one of the questions you had mentioned was that she had a process for not being seen, not being noticed, which would allow her to get a much more spontaneous, natural reaction from them. ..

stared on a waiting for her to be ready and then she would make a picture. another technique was conversation. in relation to the farm workers and ship writers she learned right away from paul taylor you do not ask the kind of questions like how much are you paid or what is your boss like because that sends union messages and people run away but they would say how do you get to the next town, how far is it or one of her favorites she would ask for a drink of water and drink it very, very slowly. yet another one was she knew that kids were interested and

the kids would come flocking around and she actually forced herself. i was shocked she forced herself to let the children hold and examine the cameras and pretty soon she would have a whole group of kids and parents would come over to mcgeorge they were not bothering her and just her purpose in all of this in her words was you get people to relax into their natural body language. she believed that all the way said before she thought people's faces were real things she was much more interested in how bodies had revealed things and i didn't show you any of these but her most extraordinary photographs are portraits where you don't see the person's face at all but you see through gestures and positions a great sense of what the emotions state that person is.

>> i have a question. once she said her photographs to the government how did she get them back? >> it was a struggle and this wasn't just true of her but all photographers. a photographer wants to immediately see the product of her whirred so he or she can criticize it and a trust may be the lighting is wrong in this redesign right so you want to see them right away. theoretically the security was supposed to make work prints from the negatives and ship those back. but there were times when there was a month, six weeks or longer before she got to see them and she was furious and there was constant argument. the correspondence goes on and on about that. but one thing she did which every one of them that i'm 100% sure is the cheated.

they kept back some photographs and it didn't send them otherwise they couldn't have known what they were doing but they couldn't use them. they couldn't allow someone to publish them because that would of course, they were on their property. they did not -- they did not alone in these photographs. but it was a constant struggle and the same was true of the japanese internment. she never saw the japanese internment photographs until the year before she died and she took a trip. she then learned the it and rather quietly placed in the national archives and took a trip to washington to see them. that was 1964 and she had done it in 1932 said it was a huge problem. >> i got the impression that none of her kids forgave her. is that true? did you develop a rapport with any of them?

>> yes. i have spoken with both her sons and one of her stepchildren still alive and many of her grandchildren were often closer to my generation, and i was actually so impressed with how judicious they work in speaking about their mother which is nice for me because i feel like they were in any way trying to insert any take of mine. they complain about her, she was controlling, she was not always an easy person to get along with. her boy is used to call her dictator bought. at the same time they understood she was an enormously generous person. every number photographer that she mentored sort of talk about her as she walked on water. she was so giving and generous with praise and hope.

so you get a very mixed feelings. and i was very struck by how what a remarkable kind of distance they had all. i read that one quote from daniel dixon, john dickson, the other son said the same kind of thing. there is all a lot of sadness and even bitterness that will never go away but at the same time all there was a lot of generosity and i can tell you personally all of those still alive should be thrilled that this book is here. i feel very good about having a book. i don't know that they've read it yet. i just mean they are glad it happened. >> i want to thank linda for an extraordinary presentation and i

want to invite all of you to purchase the book here if you are watching somewhere else purchase it wherever you can. it is an extraordinary read extraordinary history and extraordinary biography. dorothea lange a life beyond limits. thank you. thank you so much. [applause]

this morning on washington journal, we talked to dr. anthony fauci about the government efforts in fighting h1n1 flu and other contagious illnesses. he's the director of the national institutes of allergy and infectious diseases.

this is 35 minutes. >> host: dr. anthony fauci is the director of the national institute of allergy and infectious disease. thanks for joining this morning. >> guest: it's great to be here. >> host: talk about the year in review as we look at h1n1, also known as swine flu. how has preparation been so far and how things look as we head into 2010? >> guest: preparation has been well. the only glitch in the process as we know is that the virus that was used to make the vaccine, and when you make a vaccine you have to grow the virus, did not grow as well or as quickly as we wanted. and so there was a gap for a while between the demand for vaccines and deductibles apply particularly as the children came back to go to school at the end of august, the beginning of september and in october when we had expected a large amount of vaccine to be able to be commensurate with the need there was a gap. but as the weeks went by and months went by the gap has now

closed so it was clearly enough vaccine for the people and we are encouraging people to get vaccinated but all other aspects of the preparation, the rapid identification of a brand new virus that hit in april as we are getting toward the end of the school year and then the big blip we saw that we call the first wave, and then estate around during the summer, during the summer camp period and then when you have the return to school the second wave came back and it's now going way down as you look at the number of states that have wide spread activities the number of states have gone from just a month or so ago 48 states have widespread activity now about seven states have widespread activity. so there was a vaccine unfortunate the gap between supply and demand but that closed. we've had a lot of infectious activity, widespread virus particularly through the younger individuals.

it was considered in general as a mild to moderate in severity pandemic has penned a mexico. the only difference is starkly we see between other viruses, influenza particularly compared to the seasonal flu is that the fires have a predilection for younger individuals and in the seasonal flu where most of the 36,000 deaths, 92% of the 36,000 we usually get every year with seasonal flu are generally an elderly individuals between the ages of over 65 and usually over 80. we are seeing disproportionate number of younger individuals who are getting serious ill but in general in the big picture it has been a relatively mild to moderate pandemic. it's tough to use those words come mild to moderate when you see children donning but in the big picture of numbers, the members of material in cases where people died has been

relatively small and fortunately in the younger people. >> host: what is the expectation? you talked about the rest of the winter. what is the expectation into the summer and next year where there will be new vaccines needing to be developed to deal with h1n1 in the coming years? >> guest: one of the things we should make clear is a very important point that even right now and from the very beginning the vaccine that we made for this virus was an excellent almost perfect match to the circulating virus, and we know from clinical trials that the vaccine induces a very robust immune response that you would predict would be protected. so the people that have gotten vaccinated would almost certainly be protected at a very high level. that's the first thing. so your question about what is going to happen now, we are seeing a big decrease in the number of cases. what we want to make sure doesn't happen which we've seen in other panamax is to get what

we call another wave amalia's people come back from holiday season, as people intermingle with their families and holiday season and go back to school that you will get a third wave. we don't think, and we hope that that does not happen. and it the best way to avoid that is now that we have plenty of vaccine to get people vaccinated so that you can have greater protection than we already have. we have had tens of millions of people probably over 50 million people who have been infected so far over 60 million people of been vaccinated so a reasonable chung of the population right now is in munich either from infection or vaccination. if we can get more people vaccinated it is unlikely that will have another wave as we get deeper into the winter. influenza is a very notoriously unpredictable so we really don't know what is going to happen next year. if it goes the way we've seen

previous influenza pandemic scope it is likely though not for sure this particular virus will incorporate itself into the regular seasonal influenza so that we will start seeing it not in a pandemic form because a considerable part of the population will have already been immune but we will see it come back and a son of -- insulate itself to the regular flow that is the reason we want to make sure many more people get vaccinated so that those people will be protected if it recycles itself back next year. >> host: dr. fauci, update us please on dealing with hiv/aids, but how it's being dealt with as far as the disease spread and also of course in your neck of the woods actually being able to fight the illness and combat when people are affected. >> guest: hiv we still have a

very big global pandemic. over 33 million people infected worldwide, greater than 90% of them are in the developing world and 67% of them are in southern africa. 2.7 million new infections each year and 2 million deaths, so it is a very serious problem. even here in the united states we have 56,300 new infections each year which is something we've got to get our arms around and stop that because it's been that way well over ten years. with regard to treatment treatment is a superb for those people who have access to therapy the drugs we have now have completely transformed the lives of hiv-infected individuals wear when i first started taking care of hiv-infected people right here at the national institute of health in the summer of 1981 someone would come into the clinic there would be seriously ill and likely be dead within 26

weeks. north of the therapies we have available if a 21 year old person comes into the clinic was newly infected and you treat them with very good drugs we have available, if you do a mathematical modeling it is very likely that person would live to more than 69 years, which is an enormous advance. the critical thing we have to address is the issue of prevention because we still have people getting infected. and that is really unacceptable so we have to continue to push our prevention modalities that have been proven to be effective. it's an interesting statistic that there are a lot of prevention modalities' ranging from the use of condoms, needle exchange, mother to child transmission, behavioral modification, a variety of other things we can use and yet only 20% of the people who had benefited from these prevention modalities actually have access to them. so it's a combination of a major advance that have been made in treatment and in prevention but

getting those modalities to the people that need them so there is still a lot of challenge and much, much more to do in this very difficult situation we are in with a pandemic that is still raging so a lot of good news but a lot of challenges ahead. >> host: release from nih says more than 1.1 million people are estimated to be hiv infected in the united states. someone infected with a fire is every mine and a half minutes, and it's disproportionately affected racial minorities and men who have sex with men and the release points out it's not only a young person's disease. approximately one quarter of hiv-infected adults or at least 50-years-old. and individuals 50 years of age and older account for approximately 10% of all new hiv infections. what is nih's role as we look at hiv and aids compared to other departments, other branches within the department of health and human services? >> guest: if you look at the major groups that are involved in addressing this is the nih,

which was the basic and clinical research to develop new drugs, to test them and determine how best to use them. a big challenge of developing a vaccine. a big challenge of developing prevention modalities. the other agencies within hhs like the cbc plays a major role in the surveillance of disease and prevention modalities and making sure that when you have a disease that is predominant in certain areas that you educate them to you get public health programs implemented. the fda which is the organization that involved for the regulation of the drugs, vaccines it's a rock plays a very important role of which complement each other. so what you have also programs within the federal government to get drugs available to people who cannot have otherwise access to drugs. so it's very synergen to the

customer just get complementary then the department of human services from the research to the surveillance to the prevention to getting safe and effective drugs to the people who need them. >> host: let's get to the phones. with a lot of callers eager to talk with dr. anthony fauci. linda is on the democrats' line in cells vary massachusetts. >> caller: good morning, seize and and dr. fauci. i'm excited. i think this is the third time i've been able to get in and talk to you on a different subject because i am a health educator myself. one of the concerns i have about the whole influenza epidemic in terms of someone who is trying to educate patients and encourage them to get the vaccine is the we anecdotally the vaccine is distorted it. my experience it didn't go to those priority groups there were headlines recently about that where people in wall street and some lawyers and wallsten and that kind of thing got their vaccine prior to health care workers getting them. where i worked we didn't get our seasonal influences until mid

december which was a private sector screwup because our private supplier decided to take the vaccine and distribute to the more clients to give them more business which is disconcerted to me. second we had residence who were elderly who had influence like illness during the height of the h1n1 with a they were not cultured and i'm curious because when i look at the cdc website the key to didn't count the case is laboratory and there is distortion about that. lastly when will we expect this virus to mutate? i'm having trouble convincing people that they should still get the vaccine for both influenza. guests could you asked several questions. let me see if i can answer them quickly and succinctly. first with regard to the seasonal flu vaccine absolutely

correct. people should get seasonal flu vaccine, the priority group's first should have gotten the h1n1 and you're right early on when there was a big gap between supply and demand there were inequities in the actual distribution but if you look what actually has happened about 75% of the vaccine administered has got to the priority groups and manly those at risk for the applications. so early on when you have that a gap there is a lot of stress on the system and the actual distribution of the vaccine as to who gets them is the responsibility of the state and local authorities. the federal government essentially bought all of these be eight and distributed or made available to the states and a pro rated population related formula. what was distributed within the states vary depending upon how local authorities states, city

etc felt to be the most efficient way to distribute the h1n1. if you look at the seasonal flu vaccine the seasonal flu vaccine we've distributed more seasonal flu vaccine this year than we have ever had mostly because it was available early on because we wanted to get people vaccinated as we were waiting for the h1n1 vaccine to be available. so a lot of people got vaccinated about 140 million doses have been distributed. duralast question about getting or when what they mutate you know you really can't predict when a virus mutates but for sure they will and how the new tate with a view away from the vaccine protection is difficult. what we do know right now and this is important for the message and thank you for trying to get that message across about getting people vaccinated right now when we have enough vaccine essentially for anyone who wants a there's about 119 million

doses that have been discredited a far cry from the early shortages that we've had. the vaccine and virus are still perfectly matched. this vaccine is treated for the h1n1. we know which induces a good immune response that you would predict would be protected. so now is the time for people of any group early on we wanted to get the high risk people first, and about 75% of the vaccine did go to them. but we want anybody and everybody right now who wants to be vaccinated and should be vaccinated to get vaccinated now so that you can be protected when for sure we know that there will be a lot more infections this winter even though the peak has occurred and it's going down. there could be a third wave number one. i just mentioned earlier it is likely though not guaranteed there would be recycling next year of the virus as a seasonal

type of influenza and if you've got vaccinated this year you have a high degree of protection. >> host: let's go to portland ohio where john is on the independent line. >> good morning. >> caller: it's pretty early out here but my question is if we go through this every single year with a vaccine shortage. the people trying to travel around the holidays exposed to everyent people all over the year every administrative successively the last 15 years of leased can we not manufacture enough vaccine in this country? it seems like there would be a national security issue, wouldn't it? >> first of all with all due respect i have to tell you that that information is not correct. it is not a vaccine shortage.

you're talking about seasonal flu. let's put speed aside for a minute and look what happens regularly every year with seasonal fluke. unfortunately the lesion we see seasonally is the inequity of distribution to some people who want it and can't get it. other people who want it can get it but at the end of the year there isn't a shortage. we have actually had to throw away vaccines where you had unused vaccine is almost every single year with seasonal flu. what we do need is we need to get people into the rhythm of more people getting vaccinated each year. if you look at the track record of influenza vaccines we have gone just from several years ago where 20, 30, 40, 50 million people a year would get vaccinated to the last couple of years over 100 million people get vaccinated last year and 114 million people got vaccinated this year. so, it really isn't fundamentally a shortage issue.

it is getting people aware to be vaccinated, get the companies to be able to know that each year they are going to be almost guaranteed that the vaccine that they make is going to be utilized. is what we really need to do is ramp up getting people awareness that it is important to get seasonal flu vaccine. it is a serious disease. we lose 36,000 people mostly elderly people each year with seasonal flu and we have over 200,000 excess hospitalizations. so you're right. there's a sort of discordance between what happens with regard to the vaccine and what people perceive as a vaccine would be available. we need more vexing and more people being vaccinated and i think the awareness that this pandemic has given the american public hopefully if there's a good thing that comes out of that is that more people will be aware of why it is important to get vaccinated every season. so you bring up a very good point.

