economics and i haven't toward the world's financial crisis but i thought about it and seemed to me that would be good enough to win but not quite yet. ..

a. >> and here is what they tell us. in the editorial page of "usa today."

they're not interested. investor standards, lack of transparency, lack of discipline and unmanageable risk and uncontrolled hedge fund and the one that i like the best, agreed. [laughter] movies are wrong but none of them that ask the preliminary question that is not why did the train go off the tracks the war was the train on the tracks in the first place? but why was our train, the biggest brightest shiny is most comfortable train of the world? a and not only that but for the last 1,000 years. they don't ask these questions. the next question louis is the infinite the group that

created this economic civilization? unparalleled in world history not only strength insisted ability, unparalleled. the insert is, that culture is judeo-christian culture. the only one that is an answer to that question. been to find out why and how judeo christian built the civilization, i had to go back and to call on answers i stopped and checked with a friend of mine, mr. peabody. we went away back from the barofsky and paul winchell fans. and beginning to answer this question. i will stop on the way back

and those who are smart can answer the question before i get to them. let's start with 1993, 1993, 1969, 1933, 1907, 1993, 1969, 1933, 1907, 1834 , 1454, challenging. 11 '05, 35 a.d. then go back at 1250. i will trace the history of what i do in the book of our economic civilization because basically that is to build the civilization and finally took it down and took it down a notch. curiously in 1250 b.c. the

civilized nations in the world against usury but in 1250 it was the first culture to ban usury was the jewish culture. it shows up excess 22 :25 if you lend money to any of my people, thou shall not be to him now you show lay upon him at usury. they were all with line with lending and interest until the secular economist look back and say this is crazy. how can you have the investment oriented coulter if you pay and lending and

interest but the question is why did this culture thrived and all the others fell by the wayside? is like reading iras regulation. they are a tedious little details and what happens if you violate somewhat in babylon you may lose your laid the -- license but in israel you lose your soul. that is a big difference. that means going forward you will be self discipline trying to do the right thing because god wants you to. if not there are consequences. the eternal consequences far worse than getting a thousand dollar fine from the irs. really bad things could happen to you. >> but the ironic question comes out how is it that the

one culture in the world that bans usury it within 1,000 years, 1500 years become the poster children for that very act? how is it would ban led them to become the symbol? it comes down to a second book in the bible, deuteronomy. of throat the bible or the old testament david, solomon, nehemiah, th ey all say usury is dead and wrong and bad but in deuteronomy bailout day loophole that is almost a bill that says and to a stranger upon whom is land they usury you cannot lend to your brother of lot and a charge interest because you would be a bad guy is a curious $1,000 i want teeeleven hundred back your

sister-in-law would never talk to you. but until a stranger you can cause interest but then something happened. the next stage is 35 a.d.. what happens? anybody here old enough to remember? [laughter] 35 a.d. saw on the road to damascus. he is blinded by the white. and the lord says, go this man is my chosen instrument to carry my name before the gentiles in kings and the people of israel and what this means is that there are no more strangers. know every ready as part of a family and says the phrase and to a stranger almost

most politically consequential word in all of the continent to set them on the road of division although it would be synergistic antagonism they would need each other and use each other along the way. nothing else happened a few years earlier and jesus of the same thing we're the same family but introduced a new concept into ancient culture which is common in the middle east if you wanted to get rid of your wife even in jewish culture, a man could disown her and say i am no longer mary beth jesus says matthew 19 :six what no man put asunder which god has put together in marriage is a single building block of civilization.

