sort of the future of warfare, including the latest contribution to that, his book wired for war, the robotics revolution and conflict in the 21st century. without further ado i would like each of the authors to talk about the books and give you an overview for 10 minutes each and then it is. [booing] to questions the floor. >> i want to reiterate his welcome coming out on a beautiful day like today to talk about a somewhat unpleasant subject. .. american, man, woman and child. in the 12 years since then their

organization al qaeda which means the base in arabic, has waged a campaign of terror and carnage across five continents. from indonesia to washington, d.c., to new york, to london, to madrid, to virtually every city in the islamic world this organization has carried out dozens of gruesome terrorist attacks. it has become today the world's first truly global terrorist organization. and has headquarters somewhere in the mountains along the pakistan-afghanistan border. it has franchises in different parts of the islamic world and yemen and iraq and north africa and southeast asia. it has support in the terrorist operations throughout most of the most muslim diaz. the last year we have seen those cells in the united states.

for example the attack on fort hood. and it continues to wage what it calls raides on america. it was foiled last christmas but we can certain that is not the end of them. the first rule of the war is to know your enemy. and surprisingly we don't know very much about our enemy and we haven't devoted the attention and resources. in the cold war we build institutions of higher learning and across the united states of america estes' study the soviet china. but we haven't devoted the same kind of effort to understand the enemy we face today. when we retire from the cia three years ago i try to fill the gap and that is the search for al qaeda is all about. not to give a better understanding for americans and people beyond america as well, the nature of the enemy we face. why do they hate us, why do they attack, who are their leaders,

what are their strong points and what are their folder of the lease? now a book written about a bunch of murders hiding all the other side of the plan that who don't give a lot of interviews to journalists or academics and you really don't want to do an interview with them given their declaration they are going to kill every american they can find is a bit of a daunting task. the research for this book had to be a little bit unusual. fortunately they are not bashful. if anything they are quite eager to put their story out. in the ten years since september 11th to have put all scores of audio tapes and videotapes and several books explaining why it is they do what they do and what their intentions are. these are not easy to read books. they are filled with illusion to islamic history and filled with allusions to the koran and you have to have a good reference

point to figure out where they are going. but if you have that they tell a very clear story and give you a pretty clear statement of what their ideology is and what their narrative of history is. i've read all of those and in addition to that i try my best to interview people who over the years had an opportunity to meet was among the latin word al-zawahiri and deal with the other characters in al qaeda like zarqawi, the late leader of al qaeda and iraq. this gave me the opportunity to interview people like prince turki the head of saudi intelligence. for the indian foreign minister who dealt with al qaeda when the hijacked an indian jetliner in 1999. these interviews were a significant way of supplementing the record from al qaeda itself. i think, i hope what emerges from that is a relatively clear

and incisive analysis of what al qaeda is, where it came from and where it is going. it's organized around four biographies. osama bin laden, a al-zawahiri, zarqawi and mullah omar, the head of the taliban. the man who is leading the war against us in afghanistan today. i try also at the end to give some recommendations on how to proceed forward. we need a policy to deal with al qaeda that goes after its and every aspect of the uses smart weapons and putting drones to target the leadership. but also uses smart weapons in the battle of ideas. in order to wage the struggle for the hearts and minds of the islamic world. it is a nexus, it is a synergy of different strategies that had to be brought together in order to defeat this enemy. and of course we have to do it in a way in which we keep our

heads sober. we need to ensure that we don't overreact, but we don't panic, that we maintain our civil liberties and freedoms here at home. at the end of the day, al qaeda is a very serious threat to the united states of america. but let's keep it in proportion. al qaeda is not nazi germany. the controls all of europe. it's not the soviet union that has thousands upon thousands of nuclear weapons trained at the united states. it is a relatively small group of fanatics who are determined to attack this country but i think if we keep in proportion the nature of the threat we can come up with the strategies in order to defeat it. thank you. >> thanks. shane? >> thank you again for coming and to the school for hosting us. this is a fabulous event and i am honored to be here. my book is the watchers the rise

of america's surveillance state and i thought i would try to give you a sort of sense of the sweep up the story because it is the work of narrative on fiction that takes place over a 25 year period roughly from october of 2003 to early -- i'm sorry, 1983, to early 2009. and it covers a lot of ground in the area of digital surveillance on electronic surveillance, people in government trying to build computer systems to organize information in order to predict the future essentially. but i thought it was worth giving background how i came to write the book and all i ever by the sort of central figure in a rather unlikely hero of the narrative who happens to be one of the most that serious political figures of the past quarter century and that is retired admiral john poindexter many of you will know from his central role in the iran contra affair in the 1980's and it's unlikely past to become the centerpiece of this book but just quickly i was a journalist

and 2,001 covering the sort of intersection of government and technology particularly in the intelligence community after ayman alzawahihi for a magazine in washington called government executives and very quickly a senior to after the attacks but the intelligence community and the law enforcement agencies had all of this information of al qaeda and these various silos and that none of it is being shared and correlated and one hand wasn't talking to the other and that this failure to connect the dots was one of the principal causes for this surprise attack on 9/11. they came forward with what they thought was the magic bullet of switching dee dee kissell the problem. see what we finally can't see and achieve a level of awareness of intelligence. and john poindexter had come back to government and charged at one of the main project is at the defense department. his background of course was an

navy man that he had a real proclivity going back to the 80's and it showed an aptitude for computers and design. he came up with a pretty much the defense project agency which is a pentagon futurist trust that he coined total information awareness to describe this system that would achieve what it is the watchers, the people i've read about in the book have been trying to do for years, gather the available intelligence there was about a particular organization or a particular threat and to analyze and predict the future. the thing that was remarkable about poindexter's idea which was not unique in terms of the people pitching these ideas at the time was that he wasn't just looking to go find information that was in government data bases. he proposed going beyond that and the rationale was if the hijackers on 9/11 were moving about in the united states before the attacks they were opening bank accounts and come

indicating, if they were renting apartments and cars and traveling around the were leading electronic footprints with every one of those actions that required the transaction in the digital ether and the government had to go out and find the data as well and harness it and of course this would probably require a rather radical rewrite of a privacy laws much less our concept what privacy and individual privacy meant in this information age. the second part of the plan that struck me as entirely novel at the time was the idea of using the very same technology he wanted to imply for sophisticated data mining or analysis if you like of regular people and to turn that system back on the government agents who were using it as a sort of constant i watching the watchers is the assistant whereby ideally any way it would be very difficult for anyone to the use this power system without being noticed and to use technology to build very strong privacy protections as well.

it was a fascinating idea on paper which might be highly in practical and legal the and suffer the outset from a disastrous public relations effort. to say the least john poindexter's role as the head of the project struck some as preposterous and scary and with the drove it to the public mind was a logo poindexter helped design for his new program that featured the pyramid from the back of a dollar bill on the united states that has a masonic heritage as well topped by a sort of all seeing all i testing a beam of light on the picture of the globe with the latin inscription knowledge is power around the edge of the ring. [laughter] poindexter didn't last long in this endeavor and i tried many times to get an interview with him unsuccessfully. i found out this was his friend bob rumsfeld basically said under no circumstances are you to get anywhere near a reporter

in your current role. ultimately i had a chance to meet him after he left government and through a series of sort of conversations we can to this agreement whereby i was going to start writing something about him, a profile perhaps for the magazine i was working on at the time about his life after government and what he had been trying to do and he said he would do this on one condition which is i had to come out to his house which is actually not too far away in suburban maryland here and agreed that all the interviews would be done over the course of several weeks lasting many hours each time and we were to record everything and it would be on the record. he considered this an onerous request which shows you how little he knows about journalists. i of course jumped at the chance and really we began a series of conversations the lasted the better part of the next four or five years probably close to 20 interviews in all and 14 exclusively for the book so began my version with john

poindexter. i mention this because it really does sort of form the heart and soul of the narrative character driven point of the book. poindexter is a figure that shows up in many parts of the book and just to give you very quickly the negative sketch he enters the scene not in 2001 but where the book begins in october of 1983 and the immediate aftermath of the terrorist bombing of the marine barracks. you'll remember they were there from president reagan as a peacekeeping force in lebanon. it was in the aftermath of that event that just like after 9/11 there was a sort of realization within the government that there were various clues about terrorism in the area that were pointing to some kind of spectacular event specifically targeted at the marines began all the information had been kept in silos so poindexter had been on this tool information awareness mission since 1983 and the book traces him in those early years and the iran contra

period he then of course exits' from the scene and then finds other watchers as well specifically a group of analysts working at a very low level intelligence unit in the army in the late 1990's and early 2000 which was working under the project name able danger using mcginn technology to going into the public information space and put together information to map out their global presence of al qaeda and the preceding year or year and have to 9/11 and it traces the experiences they had as well trying to understand this powerful new technology and its limits and inevitably the collision course it sets towards privacy and traditional notions of privacy and would it means to be able to go out as a government agent fishing around in the public information about threats when you have to look innocent people at the same time. the book finds its more present kind of narrative dahuk if you

like in third and fourth act where i look at the nationals to the agencies and what was wiretapping programs. you might remember in october 2001 president bush signed the than secret order which is technically still secret. we've never seen the text authorizing the national security agency to intercept phone calls and e-mail communications for international communications of americans suspected of a quote on quote next terrorism and to do this outside of the normal process and the book sort of explores that program which was a parallel of what john poindexter was doing with total reformation awareness in an unclassified way and goes into the interesting connections between those two programs and the pedigree they share and the charts out how the national security agency took over poindexter's primm when the congress pulled the public funding for it. and the conclusion of the book derives at that the watchers have been on the quest for 25 years to connect the dots 9/11

invention but they are not necessarily much better at making those connections and they were in 2001 or 1983 and ultimately the government has become very good at collecting information. gathering up lots of lots and is still not very good at connecting the dots. so the book sort of charts this out from the perspective of the walters themselves and casts of these people in less of a political light and more as a sort of a techno warrior geek on the mission that lasted the better part of a quarter-century and they are unified by this passion and was a remarkable thing to get to know them and spent time with them particularly poindexter and i think what you'll find in the book is a real story told of the ground through their eyes as opposed to what normally id which is stepping back as a journalist trying to give you that objective so if you read the book i hope you enjoy it and

find it entertaining and enlightening as well. thank you. >> thank you. peter? >> let me add things to the organizers. what i'd like to do is begin with a story from the book wired for war and for this you have to imagine yourself in iraq and i had a view alongside the road it looks like a piece of trash but that insurgent his head in that ied, that improvised explosive device with care. now by 2006 there were more than 2500 of these roadside bombs every single month in iraq and they're the leading cause of koschel to ease both among american soldiers as well as iraqi civilians. the team and that is hunting for this ied is called an explosive ordinance disposal team. if you see in the movie hurt walker that won the ward is about this team. in the difficult work the team will go out on just about 600 bomb calls. they will be asked to diffuse to

balms every day. the number that may be the better indicator of the value to the war effort though is the insurgents reported $50,000 bounty on the head of an dod trooper. cowal one of these american soldiers get $60,000. this particular bomb call would not end well. by the time the soldier got close enough to the device to see it was not a piece of trash, it was a bomb exploded. now you have to be as far away as a football field to escape death or injury from the blast coming at what speed and even if you are not hit the force of the explosion itself can break your limbs. the soldier though had been right on top of that bomb when it exploded so when the dust settled and the smoke cleared the team felt little left. so the might of the commander of the unit didn't the job and wrote a condolence letter back to the united states.

the apologize for not being done to bring that soldier home. they talked about how tough the loss was for the rest of the unit but then they tried to talk of the silver lining from the tragedy and this is what the road. quote, at least one a robot dog is you don't have to write a letter to its mother. that story is the story of the very first robot killed in action. it is the soldier was a 42-pound robot called a pac bought. the destination of the condolence letter was an office building outside of massachusetts and on the side it says i robot. it is a real company named after the fictional the offals and mosul group will smith movie [laughter] which robots start of doing daily chores and move on to making life and death decisions. and this concept of what happens when the techno cheeks go to war against the terrorists is something that fascinated me several years ago i set out on a

journey essentially to interview anyone and everyone working in this for all of robotics and war. was it like to be a scientist building these robots? what is it like for the science fiction authors since blaring of real world weapons down and a lot of them consult for the military. what's it like to be in the military, a 19 year old sitting in the fattah flying a plane over afghanistan? what is it like to be their commander, the politicians? how does it affect when and where we go to war, the opposite side with to the insurgents think about the robots, you and me sending robots to fight? the war of ids that bruce talked about. how is it being framed not just an hour media but in places like london, pakistan and finally the right and all of all of this. so interviews with officers in the military but also lawyers at places like human rights watch so they are gathering together all of those stories but what i

think is interesting is the stories shrine a light on the ripple effect playing out in everything from our politics to our law to ethics to how we fight the war. but i would like to do briefly is walk through where we stand right now with robotics and the questions coming out of it. these technologies, these predators, they seem like science fiction. but we need to remember that they are actually the very first generation of all of this. they are the equivalent of the model t ford that one of the wright brothers flyer and we are using them more than most people recognize. we have over 7,000 unmanned aerial systems in the military inventory that is up from a handful when we invaded iraq in 2003. we now have over all thousand on and grout robotics up from zero that the invasion force used during 2003. and of course we are arming them

and that gives the term killer app short for a killer application and entirely the meeting. this doesn't describe what the ipod did in the music industry with you more of a robot with everything from missiles to a machine gun attacks on a whole different set kids. and when people make the comparisons of where we stand right now they are pretty fascinating kenneth is a different comparison. bill gates found it microsoft where we are with robotics now is where we were with the computer around 1980. so with the people making darker comparison they say that we are where we were with the atomic bomb in the mid 1940's and incredibly elegant technology that is cutting edge but it's also a little bit like a genie that we are not going to be put back in the box. i think it is interested is some

of the ripple effects this technologies helm the world that we are starting to see robotics is having as well and that is a huge policy implication. one is the question of where is the unmanned military headed? i remember interviewing a u.s. air force captain out at centcom and he said the problem is and this is his quote it's not let's think this better it is only give me more. we've gone from using sere go to thousands of these in the blink of an on but we haven't figured out things like the doctrine how we use them in battle? which ones should we buy and not by? to something shane talked about how do you ensure the digital security of the weapons systems so that insurgents in iraq can't download your video, can't hack into your communications using a $30 piece of software that the bulk of the internet? true story, already happened. how we deal with the new stress

that these remote operators are dealing with? that is the risk combat stress and fatigue even when you are sitting out last vegas flying a plane 7,000 miles away. the second issue is one that bruce touched on but let's pull beyond that. are we engaged in three wars right now. iraq, afghanistan but also pakistan. that is we have carried out three times as many robotic air strikes into pakistan as we did in the opening round of the kosovo war but we don't call it eight war, we don't view it as a war. why is that? is it because congress hasn't had a vote to support or go against it? is it because it is being operated by the cia and not the u.s. air force? again you have had over right now we are at 119 airstrikes. or is it the fact that technology itself that we view it as costly so we don't have to think about it in the same way?

or is it the war is changing? of the third issue that comes out of it is something that ben has worked on as well which is how do our laws keep up with all of this change that is going on? this is a 21st century technology being used against 21st century actors in the war like al qaeda yet the prevailing wall the of the war date from the mid 1940's and i remember during an interview at human-rights watch asking them who do we hold accountable when for example predator strike goes are like and the leaders of the organization got an argument city and returned to the geneva convention of course and the other sit know that's not going to be useful we should turn to the star trek prime directive for guidance. [laughter] i love that but i can't call captain kirk as an expert witness in the real court of law. this coastal also questions of who can use these technologies

which is something that shane touched on as well which is the military is using them but so is the department of homeland security. so are the local departments, miami-dade commesso or the border militias, these vigilante groups. so have a group of fiefs. the point here is that we have questions before word of who can use this technology remember interviewing a district court judge and they said the question of who gets to use robotics and how is going to be a supreme court case because it touches on constitutional level questions of privacy and probable cause. in the last issue that i would raise that is a ripple affect out of this as will america go the way of commodore computers. that is if this is a technology that is on the level of the rise of automobiles or the rise of computers what does it mean that the united states is one of the few high-tech countries that does not have a national robotics strategy?

what does it mean we are ahead right now like the commodore computers but that there is 43 other nations that are building, buying and using military robotics? another way of framing the this is what does it mean to be sending out more weapons systems, more soldiers so to speak that have made in china written on the back and the software is increasingly being written by someone sitting in india. and indeed there are two points i would make out of this and all of these questions and all of these ripple effects we can't find the answers we can debate back and forth but we know the issue happening is the technology is moving up this incredible exponential pace and we've got to figure out how to keep up because the distance between the technology and human institutions is a growing greater at the second is everything i talked about totally sounds like science fiction. yet it is reality. it's not a futuristic.

it is in the present or even in the recent past of war so that is why it is exciting but also so interesting and fascinating and fumbles with a little bit scary. thank you. >> thanks very much. without further ado, let's go to questions if people have them. there is a microphone over there and the gentleman did not right now. >> good morning. i appreciate the area of expertise that he will represent. there is a big area that was not mentioned so i would like to address this to the floor and that is the area of cybersecurity because there are many areas of battleground if you will. certainly one of those if we haven't experienced it to a large degree yet and we

certainly have experienced to a lesser degree is a text via cybersecurity. so it can cause tremendous impact, tremendous damage from the entire network which means our overall system. i realize this is a black subject. i realize there's not much that can be said without violating security. i certainly don't want to push it over that edge. but i would like to see if you can address where you think we stand particularly not in offensive but in defense of scenario. >> none of the books in question have that as a central element. however, you are in luck because at least two of the panelists have fairly extensive expertise in cyber so shane and peter if you want to talk about that question by all means.