>> host: let's go to henderson north carolina where travis is on the republicans line. good morning, travis. >> caller: it is wanted to make a couple of comments first about the h1n1 and secondly about hiv/aids virus. first as a republican i believe the obama administration handled the h1n1 very well. i understand it not everything ran perfectly but i do believe that it was handled to the best of their capability. second, i am pretty young. i'm 21-years-old but i had high-risk behaviors for h1n1 and recently thought i had contracted the virus. it turns out i didn't but when i went to the local health clinics i was very surprised how much information and how much help

the local clinic was to get tested and the information available if i had tested positive. i think the root of these problems is not or at least for aids and hiv is not the information the federal government is putting out for the use or anybody i think the real problem lies out of the simple fact a lot of people my age just don't care. they don't care about what is out there and i think that is a real problem. >> guest: that is a very good point and i'm glad you gave that message to the audience. in the united states as we heard in the early part of the show there are 1.1 million people infected with hiv. over 20% of them do not know that they are infected. and the vast majority of infections begich transmitted transmitted by someone who does not know he or she is infected. so what we need is for people to

do what you did. we need voluntary widespread testing so that people know the hiv status and they can get council even if they are not infected about how they can avoid getting infected with the are infected they can get on treatment and be counseled about how they can avoid infecting other people. so what you did was the right thing and we hope more americans would do that to go out and get tested. host what's talk about emerging viruses. are we going to see more in the future and what can we do to talk to me to pick them up earlier? >> guest: i can guarantee you we are going to see more emerging viruses because, or even other microbes, not just by resist. we see essentially a couple a year either emerging work reemerging microbes and it is a brand new one that we have never seen before such as hiv/aids, 28 years ago and saar's a few years ago. reemerging microbe is one that has been around for awhile but

it appears a different form and a different geographic location just like west mild virus which for centuries existed in africa or the middle east and then just a few years ago came to the united states and now it is endemic in the united states so the answer to the question is there is no doubt we will continue to see emerging in every emerging microbes. the way you guard against them is several. one is good surveillance mechanisms and we collaborate, we in the united states with the world health organization particularly our disease prevention. they are excellent in being able to pick up new diseases as they emerge just exactly the way they rapidly pick up the new h1n1 when it emerged in april so you have surveillance mechanisms and the scientific capability to move rapidly to make a diagnostics, vaccines and treatments so all of those things are in place. you don't hear much about it but

there is a constant surveillance for these inevitably emerging microbes that we will continue to see as long as there's civilization and mankind and the interaction between microbes and humans because it's been going on ever since the beginning of the civilization and we will continue. >> host: let's go to the independent line in georgia. good morning. >> caller: good morning. dr. fauci, a polio survivor. i acquired pali given 1961 when i was 2-years-old. and i am now being affected by the post polio syndrome and i have three questions concerning polio immunization practices. the first is our troops are being exposed in afghanistan to people who have had polio either as carriers or people who have been given the disease and ramifications of the disease. our our soldiers and marines still being immunized for polio,

and are they able to be carriers back into the current populist? because i knew a big frustration with folks at the nih is a lot of parents are not immunizing their children and soldiers acting as carriers. my second question is rotary international and many other people are funding the polio immunizations but using the vaccine that in essence does allow the naysayers to say instead of one in a million chances of getting the polio vaccine actually they are immunizing to give you the disease so that seems to be something that we need to correct. and third i didn't know i had polio. i was not buying it most until fairly recently and because of that when i acquired post polio the was a tragic event for me. i've only been affected the last two years and now i can barely

walk. is their something being done for communication about polio to a broad populist to just those who know they were affected initially because i have a feeling there's a lot more folks like me out there. thank you for considering these questions and merry christmas and happy new year. >> guest: just to clarify for the viewers when we talk about polio vaccine being a carrier there are two types of polio vaccine, there's the live attenuated vaccine that when you want to fax in a broad populations you actually have the virus in a form replicated and you can actually cross immunize other people with it. every once in awhile when you have just the life that seemed the people who are susceptible can get exposed for example in an on sanitary condition to someone that's had that and they don't have immunity they can

actually get polio that way. we are trying to eradicate polio worldwide and are almost successful, not quite. the question you asked about the troops whenever i were troops are deployed to areas where there are diseases that are endemic and vaccinated against those diseases, the troops that are vaccinated, get vaccinated with the polio vaccine that would not necessarily tall in fact couldn't be spread to someone else because you get killed vaccine. people need to appreciate that vaccination programs like we have had in the united states had succeeded in essentially eliminating polio from our country and most of the developed world unfortunately there is still pockets of polio in certain countries which vaccination programs have not been adequately on or where they have been suspended. so there is a big push right now to completely eradicate polio as

a disease but we need to understand when you get the injectable polio vaccine there is no chance you're going to spread it to anybody. >> tell more about what happens if you are expos to polio at a young age or the caller talked about he had not known he was exposed until now that he has post polio symptoms? >> guest: yeah, well again, i don't want to get people confused. what happens is that you've got to talk about real infection with polio where someone particularly for example of someone gets exposed to someone who has been vaccinated with a live in attenuated particularly people who have certain immune no deficiencies where the immune system which when a normal immune system sees an attenuated or weakened polio vaccine virus it would make an immune response, get protected and not get sick. there are some people who are immunosuppressed congenitally or otherwise to in a rare instance would get exposed to the life

polio vaccine would be handled very well by people. they could wind up getting polio. we see very rare but nonetheless finite number of cases of that. the post polio syndrome is a different story. post polio syndrome is someone who has had polio in the past few decades later get exacerbation of some of the neurological problems that were originally related to the original polio. that again is an unusual on common syndrome but we do see it in people who've been infected many years ago and it's called the late post polio syndrome. >> host: let's go to pittsburgh pennsylvania where david is on the independent line. >> caller: hello? >> host: david, the morning. welcome. >> caller: yes i would like to speak to dr. fauci. it's been quite a number of years since i met him the last time. i met him at a conference here in pittsburgh.

my question is if people like myself -- i have got the speed and or the swine flu vaccine back when was it 76, the last time. i developed a syndrome certainly thereafter and was paralyzed for several months following the. now i'm just wondering and my immune to this strain now or not? because since that time i haven't been able to get any flu vaccine of any type of a type a or b or whatever. >> guest: sure. well, it is clear people who've been ex post in the 50's to similar h1n1 viruses that are certainly different than the new h1n1 we see most of those people are elderly now and that is the reason why the elderly people seem to be relatively protected likely due to previous exposures

to the real injection of h1n1 that has some cross reactivity with the current one. the other group of people like yourself who were vaccinated against the swine flu and 76, it is likely though not guaranteed that vaccination which unfortunately caused you the problem of deane horray industries bonds and you that would very likely make you a new and to the h1n1. and you are perfectly correct that you unfortunately had a series eckert reef reaction preclude you from getting the h1n1 vaccine now or any influence a vaccine as your physicians i am sure appropriately instruct you. but how old are you? i would imagine 1976 if you were vaccinated than that's more than 30 years ago and if you were a young man then that you are probably in your 50s or older

right now that it is likely you are protected from previous exposures but you were correct not getting the vaccine this time because your previous unfortunate experience. >> host: we have a comment on twitter who writes dr. fauci, please address this new strain of tb that has appeared in a new patient in florida. >> guest: a strain of tb? is that what he said? tuberculosis? post-religious, tuberculosis. >> guest: tuberculosis is generally a very treatable disease and curable disease by standard and vacation. we are starting to see now are what is called multiple drug resistance and then and a rare case extensively drug-resistant tuberculosis. and what that means is the microbe that tuberculosis my eckert has developed resistance

against the standard medications we use and it is a serious disease and it needs to be diagnosed correctly early on so that individuals can be put on more drugs and drugs that you know are not resistant in the sense of the microbe resistant to those drugs. so that's the reason why when we get tuberculosis patient as we want to diagnose them as rapidly as possible and treat them with a full course of therapy over vice you have the danger of the emergence of a very resistant microbes which we have seen in the united states very rarely but it is also seen in other countries particularly the developing world where treatment is not adequate for the tuberculosis and then you get emergence of a multiple or a extensively drug-resistant tb. we have seen outbreaks in certain parts of south africa over the past several years

which caused a very serious problem particularly among hiv-infected individuals where tuberculosis is a very common opportunistic or secondary infection. host koschel of the independent women's burgess south dakota. go ahead. >> caller: yes, doctor, i'm 51-years-old and i've never taken any vaccines because the problem they are sloppily done in laboratories and the congress and cdc when the h1n1 broke out of the cdc was very rude to the callers and another thing is the lawyers and deceit in the laboratories. our food is bogged down with a lot of chemicals killing people. they are also making diseases. i don't trust anything that the cdc, the government or anything anybody does. >> guest: i don't know how to respond to that except to say the vaccine that is made for the h1n1 and for any of the other

influenza historic we they are very safe and historical are quite effective. i have to respect people's opinion they have but i strongly disagree. first of all, vast majority of people that deal with the cdc find them courteous and professional. i certainly have them as colleagues and find them to be extremely courteous and respectful of the american public so i would have to with all due respect disagree with this call. >> host: last call for dr. fauci from brooklyn to new york. heather is on the democrats' line. >> caller: good morning. dr. fauci, i have a question about the death of seniors from the flu. >> guest: i'm sorry. i didn't hear what you said. >> caller: a question about senior deaths. >> guest: sr. deaths. okay. >> caller: of the seniors that are lost to the food you know

how many of them have never been vaccinated verses those who have lapsed under the -- guess what it is a good question. let's get the numbers of viewers can get it correctly. if you talk about the seasonal flu just to remind you what i said before there are about 36,000 deaths among the individuals who are infected with the seasonal flu. the vast majority over 90% or an individual's over 65-years-old and the majority of them over 80-years-old. some of them have been vaccinated and still get the flu because the response to the vaccine in a very old individuals is not nearly as robust as it is in a number of individuals. but many of those individuals had not been vaccinated. we know you clearly get a benefit from vaccines even if you are an elderly individual but not as much benefit as if you were younger and that is one of the reasons why come and it

is an important point i like to make. people who get vaccinated each year for the seasonal flu even though the virus changes from year to year they build up a background immunity that can help them in a cross reacted protection so that when they get much older in their immune system is not as robust dustin of the background of the previous vaccinations that could help them when they are elderly because elderly individuals as with any disease or more susceptible to many of the complications and that's the reason why we are working hard now to get better vaccines that would induce a robust response even in the elderly individuals. >> host: dr. fauci, f thank you for being with us today. >> guest: great pleasure. thank you.

congressman ron paul recently spoke in valley forge pennsylvania about his book, "end the fed" to be arguing that the federal reserve should be abolished and monetary policy should be based on the gold standard. dr. paul is on a very chairman of the campaign for liberty which posted this hour-long event. >> i appreciate your much you coming this morning and talking about a subject i've been talking about a long time to read a lot of people ask when and how did i get the title for the book and i do tell a little bit about how that happened.