and that is why it is essential to what i write about kerkorian and jumping ahead 1105. toledo ohio. [laughter] the spanish take back bit by bit from the islamic invaders coulter that had taken over the peninsula. richard rubenstein with a gathering that took place of arabic scholars come and jewish scholars and christian scholars because in the ku source of embarrassment and what happens, the muslims in their conquest of the whole mediterranean sea, they had been taking bids of culture

from all over it and translating it to your back and saved a lot of greek civilization and brought them back to the mediterranean and the number was zero. and they joined with christian scholars and jewish scholars and translated into latin. what happens after this is the islamic culture turns its back on the whole civilization and retrenched and stop growing and imam said this is wrong and pay again and don't pay attention. jewish scholars did not have influence one way or another but the christians dollars ticket and ran with it. among with aristotle among the medieval culture and they are embarrassed because anything could happen

between 580 they think reinvented the world's 1680 than in the renaissance and the whole 1,000 years of christian history was not what is going on. the christians of that era began to build the later foundation for the greatest economic civilization the world would never see. the money flowed through rome and the institutions that were near rome began to create the banking empire. i cannot write a book without the ninth tempore. they're everywhere even in the paris hilton book. [laughter] but of course, international finance was there because they were there. the money was flowing

through into rome word various offices. there were taking this without the use of interest but they had various things that were considered croquet much like sharia banking today. there are ways around it. but the world is changing with the intellectual explosion the world has never seen before that is what is called the ku source of embarrassment i don't think richard rubenstein is a christian follower my guess is not but he said muslims to turn their back on this therefore took the fateful step that islamic leaders have rejected and i italians are the first grade banking instigators they invented double entry bookkeeping which was critical late also introduced the arabic

numerals of course, they took them from the indians but they have the number zero. and doing debit and credit calculating in roman numerals. ever tried it? don't. it is impossible. one of the key people they took, the central person of the whole intellectual is up their rediscovered aristotle they liked his notion of reason and integrated that into their own world view and begin to see faith and reason were not enemies but compatible you could find your way to guide especially through both and center the world to make a rational quarterly based world in which people were responsible for their own behavior. and they began to prosper in

people today like to look at that there is another age but this is a thriving brilliant civilization all of the great centers were catholic then is committed to new-line come with their paul -- all part of the christian dume. they invented clocks, maritime devices and technical things that allow them to go out. one of the things they created by the way, donte called aristotle the master of those who know. that is how much importance they put on aristotle. when donte goes into the inferno to the nine levels of bell it is interesting

whose chief nine sparc in the seventh circle there is only nine possible places the first circle is not bad they're not christians but the seventh circle he finds the users and he asked virgil why are userers here? but he reverse into aristotle he did not like them be there. if the poorest of christians would not have been into the ban on usury and the relationship between christians and jews would have been better. version refers him. and thus the whole thing is settled. in the fourth circle of hell we find someone else we do not even consider centers

today that is part of the problem. there are the prada goals. that aristotle defines. he did not like them me there. he describes them exactly as we would today come a people who borrow shamelessly and spend recklessly without worrying if they can pay their money back. but is what a prodigal is. and aristotle with the help of dante puts them in the fourth circle of hell. if you borrow recklessly and spin shamelessly and don't pay your money back and don't care, you will go to hell which causes people who live in those times to behave badly. that is not to say everyone is be heaving wonderfully, because they are not good enough are regulated and themselves they don't need constraint then i am paraphrasing

because society cannot exist unless people put force upon there will and appetite and less there is the more there will be without. and in lieu of moral code extra regulations do not work as we have seen. let me jump ahead. 1454. jim? due to a bird. yes. a huge commission from the pope to print the indulges broke he takes this money 1455 and publishes the first printed bible the gutenberg bible it could only have happened in the christian world because, you hear about china that invented gunpowder the printing press and spaghetti but then

nothing happened. but then peru and eight diss and vented spaceships and the colt third guy. what is the difference? fed is not to say they were not smart door brilliant but only in christian europe did you have the infrastructure to commercialize the invention so what you needed to do with several things environment that anchorage to rest they never discouraged free enterprise to also needed an environment in which people could pay their bills and pay their debt and you could expect a level of enforcement with people under a lot comes back to ancient history. finally you needed investors with christian theology, you could invest in a project as

long as you took the risk. and gutenberg borrowed money from his brother-in-law. that is how it started. he could take an invention and creates an empire. there is a lot of notion that what happened after that, strain was such that the whole notion of the protestant ethic and thomas were so burdened by guilt and able to confess that they became economically driven to prove and it is probably not that complicated. there is a simpler explanation. only in that world, only the countenanced churches said

that was the first serious theologian. he makes such a lucid explanation that the church is under his control began to flourish. no more so than in the netherlands in the 17th century were they in been virtually everything we know of the stock market, the central market, everything we got from those institutions. to be a bare, the opposite of a bull? "when you were searching the market -- shorting the market to sell the bearskin before catching the bear. 17th century netherlands they would sell but to lips before they have a bold.