in my mind if there is a sequel to the watchers it is unfolding exactly what you are talking about. so i kind of divide this cyber threat if you want to talk about the defense side of it into two big categories. one is the risk that a nation state or other organization or terrorist group perhaps could actually use the cyberattack to disable systems that do things like control electric power facilities were that some of these are connected to the internet control facilities or disable some sort of critical infrastructure. the second category is what i would call sort of rampant cyber espionage directed mostly against the u.s. corporations by foreign elements largely an inch high and i think and russia in that feeling intellectual property from u.s. companies for the purpose of building up strategic economic advantage in the home country. in terms of what is the greater real threat right now i do think it is the second because i think it is happening all the time. the recent case of google coming

out and saying it had been hacked by groups in china is unlawful because google admitted that it happened because this kind of thing is happening every day and of course there were 30 other companies attacked allegedly in the same operation. had their intellectual property stolen as well. but the cyber war if you like in terms of what one state but to whether to disable this kind infrastructure i see as less of a threat because it hypothetically speaking as some people believe could happen the people's liberation army went and disabled a power system and major cities and we were able to authoritatively not legally but authoritatively say trace it back to china it with a pretty quick escalation of a full-scale war my kid i don't think china has an interest in doing that so i think there is a sense of mutually assured self destruction not necessarily because we would again to engage

in a counter toward -- counterpoint but a conventional war on anybody that tried that. but this is in my opinion eckert next vanguard of national security. this is the sort of next great frontier and we are just beginning to come to grips with the just total strategic shift and change that this was in place for the military, intelligence committee, foreign policy and for business and a very big way. >> peter, do you want to add to that? >> a couple of things. first is the introduction of the new weapons systems raises the stakes. that is it allows you to do things you could not do before and i call this we are entering an era of battles of persuasion where my goal is not just to destroy the enemy tank but if it is remotely operated as autonomous plight can accomplish michael simply by hacking into the communications taking over it so that i am persuading the tank to do something that its

operators don't. i imagine the old movie top gun. in top gun we call tom cruise and we say maverick rico and the american f-14 fighter jets as russian mig-29 and all of the russian mig-29s as american f-14s. tom cruise would tackle his weird laugh and say no way man but i can tell a digital system to reechoed american planes as enemy and in many plants as american and it will do that because it doesn't have that sense of awareness and so that is the idea of battles of persuasion. the second thing that comes out of this is the ease of penetration and actors that might do it. it's not just large state power and can be kids and this case that i cited of people using $30 software, literally it was software if it was originally

created to allow college students to legally download movies of the internet and the insurgents figured out hold it i can also use this to a legally download american surveillance footage of iraq of them trying to watch me. they were not able to control the drone. that is hollywood movie at that point but they were able to see what we were seeing. it is a lot like being a criminal able to listen to a police radio scanner, kind of useful to them and we would not want that out there. the third thing shane raised on cyber st al-awja and it's something that we are ahead now all robotics but one of the reasons we might fall behind is that and the example i talk about in my book is the leading if robotics company that is representatives go to the art show, the singapore our shows trading festival where you look at weapons and they go to one of the booths and see what of their robots there and they called the

head office and go we don't remember ever selling one of our robots to this certain asian and they are like no, we never have to read it is a cloned version. and so they all stalled the force of their labor to basically promoting. >> my question is for mr. riedel. i was wondering if you could say little about the relationship between abu musab al-zarqawi and al qaeda and also what you think about the phenomenon of local terrorists the emerging and aligning themselves with al qaeda. >> one of the chapters in the book is about abu musab al-zarqawi entitled the stranger. abu musab al-zarqawi was so violent, so brutal that even an al qaeda he was regarded as kind of pushing the edge and that is why they call him the stranger

at the end. zarqawi is a jordanian who got in trouble with a law in jordan growing up, he was involved in petty crime and drug addiction in things like that and was put in prison and was further radicalized. and in prison he discovered the speed line and he was influenced by several radical islamic sheiks who were also injured a knee and prisons. he then when he was released from prison in the general amnesty when the king hussein died went to afghanistan and started fighting in the afghan war as i would say an associate, not a member of al qaeda but an associate at al qaeda. he was more closely connected to the taliban in fact that he was two al qaeda at that time. he continued to have an interest

in the working outside of afghanistan against the the broad crusaders zionist enemy which refers to you and me and all of us and he was involved in 2000 in what is called the millennium ploch which was an attempt to stage simultaneously on three continents and terrorist attacks on the eve of the start of the current millennium. his attack was to take place in jordan and was to blow up a very large hotel in downtown called the radisson hotel as well as to attack several targets on the jordan river valley which are tourist facilities which he knew would be attracting western tourists. he was spoiled by jordanian intelligence at the last minute. after september 11th, abu musab al-zarqawi did something quite interesting. rather than going to pakistan like most of the rest did he went to iraq and he began

building and 2001 and in 2002 to infrastructure for a terrorist underground. we knew he was doing this. if you go back and we read secretary of state colin how will i would say infamous speech now to the united nations security council on why we went to the war in my back and why there were weapons of mass destruction he mentions zarqawi and the fact that this infrastructure was being built but i think we grossly underestimated the the director and the nature of what zarqawi had in mind. he had a very deadly plot. he was going to do two things, bob everybody else out of iraq, united nations, every other country that have a foreign mission, the international red cross, all of the non-governmental organizations that were essentials to try to rebuild the iraq after the american invasion and then leave us alone while they did the second part of the plot which was to incite hatred between the

shia and sunni arabs in iraq to create a civil war and he did that by going after the shia religious sites and major figures in iraq and we have to give the devil his due and he is the devil. he brilliantly succeeded over the course of three years he brought to the brink of civil war. he did it in such a violent way that he actually created a backlash against al qaeda and iraq that i think was the key to the success of the surge in the last several years. without this a violent backlash against al qaeda i don't think the surge would have succeeded. we were smart enough to take advantage of it. not only did he continue to carry out these attacks in iraq but he also went back to attack targets in jordan and in 2005 the radisson hotel was finally attacked. one of the bombers was a suicide female bomber who walked into a wedding party on the third floor

of the radisson hotel and blew it up to literally dozens of people at a wedding. that had a backlash, too. it the jordanian people who had seen zarqawi as a heroic figure now saw him for what he was. we finally tracked him down with the help of the jordanian intelligence service and others in the use of predators jones and were able to kill him in 2006. it's not the end of al qaeda and iraq but was a very serious blow to him. initially as i said zarqawi was an associate to al qaeda but by 2004 he became a fully declared member of al qaeda and pledged loyalty to osama bin laden and when he was killed he gave extensive eulogies and audio tapes but it's also clear from the record that even they thought he was a little bit too

extreme even for their taste and we have a remarkable document i referred to in the book which is a letter from ayman al-zawahihi, the number one in al qaeda, and it is a fascinating document because and it he is saying you are oregon and we are never going to question what you're doing what do you think is really smart to attack the majority of the shia population of the country? de think it is a bright idea to blow up mosques? you are in charge, but we have doubts. is a smart to be had people on television. don't you think the will cause a counter reaction? in this case he was right and zarqawi was wrong. it is a very important illustrative insight into how these franchises in different parts of the islamic world are built and developed by al qaeda and the relationship between

them. >> yes. >> picking up on admiral poindexter's plight that information is power. i would like to ask a question to any of you who would like to respond. since the nemesis in this case the jihadists have no land, no air force, no army but they are like metastasized cancer cells all over the western world is the fact that our intel apparently does not have a whole quarterly of language speakers in arabic and other necessary languages and they don't have penetration agents in the cells. has not the internet and our global lives an electronic world become their primary means of

communication and is surveillance of the internet the best way of protecting ourselves and our country. >> i think that the internet and chat rooms and the so-called jihadists website to become a primary means of communication and recruitment also now for terrorist groups. bruce i think can speak to more of the evolution of al qaeda, but it seems to me it is a revolutionary ideology that is finding new adherents and records by diffusing helped through these different kind of channels. one thing i can speak to is there is 88 ongoing within the government now that i think probably breaks out in the intelligence community and the defense department what to do with these channels. on the one hand they are a very potentially rich source of intelligence on what terrorists are saying, how they are recruiting people, where they are going, what they might want

to attack and what they are thinking and all the other hand it is in fact a tactical communications system that allows them to swap notes, treat you as the trade messages so there is a kind of constant tension between do we leave them up or take them down because we know how to take them down but as soon as we take them down they will pop-up someplace else so this is kind of something i think proves more tactically and strategically worked on the side but it seems to me the other panelists talked as well that is kind of where it is going next if you like and i think the government recognizes that and is quickly trying to figure out how to stay ahead of that evolution. >> definitely the al qaeda sees the internet world wide web as its means of communications not only to its own collaborators and cooperatives because they can hide messages and e-mails and they can use an encryption

but more importantly to spread the idea because al qaeda today is more than an organization. it is an idea, it is a concept of the global islamic jihad and uses the internet to radicalize those who will never have any face-to-face contact with. the nature of the killer at fort hood is a classic example. he radicalize himself on the internet and then he began to communicate with hegemony american clich using the internet again. then there is an ongoing war as shane indicated. i will give you an example. every september 11th since 2003, al qaeda issues a major statement, and anniversary statement. it's kind of the state of the jihad statement from al qaeda which it says here is what we've done the last. here's how things are going and what we plan to do in the year ahead in the broadest terms. in 2008 the statement was

delayed from being read by our intelligence community basically taking down the jihadists web sites and it turned up i think four days later when they finally got one of the sites up and operating. last year it was taken down and they were back up and operating four hours later. so this is an extensive war for the breast that's going on everyday. we have on our side the national security agency. i can't tell you how many people work there but if you have seen the building when you go up and down the expressway you know it has to be tens of thousands of people with you just look at the parking lot al qaeda i suspect has a handful of very smart pakistani i.t. kids probably in their 20s waging a the war against us. >> i'm going to say something maybe not the best setting a book festival to say but the

internet is the most important tool for spreading both knowledge and hate since the printing press and that is an indicator of a what i call revolutionary technology that it has a ripple affect beyond just it's near capability with the way it changes the way people think it changes the way people operate and raises very deep questions of fall and putting this issue of privacy and one of the misnomers that on a tackle in my book is how we have a perception of insurgents of terrorists as being in our guides hiding out in caves have no connection to modern technology and that iraq or afghanistan are words that don't involve technology yet there is a sophisticated back and forth. keep the example of the ied, the improvised explosive device,

even the an improvised, that is just kind of, it's not all that good. well actually in surgeons have come up with 90 different technological ways to exploit these because there is a constant back-and-forth. the jammers and the same thing in the delivery mechanisms and one of the new things we have seen is actually mobile ied is you did in iraq came across basically a badge and a ski board that was loaded up with explosives and so all of the tools that were designed for finding bombs buried along the side of the road suddenly don't work against what is a robotic in search and within and partisan again the spreading of this is the spreading of hate that my colleagues on the panel discussed but also the spreading of knowledge because when i invent this i can quickly share it with others and that is just a reality. i'm not saying it's just like the printing press was a force for good it created knowledge, it created the modern concept of

citizenship etc. it also led to the 30 years of war. the same thing the internet has the same sort of aaa that where it led to massive amounts of advancement and spread of knowledge but of course people use it also for darker deeds. >> are there other hon questions? >> if not i will give each of the panelists a moment to wrap up and then we will be -- they will be over on the left side of the room or from our left side, door right side citing books for the 15 minutes starting five minutes from now. bruseghin? >> again, think you for coming and i went to thank the organizers for coming to put together this event. i'm sorry we didn't have a somewhat more uplifting subject to talk about this morning. but we are engaged in a war that's been going on for 12 years and the impact of the country has been enormous and has led to two other war and may

lead to additional campaigns and other theaters. the financial cost has been in the trillions of dollars. the very structure of our government has been more transformed by this war than any since world war ii. we've created a whole new sectors, the department of homeland security, the national counterterrorism center, director of national intelligence the did not exist ten years ago. that's why i think it is vitally important we understand our enemy better because if we are going to win this war it will be by getting inside the of the head is our enemy and begin to understand what their former abilities are and defeat them by understanding them. thank you. >> i second your fault and i wish we could provide more uplifting remarks but i think you for the questions as well which i think really reflect the great interest in this bill also the awareness in the public that is spreading about a lot of

these issues. to take my topic of surveillance and close out one point it's important to remember how this evolution of technology has fundamentally changed not just the way we communicate that hour very concept of what privacy is and what anonymity is. there is a telling quote at the end of the book from a and the official who was then in 2007 when he gave this speech the number two man in the intelligence committee deputy director of national intelligence which says for too long in our society privacy and anonymity have been treated as if they are the same thing and they just no longer are. and i mention this just to say that if there is any group that has come to terms i think with this sort of disconnect now of privacy and anonymity it is the united states intelligence community. i've often joked that if he were to jump in a time machine and go back 30 years and say to somebody working for the cia

that 30 years from now in the future there will be a thing called the facebook that which we have photographs of people and are able to see what they are doing and thinking and who they are talking to and what they are reading and connecting to people. that official what time would have never dreamed anybody in this country could come up with that that would have sounded so totalitarian yet we are the ones getting over that information now willingly about ourselves and the government certainly is recognizes the strategic shift and is moving to take advantage of that. nobody i've met in the course of reporting this book discounted the value of privacy. nobody was out to launch a war on the constitution but at the same time they are fighting a war. i think that bruce articulate it that well from the perspective of people in the community and they are not fleeing by the same construct as before either against the enemy or in terms of how they have to operate amongst society at large.

>> i went to thank everyone again. i thought i would go in a slightly different point which is something we didn't talk about that is the responsibility of the writers who work in fields of policy and nonfiction. i think what you see in this panel trying to do which is what i see the responsibility is to take very complex, very important issues and be able to communicate about them in a way that doesn't just speak to those on the within our field and that our job is to communicate and i will defer a little bit and it may just be the approach of the book that i wrote but i see part of that is to not hide behind acronyms and right and a staunchly but right in a way to write books people want to read and so yes for me i wrote a book about robotics and war but it is a book i think it may be the only book in history actually i know it is the only book in

history that reference is both the battle in the science of tesla but also paris hilton and the tv show gossip oral and that is a deliberate choice. it reflects my personality but also it is a choice because these topics are very important but they are also darn interesting and we shouldn't only make them draw a so that's been one of the fun things of the panel is we've taken topics that are tough but i don't think anyone blocks away from this discussion not a lot smarter about it so i appreciate all of you coming. >> that is a great note to end. thank you all for coming and the authors will be on that side of the room with their books the next 15 minutes. [applause]

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you are watching the tv coverage of the 2010 annapolis boat festival wrapping up the first panel of the day on global security. we will take a short break and return with more live coverage and about 20 minutes. when we come back a panel on the world's water situation with author of the last fishtail, howard robert ernst fight for the day and orrin, professor emeritus at the nicholas school of the environment at duke university and author of the rising sea. [inaudible conversations] we are here this year's conservative political action conference talking with jerome cori. until about your new book.

>> it is quote to america for sale," and it was a bestseller. it is an economic analysis of globalism, the need to preserve u.s. sovereignty, very strongly support the tea party movement, and it's predicted a lot of the economics that we are going through and unfortunately we are not through the hard times yet and i talk about a coming debt crisis i think is next in the book but it's comprehensive. a lot of solutions and emphasis on things people can do to solve the economic problems. >> can you give a few examples? consolidate families. if someone has lost a job, son or daughter, move them into the home. parents get older, forget about nursing homes, expand your home and bring them home into the house. go back to consolidated family is here to make sure your press residential real estate is paid

off. and then in terms of the larger issues we need to have the federal reserve audited and transparent federal reserve. a very strong suggestions for job creation. i think reduced taxes would be a good idea private small companies, they create the majority of jobs so we are aiming at trying to get the private economy revives and get people back to work and that's what america for sale is all about the. >> to spend time talking about the relationship with china right now? >> an extensive part is on china china come into that is what america for sale is all about. if we continue to have dead in cycles that are unmanageable, as we are headed towards, country like china are going to say we want public private partnerships and maybe we can manage some of your roads. maybe we could have guaranteed investments in various u.s.

businesses. china is coming and i think we have got to be very concerned that we don't get too reliant on china both economically and politically. >> you have actually been rather prolific these past couple of years. can you tell us about some of your other work? >> the obama nation is now in paperback and i still think it was really a comprehensive fee, a critical biography but certainly now a predicted president obama was going to be in politics by its history, his intellectual development, his work with people like ayers, reverend wright. i go into saul inskeep and the rules for radicals and intellectual training. it is in paperback at a reduced price which i'm really happy because i think it'll get a much wider audience.

i also went to israel. i spent three weeks in israel. i od way to president perez, prime minister netanyahu. why israel can't wait is about the coming war with israel and iran. israel is saying that the final analysis, self-defense through watching the tag. i wrote the book to try to prevent that. i think that is the worst possible solution but i had to, i think the israeli government worked through me to communicate to the world how urgent the situation was. the best opportunity is right now. everywhere just in the white house, support the green movement within iran, we might actually get a peaceful change from within. that is what i'm hoping and praying and what the book is

trying to promote is the best solution. my first novel will be out. simon & shuster, i just wrote a book on the shroud codex. i guess it is somewhat my answer to dan brown. i am catholic and supportive of the catholic church, very supportive of the christian position but argue science and it argues all of the history of the shrub. we are organizing to do a tour of turin during the shroud exhibition in april and may. i just got back from rome and presented the publication to the vatican. i am excited to have my first model in april, the shroud codex. >> with all the time you have been writing to you get very much time to read? >> i've been gifted to read quickly all of my life and i'm a constant reader. i read all the time. what whether my currently

reading? i am reading a couple of different things. making possibly a movie on. i got into that, that is an extremely good book. i have been reading michelle malcolm's culture of corruption which i think is a very good book and another good study of person obama that i think is very valuable so i read very, very generally and i read fiction as well as nonfiction. i read some old fiction. i have recently been going back and reading a lot of the old crime books you know, the maltese falcon and those 40s novels. i love that writing. i read very broadly all the time. >> do you know yet what your non-fiction problem-- will be? >> i'm talking just simon & shuster about a couple of different products.

i am thinking is seriously about another book on oil. i read-- wrote a controversial book, it is not made by's-- fossil fuel. i would like to advance that in another book and simon & shuster is talking with me about another book on obama. maybe we will write another comprehensive look of obama after a couple of years in office and evaluate whether the biographical details of how they actually play forward into the administration. >> thank you very much for your time. >> thank you.

>> more live coverage of the 2010 annapolis book festival here in booktv. coming up next the panel on the world's water situation with mark kurlansky, and orrin pilkey professor emeritus at the nicholas school of the environment at duke university and author of the rising sea.

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[inaudible conversations] starting surely from the 2010 annapolis book festival the panel on the world water situation with mark kurlansky author of the last fishtail, cod howard robert ernst and orrin pilkey professor emeritus at the nicholas school of the environment at duke university and author of the rising sea.