i really didn't create the title. it came to us naturally because it was during the campaign that on a college campus i believe it was that an arbor, university of michigan all of a sudden the students started chanting and was to my pleasant surprise they kept saying "end the fed." as it was a spontaneous outburst and gave me the idea maybe we could follow up with a book. but to me it is a very important subject because the significance of it and it's becoming more and more important all the time. now, the book was written with intent of explaining to my best ability the role of the federal reserve and our finite financial system but there's a lot more to it than just that. it -- the bottom line becomes

the nature of money itself and the book is in certain broken down to certain groups and certain parts. i start off by talking about when i first started thinking about money as a very young person and i thought at the time i had mixed feelings about talking about my personal experience even as a small child about my first job earning pennies and recognizing the value of the money and saving claims, yet when i send this to the publisher i said maybe you want to strike that because at times the stories sound a little corny but there was a part he liked and it turned a lot of other people like to read about my earlier experience and money,

and i can tell many stories about that and the reflections my grandmother had about the importance of money. she was from germany and she knew something about the runaway inflation of germany and the significance of all this and the value of owning property, and this to me was very important is starts with the whole idea about a penny and at that time a penny was made of copper, and although that is not be truly traditional monetary unit it had been used as money a long time but it never at that time approached anything without having an advantage to melt copper. eventually we and flee to the currency where it was an advantage to not use cold and not use silver. it would be better to melt your silver than pay a bill with silver. but we have gone so far that it has become an advantage the

copper is worth more than 1 penny. as a matter of fact we went from copper to copper and zinc and we are at a point now where we can't even look forward to the zinc standard. [laughter] and it is a pretty good story in understanding the importance of a commodity that the ultimate story is to restrain the government from creating money out of thin air. in the book as well i go over the history of the federal reserve. it's not the greatest of detail and there is a lot more information about the reason they brought up with the fed and greeted the fed of course they came out of the crisis of 1907. but the real important history which deserves a lot more attention than it gets in this book and that is the argument always used about we had to have the fed because the gold standard always failed and that is why we had the crisis in the 19th century but the truth is as

all the monetary crisis we had through the nineteenth-century especially around the civil war period came because we didn't follow the gold standard or local people inflated or the banks inflated or it happened in the states. had nothing to do with following the rules of the gold standard. but that history is important and of course there's quite a few textbooks written about how they got together and brought about the federal reserve at jekyll island and that part of the story is i think very, very important to understand how this happened. i go through a section also as well about my experience with meeting the various austrian economists because reef frequently asked, joe scarborough asked me he took a

quote that i had made in the banking committee in the early part of this decade and saying we are going the wrong way. you have a double we are going to have a crisis and he says how did you notice and i said i didn't know it as much as i read economics than the keynesian economics and logic tells bubbles come and then you can explain why they occur. but my exposure to the congress came with my first reading and hayak's bouck road to serfdom and from that i went on to study and read about books mimesis and hayak and the personal associations because i did hear me sixth lecture, one of the last ones before he died. i had dinner once with hayak and

cao was an important influence, the fact i read and studied and got to meet him and then got to know hans was a teacher and round the economics department at the grove city as well as knowing and being friends with leonard triet foundation for economic education and then becoming close friends with murray roth barred, one of the students of mesis. so these associations reinforced all of the things i'd inclined to believe any way. and this -- these are more or less the personal things i mentioned in the book. but we have other reasons and concerns that we should have about the whole monetary system. the other associations i have talked about in the book are the associations with a federal reserve board chairman and i

have had a few of those and as a matter of fact just for a month or so when i first went into the congress, burns was still the chairman. i didn't really get to know him and was such a short period he was in poor health. but the one i got to know the best in the early years was paul volcker, and i gave him a little bit of a plus as far as the various members of various chairmen i had met because he seemed to be more willing to discuss things on a one-to-one basis and actually there was one time when we were working on a monetary control act in the early 1980's which gave a lot more power, regulatory power to the federal reserve and to monetize the debt. and i was arguing one case in the committee that it was a dangerous thing because he could -- the federal reserve was

getting too much power to inflate endlessly and didn't have to have any reserves whatsoever it could take interest rates down to see roe or whatever. and he was disagreeing with me in pieces look what i would like you to do is come over and have breakfast with me. and that one and had been with bernanke or greenspan. they didn't do that. so i did i went to the federal reserve and we had the discussion he tried to convince me differently but feeling i had won the argument with him because as i was leaving he said you may be right about this but he himself that i may be right on the interpretation of the legislation but he himself would not inflate. he wants this so that he has the power to restrain jury authority rather than expand on that jury powers -- monitoring power. i said you might not want to use

these powers to rapidly expand the money supply but some day somebody else might want to do it and of course i made the comment i think that someday is right here. to see what bernanke did within a few months doubling the monetary base his authority was granted back at that time and there was a timing and the federal reserve where it was required to have gold behind expansion of money so they were restrained and as bad as they were in and fighting problems they still had some restraint until 1971. but even though the federal reserve act gave the power to the fed to why the corporate debt they never did that until just recently. but it used to be gold and silver the u.s. as reserved and then after 1971 they just used treasury bills which was bad but

still there was some restraint that depended on the amount of debt could force that gave license to the congress to run up the debt. but today wetbacks the dollar is derivatives. all of the worthless assets, toxic assets we were required to buy are held by the fed and we don't know how much and what they've bought and that of course is why we are arguing for the case auditing the fed. but the next federal reserve board chairman but i had confrontations with and discussion with was alan greenspan, and i tell the story in there about time i think most of you in this audience would know the story that alan greenspan of course was a supporter of and friend of ayn

rand in their group of people but in the 60's he wrote this article how bad the debt was and the central bank was and that we confiscated wealth by printing money. it is a wonderful article, and so we had one session one morning before we were going to the banking committee and it was to go in and personally say hello to the federal reserve board chairman because he was getting ready to testify and get a picture with him so i thought i would do that and had been scheduled so i dug up an old copy of the object of gist newsletter where de our original article appeared on the gold standard, so i dug that out and i took it with me and when i was meeting him i pulled it out and i said do you recognize this and he said yeah i recognize that, so i handed it and flipped open to that particular article and said to you remember this article and he said yeah i remember that article. i said what you mind signing

this an of the gulf and he took his pen out and i said what you want to add a disclaimer on this. laughter, he says no and he said something amazing to me. he said no, just read that recently and fully endorse everything you wrote back then. but now that he is out of being the chair the other day i saw him say something favorable toward gold, so maybe he is going back to his roots. who knows. but he had his chance to talk about sound money, and i think that he of course contributed so much to the financial bubble that we have now bernanke of course is i would consider him a little less friendly. [laughter] so why would -- even though i have the disagreements with alan greenspan, i would say he was a little more cordial than bernanke. but i write about these stories and repeat some of the conversations i've had with bernanke and greenspan and give

you information about that. but the rest of the book deals with we should get rid of the fed and why the fed doesn't deserve to exist, and a pretty important reason although i consider it today under current conditions probably the weakest argument and that is rather sad and that is the constitutional argument. i mean, if i wanted to get somewhere in washington and say that the reason we have to get rid of the federal reserve is because of our respect for the constitution and the constitution hasn't given authority for get it. they don't want to hear that and they would say no, the courts say it's okay. okay. the courts can read write the constitution. .. just canceled the agreement.

the government doesn't have to pay in gold because they promised. they just cancel. it the government uses the courts to abuse the contract and stick it to the people. so the people aren't rewarded as a should be. it says we're not allowed food anything unless we're there's a lot of prohibitions in the constitution and that which was not permitted was denied. so there's no provision and they are that the congress now has the authority to set up a central bank. and yet, that argument and debate started right after the constitution and of course even back then the courts were favorable for the first national

bank. but there is no authority to set up a central bank. and there is a monetary provision and that is the congress is to deal with, and deal with coinage. we have the authority the responsibility to coin silver and gold as legal tender. and the states were prohibited from doing anything else because the states even before the constitution convention were very much involved in printing money and being very inflationary. so the states weren't allowed to print their own paper money. they were used only gold and silver. today even if an individual or a state mandate that you use gold and silver, you're liable to go to jail. so it's been turned on its head. it's loose interpretation of the constitution, the willingness to go along with the court to just obliterate the whole idea of all

this money as was provided for us in the constitution. but the responsibility for monetary policy really falls within the congress. but some interpret that as to say that congress ban should be the ones that -- the one who gets to print the money and distribute the money. so the populist position. i don't endorse that, although i endorse the idea that congress had more responsibility in order to have found money. but we really don't have license to inflate the currency. the congress does not have that authority. and yet, a matter of fact, some allies who would undo the federal reserve and they would have the audit of the fed, they would just as soon turn over the monetary authorities, the monetary power to congress. but that certainly wouldn't solve the problem.

but the constitution did not serve us well in preventing what the founders wanted us to prevent. and that is to have a paper currency. they talked about emitting bills of credit. to them that was paper money and that's prohibited. and so, we are doing exactly that. and of course, that's the reason that we are in so much financial trouble right now and approaching a dollar crisis. the second argument that i used against the fed is the more argument. and that's not much stronger in washington in the constitution argument. they do want to hear anything about that either. but there is a moral argument against the federal reserve because we are giving power to a few individuals to create money. out of thin air. and have legal tender laws that says you must use the paper money.

you can't use gold as the constitution tells them you should, but you must use paper money and then that gives the central bank the authority to counterfeit money. and always for good reasons of course to maintain a stable economy. so the fed was given this authority, you know, to have a stable currency, but they did this through the counterfeiting process. now, most of you here probably remember the story of the lot, and the whole theme of the loss is that if you have a moral principle kind of a law it should read that if u.s. and individual can't do something to or against your neighbor, you can't get the government to do it either. the government should have to stand with the same moral principles. so if you're not permitted under

any system of government, particularly hours, to steal from your neighbor. if your neighbor has three cars and you have none, nobody says you have a right to go and just to get cards for any dakar. i'm going to take your car. fortunately, we still call that theft. what we do is not a whole lot better. what we do is we give the majority together and the majority comes down and say, well, a person with regard, that's unfair so therefore we have to take a car from you and give it to someone else who needs a car. because need now are right. so who does that? if you're not allowed to steal a car, you send somebody from washington, somebody from the government to go and steal one card and transfer that into the subtle transfer system comes about. and it's immoral, you would think that would be enough. a constitution is to be, why couldn't we accept this whole idea of morality?

but unfortunately, what happens is the opposition grabs the moral high ground. they say well, it's only moral to take care of people who need something and needs or rights, demands become rights, and we had this whole notion that the only way you can have a fair and prosperous societies the use of force by government to redistribute wealth. and if you can do that with the central bank in an immoral way to create new money and then distribute it. what happens though of course if the money gets distributed to their friends rather than the people who are supposed to get help. and it's a total failure. now, and other arguments that i have against the central bank and one of my strongest arguments and a major reason why we should always be concerned is the central bank and this whole

system facilitates the growth of government. and if the growth of government is the opposite of defending your liberty, you only get the growth of government by diminishing personal liberty. and that should be enough, but of course some people like big government. there are some people who delight in ruling over other people and there's a large number of people who are convinced that they are going to get benefits, you know, in this manner. so, it's a sinister tax is what it really is. governments, there's enough the coalition together that wants to see governments grow, whether it's for the well for a reason. home or if it's for these ideas of promoting our goodness around the world has nothing to do with protecting oil or anything else, but we need a military presence around the world. but if you have honest money, and governments couldn't

counterfeit these ideas would still float around, but they would be forced to pay for it immediately if we could ever get this whole nation that you shouldn't allow the government to borrow and they would have to tax us directly. and say look, if you want to pay dnc we are going to take money from you and pay for it. this would slow things up. but there's a convenience for those who want a government to have a tax be an inflation tax. and that is vote for other welfare programs, vote for all the warfare programs. don't be responsible for this morally responsible are economically responsible. just past the programs and if you find your coalition to get reelected. and this has worked. you know, running as santa claus is better than running against santa claus and that has been done for many, many years. but that's coming to an end. that's where a difference right

now because the system is in the process of failing. but one of the reasons at last so long as in the early stages, which can last for a long time into those who promote the system believes that they are certain that you control and make it so gradual that hardly anybody catches on. but eventually, eventually it fails. but in the meantime, you can see the erosion of liberty. if you go from 1913 on and matt said in the introduction, we are working with a dollar that is probably 4 cents on the dollar of 19 team. so, this is something not we have to deal with in the federal reserve, of course, is something that we must take care of and take care of rather rapidly. but the size of government spent

keeps growing. the special interest kids voting and the people get really good and it never seems to end until it ends with the calamity and ends with a bang. and then there's a choice that's going one or two ways. if we don't reestablish the notion that liberty is more valuable than tyranny, what we get is tyranny. because they will need more power and force to hold things together. they can spread the spirit they can't say well what do you need? you need more money and more welfare programs to keep this group happy and keep the business groups happy and keep the oil people happy. that eventually ends and the real big question is, are they going to be so powerful that they just come down hard on us and that of course means tyrants, that means dictatorship because they will have no other way of maintaining order and

because there will be so much poorer and we are in that transition because were becoming a much poorer country. now we were poor ten years ago and even before that we were doing well because we were able to borrow a lot of money. i think when the history of this past decade is written, i think it will be seen than in the collapse of the nasdaq novel was really the beginning of our serious problems, although the markets went back and the statistics weren't all that bad. but i don't think real employment ever was resumed. it is banned under employment. now the unemployment, those numbers are growing drastically. but i believe this whole thing started in 1990, and the year 2000. now the last issue that i want to talk about may be the one that becomes more practical for getting the attention of the

american people. and that has to do with the economic ramifications of the federal reserve. and the reason why we shouldn't have a federal reserve for just simple economic reasons. the mandate and the federal reserve act for the federal reserve was to maintain the value of the dollar and to have full employment. and maintaining the value of the dollar means stable prices. well, they failed. they flaunt, they didn't ask. they're destroying the value of the dollar and we perpetual increases in cost of living. they say no it's not about inflation, where only destroyed the money 2% per year. [laughter] but it's a lot worse than not. 2% is evil, too. the value of your money goes up, costs go down. cost of living goes down. you get more and that's how we become more prosperous.