and there they were called bearskin jobbers and then there was bearbaiting and bullbaiting all these terms have materialize. igo into a lot of the entomology sanded is a lot of fun. let me jump ahead at 1835 now be hour into america. it is interesting talking about lincoln day is coming of tomorrow because revolving around jackson who is the founding father of the democratic party and here's what we know about interjects in. he married a married woman in the shop people complained about it literally. other nice things andrew jackson has done is he took

over florida because he wanted it without anybody's permission. he owned a lot of slaves the zero on the downside but on the upside he believed in small limited central government, the state's rights, hard currency, the lack of a central bank to stop the central bank to have individual responsibility. you hear all of the virtues and you ask yourself, when democrats get together on a jackson day, what do they celebrate? [laughter] on abraham lincoln day, they freed the slaves and andrew jackson? he killed a lot of people who criticized his wife and he owned slaves didn't kill the charities on the trail of tears and believed in small central government. what is the message?

now they expended to% jackson days and they fought valiantly against the second bank of the united states the first great central bank and america it lapsed and then they be new bid to and jackson and fought it with everything he had and it was a triumph of of one man of a system already becoming corrupt because nicholas biddle was using the bank to elect his own friends so the central banking has it for those to ms. use it. know we jump ahead 1907 and

we have a point* of extraordinary growth in between there. without central banking, long stretches of hard currency were gold and silver or gold alone is the real basis of the currency where where money goes crazy new economy is new industries tripling the population and creating the world's greatest civilization the most powerful planes being done without a central bank without a paddle reserve reserve, without control of the government is our great was a fair point*. some portions were truly was a fair -- laissez-faire like

cleveland. 1907 was a panic on wall street these happen periodically a period of growth and retrenchment and the most powerful banker ever was an american jpmorgan 70 years old and the panic hit and he walks down the street and they describe him like he was 30 feet tall but he made such a presence and goes into the firm like ahead ceos of other companies. of a recall president or chairman. pulls them together for a huge meeting and said we have duplexes and solve this

problem because there is no one to bail us out. if we don't stop the panic we will believe their souls try. we have to raise capital and stop the flow right here. and they did so successfully that people looked and said what happens when jpmorgan goes away? what happens when he dies? that led to the subsidiary 1910 this meeting with the primordial slums of jekyll island church has produced more conspiracy theories than ever before. six people involved. half of them were true which makes it more interesting. one of the most exclusive hunting reserve and the world. two, at rockefeller men, one

from morgan one representing the jewish interest on wall street and a floating academic. they go on a private train and sit in separate cars. the only help does not speak english and they meet for one whole week over thanksgiving and what they do over that week is concocted a plan that would become the federal reserve bank of the united states. wrote 1910. jpmorgan is 73 years old. they said we will replace him with this federal reserves than they do something that is familiar to us of the last six months they set up astro turf headquarters where they say they are a grass-roots organization and hire people to represent and those people don't know they hired the six guys who wrote to the plan.

they know the people will not accept a central bank so we have to give the illusion of decentralization. because all along they knew the federal reserve would not be in there reserve bank from new york they knew they to put a morgan guy in church they could control. later in the year jpmorgan dies then woodrow wilson signed into law the federal reserve act of 1913 and in the process of doing that he thinks he is taking away the power of wall street but he is not. he takes away the responsibility.