>> good afternoon everyone. welcome to the annapolis book festival and their panel titled the world's water. my name is brian michelson i'm a faculty member here at the key school. i teach a college environmental science and direct the school's outdoor program. a quick note. i would like you all to turn off your cell phones we can limit disruptions for a conversation over the next hour. is my pleasure to introduce the three esteemed authors joining us today. first howard ernst serves as professor real article science at at the united states naval academy and a senior scholar at the university center for politics. dr. ernst received his ph.d. from the woodrow wilson school of government and foreign affairs at the university of virginia in the spring of 2000. his research focuses on the american political system with special attention given to citizen influence on subnational

politics and environmental policy. dr. ernst is best known for his work in the area of environmental politics and is considered a leading author on the chesapeake bay restoration program. beyond his work academic impacts dr. ernst findings have been violated in numerous media outlets including "the washington post", national public radio's diane reams show and they the pbs frontline documentary titled poisoned waters. his most recent book is fight for that they, why a dark green environmental awakening is needed to save the chesapeake bay. also we have worn pilkey professor emeritus of earth sciences and founder director emeritus of the program for the study of developed shorelines within the nicholas school of game ferment and earth sciences at duke university. as a result of the destruction of his parents house in waveland, mississippi during hurricane camille in 1969 he began the study of coastlines.

dr. pilkey's research centers on the basic and applied coastal geology, focusing primarily on barrier island coasts. the rising sea, his latest book, co-authored with rob young focuses on the global threat from sea level rise. he has received numerous awards. among them the francis shepherd medal for excellence in marine geology in 1987, public service awards from several geological societies and the priestly award in 2003. finally we have mark kurlansky, best-selling author and journalist. from 1976 to 1991 he worked as a foreign correspondent for the international "herald tribune", the "chicago tribune," the "miami herald" and "the philadelphia inquirer." over the years mr. kurlansky has worked a variety of jobs including commercial fishermen, dockworker, paralegal, cook and pastry chef.

he has written plays, novels and many nonfiction books that span such topics as baseball, history, writing, environmental issues and food. his books, and cod, salt, 1968 in food of a younger land where all "new york times" bestsellers. a finalist for the los angeles times book prize for science writing and the winner of the dayton literary peace prize he lives in new york city. he should also be sure to visit marks 2:00 p.m. presentation about his new book, eastern stars which is held in the-- i also want to say i'm personally very excited to hear from our panel today. each of these authors has made me a better scientist and teacher over the last decade. dr. ernst's are texted my ecology of the chesapeake bay class. i was just talking to dr. pilkey. his research was foundational

for my graduate work in coastal geology and sea level dynamics and in studying dr. kurlansky's approach to history has shifted the way i approach teaching global environmental issues here at the key school. i thank you all for that impact and i'm excited to hear from you all today. i will now turn it over to mark kurlansky who will be your moderator for the panel today on the world's water. thank you very much. has been thank you. it is a pleasure to be here. i write a lot about fish, and one thing i find in all of the debates about what it's going on with fish it there are two things that nobody really likes to talk about very much. pollution and global warming. fishermen try to talk about these things than environmentalists say perhaps

inadvertently making this bad and they say they are just trying to let themselves off the hook. [laughter] so i am very happy to be on this panel with a couple of guys who want to talk about pollution and global warming. so, do we have an order? >> thank you very much. is a pleasure to be here and an honor to be on this panel with two distinguished authors. you have to forgive me in advance if i talk a little bit fast. i have hundreds of people to offend in a short period of time. [laughter] so i'm going to get right to the heart of the matter. i want to talk a bit, as they do in this book, about the environmental community or as my good friend fred tubman refers to them as this cozy-- he calls

it the cozy dysfunctional group masquerading as an environmental community and in the chesapeake bay area it is 692 environmental groups. each one of them defining themselves differently saying their tactics are better than the others competing for membership, competing for resources and competing in a way that isn't necessarily very profitable or productive. chief among those in our area of course is the chesapeake bay foundation which for a regional environmental group is a phenomenal success if you forget for a second the chesapeake bay is in disastrous shape. 200,000 members, they bring in $30 million a year, a full-time staff of 165 employees and so on and so on. in this book i asked a very basic question, how would these groups be 692 environmental groups behave if they believed

clean air, clean water and vibrant natural resources was a human rights? if this was a civil right, not just another civil right that the civil rights movement of our generation and if in fact this was our summer of 1968, what would they be doing? how much urgency would they bring to the issue? what kind of moral indignation would they bring to this effort? would they engage the political process as fully as they are legally allowed to? would they endorse candidates? would they advertise the voting records of candidates? would they march on places like salisbury maryland where the chicken processing plant is or her or would they march in other places, maybe at the maryland homebuilders association which constantly fights to water down the state stormwater regulations. would they engage this process with all the tools that over civil rights leaders have in the past? i think the answer is yes they probably would, but they don't.

here is the problem and the problem i outlined in the book is not a chesapeake bay problem. it is a human problem and it goes something like this. knowledge of our own mortality. we are going to die and we know about it. coupled with the way to improve ourselves in a short period of time we are given and we usually define improving ourselves is becoming wealthier or growing our wealth. edits the fact we can easily escape the environment fun packed up our short lives leads many of us to adopt what i call the renters mentality. we all know what the renters mentality is. ranchers put a premium on short-term economic benefits. they make it very difficult to envision nevermind plan for a future beyond next year or at very best the election cycle but certainly not a generation or a millennium. given a choice between living in a world of renters in a world of the owners we would probably all

choose to live among the owners but we are not given that choice. in the role of government whether we like it or not is they force us to act like owners. to force us to act as if we were going to live on the land we currently occupy for the end of time. that environmental bureaucracy is the property manager that none of us like but that we quite frankly can't live without and our job is to make sure our government acts like a wise steward of the environment rather than a greedy slumlord. when i was an undergraduate i went to a primarily engineering school and didn't have school i had a political science professor who is fond of saying that earthquakes don't don't kill anybody. nobody was there were shaken to death by earthquakes and then he would go on to say that engineers kill people. you can imagine how popular he was. [laughter] the engineers built buildings that of course are inappropriate and fall on people and that is how they died. i'm here to tell you that

chesapeake bay is not dying from pollution. the chesapeake bay is dying from politics because we have a political system that allows this cycle of pollution to go on unabated in an unacceptable manner. i've come to believe environmental politics represents an irreconcilable conflict. it is a conflict and those with the values of owners who believe environmental protection is worth the cost and environmental restoration is also worth the cost and those with the values of renters. renters benefit from exploiting the bay in one way or another. they exploited at the convenient place to dispose of unwanted byproducts what economists and political scientist like myself would call externalities, chicken litter, pollution from sewage treatment plants, whatever it might be and exploited via overharvesting that-based natural resources, those resources that but with insert natural laws whether they

are overharvesting oysters, shad, sturgeon whatever it might be. in my book i don't argue that these renters are evil or ignorant. i don't believe that. i believe acting like a rancher from a business perspective is often to keep only rational choice that the business of business is to minimize production costs so as to maximize profits and that is the responsibility of business leaders. taking steps to reduce your externalities while inherently increasing the production cost of a bay friendly business and make them less competitive than the larger market. if environmental programs were cheap or if they were profitable we wouldn't be here today because we would already be implementing them. no amount of science, no mind of education and no amount of wishful thinking can overcome this basic fact. in the thousands and thousands of conflicts that it's bombs. restoration is a continuous effort to change human behavior and there is nothing more controversial and unpopular than

trying to do that. it is an attempt to make us act like owners and my friends it is a political problem. the basic question that guides my research goes like this. how can it be that the chesapeake bay has so much support in the general public based on more than 40 years of environmental education programs and how can it be the chesapeake day is deeply supported by our elected officials, everyone of them them regardless of party just asked them and they will remind you come november. how can it be that we know so much about the chesapeake bay from a science perspective? it in a soft midst said we know more about the chesapeake bay than any other body of water on the face of the earth. the truth is we know more about the chesapeake day than human beings have ever known about any body of water on the face of the earth. how can it be we have so much wealth? how can it be we have all the pieces of the puzzle welcome environmental ethics,

environmental world from elected officials a guidance from our environmental scientists and yet the chesapeake chesapeake bay is in such miserable, miserable shape? make no mistake, that day is a colossal disaster. i can go through the usual numbers but they won't mean much to you. i can tell you that days oyster population is that less than 2% of historic norms. i can tell you the crab population remains regardless of what i recently read in "the washington post," it remains today at a point near collapse. raw sewage flows into the bay from sewage truman plans that are designed to overflow into the bay, the nutrient pollution sediment includes toxic algae every summer as a normal part of life in the chesapeake bay and everyone every one of its tributaries as impaired bodies of water after 30 years of the nation's premier restoration effort but none of that means anything to anybody because the bay is in line today. the fact of the matter is the bay is downright russ and i want

to make a point. last summer there is a ph.d. biologist in my area and she test the water quality up and down our river. she does because their local officials don't do their jobs very well and i asked this person. sally on the day you collect these water samples if i give you three additional samples we test them? i did not tell her what the samples were. the first sample was from my not so clean toilet. the second samples from my not so clean toilet that had in it and the third sample was from my not so clean toilet that had in it that had sat for an hour that i swirled around a little bit, really gross stuff. to her surprise and not so much to my surprise would be found as all three of the samples came back with readings that were less than the readings from the river, the average reading for the river for the weekend by the way all three of those samples were within the epa's level of acceptable swimming levels. that is gross. that is the state of the

chesapeake bay and it is a major problem. to the question obviously is how did we get into this disaster? how did this unfold? and make the argument in the book that if you want to understand and you do have to understand this dysfunctional coalition which we call the environmental community. and make a distinction between the light green to dark green tennis of the group that people constantly referred to as-- and i want to outline them quickly. first there are the dark greens. the dark greens believe we are in a web of connections with nature that the distinction between nature and man is artificial and ultimately detrimental to both man and nature. they believed a world without wilderness is a world diminish, diminish for human beings. they are a rights-based group at heart. they believe we have a right to clean air, clean water and fiber and sneeze-- natural resources. another way to save it as they believe nobody no matter how powerful or profitable as a right to impair our public water

where the natural resources in our public spaces and they insist that these rights deserve the same protections as other human rights even if protecting them is expensive or inconvenient. they believe the role of sciences to identify the carrying capacity of nature, the limits of nature in a public policy leaders have to abide by those limits and we cannot compromise because those limits are not able to be compromised. they have a central tenet of understanding called the polluter pays approach. polluters ultimately are responsible for the pollution they create, not the public, not anybody else. on the other side of the environmental inspector mara group i refer to as the light greens. they are not a rights-based approach. they are responsibility-based approach. they believe we have a responsibility to protect the environment. as a gardener might protect her garden plot. they are the sabres, it save the

manatee, save the oceans and yes of course save the day. they believed voluntary consensus. they believe we don't need rules and regulations but what we really need our goals informed by science and promulgated through the education system. they believe compromise is a good thing because compromise leads to steady progress. the dark greens of course reject this approach. they believe environmental advocacy must move way beyond environmental education and moral arm-twisting. they insist the environmental community must use every legal tool at their disposal in order to fight this fight and certainly must use the tools industries are using that they so often find themselves in conflict with. their model for action is not a doctor seuss harmless borax. it is martin luther king in the civil rights movement of the 1960s and 1970s. they have a sense of urgency and outrage that quite frankly doesn't exist among the light greens and quite honestly scares the light greens.

dark greens are not interested in compromise and by the way the deeply deeply resent the light green environmentalist that are willing to compromise away what they believe are their environmental rights. beyond the light green to dark greens there's this other other group connor the cornucopia is. is different as the light greens are from the dark greens it pales in comparison to the greens and the cornucopia. the cornucopia and believes all greens regardless of their view are nothing more than closet socialists. closet socialists. [laughter] if you are using the of our mental movement as an excuse and that is what you really want, they believe in government's environmental programs are bad for business because more often than not government environmental programs are expensive. they also are a rights-based approach that they don't prey

upon the altar of environmental rights. they prey upon the altar of property rights and they believe your property rights trump my environmental rights. their holy trinity is that a free market and economic growth. they believe the free market can give us more quickly and more efficiently with the government promises us and fails to deliver which is a clean environment. they believe pollution is simply a phase and we are going to outgrow it and the trick to environmental protection is growing our economy and we will somehow grow ourselves green. the dark greens reject this. they rejected adamantly. they believe no industry has the right to pollute our environment even if that pollution is temporary though they seriously doubt it is temporary. they point out a whole developing world should go through a sturdy phase that the subten talk about it would be devastating for the planets because the bulk of the population is still in that developing states.

the dark greens live in a world with limits they cannot sustain the consumption happens. the dark greens point out that wes with its advanced technology and efficient markets have not solved its environmental problems. we still grapple with clean air, with water not to mention carbon emissions and they also point out that we have not solved their pollution problems. with simply exported them to developing nations and we consume the look of the world's limited resources. i'm going to wrap up by asking the obvious question. the answer is who is right? do is right, the dark greens, the light greens are the cornucopians's and you might be surprised by my answer. the answer answers it doesn't matter. each one of these groups has a role to play in the larger political ecosystem mccaul environmental policy. the dark greens ring a sense of urgency and outrage that is fundamentally necessary and by the way missing from the bay restoration effort.

the light green service to diplomats the middleman between the dark greens and the cornucopians and the cornucopians brake system berman for policy as if it was their job but they will cave in when faced with the uncompromising demands of the dark greens with little other choice is. what is made the chesapeake bay the ecological zombie that it is today not quite alive but not quite dead is not an flexibility of the corner coat -- max cornucopians but the triumph of the light green paradigm. by marginalizing the dark greens, the light greens have guaranteed a series of suboptimal policies that might be able to slow the pace general and slow decline but are incapable of reversing the downward trend. the trick to environmental restoration not just for that day but for the country or the globe as a whole is to change the political course of least resistance. the chesapeake bay and reverse flow just like politics flows.

imagine a situation where an official cared about nothing more than election. not that hard to imagine. is hard to imagine is that politician voting in favor of good environmental policies not because he cares deeply but because it is in his political interest to do so. when we have that situation we will have hope for the chesapeake bay. that will require a dark green awakening that quite simply hasn't happened here yet. thank you. [applause] >> thank you. while you are all trying to decide which category you belong in-- [laughter] >> speaking of suboptimal solutions, if you in the chesapeake bay have given us a solution and much of north carolina that is a disaster for

our shoreline. you have invented here in maryland a type of-- called a living shoreline. living shoreline does a really good thing. produces a-- and it will last for a decade but after a decade of two or three is all you have left is a resentment and no salt marsh. we are trying to stop your invention here but no less funding as to put in more saving shoreline. at any rate, i have come here to come to talk about the sea level rising. the sea level is rising and there is no controversy about this because we can measure the number of ways. nothing is happening now that hasn't happened for several billion years. just 18,000 years ago the sea level was 400 feet below what it is today and he came up to about where it is today, ford five thousand years ago and now it is

rising an eighth of an inch per year. within a 7-inch per year who cares? it looks like the sea level rise is accelerating and a number of state panels of experts on sea level rise have concluded that they have all profited about the same thing. maybe it is kind of a bandwagon but at any rate they have concluded that the year 2100 we will have a 3-foot sea level rise, a minimal 3-foot sea level rise. right now the sea level is rising at about a foot or close to a foot and a half per century rate and it is accelerating. with the evidence for this, we have 150 years of measurements which shows us pretty well what is happening and for the last 18 years we have had sand measurement and both come up with close to the same sea level rise rate. we can also look at nature. we have a lot of dead trees a

long shorelines and especially in north carolina. at dead tree sitting and in old marshes, sitting-- they have an eroded away. they were there and they haven't fallen in. they have just been drowned by sealevel rise. we have the cemetery in portsmouth island, north carolina which is fascinating. it is sitting in a salt marsh and we know that people didn't bury their dead in a salt marsh. however i should point out the tombstones have fallen in doing -- due to shoreline erosion. why is the sea level rising? it is rising because of the main cause of sea level rise right now is the thermal expansion, the expansion of sea water as it warms. but coming on board here and according to the intergovernmental panel on climate change in most scientists agree with this, the big player in this 21st century will be the ice sheets.

we of the greenland ice sheets without the potential of 20 feet of sea level rise. that is producing more water than the west antarctic ice sheet and would have the potential of 16 feet of sea level rise. you throw in the east atlantic i sheet and you have a potential total of 220 feet of sea level rise. we are not claiming that is going to happen by any means but it gives you an idea of what is happening. the greenland ice sheet started producing, started melting about 1995, and the melting is a difficult thing to determine and contributing to the sea level rise is difficult because you have to know how much is coming every winter and how much new ice is produced every year and how much ice is being lost every year so does not a simple thing to measure. the west antarctic ice sheet became important in 2,542,006,

something like that and in 2000 we had the first technical paper peer-reviewed technical paper that seemed to show these cannot take i sheet, the big one, the size of the united states is producing, starting to produce, starting to melt a net loss of water. the ramifications of this rise in sea level are first seen in the canaries in the mind which are the pacific and have been abandoned which is a six adderall nation. the people are slowly moving to new zealand having first tried australian having been turned down. the indian ocean maldives which have more than 100,000 people, are debating whether they have had the same council meeting at a depth of 30 feet where everybody was wearing scuba gear pointing out, making the point that the sea level is rising and they recognize they have a very

severe problem. in the marshall islands, sea level rise isn't the only problem. it is also salinization and storm surge and the marshall islands are now putting the soil into the drums, drums left over from world war ii both by the japanese and the americans. in the arctic along the coast of siberia and the north slope of alaska and parts of northern canada and scandinavia we have a different problem. we not only have sea level rise but we have melting permafrost sowed the beach is becoming more easy. the sand is loser in the easier were-- more easily move by waves and on top of that we have a much longer summer, ice free summer along the shores of the arctic ocean and that means the

waves are striking the shoreline at a much higher rate. and a much longer period of time so we have a very severe shoreline retreat problem in these places that will require moving villages back but they are no longer living in a glues, although they are subsistence societies. they require heat, seward, water and everything we require in our house and in fact the federal government insists on that. going around the world, and bangladesh you have 14 million people living below 1 meter, below 3 feet so to speak elevation that the country that has the most to lose in terms of the percentage of population that will have to be moved with the 3-foot sea level rise is vietnam. on the mekong delta and the red river delta large part of the population is bare and a large part of their rice production is there and that will have to be moved.

in the u.s., we have the most, the most threatened environments by far the barrier island, and we have 3400 miles depending on how you measure it, the miles of area island from the south shore of long island all the way to the mexican border. a 3-foot sea level rise means the barrier island development is supposed. there is no more barrier island development unless you build a massive seawall along both sides of the island. the problem there is that at the time when the barrier islands are threatened and they really need to do some thing, that is the same time manhattan is threatened, so who is going to get the money? we have manhattan, boston and philadelphia, d.c. and miami. who is going to get the money to save the city? is it going to be ocean city maryland or will it be manhattan

chorus of course it will be manhattan so the dairy or-- it looks like the barrier islands will be in trouble. development will be in trouble and we should be responding to this now. one thing we can do immediately is not to build any more highrises. high-rises take away all flexibility and any possible response to sea level rise. miami is the most interesting situation of all. in a u.n. study of sea level rise impact, using as a measure the amount of property that will be fronted by a foot -- make 3-foot sea level rise if you don't do anything, miami leads the world or go there is no city that has more valuable property that is under 3 feet in elevation. but miami has two serious problems. number one they are sitting on top of the miami limestone which is a very porous rock. so his palm beach and so are

parts of fort lauderdale i think the miami-- the problem is you can measure this in some of the pawns in the city of miami. they can measure a very slight tide and freshwater ponds in the city. that means that there is a lot of ferocity. that means you could tell they massive levy from the ocean on the ocean shoreline plus gates at the interest of the inlets and all that stuff but it wouldn't make any difference because the water will go right up and flood the city or go not to mention what is going to happen from behind. the second problem miami has, the mayor doesn't believe in sea level rise. [laughter] that is perhaps, the political system in miami is lagging behind and getting in on what is really a serious problem for that city and a serious problem for many cities. to sum it up i think we should,

don't have to look at this as a catastrophe. we can look at this is a huge opportunity for us to respond to a process of nature. in our book we recommend we consider a future planning for cities and barrier islands and we plan on a 2-meter sea level rise. that is that little bit higher by a afoot than most people would ask for but we are not predicting the sea level rise. we are saying we should plan for that in terms of putting buildings up and infrastructure, roads and so forth. so i think to some about the future is very exciting in terms of sea level rise. thank you. [applause] been i am certainly very excited to learn. we are not going to have to learn about the-- worry about the florida vote for much longer.