but they have totally prepared and maintained the value of the dollar, giving a stable prices. nobody wants to talk about the inflation in medical care. yes, people are unhappy because they can't afford it good that they can afford it because their dollar doesn't buy as much. you say we don't have inflation they see the cpi is going up one, 2%. the cost of medicine goes that much more rapidly. but when you create your money, the cost goes up differently for different areas. and if everybody's wages went up at the same rate as the money supply would go up and everybody's costs would go up the same, it would be irrelevant, but it doesn't work that way. you are wages and your income never keep up and surge in prices go up faster than others. some people suffer more. some people use the money first. people use the money last, the average person, the middle class, they use the money and they get stuck.

if you're in retirement you might suffer more than others your but they come up with these figures and they say prices when a 2% last month. but if you excluded food and energy they only win at .5% so it wasn't so bad. but some people food and energy prices go up and it's so bad here it and that's important. but wherever the government is involved, you will see the money gravitate there and then pushing prices up. you don't have a better system, but the prices go up. so as we pump more money into medicare, we didn't get better quality, we didn't give our people take care of, we just had prices go up. same thing in education. they pump out the money, the government mandating and spending money. everybody goes to college. well, does everybody get a better education? know, the prices of education goes up and the quality goes down, whether it's, you know, the public school system or the college system. there's just too much money in the air and prices are pushed

out. so we have a lot of inflation that exist today and yet the federal reserve is claiming great victory. i mean, right now one of the greatest dangers to us is that they're getting very confident and they're trying to portray that everything the government, the federal reserve and treasury has been in the past year has been successful. and if that -- if that prevails, we're just going to get more and more of this. it hasn't been successful. even if things have been temporarily, you know, resolved to the point where it's not moving as rapidly, doesn't mean that we've solved the problem because were doing exactly the wrong things that we've been doing for so many decades. and yet, there's too many people who are claiming that they've had this tremendous success. but the most important ring

about -- i think of going to finish up at this point because were getting near that time where we can take some questions. but it's the business cycle. you know, they claim that they designed these programs and the spending to help the middle class. but a characteristic of inflation, the semi- destruction of money is the destruction of the middle class. one other characteristic of the destruction of money through inflating the money supply is that it's not study. there can be a steady erosion of the value of the currency like it's happening in this country, but the end stages or unpredictable when they come, when the confidence is lost, then there's a crash at the end. people panic and we do not have the strength of our economy due to the artificial inflation that we've had, our good jobs are overseas. we are a debtor nation like ever before. and who's holding our dollars?

people -- russia holds dollars, the arabs hold dollars, chinese hold dollars, japanese hold dollars you are looking restraining them is the fact that they don't want to buy any more, but if they don't buy a few and if they start selling, they will lose the value of the dollar. so they have an interest in trying not to panic the market. but the panic always comes. it eventually will, and that's what we have set the stage for. the big question is when we have a major crisis are we going to blame the right people? in the right people in the right system, the right philosophy to blame, the correct one, is the federal reserve system because they have created a financial bubble. they create the booms and the booms demand that there is a bust. now they have been pretty shrewd and since 1971, since that's when the last linkage to go was removed. over those years, you know, i'm

a technical basis they've managed things relatively well. but you can look at some very bad -- a lot of people just because the stock market goes up in a goes down and back up again, the people who lost money aren't necessarily the ones to gain it back again. right on the stock market has been up. you know, 30%, 40% of the past year. this a recovery is here. but you think the people who lost money last year regained? do think the people who lost money in aztec bubble crash every gauge? no, it's the wall street and the people who get bailed out behind the scenes, by the federal reserve. this is what is so important not only to audit to find out what's going on with the federal reserve, but eventually to eliminate the federal reserve because it is bound to continue with its problems and that is the business cycle. so, if we care about the middle class and we care about poor people, we have to reject this whole notion that government intervention, the redistribution of wealth, the rejection of the

idea that personal liberty and personal freedom and private property and contract can solve our economic goblins not perfectly but better than any other system means that if we believe and not to care about our fellow man and care about not serving the interest of the middle class that we care about not having runaway inflation like we had in mexico and central america and germany, zimbabwe there is a well-known history. if we care about preventing that, we must know that the federal reserve system can come down on the side of saying it's unconstitutional. it's immoral, it promotes the government, and it's lousy economic policy. so therefore, how can we lose this argument? is it possible if we do our job. it's just a matter of getting information out. hopefully that information necessary to humans he american people will generate a support for ending the fed, just as we have generated support for at

least starting off with auditing the fed. thank you very much. [applause] [cheers and applause] thank you. okay, i don't hear it. >> hello? we hear a lot about illegal immigration in this country and i was just wondering, since we went off the gold standard in the 71, how that has affected the economies in other countries and if there is a link with some

of the immigration and illegal immigration that we have today? is there a link -- >> okay, the question is is there a link between going up the gold standard and the problem we have with illegal immigration? i haven't got a whole lot about that, but there's probably some linkage, but may not be direct. and to meet the linkage might be that our economy has eroded. and we have the growth of the welfare state which would be connected to the inflation by the federal reserve. and when that happens, the welfare state actually encourages people not to take jobs that they maybe should take in a free market. so then the jobs go benke and then we need labor. i get as many complaints in texas about the illegal immigration is the need for

workers. not so much now anymore because the economy is getting so weak, so it interferes with market and the fact that we interfere with our marketeer. also the welfare state in the inflation of the federal reserve permits us for a while to pay the bills of illegal immigrants. it means that we can, for a while, p. for their medical care in their education. and that encourages more to bring families over instead of having a decent working program. a cousin a free market, you would have a demand for labor. and since we don't have a demand for free labor due to the economy right now, it's less of a problem. so indirectly i believe there is a relationship here it [inaudible] >> my name is pat and i work for an insurance company in manhattan. i'm a nurse there and it's a

medicaid medicare insurance company. what to know what your thoughts are considering that we recently increased the economic status of 500 numbers a month compared to the 100 members a month. and yet, we had huge layoffs on all our marketing people. i wanted to know what you think about president obama's health care? >> obama's health -- health care program? she asked what i think about obama's health care initiative. i don't think very much about it. i think a lot about it, but i don't have much positive things to say about it. [cheers and applause] now, it's just like bailing out the financial system and the problems that we have. we got in our trouble because we inflated, deficit financing and would turn into much money and way too many regulations. so we get in a park says, what we do? we spend more money, run a more deficits, tax or people, regulates, and think we're going to get out of that.

medicare has compulsory management since the mid-1960's. the government has been involved in 65% of medical care in this country and it's not going to be solved by moving it up to 85% or a hundred%. so it's going to make things much more worse. people in washington now talk about a compromise. some people come together to back off. they proposed a 100% to medical care and the color compromise going from 65% to 85%. bicolor compromises with 65% of medicare controlled by the government is not doing well, the compromise ought to be there's people who argue for a zero amount of government interference in 100% -- [applause] in the true compromise would be in reducing it to 50% and moving that direction rather than always move in the other direction. they claim that if you're willing to compromise during much more decent person and if

you hold values in a rigid manner. so i have a lot of respect for people who say i believe in socialism, i believe it 100%. the government should take it over completely. they are two of the same respect for those who believe we are free to much government would have to argue our case in a clear fashion. hot [applause] >> dr. paul, thank you for coming. you write in the book a lot about a lander. can you tell me how she and clinched you and books of hers that made a difference in your life? >> asked me out and ran has influenced me. so many and more so because of the crisis, the sale about the shroud is actually going back up again. but it's been a book that's been read by literally millions of people. yes, she's had some influence

and they mention that about the objectives letter and greenspan's article in their back in the 60's. so i bet all of her novels. i read those as i was finishing middle school. that would've been in the early 60's. and when she started her objectivist newsletter, i subscribe to that and read it. and she -- she had an influence, but i do not call myself an objectivist. i think the most important thing she did for me was to make me think through clearly, exactly what i believed in, picking and choosing, deciding because if you happen to be an individual that has a faith and that believes in a creator, she in many ways i think mock that position. and yet, she's so great on praising people who stand on principle and heroic individuals and the characters in her book. so in one hand it's very, very

good. and as she talks about the gold standard and economic policies is just great. but she made me think things through and be more certain about my beliefs. and i think came out, you know, with a clearer understanding. but as so many libertarians and conservatives should like and enjoy can still read her don't endorse all her philosophy. and yet she's had a great deal of influence in this century. there's no doubt about it. >> good morning, dr. paul. my question is inspired by it are commuters. the city of philadelphia install target readers with credit cards. i was wondering if the potential government takeover of the bank in fact are like general motors, what about the possibilities for routine police access to the credit card system, the information in the credit card system and the police routinely using it to gather suspects were police lineup?

>> i'm not sure i understand. he's talking about credit cards being used in parking meters and whether the police might take these and didn't abuse the system. >> can the police use the information in the credit card system? >> when you have target readers are not, i think is a real threat. you know, the information that they get in the identity theft. but i guess the credit card idea is so pervasive and yet that may come to an end because that always meant that you delayed payments and you created money with plastic. but i don't know the details of what the odds are in the city of philadelphia of using the credit cards of individuals because they go to parking meters. but i think the problem in general, much broader than just philadelphia or just, you know, parking meters. i worry more about what is the government going to do with a

50 billion-dollar program, which is involved in obama's health care, which means that they're going to control every medical decision and every decision on every drug you take and every doctor does and it's going to be monitored by bureaucrats. that is the kind of thing i really fear. and we have a surveillance for signing. i said -- you know, we live with cameras. there was something i believe i'm the news this morning or last night that showed that a private camera caught somebody breaking in and stealing a car and there was a city care my sitting right up your and the city camera, the government camera, you know, wasn't working. we spend millions and millions of dollars. that's probably the best thing it's going for us all the surveillance and all these controls furthers radical -- the government is so inept they probably won't be able to do the job they think they're going to do.

[applause] so the only danger is all the money we lose to run these inept programs. >> good morning, brian. thank you rematch for any and all her attention to the problem of the fed. my question is by some miracle 1207 moves along and is actually signed into law, are you going to be confident that it would be honest the man who was going to audit the auditor? [applause] >> well, that's always the fear and yet if we get that far and we've made a lot of progress, we're going to have benefits regardless because we don't know how long it's going to take or whatever. most important thing is getting the attention of the american people to look at the federal reserve. and right now 75% of the american people agree with our argument that the fed needs to be audited.