what the federal government could walk away with was responsibility. they pulled it off whether it is a good or not. mini said this three years ago people would say how could you be against the federal reserve with the alleviation of responsibility? we are inventing the installment plan in various ways to postpone debt by 1928 installment buying has become all the rage because they will meet soon and 1933 you have the stock market crash 1929. that does not necessarily lead to a depression but we

had a tremendous stock market crash in 1987 but in 1929 herbert hoover was president coolidge called him mr. wonderful and coolidge was my model president who believed that too which of long ago determined the world would be better if he involved himself less. however coolidge calls him wonder boy he never stopped giving me advice and all of it was bad he was the first secretary of commerce the first offical to assist the government have the responsibility to put people in homes in programs to facilitate that. he was a total activist is just all the activity he did was wrong in disastrous.

he browbeat thinks to keeping people on the job and wall street pushes the price up running contrary to what coolidge and harding had done it earlier when there is a recession 1921. let it play itself out. then if they let it play itself out who who hurt by a group bated it that is nonsense. 1933 fdr takes over pro is he was too hoover what obama is to bush. some were interventionist. they wanted to recreate government. fdr takes over 1933.

first thing he does, a sound familiar? nationalize the bank. and then, he bans the private ownership of the cold. everybody had to give up their gold. or 10 years in prison. then you see history repeating itself although he had a good temperament for the job, and in some sense provided some level of solace, he was utterly capricious and would do things whimsically to affect the entire world, princeton secretary-treasurer talks about going in to set the price of gold and fdr says i think it should be $0.21. no, no, no. why?

and fdr says three is a lucky number and seven is a lucky number and three times seven equals 21. literally. this is how they did it. [laughter] the market crash follows a decade of economic growth. this is not just a bubble by virtually every home in america the federal reserve turned irani into a run by jacking interest rates right before hand and they had no experiences with a crisis of this gravity so they jacked around until 19397 years into the new deal talking to congress and the says seven years later we have accomplished nothing. and he gave congress the

unlucky number that was 17. what was that? the unemployment rate 19397 years into the depression and would not go below 10% until 1941 because of world war ii. then we put obama's cover of "time" magazine? we will ourselves into historical ignorance. i got a sense of the reality that conflicts with it in the '80s i was in france my job was to go around to individual cities and talk about the american studies theme and the theme in the '80s during the reagan ministration had a will of its own. if it has an agenda it will push it. i show this movie on the new deal then talked to the

french audience how wonderful fdr and the new deal were. that was my task beautiful city, strass board, a tragic city marched through more often you don't want to go through their older people have been there for a while have seen a lot. assure the movie at the end the most poignant scene all of these people have the model a and a model t they drive to california than the new deal is made. i am taking questions and one old guy raises his hand. he says mr. cashill? during the depression you

are poor people. they had cars? [laughter] yes. because we had built a great commercial civilization we were not celebrating the this civilization from the government but it was celebrated but suppressed over the time. and that is part of our legacy to understand ourselves better 1969 richard nixon elected president to your 20th homeownership rate is 65% it has been steadily increasing from a 45%. everyone believes home ownership is a good thing and the president is pushing

it ever since hoover started as secretary of commerce. eisenhower, truman, fha loans, etc. 65% something else happened to that is california passes for the first time no-fault divorce and celebrated that by going out to getting divorced in record numbers of. in 1970 there were more divorces in california and marriages in 1960. in the middle of the country you lamented putting california you celebrated and it becomes part of a culture. hollywood had been doing this them lost the moral capability to tell people mort -- marriages good they forgot what jesus said let no man terrorists under what

god has put together but in 1980 the rate for some reason they thought it would solve it but in 1,980,276,000 people a record year as far as we know because they solve the problem of divorce by stopped keeping the records because they were so embarrassed. [laughter] and they had almost also adopted the model in every other state so it was a craze. many people rushed out and indulged. there were some tragedies or consequences but in california it was a ritual or right of passage. it was something you entered into four while been moved on and there were so many

other distractions like a national phenomenon. this is happening and nobody pays attention to the consequences of the economy. in a shocking, which they paid not only for the divorce but two single parenthood because when the coulter loses its faith it no longer has the will or the ability and we begin to see incredible spykes especially black culture like and 15% or 75% by the '80s. it is astonishing. so what happens in 1993 bill clinton is inaugurated president. the home ownership rate in 1993 after 24 prosperous years especially after

reagan and bush, a good steady growth of the economy, the more jobs, more money, in 1993 clinton is inaugurated the home ownership rate is lower than when nixon is inaugurated and the clinton administration looks around and they want to put people into the home. he wants to see the numbers. that is how he got elected. but when they look at the numbers why has the homeownership rate gone down? they refuse to look up the real issue that the family had crumbled under the homeownership rates. they don't have ozzie and harriet living in houses in a more.