[laughter] i just want to ask each of you a couple of questions and then much better questions will be asked. there is one mic here. just step up to the mic and i will take your questions. let me just ask you orrin, i am going to make you ayatollah of the world. you can do whatever you want and you are not an elected official. you can anger everybody. what are you going to do about this problem? >> zero man what i like to be that. >> who wouldn't? >> everybody dreams. yes, well i would move the links. i would first of all do studies on how to do massive destruction on buildings on barrier islands in florida where they have hundreds of miles of high rice wine sure.

>> what exactly is the problem with the high-rise? what exactly is the problem? >> good question. the problem with high-rises you can't move them. you can move in but it is far too costly. because 12 mean dollars to move 2000 feet and in many cases there is no place to move the high-rises. yes, i would definitely plan on moving, death in a plan on moving back and i would try to do it is as mercifully as they could to my subjects. [laughter] i would not allow rebuilding. >> they always claim that you no. >> i would not allow reconstruction after a storm. the state of south carolina have this in effect when hurricane hugo came by and they just couldn't do it. it was just too hard to do. there were a lot of wealthy people who lost their houses so they made a rule if we can find

the roof of your house we will consider it can be rebuilt so everybody to find their of course. but we have to move and it is going to be difficult. i think we have to recognize we are not going to hold a shoreline in place. we can't put up gates like the dutch have done. the dutch have put up gates to hold back the sea. they are a very small country all sitting on a delta at a very low elevation, much of it below sea level but we are not holland. when it comes to the mississippi delta i is the dictator would move back these communities. get new orleans out of there and move back these communities on the lower delta that louisiana say are so important. maybe they are important but you are not going to save them. we cannot say them ultimately and they are talking about billions of dollars. we should not be spending billions of dollars for a small community in louisiana. i could say more but.

>> okay. howard i want to go legalistic on you. on this notion of rights, now come i think you are going to make a pretty rare case that a lot of environmental issues ultimately have to do with our survival and we have the right to survive and you can make the constitutional argument about it is life, liberty and pursuit of happiness, at least two out of three. but what i wanted to ask you is, beyond survival, suppose we have a level of environmental degradation that does not put survival-- is there an intrinsic right to be saved from any abuse of the environment? >> i will put it this way. yes there is.

but the problem is that every day we determined that it is not , so right now there is somebody in epa that is doing a mathematical equation trying to figure out what the value of a human life is and if you don't believe me that they do this, they absolutely do this so they want to do a cost-benefit analysis and they want to say what is it going to cost to upgrade it rand ensures power plant right down the road from here? it will cost a billion dollars. how many human lives are we going to extend ?-que?-que x how many human lives are required to extend by doing that and they have to figure out what the value of human life is then determine whether or not to do that. i think that equation is disgusting. you are having a -- by giving a polluting industry a permit. i don't think anybody has that right. i like to look at it the other way. i want to know whether or not there were polluting industries

that have the right to reduce the life expense and see up our children and the answer is no. >> why is there no one at the microphone? they are not believing me. i can go out asking questions but i think you need to go to the microphone because we are being filmed and they won't pick up your voice and less to speak into a microphone. >> thank you for taking my question. my question is for howard. i know in the environmental community there is an idea of valuing the ecological value of women and they are doing it right now. they are doing a scientific study to say how much it would cost to say, the value of using wetlands for getting rid of my

church and my church and are the value of-- and they can put money on values like clean air. how much does it cost to clean the air and if you can put an economic value-- i want to be a dark dream, i really do. and i think unfortunately i am a light green because you have to sort of, everybody doesn't think like me. instead of having number one on the bill of rights, the bill of rights having a number one thing , mine would say the bill of rights should be number one if you can't breathe and you can't drink the water, you don't have anything to say. so i'm just saying if you put economic value on our habitat for how much they are worth in the dollar value they provide. for instance on barrier islands you can say they protect from hurricanes. wetlands clean the water. there would be habitat for fish. there are ways to put a value on it and put it into dollars 10

cents. i pushed life wasn't this way. that is my question. do you think that is a possibility? another thing with the sea level rise issue, perhaps we should stop funding any kind of federal insurance on flooding, period. i do want to pay for. if someone is sitting on the outer banks in florida and people that live in florida on the main peninsula really are annoyed with the people in the outer pay or the people on the barrier islands because they want, they want bridges, and they get wiped out every year and they get wiped out every year by a hurricane and what happens is the higher peninsula is paying because they live on the water and they have their beautiful view. who wouldn't want to live there? but you should pay for yourself if you live there. i don't know if you got my question but it is mostly a question about putting it into dollars and cents of making everything in terms of that. you put the price of clean air, it would be too expensive than

to pollute. thank you. >> it is a classic perspective so congratulations. [laughter] i don't entirely disagree with it that i don't buy it entirely as well. i will give you an example of how it can work. right now the chesapeake bay we have this little disgusting fish that nobody catches. its value economically is relatively small. its value ecologically as abdominal because without it you can't have a healthy striped bass population. [inaudible] and it is also the last filter. our worst fears argonne so arguably-- when we do a cost-benefit analysis right now the simple approach is to say how much should we extend to restore it it and we don't take into account the ecological value and if you are saying we

should and i agree with you. the flipside of that is, in the county we are sitting right now there's a prohibition against winning in these waters for 48 hours after a 1 inch rain event. so our environmental officials will calculate the cost of what is lost and this is how they are going to do it. they will go to a place like sandy point part where you have to pay to go in and they will say what would the average person today? baby it is $10 a car look. how many people go into the park today? 100 people so they run their numbers and they say the value of being able to swim in public parks is what we just calculated the with you can't swim in the water on and after rain event in the county they will say that is okay as long as the cost of fixing that is greater than the economic loss of actually being able to swim. i say no, we have a right to swim in water, not just when it

is not raining but when it is raining. we ever write in public spaces. >> i want to see her bill of rights. until we get it there, i was do you get them-- [inaudible] my dog got sick from something in the river. speak the ultimate problem is this. when you apply a value to something he relates to your personal values and what it is worth for clean water and clean air to me is far greater than or some other people so whose value do we look at? do we look at high-value? what is the value of being able to catch a striped bass and not having to wear kevlar gloves because it is infected with a disease? economically it is a small value because if you cook the fish you can still eat it and they tell me it is relatively safe. but you have to tell your 7-year-old child not to eat the fish? at the end of the day, those

people have a right to diminish those things or they don't have a right, and that is what it comes down to. >> another thing i want to bring up. my children don't remember i swam in the day my entire life. when i was a kid i could wear a white bathing suit. that was the best everywhere. what is that called, shifting baseline by their memories are lost. they don't have the memory of having a normal beach. it is the artificial beach. it is not the white sand. >> your rights have been violated. >> exact but how do you make it work? 3% of the population-- if you look at the voters it is 3% of us that will vote foe environment until you get the rest of the world believing like you and i, that is why am a light green. >> i would take exception to the 3% because i studied this stuff. more than 50% of americans today will describe themselves as

having an environmental ethic and even beyond that, i studied statewide ballot initiatives for my dissertation so i want to look at environmental ballot initiatives that cost people money that bring environmental good. a billion dollar bond in california, banning commercial netting in the state of florida, having humane treatment of chickens in california and so on. the highest passage rate of any type about ballot initiative well over 60% regardless of whether or not they cost money or cut the public has environmental sentiment that is far greater than that of our elected officials. spivak cuts across politics dumm there is conservative environmentalist. >> people forget about teddy roosevelt and forget it was richard nixon that gave us both the epa and the clean air act. pb2 of the clean water act that that was overridden. it wasn't until ronald reagan

that environmentalism became a dirty word amongst conservatives and that word has gotten dirtier and dirtier with global warming. it need not be that way. environmental stewardship can be based in whatever you want. the left-wing of the democratic party does not have a monopoly on caring about the environment. >> how do you get the chesapeake bay foundation to be darker green? >> i have been poking them in the eye for nine years now. [laughter] how do you get the chesapeake bay foundation to be more dark green? steady pressure gently applied does not hurt. they are like any other group or could they have their own institutional interest and they have a actual advocacy interest and they happen to be at odds with each other. if more people said i'm going to give my check to this dark green

group weathered was the riverkeeper group or the league of conservation voters or whether it was sierra club a group that does engage in the political process they would have no choice but to follow the money. they are not doing it out of ignorance. they know what the problem is. has been made very clear to them but they have made a strategic decision that they are going to be a 501(c)(3) nonprofit environmental environmental education group. they are going to be the elementary schoolteacher for the day. the problem is when the poultry industry wants to fight regulation their number one strategy is not educating schoolchildren and it shouldn't be the number one strategy for the environmental community.

energy? yes. does that mean we have to make the sacrifices? yes. it's a public going to do it? i don't know because they've never been after they've never been asked by her elected officials. let our elected officials say listen, these policies continue down this course is going to lead to the death of the chesapeake bay and all these things and we have a choice. and pay more and go down the scores and it's going to be a choice. were not given a choice. what we've been told is that it's evolution. we were told for 20 years that the bay restoration was making steady process, that we were improving, that were that were moving along at a rate correction aired when i first came on in 2003, the chesapeake a restoration championed around the globe as the world's premier restoration effort. that's been debunked and thank goodness i hope i have imparted not. it's better soon or than later. the changes we have to do are

expensive. it's billions of dollars for storm water, billions of dollars for sewage upgrade, regulating agriculture and developing wife here and we know it is to be done. there's never been a bigger gap between what do we do about were actually doing. that's the achievement. [inaudible] >> we consider this an environmental right and we fight like hell. >> i have a question for dr. pilkey. imagine the problems with them in the charlatans i think i understand is the long-term problems with them. my understanding is they were an improvement over both heading. so, what would you -- how would you solve a living shoreline problem? over to implement in place of eroding shorelines? >> my solution would be trying to construct marshes without the bulkheads and put a foundation down there without the rock

revetments. or use some oyster shells or something like that, or use some biodegradable wet out there and said that the rock, which is a permanent feature. something that takes -- to look 30 years the future and maybe could be offered 30 years from now. by building big rock rivette and south there is a permanent thing and it's really the wrong move to make in a time of rising sea level. those rock revetments will soon be -- in 50 years will be underwater, most of the ones i've seen here. so i think the thing -- the salt marshes are so important. we think it's important in terms of the larvae of various marine organisms and there's either some questions of whether the salt marsh behind a rock revetments is the same as the salt marsh with no rock

revetments. >> i like to answer something about the question of theory or islands and getting the federal government ought to bear your islands. you forgot the federal government of the barrier islands tomorrow, much of the problem would disappear. we are maintaining shorelines with beach nourishment, for example, which import had just the development of high rises and they brag about it or used to brag about it until they realized that wasn't quite the right wing. but getting the federal government off the island would be a good first step. we tried that with the cobra system, where we does the needed certain barrier island segment as we would have no federal presence on the segments. well, as soon as the storm comes by as happened in what council beach, north carolina, everybody felt really sorry for them and also we had a very powerful senator in jesse holmes, so we just been in there and fixed everything, even though we were

not supposed to be federal money. so these things are difficult. fundamentally, i think what howard is saying i really agree with. we can do something at least in my -- on the coast. we can do something now in a strategic way or we can do the same thing later in attack at full way. records respond to a natural disaster. but if we do something now, we don't have to necessarily respond to natural disaster. >> professor orrin, four years ago lake erie was a disaster. there were fires on the lake i gather. today you hear that they cleaned up. i don't know scientifically how well, but arthur series of lessons that can be drawn from what happened there? >> they benefited from a species called the zebra muscle. i'll be honest it's what cleaned up the water more than any other fact weird to cuyahoga river caught on fire and has gotten

better. everything we know needs to be done is clearly identified by the scientific community today. in fact the we know most of us that for about 15 years. you reduce nitrogen can reduce phosphorus, the oxygen bubbles in the day will come back and make sure the sediments don't inundate the day and you harvest no no more resources that will replenish themselves in any given year. a social scientist like myself can understand that. are we capable of doing it, you know, in our political system? will see. i hope so. >> so you're seeing there was no political deal or arrangement with lake erie. it was the buckles and other fact your. >> yes. it was not enlightened management. >> there is also a decline of industry in cleveland. [laughter] >> the black sea has refined it but it wasn't because of management there either.

>> okay, we have time for maybe one more question. there's actually a mike -- sure. >> hi, howard come i read your book and it's great and i recommend everybody here read it. everybody in that they should read that and i consider myself a dark green. i've always said please don't call me a liberal, commie anything else but a liberal. a socialist come a communist is okay, but not a liberal. [laughter] anyway, when you mention the price of the cleanup, i'm heavily involved with storm water. the billion dollars would just be the one county. we could spend millions in the community. but here's the question, i know one of the ways they can get the money and that's by stopping spending it on all the wars in

afghanistan and iraq. [applause] and that's the monster in the room that nobody's talking about here and we're spending all this money on stuff instead of making our world a better place with water we can drink in soil and another we can breathe. were we to make killing people and destroying the environment on the other side of the world. and i think your comment on that. thank you. last [laughter] >> ray finally, someone asked the question. my comment is i appreciate your perspective and i share much of your concern. you have to look at where the money in a federal budget is spent. the adults really say you showed me your budget and are also showing me your priorities. a great deal of money spent on the military. a great deal of my is also spent on social security and medicare and medicaid and other vital services that our government provides. so the question ultimately is is your government reflecting the

values? from her question i suggest that it doesn't. >> the military to meet is basically don't live up to the laws that we have evoked to the rest of us to go by and environmental care of the land, it never appeared in fact, i read a number of places are considered the biggest polluters in the world, such things as airplane cleaning fluid with waters down and was it for the june or camp lejeune in north carolina. and you consider that to be really part of the problem that we allow them basically a pass on these environmental things? >> the law of the land is at the federal government is exempt from state laws, right? and the supreme court has ruled that the ability to even packs the federal government is the ability to destroy, therefore exempt from taxation.

thousands of acres in the chesapeake bay region are controlled by the federal government and many of those properties, averaging brown, edgewood arsenal's and others are highly contaminated and very dangerous places for decades and decades of military training, including chemical weapons training and other things. aberdeen proving ground by the way also was the largest sites on the atlantic coast. so it might not be safe for us to walk around, but bald eagles sometimes prefer bombs going off periodically been living in an urban area. the [laughter] my experience has been this. military officials are very good at following orders and instructions, right? they are. if the restricted to do the right thing, they'll do it. but they have a mission, which is different from or not entirely consistent with environmental protection. that they have a training mission another mission that was in a odds with virus protection

and it's a balancing act and it's a difficult thing. >> okay, thank you all very much. thank you, orrin. i think were going to be signing books over there. thank you for your questions and thank you all for coming. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> if they get the right information and their past behind, they'll do this because they're decent people. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> hi, let me get this for my husband, harry. thank you.

[inaudible conversations] [inaudible conversations] >> thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> i think you can raise the elevation of florida. you can't raise the elevation of what's sitting behind us.

