bad things and one was he called business together and send don't drop wages or prices. and therefore he did not give business a free rein to handle what was happening to them which was the downturn and effectively

the choice was for them to close, they require to do what they said and he designed this long. >> host: was that an unprecedented verne and president -- one of the interesting things we should talk about is the underlying political and economic assumptions of the 20s and 30s riss is now which i think have change substantially even policies have but was an unheard of for a president to call business leaders to gather and say i can't do this legally but i want to not to drop wages, and go to to fire anybody. had that happen before? >> guest: but when you look at this crash to see it as a distinction to in the early crash of the beginning of the decade which was a sharp contraction some of plan changes and percentage everything very fast and in that contraction and timor-leste left the economy alone. so this is different. >> host: and what happens is there is a crash of a businesses

are going to shut down and might reduce wages and my prior but they do it they can to keep going. >> guest: he didn't like that compromise and not to harp on just that. he also cited bad terror of and this is where it was in the republican platform, republicans like terrace at that point, it was wrong but they did it. >> guest: why did they? >> guest: because they had a misunderstanding it was good for business. is not generally for business, it was for the man who has the influence of the congressman so that's how it came about when he probably knew better. he had lived in london, he had lived in asia and he generate significant economic growth through globalization. this is very analogous to the 20s and that is my next book on the 20s. it was a wonderful time in terms of growth of people getting things that haven't gone before in strange places. he did live in the international

london was and he had a thousand people riding saying don't sign this terrible it is bad. even some of his own university stanford. >> host: façade unprecedented to have a mass of academics and as police tried to update policy in a direct way? guess right now, it was really strong relatively so there he was that many other not so great things and one thing that hoover doesn't deserve blame for is people say he ought to have spent and as a keynesian world and the government would have made the economy grow by remember the government was very small, it was smaller than the federal government and the states and localities. a 3% and 3.5 of gross domestic

product and often talk about this but just the federal government so this idea that the minded government couldn't do spending change the false retrospect seventh. >> host: of that point the government was in keeping the statistics. >> guest: they didn't like to keep the unemployment because they did want to have a political football and maybe they're right about the political football and the rigor of the state's and frances perkins would later become roosevelt's labor secretary. >> host: in the first woman cabinet member. >> guest: to pull out your data from her new york data into is very interested in having data and maybe it was relatively accurate and she said your data is not good and it was all over the times for months. >> host: perkins was from the york and obviously used as i think it's hard for people out and i'm from new york so i like

to read this boy in new york was one than twice as big as any other state in terms of electoral votes there was a huge population diamonds. >> guest: new york term elections so it had the most andrews of health had done very well and won an election there as governor so it she was his adviser and they did all the things that they wanted to do in the federal government on the new york level first. the programs and the thesis of the book is that whoever wrote it all and many advisers had noticed this and said we just didn't want to prove her team would have done anyway or did what we had done in new york to the idea that reason alone to this i think there was a whole progressive movement. >> host: so you have a tumor telling businesses they can't adjust the response to economic downturn which closes off not

only improves coming in but effectively means american goods can be exported and the federal reserve level and how old was the fed at that point. >> in have been found in the teams that didn't know what they're doing any surface of wealth maneuver understood the country was in a deflationary and never having in running out. big problems were in a large factor and you get into the theology. but i don't think it is the rich aspect and the maid is a much worse in the international factors with depression and other places to and that was part of it, but i don't think they really understood what was going on with money or that you could create more money. they were in the gold standard culture but there was a professor, i came to know in this time with irving fisher and he would go around to them and say there must be more money. and town certainly knew because in the book you'll see pictures

of the script that they created in may in their own money in manufactured it and one in salt lake was the ballard. >> guest: and often had a moral valor. and that is a mormon derriere and one of the reasons marion who became the fed chairman he rescued a lot of banks like in the moving and the teller blushed and behaved and the bank did not collapse. one reason that happened was the moral element and the fake money which was not his but also in the mormon culture of the bank. the mormons listen to other mormons and when a mormon told you not to withdraw your money you would think twice. >> host: were they saying don't withdraw because it is still in there for they saying withdraw their money because it will destroy everything. >> guest: i think it is summer