[applause] but obviously, there are shortcomings in the federal government auditing itself. the gal happens to have it with a bit of reputation than the rest of the agencies of government and hopefully we would be able to get some good information. i don't worry as much about the gao not making a sincere effort as i am about the federal reserve making a sincere effort to prohibit and to prevent and get in the way of the gao from allowing us to find out exactly what's happening. because i'm sure there is a lot of agreements that are made that would be hard to trace. it isn't that the federal reserve is going to have it written on the books were rated a., b., c. what they do affect whether central bankers and they say well today i'm going to send some loans to you as long as you go when and by such and such

stock or by banks or sell gold and do all these things. so would be pretty hard to follow all that went on. but you're right. this could be shortcomings. but ultimately, the system isn't going to last so with the exposure and getting the american people to understand why it's so important to know more about them. thank you. [applause] >> you mentioned something last night in your speech that if i can't borrow from not and revert a little. you mentioned, you mentioned in health care that they would tell you what you're going to eat, what you're going to drink. you mentioned unnatural foods and legislation that would take that out of the free market and put it under the fda and whatever. at what point in health care do we draw the line and say okay, this person is gone beyond their

personal liberty, they are abusing their health and somebody needs to turn that person around. maybe they're going to tell me i need to lose a few pounds. where do we draw that line? for instance, you said go from 8% to 50% and that would be a compromise. where does personal liberty and then where does responsibility begin? >> with the question is how far do we go and it's a personal decision. your endpoint may be different from somebody else's. i felt like my endpoint existed about 30 years ago. and i think what i did in my own mind was i chose to speak out. i didn't really expect a political rear and wasn't looking forward to it, but i wanted to speak out with the assumption that nobody was going to listen and nothing much would have been. and i always longed to say believe least i made the effort. so we all hear i believe wanted to continue making the effort, but we also know that when do we

do something else? and that to me is, since i am not an endorser violet, i don't like to participate in it. but i do believe in civil disobedience. i believe there is a certain time when individuals just flat out say no. so i have for that for people like martin luther king and gandhi were finally say enough is enough and they didn't take up arms. they suffer the consequences and some people do that with the tax code and the many issues and they go to prison over it. and that to me is rather sad. but eventually when the government quit functioning, there's going to be a lot of this. and their civil disobedience about the drug laws right now and in spite of how hard the federal government tries to override all state laws. i mean, the use of marijuana keeps growing and growing and growing. and so there is a defiance. when the governments money doesn't work, their enforcement

is going to be more difficult. but that doesn't mean they won't become more ruthless. that is going to be up to the individuals. it may be like if obama in the next six months, if there's a crisis brewing and there's riots going on and he says well, we've got to turn in your guns. you know, i think the american people say enough is enough. i'm going to stand up to this. i'm not going to do that. same way with gold. even though the numbers are still not total, but more people understand the issue of gold. now they're understand that a 75% say we need to audit the fed, those are the personal decisions and i were to try to prevent that day when you are forced into that position him about it seems like every single day we are. and of course the house passed something just recently to monitor all food products. usually they're driven by the powerful interests, you know, in

effect they want to regulate nutritional because you might make a bad choice. it's the drug companies behind that. and in medicine it was the laboratories that came in and closed on the laboratories in our offices because the big labs wanted us to send all the business to them. it cost to patients more, it was more inconvenient. they said you have a lab in your office because you want to make more money. but there's always a monetary motivation behind some of that. it's always the excuse that we want to take care of you. that's why we have to reject the notion that the best person to take care of oneself is that person, not the government. [applause] >> first of all, thank you dr. paul for your tireless leadership on the cost of freedom. thank you so much from the bottom of my heart. [cheers and applause] i'd like to ask you about social security and medicare and the

trustees who recently said there were $107 trillion of unfunded debt. how can we get washington to fess up and be honest with the american people. i'm 45 years old weird i know i'm never going to get paid. i want out. and i'm sure a lot of people in this room one out. [applause] why won't washington be honest? >> well, it's going to be difficult but it makes one point. he won out and you're willing to assume responsibility for yourself. and there reminds me of the principle that if you have a free society and you are led to make your decisions, if a group like this get together and say we believe in socialism, we believe we should be collect the best. we should all work for the betterment of the group and will put it all in the kitty and distributed evenly. you know, in a free society that is legal. you can do it. but if you have a free society or a society like we have today,

well they permit us to get together and say we want out? we don't want to have anything to do with you. you don't have to take a rest, will take care of ourselves. and free society that should be legal. i don't think we're going to address that issue. the unfunded liability is the only way that works were benefit is they lose credibility. and the more they lose credibility the more people will look for other places for answers. and that is to ourselves to be responsible for ourselves and that is the only way we can solve our problems. >> good morning, dr. paul. after reading the book meltdown i had a conversation with my father who is a republican although he's very disenchanted with the party right now. he also used to teach economics at the college level. when i proposed to him the idea of going back to a gold standard, first of all he holds two paradigms. one would need a federal reserve as a last resort into we don't need to go back to the gold

standard. his main argument though was that if we go back to a gold standard and a slide like you to address, the money mall to to player fact that is through normal saving landings by banks, not with the federal reserve is during right now. it becomes very limited under a gold standard as opposed to paper money. >> he's concerned if we have a gold standard there would not the money multiplier. of course money multiplier is the inflation, so that would be good. he wouldn't have the mallen vestments, the incessant dad, trillions of dollars worth of future obligation because the attitude would change. but economic growth wouldn't seize up. we have tremendous economic growth in the latter part of the 19th century. and we didn't have the money multiplier. we have to understand basic capitalism and the way the market system works. and that is if we're working and

we earn a hundred dollars and we live on $50, we have $50 of true wealth as fine as it's measurable in something sound, not paper that was his value. so if you can save half of which you burn, that is capital. that means you can reinvest it or let somebody in invested and there's economic growth here at the economic road would be slower than in boom times, but she would prevent the necessary bust that has to happen. so yes, there wouldn't have been under a system where you could only build a house where people put money in their, you know, committed it and you built a house. yes, there would be less houses, but because we were selling houses in the prices were going up and that was. maybe, you know, yes my house is going to be 120 next year. i'm going to buy 120 and they were doing this. so the things that you argue,

you know, in favor of the spirit meeting of debt and borrowing and the expansion of the money supply to fractional reserve banking wouldn't happen but that's what we want to stop. we want a steady growth. we want people who are qualified to buy houses because it doesn't work. it might help temporarily. you could have community reinvestment act in inflation and cause the boom, but guess who lose their houses first? a lose their jobs, they lose their house, and the prices keep going up. so it doesn't serve their interests. so when the very narrow sense, the argument you make is plausible, but -- but that doesn't justify it because it's only temporary and the consequences are so serious and that's why you don't want it. >> good morning, dr. paul. my question is on health freedom. at the end of the year the united states is to come to compliance -- the >> get closer to the mic.

>> the united states is supposed to come in compliance with the nutritional health of supposed be regulated throughout. i'm wondering if you could comment on not? >> he's talking about the regulation nutritional products of the codex vitamin. and that were regulations will become international. everything is moving towards international controls. there's nothing wrong with free trade and international free trade and movement. and even the international currency as long as it's a commodity like gold. but this is typical of the moment, not only monetary policy, but in the area of nutritional products. so they want the regulations to be put under the wto. and once again, i believe that's all motivated by the drug companies and they don't want competition. they want to control it and that's why i take a very firm position. i don't like the sacrifice of

any of our sovereignty and therefore not only what i challenged the wto in regulating your access to nutritional products, i'd probably just get rid of the whole bunch of the united nations and the world bank. [cheers and applause] >> you said that you don't believe -- you would say that you don't quite believe that the congress should control the money supply so my question is, should it be controlled in some fashion and if so by whom? >> yes, he was asking that since i don't want the congress control the money supply, who showed? and my answer is the market. milton friedman and i are friends and we debated the monetary issue and she would always conceded to me that my gold standard wasn't all that bad because he used the words honest to god old standard. but he said that he didn't

endorse that because the gold standard has always been abused by individuals. and they would go off the gold standard. but what did he come up with? he came up with the idea that we did need a federal reserve, we needed a computer. and the computer would increase the supply of money 3% a year. well, he probably got that number from the fact that under a free market standard and gold, the gold supply worldwide has generally increased between 2% and 3% per year. and david didn't increase, the supply of gold always serves its purpose because as long as prices are freely adjustable, prices will go down. and you could have a tremendous expansion of purchasing power as a loaf of bread cost a dime instead of $2, you know, there's a lot of purchasing power there. but under a free market, the money supply is increased by

market forces if the purchasing power of gold goes up, there's a greater incentive to buy gold. and that gold would come into the market not by the central bank passing out to favored banks and corporations and government officials. it would come into the market by the people who had to work and mine the gold. as with the more natural way. but he wouldn't be -- it wouldn't be dictated by the congress or a central bank. >> good morning, congressman. i'm a registered nurse and i work for one of the major insurance companies. i work mainly with medicare and medicaid customers. my question is this, that you address one of the main reasons to control the federal reserve is to, and their function is to keep intact inflation. medicare recipients received word from the senators of medicare medicaid services that they would not receive a cost-of-living check. and i think a lot of medicare

recipients were a little concerned. do you have any thoughts on that. and as a follow up with obama health care reform proposal, they suggest they were cut into medicare benefits. how do you see that to ultimately affect us baby boomers when that does come into questioning, if it does? >> you know, she talks about the cost-of-living increases are going to be given to social security and they're starting to pinch pennies with medicare and medicaid, which they have to. but because, you know, we are going broke. but it's sort of ironic that they have no hesitation to pass out trillions of dollars by the federal reserve to their firms and hundreds of billions of dollars of tarp funds that we have no transparency although we don't know where this money goes. but now their are nickel and dime means, you know, the recipients of the program. of the transition, my position has always been not to go after

the people who have become dependent on government medical care, just because of the politics of it all it doesn't work very well. but i don't know whether they do that for symbolism or think they're going to save enough money because the amount of money they're going to say this minor compared to these big dollars. i mean, why don't we talk about cutting about 50% or 80% of the military-industrial complex first before we do that? [cheers and applause] thank you. >> did morning. my question is let say the federal reserve is finally ended and we're looking to implement a new system. the congress. how much they'd would you have in congress not implementing a more disastrous system or even worse yet a global currency? and what would your thoughts beyond combating not? >> he said if we get -- but at

the fat and we get rid of the fed, what should be the concern about the congress making it much worse or an international central bank making things much worse. that obviously should be a concern, but it's not enough of a concern to say i believe the federal reserve alone and let them continue to perpetuate this. the concern should drive is even more to make sure they do the right things and we should start with, you know, our traditions in the constitution and the economic arguments, all the arguments i used for not going -- if a national central bank which is our dollar has become internationalized it was a fiat dollar reserve currency, the all the arguments should be used to prevent the internationals from doing the same thing but we still would have the people in congress who want to management. we just have to argue our case. that becomes an intellectual argument. he becomes an educational

problem. and that is why, you know, i feel so good about what the campaign for liberty has been doing because they're involved very much an education and getting grassroots americans to understand why it's important to not have a federal reserve, but to have an alternative to understand how it works and how the market works and you don't have to go to international governments and we don't have to depend on congress really politicizing to say we get to print the money and pass it out. that will solve our problems either. one more question and then we have to go. >> my question is either pretty good understanding of the federal reserve system and the problems that it brings to us and they have a pretty good lay understanding of school economics. what i'm lacking is an understanding of what a sound currency would actually look like. what would that end up looking like and is there anything you could recommend that would help me to understand that better? >> you're talking about -- he

wants to know what a sound currency would look like. i think he could probably go to the period of time in the 19th century when they had found money and gold coins circulated. and certificate cert should circulate. it's a trust factor that would have to be there and you could still have electronic money and whatever people could measure the value of the currency by something that should always be convertible. murray rothbard writes a lot about this and you can find at the end of the revolution but various books by murray rothbard that will explain that as well as the end of the book "end the fed." but the important thing he taught is that you should have a gold coin standard. and that is that you don't have to carry the coins around, but if the government is guaranteeing, which they are supposed to be doing,

guaranteeing that any certificate would be convertible into coin and that's better than a bullion standard. that means that if you have $500,000 you're getting worried about the government, you get to vote against the government same look i want my gold coins in my pocket. [applause] and they then would have to give you the gold coin. so there are examples of i think the best answers could be found, you know, and so much of the monetary writings of murray rothbard. i need to close now because we are time constrained. i want to thank you so much for coming. i'm delighted that there's so much enthusiasm for monetary policy reform and lo and behold i believe we are going to arrive in the not-too-distant future when the large majority of the people know when we want the fed audited that they will also want to end the fed. thank you

[cheers and applause]

>> coming up next, booktv presents afterwords, an hour-long discussion between a guest host and the author of a new book. this week, wall street journal economic editor david wessel talks about his book "in fed we trust." he looks at the role played by federal reserve chairman ben bernanke following the 2008 economic collapse. he discusses his book with alice rivl and current senior fellow at the brookings and the two shin. >> host: hello.

i'm alice rivl and it's my pleasure to be talking to david wessell about his book, "in fed we trust." ben bernanke's war on the great panic. it has a second subtitle as i read it. not every book has two subtitles. how the federal reserve became the fourth branch of government. it's a fascinating book i loved it and i think i should make that clear. at the outset, you take the reader step-by-step through the crisis of the last couple of years from the eyes of the chairman of the federal reserve, ben bernanke. so the book lets you see what dan and his colleagues were thinking, what they missed, why they did what they did, the internal intentions and uncertainties and how they were learning along the way.