[inaudible] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

>> newly out in paperback. it came out in hardback about a year ago. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> i think they have it in the manger where they're selling the books over there. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> from the 2010 the 20 annapolis book festival is wrapping up a panel on the world water situation. we'll take a short break and return with more live coverage in about 20 minutes and the next panel is on wall street, features william cohan, on wall street. from the key school this is live

coverage of the 2010 annapolis book festival. next weekend, life on the tv >> we are here at the conference talking with paul kept very. can you tell me what was your favorite book to write? >> boy that's a good question. i'd say probably the first one i had success on the faith of

ronald reagan because it was a shock. i started off writing a book on reagan and the cold war generally and never intended to talk about his face. and i started going to the primary sources, the letters, the handwritten speeches, interviewing people can interfere in people who knew him, i can do this really, really deep pervasive state that i did not expect at all. a lot of people were suspicious as to whether reagan was really religious him including a lot of conservatives because he was an astrologer. he didn't go to church on a regular basis. as i went to the reagan library, i read speeches like the evil empire speech and looked at the actual document. i saw greg and pam oliver. there's a big file at the reagan library called the phf, presidential handwriting trial which is document that have reagan's handwriting on it, not just a signature. and that's where you really see a president's role.

and i saw this week, at least half of it was richer by reagan, including the very theological portions. and i relist right there that i was dealing with somebody much more substantive than the character -- caricature suggests when he was president. so i ended up with a couple chapters on reagan's face and three or four chapters, have a book on reagan's faith. i made a manuscript among my colleagues. they said you need to splinter the soft. so that became god and ronald reagan. in later about three years after that we released the crusader: ronald reagan as a communist, which was margin about reagan's role in the end of the cold war. in that term, the crusader come was also a surprise because i found out in reading soviet archives, soviet media archives that the soviets called him the crusader. and they called him out because they knew that he wanted to

crusade some freedom, crusade in a sense of how fdr used the word and eisenhower used the word. so that -- i would say that was a guest one of my favorite books good and the other one would be probably the one on ronald reagan's closest adviser, the judge william p. karp, ronald reagan's top and. here is somebody coming he still alive, he is 78 years old good it will be 79 this year. he has parkinson's disease and he was really reagan's, sounds dramatic, but secret weapon so to speak. he's a man who throughout 1982 and 83 work to reagan's national security council and laid out, considers a paper trail of this, very explicit directions with the intention of these police taking a soviet union to bring down democracy are as they put in the document, political

pluralism through the soviet union. that was a joy because myself, my family, we spent a couple summers saying that karp's ranch, interviewing him daily, getting to know him and his family. and that's the case where he was in a matter of just looking at documents and looking at books and other things that people have written. i actually got to know the figure and spend a lot of time with him. ..

hillary clinton would be president frankly. i really did. so, that came out, and god and hillary clinton in 2007. another fascinating -- i really enjoyed studying that as well. >> what is your next project? >> i'm working on a cold war book and will be out this fall through intercollegiate studies

institute. jed donahue is the new editor and has really ramped up their offerings and so that will be out. it is kind of a 20th century history books of the communist movement the united states and in particular how the communist movement tried to get noncommunist liberals to support communist causes. >> just remind us the latest book on the shelves of stores is? >> i guess the last one would have been in 2007 the judge william p. clark and the gaudy and hillary clinton also came out in 2007 which by the way was too much at once and i've got to slow down. i've got five kids at home and enough is enough. >> what are you reading these days? >> boy, there is a book out by it lawrence reece called world war ii behind closed doors, which i am reading. i'm fascinated by that. clarence thomas's book, very

interesting. i'm always reading about half a dozen different books at once. i went back and i am digging into thomas murphy's book, the seven story mountain which was published in 48 or 49 so it's a little bit old but timeless, great spiritual autobiography. right now basically those are the three books and working through. >> thanks very much for your time. robyn stone who was boyd? >> he was many people, complicated man having grown up in st. louis, he was growing up in poverty raised by his grandmother after his father died and his father left for the vehicle for new york city. he came up in poverty and worked his way up. he decided he wanted to be a newspaperman early on in his

teenage years in the 11th grade and pursued that through a scholarship at the university of missouri working at the post-dispatch in st. louis, his hometown. very early on he thought about to be a journalist and be good enough to work at "the new york times" and that tenacity enabled him to overcome all of the barriers he faced. so he was a mix those people as well as a young man who was mentored by the jewish shop owners in his neighborhood so he had some influence as well as on the campus of the inner-city misery. he had new-found black power in the 70's and walked around with a big afro talking about power to the people in all of that including the manager ravee

eventually ended up at "the new york times" rising in the ranks having covered reagan in the white house and bush in the white house as a reporter for "the new york times" and as a reporter for the st. louis post-dispatch as well so he was all of these factors. >> and your husband? >> and my husband. >> how long were you married? >> we were married for two years. it's a love party because story that is part. it's about journalism, the new york times. there is some juicy stuff about the times. but ultimately i call this book a success story because it's about this man who as a young man was on a mission and he ultimately achieved that mission but he was also in search of not just professional excellence but a family, the family he had lost as a child and he wanted that so

much. some of his personal growth story as well as professional growth story and i was fortunate to see a part of both because at one point he was my boss as well. he recruited and hired me at the new york times. i worked with him for awhile. >> when did gerald boyd died, what was his final position at "the new york times" and why did he leave? >> he died in 2006 november, thanksgiving day actually. >> unexpected? >> no, he had lung cancer -- >> smoker? >> he was a smoker. he been diagnosed about february so it came quickly. he died three years after leaving "the new york times" in the wake of the jason pooler page prism scandal and when i go to universities and i talk about his story to journalism students

i ask how many people have heard of him and i see a lot of hands and then i ask before you heard of me coming here how many people heard of gerald boyd? very few and that is one of the reasons i'm telling his story because it is a fascinating tale, american tail but also journalism in many respects. so he was the managing editor of the times. six days before 9/11 to leave the paper it was a tragedy international terrorism so they are thrown into covering the terrorist attacks the war in afghanistan and iraq and they are pushing to establish their mandate on the paper and put their people in place and it is

they are tired and pushed and all kind of productions and all of that kindling capitulation environment and then along comes jason blair who plagiarized those from other people's stories and makes stuff up out of it and he was discovered and i call that the match that with the fire come that ignited some unhappiness. so ultimately he was asked to leave the times. >> the fact that he was african-american, was that important? >> absolutely. it was important in how the story played out. i don't think it was important in the fact that he was a plagiarist. he acknowledged that he had the emotional difficulties and that

all played out at the new york times. but the fact that he was black led some people to assume that the african-american man who promoted diversity was in some way aiding and abetting this journalistic criminal when that wasn't the case, and in fact jason did not like gerald as he wrote in his own book because he could not get the support that he needed from gerald said gerald didn't hire jason. he didn't supervise them directly. but the assumption was that there was a connection between the two. and i think that affected joe's tenure quite significantly. >> your husband died in 2006. four years later your publishing the book with his name on a in the introduction by you.

>> i did the after word. my times in black and white is gerald's book. he wrote a draft, to draft actually be read the first one was 800 some odd pages and i remember telling him nobody cares about the kids from the old neighborhood, take some of that out. then he brought a shorter version, 250 pages and i thought it was too truncated. it started with entering the news room and i said what about the rest of the story? after he died i finally gathered my stuff together and i knew that this was a story that needed to be told so i married the two versions and put on my reporter's hat and interviewed some folks, like the jewish store owner from back in the neighborhood. i interviewed on it was no longer with us and i interviewed his first wife, who gives some

color with the abiding and fills in some of the blanks and also to describe emma, the woman that he left his first wife for and she was on her journalist had and graciously answered my questions. so why did a little work. but it was for the most part his book. these are his words and his story. >> sounds a little tricky what you had to do. >> it was -- they were a challenge but all in the name of good journalism. >> tell us about yourself. >> well, i'm a journalist about 20 some odd years and that new business, and gerald used to say i couldn't keep a job. i've worked at several newspapers including "the new york times," the "boston globe," the detroit magazine including essence magazine and health magazine, developed essence's web website, heineman author

myself, how black families can heal from sexual abuse which came out in 2004, and now online and editor of my late husband's book. and by looking forward to doing more good journalism in the future. >> what should people know or remember about gerald boyd? >> i think they should come away from his story with a true sense of the depth of his character and humanity that he came from nothing growing up so poor they couldn't afford lunch, they had breakfast and dinner and they felt incredible odds to do what i call social justice through journalism eliminating the situations people live in, eliminating what's happened on the national level and also that he cared about ethics, about

diversifying the the news room and he speaks something called diversity of thought, not just people of different colors around the table, but people who came from different backgrounds and grew up poor like he did, people who had jewish mentors who connected with people from different ethnic and racial boundaries. that is what he was about and i hope people get a sense of the man and his character and humanity. >> some viewers are going to hear the word social justice through journalism and have an adverse reaction. >> and he would probably never describe it that way. but that's what i saw and the stories that he was intimately involved in and he was most pessimistic about the series races lived in america through which the time won a pulitzer,

one of line with which gerald was connected in his 20 year tenure at that time. that is one of the furies the describe the interracial relationship that led to misunderstandings and frustration and anger, and his colleagues led reporters and editors to believe that what really explain the in the eliminated the dynamics in a racial interaction. so in that sense i call that an act of social justice to get in there and explain. children of the shadow the series that eliminated children growing up in poverty across the country and that wasn't a black or white story but how kids are living and making it, who is failing them, and again this is something that he was intimately familiar with having grown up the way he did. but also he pointed to shed

light on that so in my mind that is an act of social justice, journalism to make people aware respected the sulzbergers participate at all in the editing of this book? >> no. sprick gerald boyd is the author, the original author of "mai tais in black and white race and how were at "the new york times"." his widow, robyn stone is the editor and the author of the afterward. >> book tv coverage of the 2010 annapolis book festival continues with a panel on wall street. it features william cohan, author at "house of cards." [inaudible conversations]

>> good afternoon. i am the president of the board of trustees for the school during indianapolis maryland. it's my pleasure today to introduce williams cohan, the author of "house of cards" detail of hubris and a wretched excess on wall street. at the beginning of march, 2008, the monetary fabric of bear stearns, one of the world's oldest and largest investment banks began unraveling of. after only ten days the bank no wonder existed. its assets sold to jpmorgan chase. the effect would be sold nationally as the country suddenly found itself in the grips of the worst financial mess since the great depression to read in his book, "house of cards," william cohan exposes the corporate arrogance, the power struggles, the deadly combination of greed and inattention that led to the collapse of not only bear

stearns but the very foundations of wall street. having been a wall street banker for 17 years, william cohan has in-depth inside knowledge of investment banking. in addition to his years as an associate and then vice president, at lazard frères, mr. cohan was a director in the acquisition eckert but merrill lynch and a managing director of jpmorgan chase. he left jpmorgan to write the last tycoons, which received the 2007 financial times goldman sachs business book of the year award. he probably wishes that was the to those of seven just financial times business award. [laughter] after today's wall street journal report on the sec problem. the last tycoon also appeared on the best-seller list of "the new york times," "the wall street journal" and usa today. mr. cohan writes regularly for "fortune magazine," the daily beast, art news and the financial times.

he is a contributing editor and writes an opinion column on business for "the new york times." mr. cohan is a graduate of phillips academy, duke univ. of the columbia university graduate school of journalism and the columbia university graduate school of business. he lives in manhattan and in columbia county and york with his wife and his two sons. please welcome williams cohan to the annapolis book festival to talk to you about "house of cards." [applause] >> thank you, speed. it's a pleasure to be here. i didn't realize how over educated i sound. i don't know how many of you were here for the previous panel on water usage and abuse. it was very interesting and i just want to refer to howard earnest who said that he had to speak fast because he had a lot

of people to offend. i agree with him. i will be speaking fast because i have a lot of people to a friend as well, and also or in velte who says as the water levels rise the will be a temptation to think about saving manhattan and supposed to other low-lying cities like miami or places along the chesapeake bay and i think after i get done you will agree we won't want to be saving manhattan. [laughter] if he were here you hopefully get comfort from that. i started writing "house of cards," didn't have a title for it and my wife came out with that epiphany one time in the middle of the night and i will explain to you how that came about. i started on march 17th, 2008 which was the david jpmorgan

announced that there was bodying bear stearns for $2 a share and then because of a legal drafting error it got increased to $10 a share as well as 100 cents on the dollar for all the creditors which is an important distinction because as i'm sure you all know that when lehman brothers piles of bankruptcy six months later when, the stockholders got wiped out and the bondholders and the creditors got 9 cents on the dollar so there was a huge distinction made between the two firms. one firm of shareholders were given a small amount and creditors were saved and the other firm of shareholders got nothing and the creditors got next to nothing. so i started writing it the day that the deal was announced and finished on december 1st of 2008, which must be some kind of crazy riding record. i don't remember sort of

compared to what child birth must be like. i don't remember along the way, i don't remember doing it and yet have this thing out there in the world. people after what happened in september of 2008 when merrill lynch was sold to banc of america and lehman brothers failed and aig was risky to the tune of $85 billion all of the advances we know about the creation of the t.a.r.p., the t.a.r.p. funds and the changing of the agenda repeatedly before the proceeding people said you can just write about bear stearns any more because the whole dynamic is changing. the story is bigger and more complex. don't you have to change direction or shift towards this and the answer in my mind was not only know because i have so much interested in having written about bear stearns. so to change the direction to change horses in midstream or

not particularly easy as the expression goes. but more importantly is the fact that the truth was what happened at bear stearns is the same thing that happened at lehman brothers and the same thing that happened at merrill lynch and at the same thing that happened basically at aig is a chronic problem of cancer is chronic problem across wall street. by the way which has not been remedied, not even the slightest and neither of the two proposed bills the house or the senate version will do anything to change that unfortunately. that is another story we can talk about if you like. and so because the characters at bear stearns were so fascinating and my access to them was a gift and i was able to talk to them all about what happened, one of the few places on wall street i didn't work was bear stearns so i knew of these people but i didn't know, i hadn't worked

with them so i was fortunate they opened up to me and really bear stearns became the canary in the coal mine of the crisis and i figured if you understood what happened at bear stearns you could understand the rest of it. it doesn't mean it's particularly easy to understand but i think that i leave out in the book in a way that makes it compelling along the way and exciting meredith and interesting narrative and people have compared it to an awful which is a nice thing and unfortunately it is true so therefore it is not a novel nor could i ever hope. but what i thought i would try to do today is help you all understand how the 70 and by at least the bill cohan version of what happened and why. other people have other versions and i have mine. i'm sticking to negative two years out now more than ever as they say especially with the events that occurred yesterday

with the sec lawsuit against goldman sachs. so i think that you have to understand how this all started. and it's been going on for a long time. it's not something that just may be keen to hit in the last few years, but i think the dynamic and the ethics of wall street has been changing for probably close to 40 years which is when the will street started transforming itself from the series of private small partnerships undercapitalized by the way wall street has always been a dangerous place and firms go in and out of business all the time said the weakness is a we were organized whether you are organized as a partnership or corporation doesn't necessarily protect you from bad decision making and the calamitous waves because wall street has always been darwinian and the interest and people forget that. but i think the whole ethic and

a dynamic began changing in 1970 when a firm which was a small private partnerships or of the google of its time decided to break the conventional rules and go public and basically substitute for their partners' money to public funds from shareholders and money from creditors said you had a situation where partners the wall street firms had their own money invested. they shared the profits of the firm of gush firm made money and if they lost money they shared in the liability of the firm. the losses of the firm up to and including their entire network said you had a situation if the firm made money they did well and a lot of them did do very well and if the firm didn't make money lost money and didn't do well. i can assure you that created a

high level of consciousness about what the partners were doing on any given day and a fairly good understanding of the business lines the firm was in which is why wall street really until 1970 and beyond and 19 eda and beyond wall street stock to the meeting that a new well which was underwriting debt and equity securities raising capital for corporations all across the country and the world and taking a little risk in doing it most of the time and making money along the way as well as providing advice for takeovers and sales of corporations. but what happens in the beginning of 1970 when the doj went public with the substitution effect that i talked about, the transfer and risks from the individual partners who worked at the firm to shareholders and creditors and once the doj went public of course the rest of wall street quickly followed suit with merrill lynch following.

bear stearns went public in 85, goldman sachs went public in 99 and where i worked in the subject of my first book went public in may 2005 after almost 160 years of being a private partnership. most of the firms on wall street with their big banks or investment banks or small boutique firms are public companies and that has changed dramatically on wall street and the funny thing is when i first started writing this book there was a conventional wisdom that was established quickly by the ceos and alan schwartz was the ceo from january 2008 to march of 2008 he was the shortest lived ceo in history he bid up the firm a long time but he only became ceo after jimmy kaine had been a long time ceo of bear stearns from 1993 and decided to retire as he says even though

the writing was on wall and there was time for him to go when allen schwartz testified in front of the banking committee in april 2008 literally several weeks after the firm imploded he said, paraphrasing but basically a once in a lifetime tsunami hit, i don't know what i would have done differently. i scratched my head every day wondering what we could have done that would have saved the firm and i come up basically with nothing. the ceo of lehman brothers said pretty much the same thing in october of 2008 weeks after lehman brothers filed for bankruptcy and he said go to the grave wondering what he could have done differently. the conventional wisdom was established by the ceos and is the was the conventional wisdom to this day and what i discovered in the reporting of this book was of course the conventional wisdom has nothing to do with the troops which is

often the case in these matters. it has a lot to do with the truth but wall street would like you to believe but not the real truth and so what i discovered is wall street did this to itself and part of the way wall street did this to itself was the transformation of from being private partnerships where they shared in the risks and shared in the liabilities and they were cognizant on a daily basis of the risks being taken in the firm and to the dynamic on wall street where other people were taking the risk and the rewards call what i call secret less risks or been taken and the rewards went to the people who worked there for and how do i know this? i worked on wall street 18 years and even though i was a mergers and acquisitions banker didn't risk a penny of my firms capital the only way i ever got paid year in and year out was a bye generated revenue for in the

business line i was in and if i didn't generate any ravenel i didn't get paid so if you can imagine what it's like in the business line where you are actually risking the capitol like mortgage-backed securities to concede the incentive is totally skewed to generating as much revenue as you possibly can and making the case to your boss the you deserve a bonus and by the way what other industry in the face of fear of ps of between 50 to 60 cents of every dollar of revenue in the form of compensation to the people who work there? the irony of course is the firms went public and to other people's capital to run their business is you would think the firms would be run in the interest of the public shareholders. unfortunately that is a big fat fallacy because 50 to 60% of every dollar of revenue gets paid on the form of compensation to the people who work there. they are not run for shareholders as we discover.

nor have they ever been run for shareholders as we've discovered or should know by now. they are run for the benefit of the people who work there. in addition to having this transformation of partnerships to public companies you also have another dynamic on wall street which is wall street is very good at financial innovation. innovating products that they can sell on what is wall street really. it is a massive selling machine. it is an army of salesman who get rewarded if they sell and generate revenue so the need products to sell like although companies need cars to sell, like general electric needs refrigerator's be readable st. needs new products to sell and the good news is the higher a lot of smart people and pay them a lot of money to do just that and guess what they are very good at doing that and sometimes the innovation they come up with are really valuable and helpful and what i mean by that is valuable and helpful to what i call the democratization

of capital and what that means is allowing companies to get access to capital who never would have had access before for example mike mulken who is a convicted and rehabilitated phelan was the person who came up with the idea of junk bonds, high yield securities allowing companies who didn't before have access to the capitol markets to have access to the capitol markets to the issuance of bonds that investors could buy to pay the higher yield and the phrase yield securities to pay a higher yield and say the bonds of general electric. that only made investors who were willing to take more risk would buy the securities because they got paid more but more fundamentally allowed companies to didn't previously have access to capital to have access to capital the public market. that in itself is a valuable innovation and mike mulken is to be applauded for that.