in between. everything is fine and it if your honour's job as the cubs zero. come back another day. and that is technically true because no bank rarely have all the money and that is not have the money in function. >> host: the widespread consensus among economists what they should have done rather than raising interest rates and making money more difficult to obtain should have been there done nothing or lower the rates. >> guest: the concept that we have today much of the book is his race but not economics of the open market operations or you buy and sell bonnets or soak up money from the economy and was not specially developed. the gold standard function differently and if you want to make an argument against the gold standard this is the example. if the louisiana katrina flood of coal center policy at the absolute risk pretreating data

because people did go hungry. >> host: so then talk about prison out. the hoover has been terrible for years and he gets kicked out with extreme prejudice. he gets moved by fdr who among other things was prohibition. >> guest: and that was part of it the sale was the knowledge that he would do that and, of course, is in of their revenues that came and these are significant event revenues and in the 32 election roosevelt gave lichter and in the 36 election the game in ending. >> so what did he end up, how did the extent really kind of putting anything to remind happens doing on steroids, what was his depression solution? >> the basic solution i believe that a responsible president would have done is to free rein

to the banks and helps them out and create a credit mcginnis and some loan mechanisms and help with maury does and have some of those entities today. i am generally in favor of, this is not a show libertarian book and i think it is okay to have the fed and sec and clear rules of the game. >> host: limit the uncertainty with bad policy that is certain. >> guest: but there were of the things that are not in his platform and and that was the problem and central to changing economics of agriculture and saying we will pay you not to produce. we won't limits apply in the pipeline and repaying the whole plant and a lot of other complex things. >> host: where this that come from because the agricultural policy was sent here he was

talking about helping people to then antley said the prices at a time when people were going hungry so this is not exactly what i think the typical kind of a fdr de fuente really understands the. >> guest: have the interest groups and individuals. there were those farmers to one of the time of high prices they have had before around world war i and has significant drop in prices. >> host: even had taken it on the chin and even to the 20s we might say looking back that may be more of america should have moved this city faster which is what it did eventually anyhow [applause] the 1920's senses was the first reported in town so people were moving to the city's. >> guest: some of the expansion that in the roosevelt was elected in part and he put henry wallace if they knew in agriculture secretary but they made a bunch of rules and put a

tax on middlemen in the theory that that would help the farmers and that millman got in the wake of efficiency rather than help contrary to what we think today and there was an analysis in the business here call the national recovery administration which had had a whole bunch of loss of fees topping the little bit britain, copying definitely the german cartel system and have been a positive in the book also what stone was doing and at the time they did not know you was a monster rally is not become a very naively in the book of injuries as to how some of the characters go to the soviet union and our goal over and get the six hours and they. >> in you see them especially rexford tugwell implementing things they learned from fascist italy from the role of stalin

[applause] the national recovery administration and the but human to the summit a limb blessed as banesto retardation act and often called the and that's running america. what was then a revolutionary about that and how did it play out? >> guest: america was supposed to be the forgotten man that this was a cartel arrangement where big companies wrote code that may hard for the zero companies to survive and and tell the story from the schafer and economically but also through the family who in the end it tons the nra. >> host: schechter brothers' bid was talk about that in length and a couple of minutes. >> guest: anyway the nra to make a think tank had a look at this before it went a whole bunch of rules in every state with a mixture of government and in this chamber was supposedly self-governing banaa really and it went on and a big thing taint

concluded after a thousand pages that there was was returning recovery in the name of that think tank was the briefing institution so roosevelt from all over the place and people told this isn't working in it was eventually to challenge than the supreme court and lost and had a band. >> host: it was an attempt to regulate and oversees virtually all aspects of the economy guest back the difference is that the agriculture stuff survived that was a tremendous blow in retrospect a one of open the blow that the supreme court's struggled with said no national recovery administration before the business sector and there were other components to a. child labor components that later became the line at, but that governing of the economy by rules thing, that did not come back with the same line. >> host: it was very popular among the common man to the