you are a very good translator of a fed speak by the way. i've been known to speak of fed speak though i always try not to air it but the last couple of years were a wild ride with the fed and it's not necessarily over yet. i was watching closely during this period, but i learned a lot in this book. there are other books about the crisis, quite a few of them mostly on particular episodes like lehman or bear stearns. but this one gives a very close inside look at the actions of the federal reserve, with particular focus on ben bernanke. now, you start this book with that climactic weekend in september of 2008, which was actually only a little bit more than a year ago. it's hard to realize that it was

not long ago. the weekend when they let lehman fail and then bailed out aig. and then you go back to the run-up of the crisis and perceive more or less chronologically through the whole step-by-step thing until last summer. now, your basic judgment, as i get it is that many people including ben bernanke and his predecessor alan greenspan should have seen the potential for the meltdown that happened in the financial system and enacted to hit it off, but they didn't. and once the crisis happened, bernanke was in the right time at the right place. he is somewhat a hero of this volume. so, let's start by talking a little bit about ben bernanke and why you think this was true. what did you learn from being a

scholar of the great depression for example? >> guest: , well, you know, ben bernanke when he was a student of economics at harvard and mit he came very interested in the work of the great economist nolton friedman and anna schwartz did that really pinned the blame for the great depression and on the federal reserve was too tight with credit at just the wrong moment. the federal reserve was captured by the economic orthodox of its day and the gold standard in managed to create the great depression or take a recession and turn it into the great depression. friedman said that the banks failed as a result of that. bernanke and bought their arguments but added one and the amendment was that the failure of the banks themselves made the great depression worse. and that insight, that work of history turned out to be enormously relevant in this crisis. because after all, let your member what happened here.

we have a housing bubble burst and the secretary pronounced it to be contained, meaning that the damage would be limited to housing and it wouldn't screw up the rest of the economy. and it turned out not to be contained. and when big financial of stations began to implode, especially after lehman, i think her neck bernanke realized. and i gave him more kurds i think to do dramatic things that some other person what is done. i think at the beginning some of his colleagues that he was overreact team. after all, anyone who studies history tends to see everything like this is happening again and they thought he was overdoing it. >> host: he was fighting the last war. just go the 50-year-old war. it turned out that it looked a lot awful lot like the depression. it's stunning that we could be in 2008 doing something that we thought would never happen

again. >> host: now he wasn't an academic. he never was on wall street. now, was that a handicap? >> guest: i thought it was in some respects, but others know. academics have a way of looking at the world and he certainly had a keen sense of history. i don't think he necessarily understood exactly how the markets would react to some of his things, the way someone like alan greenspan would. ..

washington determine he said at the time to follow a policy would be different than greenspan. i call him in the book to be the hon ungreenspan. i think actually that was a bit naive but it did help him build consensus at the fed when the time came to exert strong leadership to push people to do things they were not entirely comfortable with he had acquired their trust. i think in the beginning he seemed kind of awkward in public

like when he was speaking his hands would shake sometimes. >> host: i was with him when he gave his speech and i commented afterwards. you see and very relaxed to a couple of years ago and say i've been doing this a lot. >> guest: he grew into the job. i think we are lucky this crisis didn't hit in august 2006 when he had been on the job six months. he did have a year to get used to the fact. i don't think anybody can appreciate just how much power you have put more frighteningly how much every word you utter can move markets around the world. i don't think people appreciate when they become fed chairman how loud the megaphone is. >> host: it's partly the press. >> guest: we are good amplifiers, absolutely. i also think that some people

don't like the decisions he made that very few people i hear even the critics of the congress thinks that he was somehow motivated by something other than what he thought was the right thing to do. he's accused less than other people of being in the pocket of wall street particularly because imagine -- >> in part he was never a wall street person. >> guest: if he had come from goldman sachs that would be different. so that's true. but i also think that he's not a very pretentious person and when you're telling people the world is about to end and you are not known as the hype artist people tend to say you must really mean and whereas if he had been one of these people who had pronounced every third day as the most extraordinary day in american history that would have been different. >> yes. let's come back to the question why so few people saw this financial crisis coming. you and i are presumably among

the culprits. we were not in her responsible public positions but i watched the economy and markets and had been at the fed and to cover the economy and especially for "the wall street journal" for many years and so far as i know, neither of us were out there issuing dire warnings in 06 or 07. why did this crisis keep so many people by surprise? >> guest: that is a very good question and i am not sure i have a complete answer. some of my colleagues in the press will take a question like that and point to half a dozen stories we did in the run-up to this crisis. and say we did see it coming but i tell them what if we had done a better job, if more of us had seen it coming, if we had listened more to the cassandra and less to the people who told us it was going to be all right it might not have been so bad. so i want to start from the

beginning say the press didn't do as good a job as it would. >> host: neither did the academic. >> guest: know what i want to start from the beginning. i think one of the frightening things, the litany of people and checks of the system that failed it's hard to find something to function. it the best i can do is say i think two things. one is we were diluted because we had such a stable economy for so long and such a resilient one. it wasn't like nothing had gone wrong in the previous years, 11, the textile bust, a couple of wars in the middle east, the mess of the 2000 election, oil prices going up and down. there were plenty of things wrong in the economy but each time the economy stumbled and picked up again so people began to believe the u.s. economy really was super brazillian and would recover everything. >> host: i said that at the time to read you probably did too aveda >> guest: we were lulled into

a false sense of security and the other is a imagination. i don't like the metaphor that compare this to 9/11 because so many people died at 9/11 there is one part that i think is a parallel. there were people who said we were vulnerable to terrorism. there were people who said new york would be targeted after there had been one terrorist bombing. there were people who worry about terrorists, during an airplane but nobody was charged with security of the country would ever imagine al qaeda was organized at hijacks of any plans and fly them into so many buildings at the same time. in this case i honestly don't think it occurred to anybody that so much of the financial house of cards was built on the assumption that house prices wouldn't fall across the country. and if they had seen that coming, if they said okay with house prices fall and not just in one place all over the country and not just a month or two but six months or 12 months maybe they would have been able

to see how interconnected everything was. as you know bernanke and hank paulson the treasury secretary in the fall of 2007 were describing the housing problem as contained. they didn't see what was going on at bear stearns or a ing or any number of these big financial institutions was tied to mortgages which were tied to the price of the value of the house. >> host: it seems amazing in retrospect but i was among those who said the subprimal market is quite small and it's not going to move the whole financial structure. >> guest: one lesson might draw from this is for the press that when 90% of the experts say everything is going to be okay and 10% say they are wrong and the sky is falling our tendency is to ignore the 10% or make our coverage kind of 90/10. but i feel we have to listen more carefully to the critics

and examine the arguments more, not hyped than the ones who say the world is going to end every three days hoping someday they will be right but the ones who have reason critiques we need to spend time sharing views with the public and getting people talking about them so we don't join the group which was the problem. >> host: what about bernanke himself in this earlier period? he was on the board of the fed will greenspan was chairman that he left to go to be the chairman of the council of economic advisers and he took over the chairmanship from greenspan and 06 when the housing boom was running out of steam. it was turning down. it was before the crisis burst. but in what respect was the fed asleep at the switch in the period? because housing prices were levelling out and then turning down and we were all worried

about this is a prime crisis. but it proved to be much more than a supply problem and the fed as i remember wasn't doing much. >> guest: i like the asleep at the switch metaphors as much as a doctor who misdiagnoses a patient. i think that you can go further back than during the greenspan years the fed kept interest rates very low for a long time. in hindsight it looks like that was not a good idea that it had many more unintended consequences sparking an orgy of speculation and borrowing. >> host: but we were in an incomplete recovery. if you think it retrospect they should have tightened sooner than you have to put bernanke on one of the sitters because he was making the strong case this was necessary to avoid the deflationary like japan and that the causes of low long-term interest rates for savings around the world, there wasn't

monetary policy. and second, as you know, alan greenspan wasn't exactly an admirer of regulation and didn't -- host collided know that. [laughter] >> guest: swine flu it didn't push it hard. he gave a speech as governor and which he said in case of acid bubbles, when the price of stocks quote at an unsustainable pace, the fed should not raise interest rates but it should think about using its regulatory tools to try to deal with that particularly access lending. but i don't think there's any evidence. he didn't pursue it. so that is when the seeds are planted. yeah i think they misdiagnosed the economy in 2006. i have no doubt and i don't think ben bernanke would say otherwise that had he been more present in 2006 they would have been doing more to prevent banks from lending so much on these mortgages that were never going to get paid back. >> host: the end of 2007 the economy looked very weak and the

fed began taking action other tentatively at first and then more aggressively and did it rather unusual things to get liquidity to the banks. but even then bernanke did not have the whole board or open market committee behind him. do you want to talk about what he was against? >> guest: that's true. as you know the fed chairman is very powerful but not all powerful and bernanke didn't have anywhere near the clout on the committee that greenspan had at the end of his -- >> host: at the end. >> guest: right, takes a while. greenspan had the job for 19 years. it's hard to imagine ben bernanke doing his job 19 years or am i sure that's good for the country frankly. the federal reserve policy committee is when fully stocked 19 people. the presidents of 12, regional fred banks and seven governors

including the chairman in washington, and the chairman could only go so far without the committee behind him and there are a number of people in the committee who was then and now think that if you do too much to help the economy you get on welcomed inflation and the fed ought to err on the other side and there are also people who are very uncomfortable with the way bernanke used the money in other words bear stearns or aig -- >> host: too much feeling out. >> guest: and so he had to work hard to convince them that this was really one of those once in a 50 year even as that required once in every 50 years medicine and some of them are still skeptical. some of them think that this was a mistake and had for instance he not been so beautiful to bailout bear stearns and bear stearns had gone bankrupt we might have had a smaller crisis. >> host: let's come to bear stearns. you say in the book there was before bear stearns and after bear stearns, and now we are in

the early 2008. why was that so significant? >> guest: so in january 2008 the fed cuts interest rates buy quite a bit, 1.5 percentage points in a matter of days. pos could you describe that as an bernanke weeks up. >> guest: and then i think dan bernanke brings a sigh of relief and thinks we are ahead of this and then they are kind of surprised by the bear stearns episode. i think it's significant for two respects. one is it happened and institutions that had collateral which had some problems but had collateral couldn't borrow short-term. >> host: let's be clear it wasn't a commercial bank with deposits. it wasn't really an institution for which the fed felt responsibility. >> guest: the first thing is it happened. bear stearns was in trouble and that was a surprise. bernanke judged it was a surprise for which the markets were not ready and hank paulson

at the treasury and tim geithner at the fed agreed and then secondly the fed decided as you point out quite rightly to help a bank for which it had not been responsible it was not supervising, didn't know a whole lot about it and it uses extraordinary power that had been given to the san in the 1930's but not used since to land to almost anybody in circumstances that in the fed opinion without checking with congress or the treasury of the president are deemed to be unusual and the reason i did a story in the journal that used that before and after bear stearns because it was a red letter day and if you talk to people there been bernanke, don call, long-term german they were crossing a river they had always avoided before and frankly i thought as a reporter who covered the fed it is never going to get more interesting than this. this will be the big event. that is when i started to write

the book. i was naive to go to the other point not singing this was coming. it never occurred to me that i was in the foothills of the crisis and we still had the himalayas. >> host: was bear stearns to big to fail or two interconnected to fail? why was it so important? >> guest: it wasn't that big which is one of the troubling things. it wasn't one of the big houses. it was interconnected but we didn't know what interconnected was until we got to aig leader in the drama. but i think it was such a startling thing the world has grown, the markets evolve to the point there were lots of institutions that depended on lots of short term borrowing and i think the fear was if bear stearns when bear stearns couldn't borrow short term if they failed that everybody would be in trouble and nobody would be able to borrow short term and

all the banks would seize up and so i think that was the judgment they made that the bad things came from bailing them out, the notion people on wall street would do the fed will always be there were outweighed by the shock that would have happened if the field. >> host: what they had to do was take pretty toxic assets and lend the money to another bank, jpmorgan chase to rescue, have them rescue barras terms. >> guest: basically $30 billion. $30 billion of money which is our money used to subsidize the purchase of bear stearns by jpmorgan chase and in return the fed got its characterizes alone but as you know it looks like a purchase. if it goes up and get the money and it goes down the lose money and they are managing this portfolio of $30 billion worth of stuff that nobody else wants.