unfortunately in the typical wall street fashion as is the transformation of the system from one where everybody shared in a pretax profit as well as the liability to one where people only care about the revenue they generated, people to try to figure out what mike mulken did on wall street for, the constricted what he did and figured how they could do it themselves and then try to out compete him and then massive effort of all competing because of the revenue that was available if you sold junk bonds to people you have the creation of what became a double in 1987, 1986 and 1987 which exploded in the crash of 1987, 22.6% in one day literally a month after mr. good working on wall street lysol and grown men cry for people have computers on their desktops and could get real-time quotes that quote some machines

and i saw grown men crying looking at portfolios destroyed one day at a time and allowing this kind of thing would never happen again as the result of the brady commission that together an inch and a half thick report on quote on quote market mechanisms to help give a guide to prevent this from ever happening again and of course we all know within years it was all happening again and whether it was the internet global when the internet firms who graduated college in a lost stayed on market street in san francisco had an idea where they were going to have peoples of labels on screens and there's a paradigm shift onshore you can remember that the was ten years ago and we had the nas-daq 5500 until the blue what in march 2003 precautions for that

were filled for a long time so wall street is good at these innovations. unfortunately they are not good at having coverage on their own behavior so the doubles after the innovation and people figured out what everybody's doing the bubbles and sleet and the only explode when people take it one step too far which is what happened to in the high-yield crisis of 87 and the internal crisis in 2000 and lo and behold what happened in this crisis in 2007 and 2008 and the innovation this time was with a fascinating innovation at salles and brothers in the 1980's who came up with this idea of securitized in cash flows for which was another way of saying aggregating, bundling up these cash flows that people had when they paid their credit card bills are paid their car loan payment bills or surprise

surprise they pay their mortgages, so you had people once upon a time would go to your local community leader, he knew you, you knew him, he knew your family, he knew where you work and decide if you want a mortgage she would give you one based on your reputation and credit quality and in command all those things and you have this jury symbiotic relationship he kept the asset on his bank balance sheet if you're a good customer and paid for mortgage his asset was worth 100 cents on the dollar may be more depending on interest-rate changes. if you didn't there was no place for him to sell it, he kept it and lost money and you were no longer a good customer but that relationship existed among homeowners and banks for a long time until lubrani rican along and he had an idea you could buy these mortgages from all these

local banks and package them into securities to slice them up and get them printed by you to seize and sell them to investors as securities to investors all around the world and that was a pretty nifty little innovation. unfortunately it got out of control as we all know yet there are a number of other factors for that besides just the that the compensation system that was a big factor because a huge mortgage-backed security something like 85 to 90% of the revenue in the profits that bear stearns had from the last two decades of existence can from the mortgage-backed securities business the firms had built so this was no small innovation was major and the mid-market dwarf

to many times the size of the treasury market or the corporate debt market so inadvertently it probably wasn't his fault other than he introduced and least this monster on us because wall street behavior so now another element to this that has been discussed is the role of public policy and creating this crisis and one of the things that both of the clinton administration and bush administration did over 16 years basically will push for home ownership we all want to own a home because that is considered part of the american dream and for the longest time something like we may have this numbers of but something like 62% of american families own their own homes. the clintons got it in their head and so did push's that would be a good thing if more people own their own homes and

they became good politics and also pushed for the reva riding of something called the come emt reinvestment act that pushed banks to make loans and mortgages available to people who wouldn't ordinarily have them available to them who had previously been printers and now had money being thrown at them so they could buy their house and participate in the american dream which was great politics but unfortunately a lousy economics. by the way i have to say it's lonely appear when you're sitting on a panel with the people to deflect you that's more fun so let me just take a -- [laughter] >> there's no one to disagree with him here. >> which i like. i like that. we will give you a chance of a little while. so as a result of pushing the community reinvestment act on all of us and the banks making more loans to people, mortgages available to people who

otherwise had been renters, you have a gradual increase in home ownership in this country from something like 62% to 67% and people watching on c-span of course will know the real numbers and i sure i will get a lot of e-mails telling me what the real numbers are but i think that is directionally correct. unfortunately, what that meant is a lot of people got access to mortgages who really couldn't afford faugh the house the for bonding and afford to pay the monthly interest payments and principal interest payments on mortgages and how we know that? we know that now for obvious reasons. but scientists -- i researched this in december this was happening as we all know pretty much along the way and i spent a day when i was writing the book in baltimore actually a center that existed in the inner-city baltimore to help people who couldn't pay their mortgages

they would come in and meet with people there and they would give advice about how to work all their mortgages because they couldn't pay the mortgage payments and other houses were in danger of being foreclosed and i went through a bunch of documents where the names of the people had been blacked out by you could see that all of the information on the documents about where these people worked, where they live, the amount of money they had in the bank come every key aspect of the document where you wouldn't think it would be fictitious was in fact fictitious. more to the point, you wouldn't think that the borrower on the loan, the mortgagee, would sign the document at the bottom even if it contained all of this fictitious information about this person. unfortunately that is what was there at the bottom of the loan document repeatedly was the

signature of the bar even though they knew and the mortgage people making the mortgage new the information was fictitious. you have to ask yourself why they would do that. none of us in this room would do that. nobody bulging on c-span today would do that but unfortunately a lot of people in this country did that. i'm sure they did it perhaps as a one-way option. maybe they didn't think of it that way that they had been renters before. if they could own their home and be part of the american dream and it worked out, great. if it didn't work out which the suspected in the back of their head then they would go back to being from terse and they were no worse off for it. unfortunately because of the way that wall street works, all of these mortgages that turned out to be not such great mortgages are packaged up and made into securities that were sold as investments all around the world. and in fact the demand for these investments will supply in part

because after 9/11 alan greenspan lower interest rates so dramatically, was a very scary time and interest rates were lower from like 6% to 1% by the way they are even lower now which is a whole nother problem. as a result investors aren't the world were looking for higher yields and wall street was the too happy to be there when the mortgage-backed securities offering all sorts of yields depending how much risk people were willing to take and the then blessed by the rating agencies that once upon a time we had about ten triple-a-rated companies in the country thinks to wall street and the rating agencies paid by wall street for their ratings they got. next you know you have thousands and thousands of mortgage-backed securities rated aaa which investors all around the world were more than happy to advocate doing their homework were not more than happy to buy and stuff into their portfolios and think they were great. unfortunately, because it's hard to tell a story when everybody knows the end, but unfortunately

what happens as we all know, people stopped paying their mortgages they probably couldn't afford in the first place and all of the securities tied to those mortgages, you know the underlying mortgages started to lose value because the cash flow that was supposed to be generated and paid to the investors wasn't being paid and wasn't being generated. is that was the sort of fair to strand of dna. just to review we had a crazy changing the way bankers on wall street were compensated and the amount of skin the cat in the game. there was dna number one. that began in 1970 and continues to this day. a dna strand lumber to is how good wall street is that financial innovation and how good they are about rewarding themselves for financial innovation and taking big bonuses as a result of that. strand number three was the change in public policy which pushed for increased home ownership at the same time that

greenspan lower interest rates dramatically and kept them low for a long time which created a huge demand from investors the world over for higher yield, securities they could get more money for in interest payments with wall street people and lead to happy to stand in the breach and provide those securities and investments blessed by the rating agencies that were paid for, bought and paid for by wall street. now, to really get things cooking you need one of my favorite aspects of the crisis and that was agreed and shortsightedness. and one thing about wall street, they've got a lot of greed and a lot of shortsightedness and frankly nobody had more of that than the people what bear stearns and my favorite character i write about in the book, jimmy kaine, the longtime ceo of bear stearns from 1993 to january of 2008 when he quote on

quote retired. so just a little bit about jimmy who is the central casting and was a gift to me as a writer and i thank him for that all the time although i'm sure he regrets tremendously speaking to be spending any time with me. we spent about 30 hours together all told all on the record transcribed tapes and interviews. sebelius a real gold mine for me. but jimmy came from the north side of chicago he went to perdue and stopped participating in perdue relatively early on and dropped out one semester short because he had already given up. he pledged bridge all the time of his fraternity house and told me he may and i know this is a family channel but a family defense, but he visited the house's of the ill repute in west lafayette indiana and he told me that was a great deal of

pride. and he worked for his first fall there and all's business in chicago to was a scrap iron salesman. this is the guy that was the future ceo of bear stearns. he decided he would rather spend time playing bridge the and being married to his wife were selling scrap iron so he moved to new york as the pursuit of a bridge player and believe it or not there are people who are professional bridge players even though there is no money in bridge it's not like poker where you have the world series of poker and its televised and people make millions if they win. when you play bridge either professionally or tournaments' that happen all round the country and all around the world regularly winning as a prestige thing to read and believe it or

not before there was facebook if you can imagine a time in our lives before there was facebook and the internet, bridge was like the facebook of its time. it was social networking at its best so you had jimmy came both into new york and playing bridge and bridge clubs in manhattan getting paid he hoped something like $500 a week and he -- wall street, the big waves would come after work to the bridge clubs and want to play with people like jimmy kaine. jimmy came by the time it was a nationally recognized bridge player me give one infected the championship or two by the time he came from chicago to new york and he would meet people like larry tisch who ended up running cbs as many remember and at that time was one of the largest single investors on wall street and somebody who was a big bridge player and although not very good and he played bridge with jimmy came on a regular

basis until eventually jimmy came that the woman who became the second wife and she said if you want to continue to have me as a girlfriend you need to get either a real job or a new girlfriend and whatever reason he chose to get a new job and he used the connections he made on wall street, got interviews at lehman brothers, bear stearns and goldman sachs and ended up not having good interviews of lehman brothers or goldman sachs and didn't even have a good first interview is there stearns but then he met a guy named ase greenburg who was the number two partner at bear stearns and was a bridge a fiscal model also not merely in the league of jimmy came that he had heard about jimmy. so during the interview they talked about bridge and the is the reason that jimmy goff hired under stearns because he wanted somebody to play bridge and teach him how to play bridge. [laughter] now shimmied into a lake and a broker at bear stearns and got the permission to have larry

tisch as one of his clients and he was a great client to have. jimmy had about 12 clients most of them from the bridge world and he built a business at bear stearns out of this but the skill that he had at bear stearns was the ability liked and bridge to create a political coalition with the people around you that could help or hurt you been able to read the cards on the table that could help or hurt you so he was able to put together coalitions of people in the firm that would promote his career and eventually he rose through the ranks of the firm to become the ceo and when he became the ceo of their stearns a 93 eliminating ase greenburg at ceo but not from the ranks of the organization ase greenburg remained at the firm on the

executive committee and on the board which was a little odd because when you decapitate the king he should get rid of talents to of keeping him from but he made the decision to keep him around which didn't really help things as we move forward here but when jimmy took over the firm and 93 this bear stearns was creeping around $30 a share and its peak in january of 2007 the stock was worth $172.69 and jimmy kaine was worth more than a billion dollars and his own stock. the only ceo on wall street more than a billion dollars in his stock and for a guy that didn't graduate college who told me that his life's ambition was to become a bookie i think this is a pretty good accomplishment. he doesn't think he accomplishes the ambition of becoming a bookie. i think he did because he certainly was a good gambler especially with the shareholders

and creditors at bear stearns. now where the shortsightedness comes in especially bear stearns is as i said before bear stearns

reach so for at least three weeks of the year plus the time he spent on vacation and leading by helicopter on thursday afternoon to go to his house on the coast of new jersey to play golf he wasn't as focused on running the business and understanding the risks that ran in the business as he rightfully should have and one of the

reasons was you would think that if he had a billion dollars on the line in his own stock would be plenty of incentive to remain focused but what is forgotten and that is that he had over the years taken up something like 400 or 500 million in cash that he had in other accounts that because the wall street had transformed itself from the series of partnerships it all comes back around. you've got to love the way wall street transformed itself from a series of partnerships to public companies he didn't have any skin in the game so i would ask how does it feel to lose a billion dollars in your own stock, how did that feel and he said it didn't really affect my life. it only affected the life of my hair is and it's the comment but he's absolutely right and in fact that embodies the whole problem of the loss of alignment between the people who, wall street and work on wall street and the people who are financing

the wall street, the shareholders, the creditors, complete and utter loss of alignment and as a result of that you have a situation where toxic securities can be created in huge and vast amounts without anybody realizing the risks being taken. now all of this would have been bad enough without what really caused the decline and fall of bear stearns and lehman brothers and merrill lynch and every other firm on wall street including almost morgan stanley and goldman sachs and that is the little dirty secret of wall street which is the way wall street finance itself. this is something nobody knew, not even on a new. i spent 17 years on wall street and i had no idea how the wall street firms finance themselves so what of the biggest revelations in a long series of revelations, trust me there were thousands of revelations but the biggest single revelation was how wall street finance itself.

the way wall street finance itself which was essentially in the short term financing markets they would borrow money on a short-term basis and use that money to create long-term assets and that mismatch which some people tell me what thinking is all about, you borrow short and go long. unfortunately because the wall street greed in the way the executive committee of bear stearns and other firms compensated they were rewarded to maximize profits which i guess they should do using as little capital, new equity capital as to do that and one of the ways they did that was by borrowing what was called in the short term repo markets which is wall street lingo for overnight secured financing. so no wall street banker would ever tell their clients, noble street banker would tell general electric or macy's or any big johnson & johnson or any big company to finance themselves

this way but wall street finance itself this way because it was cheap to do it. so places like bear stearns did is they would use the securities on the balance sheet as collateral for short-term overnight loans from people like federated investors or fidelity. we've heard of all these people, although i'm not sure people would come after me that big asset management people who had a lot of capital available who would lend on a short-term overnight basis to places like restaurants secured by the balance sheets. by march of 2008 the assets that bear stearns has on the balance sheet were billions and billions of dollars of mortgage-backed securities that they were using as collateral and the overnight markets with fidelity and federated for financing. and how much did bear stearns made in financing every night? he needed 75, i will answer that

come $75 billion in financing every night to run its business. it had 18 billion cash on the balance sheet just to have the round but it needed $75 billion in cash on the overnight basis to run its business. so in march of 2008 it was the rest of what i described to do wasn't bad enough, if it hadn't been for the way wall street chose to finance itself because it was an expensive so they could have gotten long-term loans they were much more expensive they got this short term over term financing which would have been in march of 2008 is the essentially gave every night to their creditors a vote on whether to do business with them anymore and in march of 2008 the creditors voted no, a resounding we know to do business with bear stearns. they said we are not going to roll over these loans anymore. there's nothing you can give as collateral that will induce us to get to these loans and the more so when that happened the

deed was up and the firm had not been rescued by the federal government on that friday morning would have filed chapter 11 bankruptcy and been liquidated so that's what happened to bear stearns. the same scenario and over that weekend in march it was only because jpmorgan cantelon and bald bear stearns that was saved the reason lehman brothers went under is because there was no one to come along and body it in september of 2008. bank of america bought merrill lynch instead of by a lehman brothers but the regulators in london and england wouldn't allow barclays to bye lehman brothers so no one was there to buy it. if no one had been there to buy bear stearns it would have been filed chapter 11 and had been liquidated as well to read by the way, i believe now after a couple of years of thinking about this and then i will stop people can ask questions had a

light beers durham still in the first place in other words had they not rescued their restaurants which was by the be the first time in our history that the federal government decided to save the security firm every other time before that all of these securities firms had gone in and out of business had been allowed to go in and out of business without being faced. it was only until bear stearns can along they decided to save it. had they let their stearns go out of business and not saved it in effect had we, the american people, and not subsidize jpmorgan acquisition of shares durham to the tune of $30 billion have a field, got into bankruptcy and be liquidated by believe a lot of what happened in six months later would have happened very differently. it would have prevented the crisis because it was over long before march 2008 came along but lehman brothers probably would have sold itself. merrill lynch would have sold itself. these other firms would have raised a lot more capital than the into the freezing and they would have cost the american

taxpayers a lot less. it's easy to say that in hindsight, 2020. along the way they thought of the saved bear stearns then they would have saved the rest of it but of course now we know that didn't happen. with that i will stop and turn over to my fellow panelist which is you guys. [laughter] .. last panel asked that.

he said if you were the ayatollah of the day. >> that was on the panel earlier. >> to meet the problems on wall street are like the ones in your card. follow me here. if you come along with the weed eater and rip off the top it looks like the problem is gone. unless you pull them out by the routes you are not going to get the full we'd gone. what this legislation does is comes along and wax off the top but doesn't go to the root of the problem which will prevent a week or this kind of crisis from happening again. we may be on our way to having it happen all over again. 1 thing wall street is good at is not repeating its mistakes in the same way. 3-peat plenty of mistakes over

and over again. you can't get away from greed or shortsightedness because that is human nature but there was a period of time from 1933 on, lexus say from 1933 to 1983, 50 years, basically kept these firms from doing stupid things. but over time as we all know the rules that governed got watered down. we became part of a laizzez-faire regulatory environment beginning in the reagan administration continuing through all the other republican and democratic administrations and we had a total breakdown in the way wall street is regulated and one thing we learned you

have to regulate wall street or it is prone to these crazy behaviors. until you fix the fundamental problem that began deteriorating in 1970 which is the lack of skin in the game and accountability you are not going to fix the problem. as it stands no one is talking about having these wall street guys have their entire net worth on the line like they used to when it was a private partnership. if you could do that and i don't have an idea i can propose, people talk about the poker rule and our esteemed gov. paul volcker has come up with this idea but i believe paul volcker was making a lot more sense on the outside looking in than when he was brought to president obama's side and is on the inside looking out. his proposals make no sense whatsoever. he made much more sense before

obama up brought him to his side but he is proposing proprietary trading and private equity operations that have nothing to do with it. they are more a symptom of the problem rather than the problem itself. these firms are being run by people who get rewarded for taking risks with other people's money and have no accountability for their behavior. if you want to change that you have to create what i call the william cohan rule. if you take for lack of a better number the top 100 people at these firms and create security that is representative of their entire net worth and the 500 people at these firms would be a large number, very big security and you put that at the bottom of the capital structure on the right side of the balance sheet. the first thing to get lost at any time is that capital.

including people's entire net worth including their homes so they lose their home and everything else if they screw up again. if they mess up again they are going to lose everything and i 3t

homes when they could afford $5,000 homes. is that part of the current boom? >> you mean the washout of those people who bought homes they couldn't afford with money that wasn't theirs? >> yes. does he have an adjustable-rate mortgage coming do? >> waves and waves of people lost their homes because they couldn't pay their mortgages and

that will continue. the real big issue that has yet to play itself out is in commercial real-estate. to me, trillions of dollars of commercial real-estate loans are piled on the balance sheets of banks outside of manhattan who will allow that to continue to exist. banks outside of manhattan are in the country that have preponderance of commercial real-estate loans which are mostly under water. >> as i saw in florida year ago, families who had moderate incomes and huge houses, the same feeling of sympathy for the guy who loses a shopping center. >> we won't have sympathy for them and i am not sure we should have sympathy for someone who bought a home they couldn't

afford or couldn't make the mortgage payments. if you enter into a contract to sign on the bottom line you should have enough integrity not to enter a contract you can't pay back and you can make sure you make those payments and i don't have a lot of sympathy for people who don't do that. i am sure as people claim they didn't understand enough that they could get something they couldn't afford. people have to start taking responsibility for their own lives and their own actions. >> thank you again for that night's presentation and i like the way you talk about different threads that contributed to the crisis. you may have left out a few more. >> probably true. >> and i am surprised you are focusing solely on getting all that skin back in. it seems like that is a very

good start but there are so many other things that need to be done as well and i am afraid our political system is such that you can't handle anything like this complexity. my guess is we would have a hard time getting your suggestion past so i am pretty pessimistic. it sounds to me as i do various readings and listening to you in many regards the banking industry itself doesn't get it yet. they are sort of isolated master of the universe mode and you wonder what will wakethem up. >> ron emanual said something like we have a great crisis here

and you should want to change things. a year-and-a-half later we have wasted a crisis because the political logjams down the road, in washington, so political that it is just so distressing. as a citizen who loves his country and believes in it to witness what goes on when there are such huge problems is distressing. wall street doesn't get it either. basically the american taxpayer to the tune of something like $12 trillion subsidized in a huge way the revival that occurred in 2009 on wall street, the profit these firms make in 2009 were done on the backs of taxpayers. i will give you one example of

that was done. by keeping borrowing rates lower than alan greenspan lowered them to 15 basis points so these banks that are all banks, no security firms, the three that went out of business are gone, lehman brothers is gone and bear stearns is gone and the two others, morgan stanley and goldman sacks are bankholding companies. they can borrow something like 50 basis points and treasury securities for 300 basis points so they can pocket the difference in pure profit every single day and in terms of billions of dollars and that is pure profit on the bottom line. whether they barrault from the fed or not they can turn around and buy those treasury securities that help with our deficit and recycling helps the bank and they have huge profits

and pay out $140 billion in compensation. the most ever. the rest of the country is struggling through a 10% unemployment or 18% structural unemployment and the economy is still in shambles wall street is taking $140 billion in compensation and not thinking twice about it. at the same time, if we look at the savings rate on your bank account i look at mine, 15 basis points, that is platinums savings and i am one of there good guys. 15 basis points. a few disconnect. i am shocked by it all. >> if i could ask one quick question. have you heard much about this idea that the chinese building construction market may collapse? do you have an opinion?