extent that we can gain to that or was it? obviously individual businesses and people did not like poverty but roosevelt, did he ever go through in terms to the extent they have service? was the ever unpopular? >> guest: roosevelt was not, the nra, it was like a natural disaster. all the old rules were off and there was disbelief and be will just get through this time. as in war and other writers have written quite a lot about that. so they said it will have to get rid of the emblem was led by general johnson. and you will have to get through even if we don't agree and i think incredible policy was it was not a war and the monetary events for mysterious. we know it was solvable and we

have in the economy in a frozen while the less disruption and it would have righted itself sooner than were offered to appear in. >> host: one thing you mentioned mussolini german cartel system of the seven union. in subway inevitable because it was the american spears parts of the developing world at that time with the industrialized world and everybody has something like this and the rise of collectivism and the same action there is a recent book out the came out cold three new deals which write about mussolini and hitler and so and some way to the american experience wrapped up in this large amount of collectivization >> guest: there was a romance with the economy of sales pitches states are inefficient. if you have with the flowers blooming in bloom differently enemies for ms a garden and there was a sense that the economy could grow further

luster was rationalization standardization and even now they are making standards. >> host: of the rules have to come from an outside authority not generated by industry or customers. >> guest: right they have to come and probably this is a fallacy about that. only government can supply the capital. as an incentive money john and inflation and there's this idea that there would be good things and only to remove has enough money to do but in the book i also argue that americans need not necessarily have such a large new deal as it did in and that it was sort of an accident of history that many of roosevelt's advisers were scholars of what happens abroad and actually i call the pilgrims with a lot of it the one happen abroad that and may be less faith in the u.s. was the mack let's we come -- when we come back let's talk about that.

>> host: we were talking a bit about what was called the brains trust originally and then cut short in in a brain trust that tva had it been in the with the most academics and they located and having some connection to a columbia university. in rexford tugwell who ended up being a major player, it an architect in the new deal operations. he and a bunch of his friends in 1927 took a very interesting and it retrospectively bizarre junket to the soviet union or against the era of the trial and

was not an him and most of his colleagues were bowled over by what they saw. talk a little bit about the junk a chapter in your book which is really a stunning piece of historical recreations. who went over there and what did they see and what did they bring back to the u.s.? >> guest: i also think what i wrote this, one of the to the new deal i thought it was the influence of the european entities from russia to a late and was not parenthetical it was important and and our standard histories via voice have assigned a rick by that and he said more than you were a hater. these people were not working from moscow. they were in your public coffers. there were like people who know, but they were influenced. as well as in italy on the right you look of a cover uc mussolini oliver place in the 20s.

>> host: recently? >> guest: in the cover of ford's in the 20s so americans are interested in what was happening abroad and is for a relatively unemployment when down there. unwound so they're left-wing arguments didn't have much reverberation at home so they go to the stick to the union and it's a time when the u.s. is not recognize yet so it is an unofficial trip and a number of ways and when american labor organizer and the like the soviet union either said they were in labor delegation that was an official. the unit's revenue and was probably, and they didn't want to planet. that is that fair worker. so they went a bunch of professors and a homer these are a tenured faculty and then russia ever royalty. one of them was rexford tugwell an interesting professor of

columbia who live all of the entire book. a good part of a man i believed in giving the economy of scale and his background was agricultural and another was paul douglas from shingle who later became senator paul douglas, a man of great integrity who was a labor professor at the time of at the university of chicago and had come from maine for the seamen it views of their arms and launching new unknown takes care of it and he believed in a stronger coverage insurance and answer dulles -- another was a sort of paul krugman of the day or maybe sam wilson named stuart chase, an accountant to read about economics everywhere. they went over and i had a good time and it rexford tugwell on the farm and there were at times putting of events. >> host: this is at the time

when stalin had basically had consolidated power and that was it collectivization process. >> guest: it was before the really bad stuff. the were seen to be over soon to f. of policies and to seem to be more moderate in one country of world revolution but it was to get american labor and the had this 6,000 plus in the rear with him and the had the trots bna wrote in their diaries what stalin or a thief could go back and find what they wrote and they were extremely inspired in each one that came from the book one article, they debated. and stuart chase wrote a book to in his book was one dekalb and that new deal and it was in 1932 and in the last sentence of the new deal is why should russians have all the fun the world practice cease to the continuity. it certainly wanted roosevelt to