>> host: her right. and i guess i have to confess when i was at the fed i don't know if i ever heard of this emergency provision 13-3 whatever it is. but i certainly never focused on it. >> guest: i knew only because my colleague who covered the fed with me at the journal and is now at the economist when an editor of new york would say there's a rumor the fed is going to lead to this company or that company gregg would always respond they haven't done that for a long time and it would take a vote of five governors to do it so i wouldn't have known about it either if greg had and have taught me about it. host koza then disaster upon disaster. there was the rescue of fannie and freddie mac's and bernanke was participating in all of these things and then there was lehman brothers, which was in some ways like bear stearns.

it was also an investment bank. but they let it fail. why did they do that? >> guest: the first thing important i think as they wasted the time between march and september between the restaurants and lehman. they didn't do the fannie and freddie thing and that was preoccupying and people disagree and argue about whether they did that the right way but they did something. >> host: they had to do it. >> guest: the question is whether they could have -- the sali problem, had a planned and executed it. they didn't get ready for another bear stearns. they didn't go to congress and say we don't have enough power, we don't have enough money get the equipment we need to cope with a fire like this again. they say to paulson and bernanke we would have been turned down the election year and that would have been worse than asking all but neither do the prepared internally what do we do if this happens again. there is a little discussion about options but not really a lot so they are not well prepared for lehman brothers. lehman brothers gets into trouble, paulson and some extent

bernanke are reluctant to do another bear stearns. they both been pummeled by their colleagues for bailing out bear stearns. >> host: and by the public. >> guest: and by the public and they say there are three issues here. one, wall street shouldn't count on us to deal everybody out. number two, the markets know that the man is in trouble, and number three, we don't -- lehman is in such bad shape they don't have enough collateral security to offer the fed alone big enough to keep them going so they say let's do bear stearns i can only this time see if we can get wall street for its own self-interest to subsidize the deal. that's when they call everybody together the new york fed and they also managed to get wall street to put money on the table and they find a buyer. barclays, the british bank. unfortunately the british government doesn't let it happen and they get to this point where they don't have any alternative they think -- >> host: very late in the game. >> guest: history would be totally different if the british

government had let them go through and barclays had been able to bank lehman brothers. it might have been a catastrophe later. i'm not saying this wasn't the only problem. we now know that the economy was slowing precipitously at the time that lehman was going down but i think that they made in this calculation. and bernanke and paulson dropped the notion that they somehow wanted to try a failure. they don't mention that anymore. they rely exclusively on the legal argument they didn't have the power to do it but i find most people don't believe it. they think the fed managed to stretched the law every other day except that one but it's worth remembering the editorial pages on monday the monday after the weekend praised them for letting the men go. it was in the aftermath and the few days afterwards that it turned out that they had expected some ripples but not the tsunami. the markets did not anticipate -- >> host: what happened? >> guest: lehman brothers goes

into bankruptcy, a lot of news and then a couple of things happen. one is that the fed and the treasury figured the money market funds, these mutual funds that take deposits from people are not in short usually and the use it to buy short-term ious from places like lehman or industrial companies. they fought certainly it's been so much publicity about lehman of the money market funds would still have money. a big one date and it had to admit that it couldn't pay back the people who put the money on 100 cents on the dollar so that triggered 19th century style from on the money market funds. the around the world what happened is people said if the u.s. government will let lehman fail who knows who might go last. and banks refuse to lend to each other because they were not sure who else has problems we don't see. so the financial system, we never found a great metaphor or

the right metaphor. it sees is out, the wheels stop turning and a freeze is and that's when bernanke becomes the hero. >> host: we have to leave it there for a moment and mid crisis to take a short break and come back to continue this story and we will come back to that point. and what happened next.

>> host: back again we are talking about your book "in fed we trust" bin bernanke's war other great panic and we were in a panic when we took a break. it was a bad moment when whether by design or accident whole history ben bernanke tim geithner dennett the new york fed and hank paulson at the

treasury lehman fail, and the consequences were dire and almost immediately they were faced with another giant. aig. is and even a bank or investment bank. it's an insurance company. and what was the fed doing buying an insurance company? i used to have a fantasy back when i was at the fed if somebody in this staff walked into my office and said i think we ought to buy a large failing insurance company -- [laughter] -- what would i have said? >> guest: i think there was quite a bit of that in the fed at the time. so bear stearns and lehman brothers are kind of second cousins in the banks and the fed understood the business they were in. they really did not see aig coming. aig is a terrible illustration

how firms can exploit loopholes in our financial regulation. aig, which is a fascinating history of its own at this point is a series of very strong insurance companies on top of which has been built a casino and the casino is where people are betting on the default of other companies and it turns out that they've taken a lot of bets that the house doesn't have enough money to pay off the people who placed bets. >> host: because they were counting on the good credit rating of the insurance company basically and when they lost that they were in trouble. >> guest: they couldn't borrow money to pay things off and they hadn't set aside enough money and their counterparties, the people who placed the vets were every big name in banking you could think of, goldman sachs, deutsche bank all of them. and from what i know, it was only on the friday before that weekend that they realized aig might actually be a problem and i discovered in the book how tim geithner as a quick course on

the insurance law, what happens when an insurance company goes under and they negotiate with the new york insurance commissioner can they take money from insurance companies and give it to the parent to pay off some of the bettors and they hire a couple of big investment banks, jpmorgan and goldman sachs to see if they can raise money for aig but it becomes clear in the wake of the lehman brothers this is not going to work. that this outfit is about to go under and the other banks are saying we want our money from these guys and it has all the earmarks so they swallow very hard. bernanke says this is the one the most help reached about when they spend $85 billion now well over twice nearly three times bear stearns, just a matter of months to bailout aig and basically take ownership and this time there's no hope of getting anybody else to do it. the taxpayers through the fed get 80% interest effectively. they fire the ceo and their plan is maybe we can solve the pieces

and pay ourselves back but the disaster is so great that hasn't happened. >> host: so they still own it. >> guest: they still own it and it's hard to manage. the government is not equipped to manage this well and as you know it's the gift that keeps on giving you stomach pains. we now know that at that time there was some consideration of saying to goldman sachs and the deutsche bank and everybody like that we can't pay 100 cents on the dollar. everyone is quick to have to take a little bit of a hit. they decide they are not able to do that unless the banks acquiesce surprisingly. the banks decide they would like 100 cents on the dollar and geithner and paulson and bernanke decide to pay 100 cents on the dollar and that a year later is causing quite a bit of at title among the public who wants to know why did the bond holders at washington mutual get hurt and preferred shareholders of fannie mae and freddie mac and all the workers at gm have to give up staff but aig's

counterparties -- >> host: not to mention all the people who lost their jobs. >> guest: somehow it was too important for goldman sachs to get less than 100 cents on the dollar or deutsche bank so there's a lot of resentment. >> host: and added to that it turned out that aig had promised bonuses to the very people who were running the operation you described as a casino and making a lot of money on this casino and a promised these bonuses and authorities once they owned the decided it was a contract and they had to pay them. but that further outraged -- a lot of people including need. >> guest: there's a lot of things to get outraged about. the only thing i would say in the defense of the people making the decisions that week is it was kind of a busy week, and i have no doubt if they had had another ten days to think about what is the best way to do the aig thing that they might have

found a way to avoid some of the things that got us so angry. but this is a little bit like a military campaign, world war to think where you've got battle's going in every continent, and so more than most people i guess i cut them some slack for having made decisions that a year later we can see we are not optimal but they definitely had some people got rich off of this and some of the people that got rich are people that in my opinion have caused the crisis. >> host: yes and that is going to be a continuing argument for a very long time and cause a lot of people on main street as they say and people who've lost their jobs feeling we got a raw deal. >> guest: i think a lot of americans think that wall street got bailed out and they didn't come and they have a substantial number of facts on their side. stock market is up, the banks have enough money to pay back the government, bonuses are back

on wall street and we have still 10% unemployment and no prospect of returning to anything that we would consider normal for years to come. >> host: the argument to be made in the defense of those taking these actions is if we hadn't done that it would have been worse. >> guest: i really admire barney frank for his ability to come up with the right one later at the right time. nobody else in washington has that ability in the matters of financial. he had a bunch of economists perform and he said he envied them because they had available to them the counterfactual. they could say if this hadn't happened that wouldn't have happened and so forth. and he said politicians don't have this luxury. nobody ever got elected with a slogan it could have been worse. it would have been worse without me. and in a sense ben bernanke's problem is if you hung a banner from the federal reserve today and it were honest that is what it would say.

it could have been worse. >> host: it could have been much worse. >> guest: and that isn't very comforting. >> host: come to that now because up to this point they were just fighting fires, sending of the advancing army in different parts of the battlefield and one institution after another was going down. and not surprisingly and perhaps belatedly they decided we'd better have a coordinated strategy here. and they came up with this thing, they being bernanke and paulson and also geithner, called the t.a.r.p., the toxic gas at -- >> guest: troubled -- >> host: troubled assets. troubled asset recovery program. [laughter] they went to call the nurse and got a lot of money to make a general solution to the problems

and try to prevent any more institutions from going down. they had to scare the congress to get the money. talking little bit about that. >> guest: after aig, bernanke says he doesn't think the fed can keep doing this. the fire is getting too big for the fed to put out and paulson comes to the same realization and they decide they have to go to congress. this is something paulson has been trying to avoid. he's more comfortable having the fed do this and go to the congress and beg for money. totally irrational. so he and bernanke, no sign of the president, go to capitol hill, meet with the leaders and bernanke does scare the hell out of them. bernanke invokes the great depression and says it is off to them to stop it and he says he is known for some time they are going to need taxpayer money and every other banking crisis eventually taxpayers come in and help rebuild the foundation of the bank's and i think he makes

the judgment that the only way to get the congress to act is to tell them that the world will end if they don't act and it is a high risk think because as you know congress initially says no the house rejects the bill and it's kind of like he told us the world would end if we don't do this and then they don't do it so i think there was a great deal of damage done and even worse, they told congress they are going to use the money for one thing and the use it for something else and there i think they hurt their own credibility with the public and markets that hurt in the months to follow. >> host: they went with an incomplete plan that we need to buy these troubled assets. but they couldn't figure out how they were going to do that and they didn't explain it to the congress and in the and they didn't do that. >> guest: correct. >> guest: i think bernanke's view is this may not work and we should be prepared to use taxpayer money to buy shares in the banks and his concern was as long as the law is written broadly enough so that we can do

that i'm not going to make a fuss. but paulson and what i think was a real communications mistake only says our plan is to use this to buy assets from the banks lousy if loans at the bank but he dumps on the idea putting money in the banks of buying shares in the banks so he seems to close the door on something that actually within days they end up doing and that is never good in a crisis or any other time. >> host: possible was not very experienced in political matters went up with what i remember as a one or two page description of what they were going to do which the congress found insulting. >> guest: the treasury view on this their position is, crystal balls don't try to write the law. just tell when you need and let us write much the way president obama has done on the health care. where i think they made a huge mistake is okay if that is what you're going to do you should write a letter and say i need

your help and these are the objectives. instead they write something that looks like a law and looks like a grant of almost unlimited authority to the treasury and even says no court shall ever be able to oversee the sand as if there was a tactical mistake and it blew up in their face and i think it does reflect a bit of paulson's in experience dealing with congress. i think he was used to doing deals, getting things done. >> host: and this was his opening offer. >> guest: it didn't play well and i think it hurt them because you still here today they said they were going to by the toxic assets and they didn't do it. why didn't they and i can imagine other treasury secretaries who might have handled that with somewhat more agility and bought themselves less trouble. >> host: with the did do is buy shares in the bank's, and the banks didn't all want to go along with this actually. they had to persuade them to take it. why was that?