>> there is a very smart guy who you should listen to what he says. he was on charlie rose talking about the boom in chinese construction that he has figured out a way -- a version of what john paulson did in mortgage securities in china and makes a persuasive case with cranes everywhere and big problems. they have problems in their economy which will hurt us. they are buying the vast majority of our debts at the moment. if they stop doing that somebody else has to or we will pay higher rates at, we will go from being a triple-a-rated country to a junk-bond rated country. >> i apologize if this has been covered because i was

unavoidably detained. thank you for informed criticism of wall street. there's a lot of an informed criticism. i happened to work on wall street as an it guy before they slaughtered everything and one of the things i noticed or part of it i noticed that made this crisis different from others is the large pockets of money that was not directly out of control of the federal reserve banking system. the artificial inflation and derivatives, a large amount of money that went overseas which is not directly under control. when they started to raise interest rates, long overdue, it was inverted and i watched this and my colleagues tell me we are heading for a recession. how can we be heading for recession? everyone is building everywhere in sight. what i began to speculate as foreign money was being dumped on the long end of the curve because it is easier to do that.

i was wondering about a much bigger risk that the federal reserve system isn't up to the task of controlling the affective money supply. >> the federal reserve is certainly out of options. they went as low as they can go. using monetary policy to solve our problems, that is no longer a quiver. it is clear rates have to go up if for no other reason than favors get rewarded with savings as opposed to banks getting rewarded for getting huge profits. i am not an expert on the fed, but i do think that history -- history will end up being kind even though it is hard to

believe, to the men, henry paulson, ben bernanke and timothy geithner who, through some kind of haphazard throw everything against the wall with a fixed approach managed to pull us back from the brink and part of the reason they were able to do that is ben bernanke was a professor of what happened in -- that caused the great depression. he made it his business to make sure that never happens again and one of the things he believes worsened the great depression was the fed's failure to pump money into the economy. you can say a lot about ben bernanke but he pumped huge amounts of money, trillions of dollars into the economy and it is what got us back from the brink. the questions is use our

yesterday with goldman sachs not indicted -- it is nice to see them backing reality again. under kris cox they were out searching all the time, joining him as a surfer in california. no one heard from kris cox is beyond me at the moment but we saw that the markets fell 140 points and $12.4 billion was taken off of the market cap as a result of the civil suit where they made $15 million. there is a huge disconnect, how quickly things run up in the next few months.

don't forget a year ago the dow was around 6,000. now it is 11,000. we have this huge run up where the economy has not recovered the same way. we are in a very jittery time not help that all by what ed at going on in washington. my new book is about goldman sachs and is halfway done. >> the great vampires. >> that was not needed in that. >> yesterday's the sbc announced accusations against goldman sachs. >> you may have seen that. >> pushing toxic waste at the same time trying to hedge against it on the other side. i am curious to know what you think about that and what is

going to happen. are we looking at some fundamental change on wall street? all that is left is morgan stanley. what do you think of that? >> i could stipulate that the question is not for me. my answer was to that question on the editorial page of the new york times, for all of you to read, to summarize we spent yesterday afternoon riding of my shots in case someone asked me this question today and the new york times was kind enough to publish it in the morning paper. the answer is slicing $12.4 billion off of goldman's market cap seems to me like a bit of an overreaction. the problem with writing that

kind of thing in the new york times or having some video taped coming back to bite me in short order but it seems to me that this was a civil complaint. certainly doesn't read well. the complaint makes goldman sachs look terrible. the first thing that makes them look terrible is there has beenú y the case the sec put

forward yesterday doesn't make them look very good, ethical or smart. what you have to remember, what i wrote in the paper today is we only heard one side of the story. i am not trying to defend goldman sachs, but it is important, i have seen this movie before. since i wrote a book about bear stearns and fully expected there to be some criminality involved in the hedge funds of bear stearns. i wrote about it extensively, two hedge fund managers were indicted criminally. there was a trial last fall in front of a jury of, quote, their pincers in new york. they were not their peers but they were a jury in brooklyn.

it wasn't the sec, it was the eastern district of u.s. attorneys, took pieces of e-mail that were the most inflammatory pieces of e-mail and package them up and tried to sell them off as criminal indictments. sounds like what wall street was doing with mortgages but in fact when the jury heard the full e-mails and the context and saw that it wasn't black-and-white their case failed miserably. there was much more evidence they could have used and failed to use so as shocked as i was by these guys, that jurors said things like i wish i had my money invested with these guys, things like that blow your mind. i have to say to myself is very easy for the justice department

or the sec to write up a civil complaint and coal from its damning information and e-mails in a very damning way and doesn't look good for goldman sachs and people reading that decided they would ask questions later so you have $12.4 billion of shaved off goldman market cap for a deal where they made $15 million in fees and may have made other things we are not privy to at the moment but you have to ask yourself, was this done because the sec wants to show some teeth after ten years of being toothless? is it because we want to blame goldman sachs and they are the easiest target because we don't have anyone else to blame? nobody has been indicated. there has been a wave of revelations about what other firms did and nobody is being

held accountable. at least with the enron crisis there were people who were held accountable. they were sitting in jail because of their behavior. we don't have anybody who has been held accountable and it is very frustrating. i understand why the sec has moved to do this but nobody can rush to judgment because until you hear the other side of the story how can there be a conspiracy with only one person involved in the conspiracy? the fact that john paulson who made billions of dollars from this was left out of the lawsuit and he was supposedly goldman's partner boggles my mind. how can that be true? goldman has said normally these things get settled. this same time they get announced, literally the day before you will notice quadrangle group settles with

the sec and andrew cuomo, the attorney general, their problems with trying to influence the people who make decisions about giving out money to private equity funds and pension funds and former car czar who was involved in doing that, they chose to settle rather than fight. goldman chose to fight rather than settle which means goldman thinks it has a good case and if it has a good case, as much as they are so easy to hate and everyone wants to hate them i suspect there's another side to this. >> i have a two part question. the first part is do you think this goldman thing is the tip of the iceberg and in the next couple weeks or months we will see other firms coming out with this casino approach that we see

on wall street where it is nothing but a bunch of gamblers? and i did read your article and i do debate just because something is not against the law has to be brought up civilly, does it make it right? my interpretation was if you by someone from someone selling you a product, you put your faith in to what they disclosed and the transparency of what they are telling you. henry paulson is a criminal because he selected for goldman the securities he wanted bundled to tel so he could short against it knowing they were all bad loans so that he could make the money to put in his pocket and just because i use the word criminal that there is not a

law. when something smells, it stinks. goldman do. they had him as the innovator and selector of the securities and they did not disclose it to any of the institutional investors. it was a lack of disclosure. all the other firms are doing it. >> you touch upon a very important point which is this whole thing stinks to high heaven. it stings and it gets back to the deterioration of ethics on wall street. maybe wall street is a reflection of our society as a whole. it might very well be. there has been a deterioration of ethical behavior certainly on wall street and it stems from the desire to make as much money

as you possibly can as quickly as you can. i went from being a journalist working in north carolina in 1983-'85, where it would take me ten years to make as much money as i did in my first year on wall street, it would take me ten years as a reporter at a time when people were not getting paid that much. you can imagine not only were we sucking out the best and brightest of our american youth who for some crazy reason going to wall street to push paper around and deceive investors and create securities full of opaque as that no one can understand,

even the lawyers, alone people who run these firms, yes, mr fabulous fab may have understood these securities and may have understood what he was pushing on people and seemed to be jesting about it. it is terrible and i was really hoping this crisis would reorient our best and brightest back to doing things where they manufacture or doctors or scientists or those things that can help make things and add to society as opposed to pushing paper round. unfortunately because wall street made $140 billion of compensation to spread around everybody in business schools, best and brightest in colleges and universities want to go to wall street again. it is a terrible deterioration

of ethics and responsibility and good behavior. my father's generation didn't do that. people who lived through the great depression would never be paved the way people are behaving now. >> do you think it is the tip of the iceberg? >> every firm was doing this. goldman probably had people just that extra bit smarter to create -- if you ask what they created, they created a security called synthetic collateralized debt obligation that wasn't even made of other securities. it was made of the risk of other securities. you can't make this stuff up. even if you were the best fiction writer on the pace of the earth you couldn't imagine security like this. was goldman doing it? yes. innovations come along and other firms deconstructs them and copy

them because of the opportunity -- $15 million in fees even though it is meaningless in the p and l of goldman sachs with mr. fabulous fab so he can show $50 million of revenue. his bonus is going to be pretty big. >> since there is no law presently on the books that they are breaking that make it right? will they get away with what they have all been doing with the argument that they are going to use as their defense that we didn't break any laws? >> my greatest moment in life after getting married and being present at the birth of my two sons was going on the john stewart show a year ago. so john stuart, when you go on that show your just a procter. you are not informed of the questions he will last before hand. no way to rehearse.

you have to think fast on your feet. it is taped live. the stress level is very high. the nice thing was he said a lot of nice things about the book. i wasn't sure he would treat me like jim cramer. it was right after that. he treated me very nicely but one thing he asked me was he said to me so in your book you talk a lot about bernie madoff. the first thing is i don't mention bernie madoff once in my book. first thing i have to decide whether or not i am going to correct john stewart and decided to not do that. i decided to roll with it. yes, i talked about bernie madoff in my book. he said answer me one question. what is the difference the tween a ponzi scheme and an investment bank which was a great line which he couldn't have used had he not mentioned bernie madoff and thinking quickly, i said

something like the truth is obviously bernie madoff was a criminal, went to prison for 150 years in north carolina or wherever and what he did was against the law but what wall street does isn't against the law. they helped write the rules and regulations by which they live. there is a revolving door between the sec and congress and wall street and the money goes back and forth and we all know how this works and it is no surprise, the only indictments are these hedge fund guys. there are no other indictments. wall street has written the rules you live by. when it violates the rule, what goldman does is come within a hairsbreadth. that is my point. it is not to say the sec will have a hard time proving that

goldman sachs broke the law but they didn't break -- they did break the spirit of the law. you shouldn't be doing what they did and they are clever enough and have the best lawyers and will be very hard for them to prove that goldman actually didn't make the disclosures they claim they didn't make. i think bolden place it up to the edge of the law. they know the rules perfectly because they helped write them. >> we're running out of time but we have time for one quick one. >> i will make my answer quick too. >> my question is with the it revolving door and inappropriate -- will there be a reduction in

funds? i am nervous about investing in wall street. until there are more regulations i am not sure what the next thing will be. >> wall street seems like a big black box. of big casino. part of what i am trying@úsr who are not wall street brokers

who have a very different philosophy and those are the people you should seek out. most people don't have the time or inclination to manage their own money. they may not be good at it. it has to be a very frustrating time for people. washington doesn't do anything. what they choose to focus on in terms of regulation. the only good aspect in this bill is in this push obama said yesterday, you have got to regulate these derivatives. people sent -- see what they're made of and what they're bought and sold for. that is hugely important. we don't have time to get into it but the credit default swaps market and creation of these derivatives exacerbated all the problems we faced. >> we could have a daylong seminar on these topics but i want to thank william cohan for

an informative presentation. [applause] we have a few minutes until our next panel. william cohan will be to the table to the right and you can purchase a copy of his book and he will sign it for you. the next panel will start in ten minutes. thank you very much for coming. [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> they want me to -- >> that is fine, thank you. thank you so much. >> my pleasure. you will see how day did it.

thanks for coming. >> could you do to emily and alan? >> do you think john stewart knew whether bernie madoff was in your book or not? >> yes. i think he knew what was in the book but he was obviously setting up the joke which basically a i love the guy. that is what he does. >> both of them -- >> okay. >> k r i s t i n a.

>> is there any hope for wall street? >> michael again? is there any hope? >> any hope for anything? >> i know. if i were a politician running for office i would have to say yes. i think we have been deteriorating. i am doing a book called 1963. the day kennedy was shot seems like -- you know -- i think

obama is trying to do the right thing. at least he is trying. he is not getting much cooperation. [inaudible conversations] >> thank you for your kindness. [inaudible conversations] >> david. >> starting shortly the last panel of the 2010 and apple was

book festival. it features the new america foundation's barry lynn with his book "cornered: the new monopoly capitalism and the economics of destruction". >> they threw the woman under the bus. >> read my article. >> when was the article? >> it was last summer, june or july. >> they need to be excoriated. >> do you have some more in the boxes? >> yes.

>> ok, great. >> my name is dan. can you do me a favor? are enjoyed your lecture. >> twoi enjoyed your lecture. >> two days after that day. >> deuce started out at the journal? >> believe it or not. i started out as a journalist and i was there for two years and went to wall street for 17 years. [talking over each other] >> early in my career.

>> i was and and and a banker too. in grad school i went there. >> peter. >> what industries? >> mostly sports illustrated. we are selling our business to work with goldman to our embarrassment. actually i thought their image was on amendment to yesterday. >> goldman guys -- the others set up shop. >> they would say that. they always say that.

>> you are stupid enough to go with a broker. >> make that out to you? >> no. >> on booktv, the 2010 and apple was book festival. up next hour final panel of the day featuring the new america foundation's barry lynn discussing his book "cornered: the new monopoly capitalism and the economics of destruction".

[inaudible conversations] [inaudible conversations] [inaudible conversations]

>> good afternoon. good afternoon and welcome. welcome to the annapolis book festival. of beautiful day. i am the president of the maryland capital advisers and cast a trustee of this great place. to date we are pleased to have barry lynn join us to have his latest book entitled "cornered: the new monopoly capitalism and the economics of destruction". after our collective experience of the last few years we are more interested in finance and economics and that is a good thing. barry lynn's book makes an important concentration of market power as well as today's

megacompanies and how affects us all. it is a great book. it is a book that will resonate with any of us as we go out and shot for good and services at the nearby malls. by way of introduction, barry is the director of markets enterprise and resiliency initiative and a senior fellow at the new america foundation. his previous book was "end of the line: the rise and coming fall of the global corporation". he has presented his books to the european commission, the white house and the u.s. treasury department. as well as many corporations, labor industrial unions and academic groups. he published several articles in the times, harper's magazine, just to name a few. we will have time for q&a after the discussion but now let's learn more about the monopoly menace as the title of our forum

is called. >> thank you for coming. it is a pretty day outside and i would rather be outside myself. i was up on fletcher's boat house of a couple weeks ago in d.c. and there were a lot in the water. what i want to talk about today is not fishing but another thing that happened in the water which is the tea party. there has been a lot of talk about the parties in this country recently. it is important for us to give the story of the original tea party right. a lot of folks say that the tea party was a rebellion against high taxes and that is not really the case because actually the tee that was going to be landed was going to be considerably cheaper than the tee people were drinking at the

time. some people say the tea party was against the principle of taxation without representation which is true. 3ñ,ñut2ñ they accepted taxation within

reason. what they rejected was monopolization and they rejected that completely. america was in many ways a rebellion against monopoly. it was against monopolization over our souls by any one church, rebellion against monopolization over land by anyone or few awards. it was a rebellion against monopolization of trade and commerce and our markets. for 200 years we used our anti monopoly laws to protect us against concentrated economic power hence concentrated political power. that was the purpose of these laws. we can look at it as a way of extending the concept of checks and balances into the political economy.

in some ways the one great misfortune about power and time monopoly laws or antitrust laws is we got the word anti in them. makes them seem little bit negative. at the heart of them is a very positive and important vision and did is a simple and elegant position. an independent republic made of an independent citizen. it is important to talk about what that means. independent republic, that requires us to use our government to fight all of these efforts by a monopolies in other countries to dominate trade over some activity in this country. the founders understood the word free trade. it didn't mean protection but it also meant you wouldn't allow

another country to dominate another fishing. the idea of an independent citizen is every citizen in the country or as many citizens as possible would have property and liberty to work that property. the liberty to bring that property to an open market. you have to understand the word property is not just real property. is not just land or machines. the concept was property included labor itself. this was something james madison made clear in his writings. he reviewed labor as a form of property and you had a right to exercise it free of control by other people. one of the great things about james madison was he was very realistic. he understood that not every individual would be truly independent all the time. his goal was to distribute power

as much as possible. he wanted to enable as many citizens as possible to make themselves as free as possible at any one moment. over the years a lot of folks called madison and jefferson and naive. they said their vision of property competed specialization but madison's view was very practical political. he understood that those who preached specialization actually wanted to concentrate capital. they wanted to concentrate control. what he also understood was independent citizens who saw

themselves as independent, he saw these people as essential to the preservation of liberty. he said these people are the best basis of public liberty. they are the bulwark against the would be lord's. he expressed this in a simple equations. this is an equation they can't capture today. the greater the proportion of this class of independent property owners to the whole society and the more free and independent and happy must be society itself. it is very important for us to remember that this vision is not also a vision that was isolated in time. it is not something only of the nineteenth century. there was a long period in this

country when that vision of an independent property holder was erased. that long period in the nineteenth century when the clue the cracks were in control and in the twentieth century when the corporate guests were in control. the independent property owner was shunted aside. but this vision was resurrected in the 1930s. we actually resurrected this vision in the second new deal. the people, the populace in the new deal prevailed again. at a time, early 1930s is a time when germany, japan, russia were falling deeper and deeper into a foreign carrier terry and even totalitarian horror. in the united states the people resurrected a democratic republic. during the second new deal.