recognize the soviet union which he did so i think is part of our history but you should knowledge and is hard to remember kissing in a trial and execution is very controversial and the privilege of expression being executed one of the people were in russia so of the russians used the land dennis said you don't have a this in your country and they probably didn't sign with 10 and end the founder of the aclu. >> host: but then he turned off the trip for their relatives recently and he became estranged from i recall just. >> guest: plan by the scale of the thing to which they said they sold the when the economy and i should say where you find in the tests on him is how they reacted in the first well in decade later and i do follow their reaction. paul douglas had talked to a

young woman he was going to a divorce at the time. he taught to young woman who made a big impression on him and she told him it was free and the soviet union and he never did hear it and she wrote down her name in his notebook and 10 years later reading the new york times he sees the issue is one of the people liquidated and that was a huge turning plan for him and he wrote to that he had some regrets for his small role in recognizing this. so they are reacting only. >> host: again the soviet union, not to seven individuals from both the ability to move in history of where to me is possible for their own actions. all of this was a wave of industrialization and kind of the aggregation of people in cities, bigger businesses and industries of scale pretty much happening throughout the industrialized world. >> guest: the idea was everything was a factory the tattooing have a common.

and sometimes the u.s. government wasn't interested of that was in the capital and that they will give you can pass a more anchors and you can get in the u.s. to your farm at drakes parent. so there was this interchange in the competition. there were building a dam will want and when the u.s. bill as good a dam as the hoover dam. it was like a space race. >> host: gordie for they even began. there was also if you look back in some kind of free-market economists saying what he is at the time talking about how you didn't need outside direction of the economy. that was a real minority position and that point and everybody seemed to agree or kind of the world view was that things had gotten too complex and too sophisticated to quickly in this new modern world we need people to mention the trains ran on time was that there was some kind of overarching set of goals that would restrict what the

messiness and inefficiency of competition to straitjacket individuals to do what was right for the assembly line. >> guest: only government commercial the capital and make something comprehensive. and that has been as proven by the internet most recently. i don't think we could have imagined in the internet would rise by itself with some of government spending in this organic way. >> host: they put that at the two great american military, about things being a result of human action but not human planning. that is more common now but the fact that was there serving. thus i talked about rexford tugwell role and trajectory in the new deal. >> guest: i like rexford tugwell because he was honest. he reminds me of secretary rice to was the -- he is former left-wing.

he knew what he believed. he went in government and he loved it and it roosevelt at love him and this is also a book of the agony. when you go into government to do your best and you are not appreciated the the thing that is proved it was not to plan and of the caris. he was a columbia professor and godly to go in the kevin in colombia with him by very ostentatiously. come back, we levy. he got there, he worked in an agriculture department and he became head of the resettlement is it -- administration with a move people around as in john steinbeck. a lot of and so on and he saw that a lot of the projects weren't really working. fertilizer words, money and arms would not have to be sold or closed their fine work. he made a planned communities in greenbelt, maryland. he cozied up to eleanor appreciated them both new york

state champagne which roosevelt thought was office and it probably was. >> host: and think the market has proven that. >> guest: and the kind of threw him out, but not before he had made the pan for his own little soviet farm. which is in cassie grant, arizona,. and he tried it to appear he put saddlers and and try to make a town and gave them houses and these are people like the mineworkers and the photographs and people with nothing but a sign up for the town and never supposed to work together and have a kind of sale and what is a wonderful is that rexford tugwell saw and was honest and and and it wasn't working in this letter is two and made an interview about it and he discovered that the settlers and the little farm have not worked together in that they have fought and trashed the community house and that they had resisted that the manager of and they

wanted the milking machines for example which is a completely rational thing to want to get productivity up for milk with the administration or authority to not want it because of parts of this was creating jobs. and you take away the job so all of these policies are and everything and rexford tugwell saw that. he understood the importance one and he tried to go back to colombia and would not have him even though he had an apartment on riverside drive so he kind of went around and the private sector and eventually did get a reward becoming a government supporter rico where he encouraged the reform that had too much of an aspect of a preparation for our case. and then he spent a lot of years being a professor trying to read the right of the constitution because he concluded looking at the screen and the problem was constitution and if we had a more modern constitution but here is a man that all this all the way through.