people were buying homes but they could not afford the we were one broken refrigerator way from defaulting and they're moving into the home ownership market. looking at the numbers it is inevitable a single-parent makes 20% of the and come up a mere couple a single mother makes 40% the homeownership rate 1993 point* couples was 85%. there is no problem. if we had been a nation of married couples moving forward there would have been no economic crisis or subprime crisis. none of that would have happened but instead the homeownership rate was less than 30% four single parents that was pulling it down. instead of saying what could cause this? would we work on fortifying marriages come to keeping together and couples who

work hard the opportunity to buy homes we just want to push the numbers. who can we blame? federal reserve did this study the provided all the ammunition the administration needed. they studied rates for the fha loans, the rates of approval looking for government assistance loans for white families getting loans as 77% am black families 61% so they immediately said the only reason the homeownership rate is not growing is because of racism. what else could it be? they did not look at the family structure it was not race but family structure and you could see the headlines in places like "usa today" not all homeowners are created equal

in matters where we look like an credit that is nonsense but banks have no interest in turning people down but they have every interest in the world and when you look at what happens after that, every organ of government, a media , even industry tells the would-be homeowners to get a house, no matter how you can get it. i found the 1992 article from "the new york times" in which they weren't talking about acorn a wonderful new rejuvenating organization bringing equity to the housing market and in 1991 they have paid today takeover of the house banking committee isn't that

cool? remember when it was patriotic? one year ago it sounds racist today but it was patriotic in 1991 it was wonderful her o user everything around because you are liberating with the entrenched numbers. here is what they say no one who gets a mortgage ever has to go back to the office like it is a good thing. acorn assisted for workers who did not speak english or no credit history or had to sign the letter x four their name. [laughter] they're celebrating this. 1992 these the same people criticizing wall street to get involved in its business

and this this misunderstood it is not a type of loan but the kind of car were it is a fico score coming from the acronym of the fair is sick corporation. if it is above 650 you are a prime burr were and people want you to lend money and they made money on your interest if you're below 650 you are a subprime borrower because you did not pay your money back they turn to higher interest rates to compensate the will not pay the loans back. starting in the late 1990's subprime borrowers everybody wanted them because the government was forcing banks to give loans and forcing fannie mae and freddie mac

but the media was celebrating this but in the meantime nobody was watching what was happening. it was not good. and a major cultural change had gone on at the same time and if you remember at 1300 and you were a probable you were a center if you default on the home loan and borrowed recklessly and do defaulted wall street was shocked when they were shocked when people missed the first payment. this is a bad sign. it is not a good move. in 2000 prada goals were no longer centers. who were they? they were victims. you can watch any show on tv and they are a victim. i don't go into the whole history of the mill town but

the one final note is in the homebuilding mania is building projects fast they said one to another common go. they had brick for stone and said let us build a city a tower that may reach into happen. in the first years of the 21st century they promise affordable housing regardless of incomer character, debt obligations to be packaged in short and sold without risk under the guise there is no risk all would prosper but unfortunately like the folks at babbled will language was compounded and they did not

understand one another speech and at this point* than the think my a financial advisor because this is in penetrable but even in the cbo did not understand what the workers were doing they did not know what the collateralized debt obligation all of these financial instruments are being created to minimize risk but they were building a tower with the financial equivalent and din 2008 out from underneath the collapse was not the economy but if i could paraphrase james carvel and paraphrase. it is the culture, stupid. thank you. rival take questions. [applause]

>> will you talk about the unfunded obligations of medicare? >> it is overestimated. a good guy said we can guarantee until the year 2013 you can least get 76 back on your dollar. gettelfinger that is in my contract. that is what will happen. that will be the compromise they have already figured that out. it is the first time i heard that but it intrigued me because this is another roosevelt idea we thought whatever we put in we would have it. but do not count on it. count on three quarters of it. >> i did not hear you mention about the artificially low interest rate.