to understand what was accomplished, this is after the corporatetests were in control. i will turn to the words of supreme court justice william douglas. half a century ago he said these words in a case in which big oil companies were attempting to capture control of independent gasoline stations. when independents are swallowed up by the trusts and the entrepreneurs have employees of absentee owners the result is a serious loss in citizenship. local leadership is diluted. he who is a leader in the village or the town becomes the pending on outsiders for his actions. clerks responsible to a superior in a distant place take the place of residence proprietors behold and to no one. in the 20th-century in the middle of the twentieth century we recreated in this country a republic of independent citizens. those of us who are somewhat

older remember it this. we remember growing up in a country in which power was really distributed throughout communities and states. two years ago i started writing this book, i told people i was writing about monopolization in america people said you are crazy. there are no monopolies in america. this is cowboy capitalism, the most competitive system the world has ever seen. as mike suggested we are less serum of that. we had the experience of what happened with lehman brothers and the meltdown and the experience of what we learned from the debate about health insurance and learning how much power is concentrated in private hands. we had the experience of watching films like food ink or reading michael pailin's books and learning what is going on in

the food system. most of us think we live in a free market system. but it is important for us to take an honest look at what is taking place in our republic today. one way to do this is to start with books. you guys are here because you actually really deeply loved books. this is a book festival. i spent a lot of time talking to people in the book industry in recent months and the reason is because last fall there was as some of you may remember a big price fight between amazon and walmart over books. ..

in front of the press and both business and united states right now we see fear. let's think about to be here for

a second. when you go to the store you see all these different beer brands and one of the greatest success of the country, all these new bottles and it's true in 1970 there were four pure was in the country now is about 1500 approvers in the country. the difference is that to foreign trading corporations fell about 90% of the beer. two of them. all of those little tiny breweries, all of them have it together total about 4% of the volume of beer in this country. last weekend i was speaking at a brewing conference in chicago. one of the borough worse stood up and said she was speaking to the people who were on the craft brewers association and he said i looked around and i see two foreign corporations running of

the year market in this country and what these people said, with a told him is we have to be gentle with these folks. we have to go gentle with these giants because if we disturb these giants they will disturb us a lot bigger and a lot more effective ways. and i was talking to another guy afterwards. one of the biggest most successful independent craft brokers in this country and he told me how does he get into a market, into a big box stored in america today, how does he do it? does he call wal-mart and say i want to take my year and put it on your shelf? essey call kosko and say take my year, but it on your shelf? no he calls anheuser-busch and says will you use your trucks and distribution arms to carry my beer into the wal-mart to carry my year into kosko and the

place you decide to place it. that's the open market system in the united states of america today. and the beer brewing we see thir. the same in manufacturing. there is a law to change -- there's an effort in the congress to change pricing policy in this country. it is an arcane subject and i'm not going to bore you with issues of pricing policy in this country but it's a policy the way this could benefit taxable real manufacturers, producers in this country none of them will go out and speak of in favor of this law because they are afraid. they are afraid that the powers that controlled the trading companies will take retribution against them. they are fearful. johnny and manufacturers are fearful in this country. before i go on we talk about

this country being a sort of paradise of entrepreneur should of small business. we should understand exactly what has happened to small and medium-sized business in this country. the oecd recently came out with a study looking at the sort of number of people in this country who own their own business is actually the 22 richest nations of the world, the 22 richest nations. where did america come out in that list of the 22 richest nations? we came out second to last about only luxembourg. meanwhile, wal-mart, one company now controls in some cases upwards of 50% of the various lines of business in this country. 50%. often 50% plus. but let's get back for a second to this issue of fear. let's take a look at the sort of our independent workers because not everyone has the ability to

run their own business obviously. the salary workers in this country let's look at white-collar employees and what is happening to people in this country. just one good example think is what is going on on madison avenue in the advertising industry. not long ago you had the couple dozen large advertising agencies, independent agencies and if you were a worker, if you were in executive you could go and you could compete the different potential employers against each other. you could sort of get a good salary. there's a market for your labor in that industry. recent years, three giant holding company is about up almost every single one of those agencies. they control those agencies. the relative bargaining power if you are an executive in advertising today is coming your

bargaining power has gone down a whole lot in the people who control the system. you live increasingly and fear. not to mention the fact your chance of getting a better salary and more benefits has gone down. we have a fancy name for this. we call the labor monopoly that is when you have a single wire essentially in cahoots with each other. we can also express in a more simple way which is that when we left them, a bank monopolies, we see to them the power that governs the power to dictate terms. this is true as we just learned about doctors and nurses. here we are worried about creating some kind of a government control over medicine yet we already have a hard doctors and nurses already been consigned to government by private governments called insurance agencies, insurance companies.

it's true in silicon valley just last week in "the wall street journal" there was a report the antitrust division in the department of justice is looking at a buyers cartel for labor in silicon valley. they said google, ibm, apple, intel and a number of other countries have, quote, the have agreed to offer each other's employees, the buyers cartel in silicon valley. our independent republic you know many of you have heard of the battles between hambletonian's and jeffersonian speck in the early days of the republic. they fought on 2 million from whether this was going to be an aristocratic republic in which a few people use in chile are system would be mumbai a few words in charge of industrial and land is states, that was the

hamiltonian vision or what everyone would have property. then the second front was they fought over what kind of trading relationships we would have. what we've essentially be dependent on the british, that's what hamilton wanted where we fit into the system, or what we have free trade which was understood to mean we would trade with anyone with a spanish or french or dutch, whoever. it took 20 years at the beginning of this country to work that out. the sedition act, the embargo act, the war of the t-note wealth. these are putting ourselves free from the british trade system. eventually them addisonian spawn didn't come won and we managed

to keep ourselves free of other people's trading systems for a long time. and after world war ii, we had the power to engineer an international trade system structured around this strange but kind of weird lee perfect amalgam of interdependence and independence in which the nations of the will what kind of brought together in a system in which they could pursue their own sovereignty yet there was just enough industrial interdependence to insure that there was really hard for them to go to war with each other. our postwar trading system hammer together in short peace and prosperity through interdependence for many decades. so what have our free traders and over the last 17 years? since the clinton administration came in and signed the uruguay

round of the general agreement on turner was on trade? the essentially sold the keys to this entire. it is a beautiful, this liberal, cosmopolitan entire that so carefully structured imperialists systems. they sold those keys. it turned over the control of wall street and wall street essentially turned over control to the wall street great trading companies and we should understand what wal-mart what is wal-mart? the company reincarnate. we just got the wrong and on us again. and the result, our independent republic is increasingly pt pendant. i will give you a couple of examples, food ingredients, vitamin c dysphoric acid using these different practiced phyllis to preserve the packaged

foods. vitamin c was first synthesized in the united states, first mass-produced in the united states. we are now 100% dependent chinese vitamin cartel for vitamin c. 100%. drugs from the ingredients in drugs, the actual ingredients about 90% come from china, the weekend trade with china tomorrow we don't have jobs. when the obama administration looks at china what do they feel? fear. that is the beginning. i won't belabor this, but just, you know in my books one of the things i look at just to make clear because we do conserve results primarily consumers to this point, variety is down. for ideas down. i tell stories about the company, there's one company that dominates our eyeglasses

business in this country. those two countries that dominate the toothpaste business in this country. there's one company that dominates pet food production in the country. we go to the store and see choices but increasingly it is an illusion of twice with the quality of our products is going down. the safety of many of our product is going down. our health if you measure by say diabetes rates in this country, if you measured by life expectancy in certain groups of people it is actually going down. prices? they are going up. vitamin c cartel, what they did to the chinese after 100% control of vitamin c they raise the price of four entered%. beer, last year was a bad year for beer in this country. people are of jobs. beer consumption went down. price went up. inputs and you're went down. price went up. why? to companies that work together in other parts of the world control 90% of our beer.

job creation, that's gone down. monopolies don't have to create jobs, they just tax more. innovation, that's gone down. destructive speculation will that wind up. manipulation of choice within our political system, that's gone up. autocratic control in the country, that's gone up. vital systems, this ability of vital systems of finance, of production systems, that has gone down. two interconnected to fail it's not just true in the financial system is also true in our industrial system. pretty much every economic market in this country has been in some ways monopolized. i go through and i won't go through here but whether it is grains, metals, energy, retail, services and production if you

look at high-tech you about microsoft, intel, ibm from cisco, half the company's role the systems. i haven't even mentioned the folks that have their hands on our brain like google, at&t, comcast, news corporation. just to sum this up actually i will turn to an outside expert a guy named jim cramer some of you know from msnbc. when the justice department a couple of years back approves the whirlpool, maytag merger that gave will pull 75% control over our washers and dryers and various other things in our houses this is what jim cramer said. if there was ever any out in your mind that we have a government of, like, and for the corporations, if you thought for a second that we were not right back in the gilded age, if you have the least ounce of faith in

the regulators to do the right thing, you should give that up right now. then he went on and he goes on tv i play a guy who's out to help you make money. but when you're not trying to get rich, feel free to get mad. so how did this happen? there is the simplest answer, the simplest answer is that we were taught to see ourselves differently for 200 years in this country we saw ourselves as citizens for most. and what the citizens value? citizens valued liberty for most. a generation ago, however, we were relabeled or allow ourselves to be relabeled consumers. what do consumers tell you? consumers value not liberty, the value of stuff, lots of stuff, cheap stuff. it is important i am not making some kind of a hippie ranch.

this has to do with law. strange as it may seem americans are not citizens but we are consumers was actually used to refrain how we apply our antimonopoly law. again for two centuries in this country we store and a monopoly law to protect ourselves as citizens from concentrated political power and from purgation in the marketplace is. there's part of an anglo-american tradition that goes back 800 years. practically this meant a couple of simple rules that we would use the balk in pos competition just for the sake of competition a matter what because competition means that there is not collusion. and we would use the wall to protect our markets. then and 1981, the ronald reagan administration came to power and they changed this frame. they said from now on, rather than using these laws to help us

as citizens we are going to have them help us as consumers. we are going to use these laws to promote lower prices because that's what consumers like to read and they did so for a simple reason, to promote consolidation. because the consumer welfare test the put in the places is simply a thin cover for the cold efficiency argument. some of you may recollect this is what -- back in the gilded age, john d. rockefeller, jpmorgan, people would say how is it you should have so much power they say it's more efficient as we. competition is wasteful, competition is wasteful. but all the power in my hands and i will dictate what happens in the system in a way that helps create a more efficient system. it's good for all society. it is a seasonally of course what we khator said.

it is the same as many people who run the biggest corporations now. people run wal-mart say the same thing. let us use the power. it's good for you. in 776 in this country return from subjects into citizens. in 1981 we return from citizens back to consumers. this is not a partisan thing. when the reagan administration started to put in this idea of a consumer welfare test a lot of people from the democrats to believe in this consumer movement, they said a man. but we have to be -- we should understand the basic logic of consumers this is the basic logic. consumers are served best by lower prices. lower prices are achieved through economies of scale, our goal monopolies are our best friend.

to accept this efficiency argument has always been the and this is true in the 18th-century france, this is true in nineteenth-century america and in 20th century soviet union it's always been to accept a straight line trip to concentrated political power. and in the three decades since that happened in this country, market after market this has already in place to what i said before the market after market trading companies run by wall street financiers have inserted themselves into the relationships between american citizens. i will give you an example of how this works. one of the things i did when i was reading this book as i said i'm going to go find out -- i'm going to find myself a farmer, one of the last jeffersonian addisonian farmers they went to this place and in eastern

tennessee the but haugen valley. and i found this fellow named ronnie hazelwood. he has a dairy and 70 cows. and he says you know, mr. hazelwood, where do you sell your mel? he says that's become the problem. i used to sell it in the local community but now i can't. now why depend -- there is a guy on the other side of the blue ridge that sends a truck over every day and picks up my milk and there's a couple other surviving very spirited what about the people in your community? they buy their milk at the wal-mart. so i went to the wal-mart and one might find out where does wal-mart get their milk if not for mr. hazelwood. so i went to this wal-mart in elizabethtown tennessee. i went back to the cold case and i looked what was inside the kuhl case and it seemed to be all of these choices in their. you could buy milk that had a label that said pat garrey on the label that said mayfield

another that says great value, that's the wal-mart in storebrand. well, what i found out the little research after the fact was paid to dairy and mayfield are owned by a company called dean foods and they also provide all of the milk in the southeast at wal-mart puts into its stores. and dean foods probably controls horizon milk which is the organic milk that was in that store. basically for plans, one company and they didn't feel like they had a deal with a 70 cow farm in the valley even though it was about 3 miles away. so the united states in 2010 farmer and a dairy farmer he's locked out of his own community. he cannot sell to his own neighbors. so when you and hear the word consumer i think we should swap

in the word from now one of the work like peon. we should swap in the word like tenant or maybe like proletarian let's go back to the word subject. that's what we are now. we are subjects who once every four years are patronized by one of the other factions of our elite. when you hear the word consumer think concentration of power in the hands of someone other than you. indeed we've seen the greatest concentration of power in this country than we have seen in more than a century. i wrote cornered for many reasons. in part it was simply to highlight the degree of concentration that we have seen. no one has done that. i don't know why that is to read the indoctrination of power people just really believe the myth. i didn't tell few years ago. i wanted to show how this power

affects people. i wanted to show how this power of six companies and systems. i want to eliminate the political arguments that they used to concentrate its power. i want to make clear the stakes, what are the stakes? the stakes are we increasingly see in this country a combination of private and public power blurring together private and public power. it's all ready corporatist and nature and increasingly futile and nature and authoritarian and major. so what to do. a kind of seems a little hopeless, doesn't it? you know it ain't going to be easy. but i am absolutely completely certain that we will prevail. we will break up and harness these goliaths.

we will redistribute this power. we will resound our american republic if their time. now why am i optimistic? first, we have no choice. in my previous book and this book elkus systems have been made to interconnected to fail. it is a simple engineering issue. nothing complex about this. look at the systems and you can prove that they are fragile and they can be made safe. so if you look at you can understand it did have to do it. you cannot live in a system set are going to be -- they're going to collapse. the sec brings i'm optimistic is we have a very powerful tool that we have not been using. this is called common sense. and the language if you read the language and read madison and

hamilton, if you read brandeis they speak in the words of common sense. they don't use the words of the academic economists. they don't use the words of the social scientists. they don't use mathematics to describe political systems. you know what takes place in this country every single relationship in our political economy is political in nature, political in nature. there's nothing fancy about it. it's just like the end of the wizard of oz. most of you have seen that. it pulls back the curtain and what did they find? they found a little short guy pulling a bunch of letters. the academic economists in this country what they do, what they serve, they are the ones who leave the curtain that hides the people pulling the levers.

so just stop listening to them, use our common sense. the common sense does not all of your aides in one basket. academic economists until you put all of your eggs in one basket. the third reason i am extremely optimistic is that we have this very, very powerful political philosophy. it's an hour passed. the books are all there, the documents, are there, bill walz are there to be dustin off. for 200 years, most of 200 years this was a space republic. it can be made so again. the models, are there. we have a model in the second new deals shows exactly how to distribute power. this is a deeply conservative philosophy. it's based on the idea that we

should never have faith in any tiny elite to lead us in one direction or another. it's based on the idea that the only we can move forward is by dispersing power as so that the very slow wisdom of the people can figure out when someone is doing something bad and block it. fourth reason i am extremely optimistic is that we have the power. i've spoken recently to all these different groups. i spoke to the booksellers and i've been speaking to farmers and to the brewers. everyone is in their little corner and they are looking up and they just see the local bad goliath and they feel like they all alone. when we bring all of these people together with the

opticians, the pharmacists the software engineers, the scientists, with the advertising executives, with the doctors and the community bankers and the veteran capitalists and all of these people who've been excluded from the system we have a really big numbers. we have the same enemy. it's very simple. we need to come together. and there's a fifth reason aye delivery optimistic and that is a lot of them are going to help us. we kind of about them to do what they did. so when we stand up and organize and say that what you are doing is really dangerous physically. it's dangerous politically. it's dangerous economically a lot of these people were going to help us take part this

concentrated power. i know this. there are people who really believed in the democratic republic of america. but it's not going to happen until we organize. now the good news and here is more good news that it's already started. it's starting in the u.k., starting in the tory party, starting in the liberal democratic party. i spent a lot of time talking to people in both of those parties the last few years. to stuff some extent it's already happening in this country. there are pockets within the congress. there are pockets within the administration. there are people, individual people in the congress and administration doing a really great things. i can't say unfortunately the administration as a whole is doing great things yet. i can't say the congress as a whole is doing great things. there are people who see the light and there are people who -- said the issue is due in power those people.

one thing though and i started talking about tea party. in some ways that is another sign that good things are happening. a lot of the people who are in the tea party or out in the streets, these are the people who are out there leading an effort to make change. in some ways i think they might be misled. i think one of the most important ways the army being misled is to attack the government. they know something is wrong. like we know something is wrong. we all know something is wrong. but we have to understand, we have to remember and this is the thing about the democratic republicans. madison and jefferson and brandeis, what they understood is there is no such thing in

this world and were the libertarians are at fault. there is no such thing in this world has no government. there's always government. either run by us or run by someone else. and if we are not using government, some one else is using the government against us. that is just the way it is. so in many ways negative in fact we have people out in the streets in this country now is a good thing. so you add all of these things up and the change is happening. the other side does not have the power. it looks really bad but there is greaakening that is taking place. so anyway, thank you for coming out. and we have a little bit of work but i think it is going to be fun. [applause]

>> by the way, barry does that in the book as well, it really bums you out. [laughter] and then shows there is potential hope to get out of this. we have time for some q&a there are questions. >> there's a microphone at the end of that rope, please. this negative i really appreciate all of the mollies you talk about. the big granddad is right now six banks represent about 60% of our gdp which i was shocked when i found that out and they are spending over a billion dollars a day with congress trying to

affect the change into laws to regulate will st. and wall street can turn around and sell to their investors stocks and then turn around and take the call i forget if it is true but it is or what it is and then bet against it and make themselves a lot of money and it is perfectly legal and they have that kind of clout and 60% of the gdp. that is a monopoly that is really hard for us to deal with and on top of that there's one other thing they don't understand there's a movement -- i know in your they're trying to do it and that is a tax wall street. for half a percent of tax on the transactions on wall street that is the equivalent of all of the bailout money that we got.

but we paid out. if that is a half percent, if we tax them at 20% which is what we all pay for sales tax we think china would get paid off pretty quick. >> these are both great comments. one of the reasons i don't focus on the financial consolidation, i do focus on this in the book, but i also knew that there's a lot of other people who've been looking at that in recent years and so when i was writing this book especially as the financial collapse started there are all these books and all these research projects that were sort of being launched and what i wanted to do is no one has been looking at how wall street as a group, how does it exercised its power out into the rea