>> host: he pops up in a lot of things about a year ago i read about the monopoly board game and rexford tugwell was a player in that because his economic ideas with are just confused, one of the early prototypes of the game. he was a fascinating a character any mention the constitution. earlier it you had mentioned the schechter brothers, the book is filled with great care to. talk a little bit about the schechter brothers and how the constitution and in a pumping them out of a kind of third-place. >> guest: remember the supreme court you have with a very conservative core of what we would call conservative they had decided on this of a for both beckham and never regarded as piven and conservative and retrograde. and the centers were a small chicken slaughter business, they were kosher jewish pushers on roush avenue and they were prosecuted under the nra and ever the case that was paid to

go to the supreme court to approve the constitutionality of this before we estimate that it was unclear if that should fit into the commerce clause. >> guest: the mist of the federal terming can do in the state's. >> host: it has to apply to interstate commerce. >> guest: the and are a breach that and everyone knew there needed to be a test so the stick in business was taken because in another case they had interstate commerce and never prosecuted very nastily. a lot of the laurie prices, that was illegal. always a problem working too many hours. the competing and when you go and look back. >> host: it's a member that they got a tryout. >> guest: a lot of like about them and was never a serious they realize what the government was saying was wrong and to me it would be like probably the czarist russia or other family recently have come from and the

lawyers can say things like you are not an economist, they talked down to them. you don't have any agricultural economics. and they would say i don't have much school and i'm barely speaking english and their english was mocked but when they got to the supreme court to the argument went to them because of the logic. they said their lawyer said one of the rules of the nra is the man not pick his chicken and america is about consumer choice. he imitated for the justices house of it was a legend in the name of efficiency and the justices laugh. and then when the justices left. >> host: one of the things this before forbade was and to live looking and a chicken coop and saying i want that chicken. >> guest: and you could not to that and in a time when there is still tuberculosis and on antibiotics picking you're own show and was important for

health reasons. this is known as the sick ticking case and the justices sided with the centers and they said the legation run the ride, one of the commerce clause and so on. and the was a lot of discussion around that. it was an enormous event because it of the nra had stood above would have the kind of intervention we have in agriculture in business so the shift in america forever and we never said back up in the english people so that might apply. nra killed in 20 minutes the road and english people and in america they were shocked the didn't know what two say and, of course, q1 was curious. >> host: one of the interesting simas for the story and it struck me in a way that was, it is two over bluntness in the last band of lost america and a big part of attention in that case seems to be the kind of old pictures of america versus an immigrant america. and ever lot of class

distinctions that plank out in the trial and it was kind of interesting that the old court was richard green and 19th century and that signing on the size of these pidgin english speaking and educated in to issuing grants the, true pearson had a lot and in a row mean things about people who. that was what was so wonderful. there were a small business and it didn't matter what their ethnicity was. they have been wronged in the supreme court saw that. mrs. schechter wrote a poem about it say i'm proud of for some it things. as of this was a wonderful story and we never learned in school because it was against fdr and what it was an important story. >> host: speaking of people lankans fdr and other interesting book is wendel

wilkie who in an uprising against souza of 1940 as a republican candidate for president. talk a little about wendel wilkie because he may be the hero of the public billy. and what was his role in all of this and how does the end up? >> guest: thought he was a performer. he was a democrat. he was for reforming in he was originally in the utility business so he started out in the business and said we're contacting utilities and his was not clear to me like that. he is going to be clean and he built up this utility company very lovely. and it was going to lead itself. >> host: at which they have no virtually no water country. so of the tva law was passed with the same authority and this

is the same power schaivo we talked about before before public sector and private sector and one of the leaders of the team in lansing said in, year statute is agreed to an end perret, but this attitude is egregious and it's clear to be changed so you won't have money so why don't you corporate with me and the commonwealth of southern and maybe make the power and restrictive away. you took one to graphic look at essentially william rosin here and washington said you don't understand is over. i report directly to resolve because the fdr does not go to the secretary of the unfair and have this. >> host: that must have been in this single one is public works project that american history. there of those things now with in