>> guest: i think one of the things interesting here that goes to the aig lehman or aig thing it doesn't matter what your legal powers or if it is a big enough crisis and the chairman of the federal reserve and treasury secretary stare at you across the table and say you need to do this for the good of the country that even the mighty bankers on wall street will do it and in this case they did. i think they knew that a couple of things. one, they knew the system was in trouble. they knew that some of their colleagues were very weak and needed the government money. and these are believed or acquiesced on the view if the government only put money in the weak banks that will identify those banks as being in trouble. >> host: that is the reason. >> guest: and so, in order to get the banks to dewitt, paulson gave them a pretty generous deal. the money was not expensive by what the market terms, and they were not a lot of strings some of which came back to haunt the treasury leader. but i think we know a little bit more now than we did at the time

most of the big banks have not pay back the loan and so, the combination of putting capital into the banks and then the obama administration stress test which we made fun of, this business of sort of putting the banks through an exercise, what if exercised, what if the economy were bad, how many losses would you have and how much capital do you need against those losses, that exercise we ridiculed which we thought was a stunt of some kind, that turned out to work pretty well and it has allowed the banks to begin to raise capital privately so they can pay back the government. so, i think that there are a lot of things they did that you can say in retrospect might have been in the sticks and other unstated including initial terms of putting capital into the banks which you can save the had done it differently it might have been better. but when you look at the package putting capital into the banks, the stress test and getting banks to raise capital privately

it looks about as good as you can help. it looks as intended. >> host: meanwhile there is a monetary policy which is what the fed normally does. [laughter] >> guest: the good old days. >> host: the good old days. in an economy that was collapsing, and in plant and going up and -- on employment going up and bernanke came back to the colleagues of the open market committee that does these things and says we've got to keep going down to zero and they did and they are still there. why did they do that? >> guest: well, i think that the way the fans usually deals with a slow economy is to cut interest rates so it's easier for people to borrow and the five said they thought they learned from the past from japan and from the 30's is when things are bad the fed has to do a lot, and its foot on the accelerator. as you know they didn't stop there. once they raced to zero they

kept going and found other ways to put credit to the economy. buying securities in the markets to put money out there. so this is a grand experiment and frankly we do not yet know how this is going to turn out. some people think this hasn't worked so well but given the amount of credit the fed put in the economy would have expected the economy to be doing better. other people think they put so much and we are inevitably going to get out big of inflation at the end of this chapter. i don't know what the answer is, but i do know that they did some things -- they thought about them but they realized they were taking big risks both economic and political risks and they did then because they felt the alternative was worse, risking another great depression. >> host: a real catastrophe. now your story in this in the summer of 09 last summer when it's still not clear the recession is over although it looks a little bit better now

than i did at the time you took the book off and said i can't keep writing. >> guest: i barely made it to the summer. it cannot and august. i think i made through march. >> host: at that time, economists were saying we are hoping to see positive growth by the end of the calendar 09. but a lot of people were skeptical about what was possible. but it has now happened. do you regard this as evidence that something is working here? >> guest: yet i think so. we had a big dose of fiscal stimulus. some of which hasn't been spent but the 787 billion-dollar fiscal stimulus and a good chunk of it has come out and that is helped some. i think the monetary policy has helped, and i think that a number of the other lending things the fed has done has helped on the margins. and there is kind of license a deep sigh of relief in the

economy that okay it's not going to be the catastrophe. so, things are going the right direction but they are going the right direction so slowly that it still feels pretty painful. >> host: there's an awful lot of people, although last month the unemployment rate didn't rise and that maybe is good news. >> guest: we lost -- it is amazing that we can basically take out the champagne because we only lost 11,000 jobs last month. >> host: we haven't gained any yet. >> guest: it is quite to take months of two or 300,000 jobs a month to get back to where we were before. so i -- what i usually say is the economy is out of intensive care. it's not healthy it but it's out of intensive care and that's better than being in the cemetery. >> host: about the banking system? there is still a lot of concern about some of the big banks more particularly about a lot of

middle sized and smaller banks all around the country especially the ones called commercial realistic because people are not building buildings in the mall anymore. this could is a huge problem this is a rolling crisis. the big banks seem to be getting their act together. some more than others but as i say even citibank is raising capital privately and the concern is moved to smaller banks and midsize banks that have lots of loans and commercial real estate which is collapsed and that means they are taking big losses and we've lost 130 banks so far most of them but not all of them small and we are probably going to lose more but more seriously that these are institutions that lend to businesses who don't have a lot of options for getting money. very big companies of the banks won't lend money they can sell securities on the capitol markets. but small businesses and medium businesses often can't and i think where it is particularly

important is if you've been a longtime customer at the bank goes under or is sold to somebody else even if you are a good credit the new bank may not understand what you do it may be reluctant to lend you money. >> host: if it's on the edge it is pulling back your credit even though you have done nothing wrong. >> guest: that is a huge problem and i know that you know better than i because i heard you talk about it, the recession are arrived late, state and local government but it's there with full force and there's absolutely no reason to believe things are going to get better for state and local governments. which are not only important part of our government but an important part of our economy. one in every 11 american workers works for local government and the recession isn't over in their records. >> host: we've had a catastrophe in the economy which isn't over yet and its worldwide. we aren't even talking about the people who lost their jobs in other countries. started here in our financial system. have we learned the lessons that

will prevent this from happening again? >> guest: i don't think so. i think that there are some things we have learned and i suspect it's a lot harder to get subprime mortgages to can't prove you have an income today at least for awhile. >> host: or anybody working. >> guest: that's the other part. but i think we are now not in a very good stage. there's a lot of anchor and a lot of rhetoric about beating up on wall street and on the fed or whoever else you think is responsible which is understandable and inevitable in democracy and i'm glad we have the right to do it but there is little consensus what repairs me to be made to the financial system in order to prevent a repeat of this and so the treasury and fed today do not have any more authority to deal with the collapsing financial institution likely members or aig did they did 15 months ago. they have a choice, bankruptcy

likely and brothers were bailed out like aig. and the one thing they've been asking for and seems to me to be obviously needed is a way to close these institutions so that if we do have another crisis they can do it in a more orderly manner that doesn't put the taxpayers on the hook. all the other things are -- it is hard to figure out and there's one set of people who says we shouldn't rush to judgment. they will overregulated and have unintended consequences if we move too fast. the other set of people say congress on the act in a crisis. we know there's things wrong with our financial regulatory regime. if we don't act now the crisis is already fading from the memory and they will never act and so far nothing much has happened. the bill has passed the house but it's not going to the senate. >> host: what hasn't but there is a bill in the senate and there is hope that something will happen but it's not clear exactly what although one of the things you mentioned, the resolution authority, some powers to close on banks the way

the fdic can close down a bank i think there is reasonable consensus but they haven't done it yet. >> guest: and there's consensus on a less consensus that seems to be at least among the democrats a sense of consumer regulation of to be at a independent agency. there is less sense of what the rules of the game should be going forward and who should enforce them. should the fed have a bigger or smaller role and there's also quite a bit interesting motion at the international level about coming up with a new set of rules for the banks about how they behave. and where i see there is a great deal of consensus on the big picture stuff which is important, but i am wondering whether they will be able to come to consensus on the details of what was or because banks in germany, france, the u.k., u.s., japan are all somewhat different and the government stand to want to tilt the playing field in the reduction and the battle usually prolongs things. it took 12 years to get the last

one. so, there is certainly a lot of smoke. there's a lot of talk about this and that's better than not. there's not much urgency to get this fixed. >> host: that is right. one thing that seems to be happening with all the major countries is controls on the executive compensation at first hour bankers were saying if they cut costs we will go overseas. but now the brits and french and maybe the germans and others are also putting controls in. >> guest: i think the question there is so there's an interesting question what extent compensation costs this thing. and there's new rules about to be written so bankers can't take the big profits, drive the banks into the ditch and have the taxpayers feel them out. there's another question whether we people and finance too much

and -- >> host: most of us would say yes to that but it's a little bit like ballplayers. how do you fix that. >> guest: right. what this easier to beat up on the taxation because it covers the fact they are not doing -- can't come to terms with the others so if all we did was fixed compensation, limit their pay or set up new rules i don't think that would be very good. so in the u.k. for instance it's almost like they want to talk about bonuses than anything else had and so they can argue about bonuses and so it plays well but i would hope that it is in service of a broad fix to the system because there is an awful lot of things clearly broken and we can't fix everything but we can at least fix the things we know are broken. >> host: i think to make the case well in this book that the system was working and was

working in a lot of dimensions. it's not that this is here is the single cause. there were a lot of causes and there will have to be a lot of remedies. let me ask you before we end about the choice of the word panic which is in your title. you call it the great panic. now i associate the word panic with of the panic of 07 or 1837. is that a word we've used recently? why did you pick it? >> guest: i picked it for exactly that reason. i think this is more like the panic of 1907 before the fed was created when jpmorgan himself, the man served his function. it's more like that than what we have seen since. a panicked is when there's loss of confidence in the whole financial system and it reduced its to take their money in because you are afraid you can't trust anybody with a. so that is basically my diagnosis of what it is and it

is a deliberate harkening back to those earlier periods of instability and chaos that lead, chris that the fed was created to do the world they are doing now. >> host: even in this panic. guess we thought all they did was move interest rates. >> host: and that is what they did for a long time the easy times. [laughter] so i think we are out of time. >> guest: thank you. it has been a pleasure.

now history professor linda gordon recalls the life of depression era document three photographer dorothea lange. the leon levy center for biography of the city university of new york graduate center hosts this hour-long event.

>> this book was my first biography and i think it will be my last. [laughter] biographies are too hard to write. i've actually a social political historian masquerading as a biographer, and i've learned my book belongs to a category called the life and times category of biography. and in fact when i began my fault the times would dominate, that the book would focus on the political and social culture of the depression, world war ii, the cold war, and that the life would be a mere illustration. that was not to be. all that history is in the book but dorothea lange is the star of the story with her first forceful personality she moved into the driver's seat and in a sense took charge although i spent time arguing with her

back-and-forth over quite a number of years. of course she didn't write the book. a biography is always got to be one life seen through another life in this case, line. although i had written a great deal about gender this biography forced me to examine more closely how gender works in the life of an individual. and this lecture for which i'm grateful for a number of reasons forced me the chance to look back and spell out what i was doing and let me warn you are telling you that what i'm about to say wasn't in the book at all, which is kind of a meditation after the fact about the book. now, thinking about this issue of gender was particularly complex because i was writing about an artist and because an artist's work lives after her.

it was produced in one context but it takes on new meanings and whenever context people than see a leader. no matter how stringently we try to exclude contemporary manning's the intrude. so, and thinking about this as well as writing the book i had to try to retain a kind of double awareness. about the past, the purpose of which dorothea lange live and also the present. now i make the observations about gender against her will. she was no feminist and she did not want to have her work discussed in gender categories. she wanted to be a great photographer. she did want to be a great woman photographer. but historians should not necessarily try to please their subjects. so i am doing it any way. there are several things to win going to talk about. i'm going to talk about the

personal, the social and political and what is in the photographs as we see them today. but i'm going to start with the personal. a middle class child of a german immigrant parents born in hoboken and 1895. very middle class life until to traumas and when she was sick and she got polio. when she was well, her parents separated. the physical experience of polio was certainly painful and terrifying and she emerged with a permanent and small disability. but she was deeply upset by her father's departure from household. but the biggest blow negative were how they were assimilated and understood by the yondah speed and in this regard her mother's influence was key. her mother was embarrassed by her disfigured foot and lower leg and heard lamp and she urged her always to try to disguise them as much as possible.

in this way even her polio experience was gendered because her mother had such anxiety about what her body would look like. when skirts got shorter, she began to wear slacks which was unusual and not at all fashionable at the time. she never again wore a skirt that was less than floor length. as an adult photographer, she made many, many images of feet and legs and with her typical magic she could make photographs of just feet enormously expensive. her mother also presented the marital separation to her as a desertion, and abandonment by their father although i learned that in fact it was actually more mutual and more ambiguous. i won't go into that story. it's in the book but the point is that the dorothea felt abandoned because this is how her mother felt.

she developed such region against her father that when she of life in san francisco in 1918, and where she was to spend the rest of her life she adopted her mother's maiden name which was lange or lana and she never mentioned her father to anyone including her two husbands, her children and best friends. so her experience of these childhood blows along with her identity but that didn't make her response determine or predictable. she was born with an assertive temperament. another girl might have used a similar experience as quite differently. from age 12 she did the practice of wandering alone the streets of new york first lower east side where she attended middle school and in the upper west side where she attended high school and the entire island of manhattan. she may have had a limp but she was extraordinarily strong. this will occur in the city was

also self-taught. a mediocre student in school. she didn't attend university but she discovered on her own the modernist art that was then blossoming and new york. she taught herself photography by taking jobs her first was in one of those chain of portrait studios where she made cold calls to people trying to sell them portraits. she worked as a receptionist at various photography studios and basically gain on her own fees for the graphics skills. one of the people she worked for was a very noted photographer by the name of arnold, a german-american, and he thought she was very talented and gave her a cast off camera. excuse me. i should have shown that earlier.

that is dorothea and her younger brother. i figured it was given to me by a descendant, i figure she might be between eight and ten in that picture. she moved to san francisco in 1918 and opened a photography studio in an upscale location within two years she had become the portrait photographer for san francisco's wealthy art patrons. this high velocity success the right to think from the conjunction of her charismatic personality and a kind of modernist visual sophistication. at first she used as you see here at the top picture the romantic victorial list style that dominated the 1920's. but she soon began to modernize these pictorial conventions incidently for those of you that know anything about san francisco history the man at the bottom is mortimer, one of the most powerful men