>> when greenspan retired in 2006 he was hailed everywhere as the world's greatest hero by 2,008 he was the coach of the financial world because he kept interest rates artificially low to worth three years there was a reason for it and a lot of it came out of september 11th in the fact that bush inherited a recession and people don't want to talk about it but that was the state aggravated by september 11 which led to this and the low interest rates but encourage people to come in on the adjustable rate mortgages. maybe with 4% interest when it goes back up to regular levels than people find themselves unable to afford their homes than they are all victims. they didn't know. did they know?

if you are not wise enough to figure you cannot afford it you should not be there i hate to be judgmental but it is true. >> one of the questions that comes to my mind like an alcoholic you never get some the road to recovery are recognizing what we have done? we don't see any real taking of blame by guys like barney frank four instigators three actually going to change the problem? are we getting out there so we can turn around? >> when i win the nobel prize next year you are right. the perfect question and unfortunately as far as i can see no recognition of a cultural problem that underlies it all. no recognition battle. it is unfortunate because the president is in a good

position is a very good family man, he is not using the model he could to tell people get married, as they married, build a new state then buy a home. we're not hearing that at all. they're so artificial i am optimistic for the state of america but not for the next few years. >> you get married and meet tony rezko. [laughter] >> i forgot that. there are short steps but not for all of us. other questions or comments? >> to the lender see the

housing crash coming? because of the government involvement to make it difficult. >> that is a good question and often misunderstood the blame comes down to the lenders but there is a very good book on the history of countrywide with the mortgage brokers and angelo mozillo be leave to he was realizing the dream for these people and they were so myopic they refuse to see what was happening. when i did research for my california book whole thing on the breakout of affordability this is how bad it was kansas city 2006 a family of median income could afford to buy 87% of the homes in the marketplace

you to look at seven negative 10 homes and have a shot but then los angeles 2006, the number was 2% one decade earlier it was 50% you could buy one out of every two houses to being able to buy one out of every 50. where will they find new buyers? i did not realize it at the time they were downgrading downgrading who could buy them but at the end of the day in california you did not have to be a citizen in your show income you do is walk in and say want a $200,000 loan and you know, the market will go up so i can buy it and flipped it and walk away. you would think they saul

that coming but they did not not even in that industry and wall street did not see it at all. if you're investing winter and dollars per day ignorance is not an excuse. i appreciate you coming. thank you for your help and have a happy day. thank you for remembering our annual history. thank you. [applause]

>> para the cpac conference talking with one of the authors of game change. can you tell us you got the reaction you thought you would get? >> every author who writes a book hopes to have some success by -- but we were pleased rewrote the exact book that we wanted from our first conversation. we were able to execute the plan and we had more success than we had hoped for. >> host: anything unexpected from the reaction? >> guest: one of the things we hope for but did not know if we would achieve the book has been well-received by the left

and the right to a lot of political books are from the people on the far left or the far right we wanted a non-partisan book from each presidential campaign that has a great story with great plots and a great story and as we come to meetings like this and also have doing cable tv and talk radio and pleasantly surprised they are not viewing it as a partisan weapon but as a great story that we hope we told well enough with the material. >> host: did any of the subjects in the but contact you after it was published? >> guest: we make it a policy not to talk specifically about the reaction but all of the contact we have had has been positive. they may not like every the opening but have been pleased with the overall portrait and have been very nice about the book overall.

>> host: do you know, about your next project? >> guest: may be. right now the goal we have is to try to sell the book. one of our strong believes from the beginning although it is about a political campaign it is not about politics or politicians as much as interesting people who happen to be involved in politics but married couples in a great competition under a lot of pressure. we're trying to extend people to look up the book who don't necessarily might want to read a book about politics but a great story. >> host: are you able to read any books will you are on the road? >> guest: someone very smart told me you have a choice you can read stuff on the web, newspapers or magazines or read books. i read a lot of newspapers and magazines so right now