andymac should be on trial for providing 100% guaranteed taxpayer back guarantees for mortgages and the ball the bailout we did, the two institutions that never paid back any of the money or fannie

mae and freddie mac. those who voted for a bailout of the bank should be on trial and so should the people who voted for the $800 billion failed stimulus and most importantly nancy pelosi should be on trial for running up the national debt by $5 trillion and putting our nation in financial peril. i would submit that the s&p and moody's's should be on trouble for giving the aaa bond rating to asset securities. these are the people who should be on trial. estimate that ben bernanke should be on trial for policies that debase our currency. >> okay, all right. put government on trial. they are the ones who are

guilty. they are the ones who lost our money and they're a ones who should be behind bars. >> thank you. >> all i am saying is if they were the jury would be in trouble right now. >> take a deep breath. >> time to hear from john mackey, the chairman of whole foods. >> would you please take a seat? we would like you to take an oath to take the truth, the whole truth and nothing but this truth. would you like this where on the

wealth of nations or atlas shrugged? do you swear to tell the truth, the whole truth and nothing but the truth? >> i do. >> can i ask you one thing? have you seen the price of a approval lately? >> you are pretty funny. i just need to say one thing. you need not insult by calling me a registered republican. i have only voted republican one time in 40 years and i deeply regret that decision. i am apologetic for the miscalculation. what i did recognize you to be was someone with a sincere appreciation of the magic of free markets and deep libertarian sentiments. >> worked it out in counseling later on. let's get on with the trial. >> i thought it would be

interesting to hear your perspective on adam smith's notion that character counts in the marketplace and we expect first thing of business leaders other than that they ruthlessly try to take as much out of the enterprise as humanly possible. do you have experience or thoughts you want to add? >> with the business people should be ethical? >> that would be a starting question for you. do you think a business owner has the responsibility to obey the law? if he can't get caught and his business would do better where is the greater responsibility? to the shareholder or the law? >> he should obey the law. >> unless the law is unjust says one of the members of our audience. >> by the way there's no controlling them once they get profits. go ahead. >> anything on wall street that troubles you what would they be?

>> the way i see business is i see business people as the heroes in this world because they're the value creators. we create value for our customers, our employees, suppliers, investors, communities. in deep for the whole world. a does trouble me some times that i think wall street for gets it is of value creator. sometimes my company has been public for 20 years so i have been dealing with wall street for 20 years. it is a little bit of a love-hate. they have created value but i sometimes think they have forgotten why they exist. what their purpose is. what they are supposed to be doing and that troubles me. >> what about as a domain of executive compensation. you have strong views about that in terms of your own business. do you think the people who head 9 -- financial firms on wall street are on the right track

there? what would your assessment be? >> ultimately those decisions need to be made by the board of directors and shareholders who elect the board. sometimes there may be not doing a good job in corporate governance but i don't think that is something the government should be involved in but i do think some time some of those salaries would seem to be higher than market rates. >> is that something for collective action or do you think the government should keep its hands off problems like that? >> ask him to define collective action. >> the judge wants me -- >> ask him like it is from you. go ahead. >> i don't think i'm too -- supposed to ask questions. >> you will be fine. >> i think it requires collective action but reforms need to come from within the

business community. within the shareholders. within the boards of directors. they're the ones that have to be responsible. i do think they're not always doing their job well and a lot of corporate governance reforms i am seeing i don't like all of them but a lot of them are very positive. >> last question is about a fundamental distinction between the kind of business you run and the kind of businesses we see on wall street. just imagine yourself in the role of baker. that is one of your roles. when you sell someone a loaf of bread to price the consumer pays you for that is a reasonably close track on the value the consumer receives or else the consumer would go elsewhere. it is enough to cover your costs so that is one of the preconditions adam smith describes for market incentives and social incentives to be in close alignment.

that condition seems match for your business. >> you have thirty-second. >> they the condition is met as well for the financial-services industry? >> not always, no. >> for example, if a financial services firm is confronted with a decision whether to invest in millions of dollars of computer equipment to make a forecast two minutes earlier. >> wrapped it up. no more time. >> no more time. let him answer quickly. >> i will give you an example. when my company went public in 1992 we did an initial public offering there was no price competition on wall street. they were taking 7% cuts every time they raise. you couldn't go out and negotiate 6% or 5%. i thought that was a price solution but investment banking firms -- as far as i know that

is still the clubhouse rule. >> thank you very much. your witness? >> thank you. you mentioned the housing bubble and i wonder, looking back on what happened with the massive over investment that happened in this country, who do you think is most responsible for that happening? obviously wall street took a lot of excessive risks and banks made accepted loans but when you say this is the result of wall street's or would you say when the federal government was providing 100% taxpayer guarantees that these mortgages many of which were incredibly flimsy which people had no intention of repaying, when the government is telling these banks they would provide a 100% guarantee who do you think is more culpable for creating this

crisis? fannie mae or the bankers? >> they're probably both a little guilty but if you are asking me i think fannie mae is a little bit more. >> maybe fannie mae should be on trouble -- on trial here. >> i didn't set the parameters. >> you believe the t os are overpaid on wall street? >> these types of decisions ultimately you can look from the outside. their compensation seems to me at times excess of. >> let me concede the point that many ceos of companies and banks are overpaid. then the question becomes who do you think in your opinion is responsible for that? that is to say would you favor the government coming in and telling companies what they can pay their ceos or is that a matter for boards of directors

and shareholders? >> boards of directors and shareholders. >> the top 1%. a un the top 1% of income in this country? yarn incredibly successful entrepreneur. >> i plead guilty. >> we have heard a lot of condemnation of my clients is based on the fact that they got rich just as you did. you got rich. people on wall street got rich. is it a crime to get rich in this country? >> it appears that might be becoming so. >> can i ask if you makeover million dollars a year? >> do i have to answer these questions? >> let me rephrase the question. >> that would be superawesome if you did. >> how much money do you make a year? >> there are people in congress

who feel they want to basically have a law that says no one should make over a million dollars a year. would you favor that? >> that would be bad for the national basketball association. >> very well put. that leads me to a question. if lebron james can make $50 million a year to play basketball is it access to pay a ceo of a major company that employed tundra of thousands of people and has control of billions of dollars of assets $40 for $50 million? >> not a fetus gives us lebron james. >> this is most important. you started wholefoods how many years ago? >> about 32 years ago. >> how did you get initial financing and initial capital to grow your business? >> beta everybody i knew.

>> ever go to wall street? >> to start the business? yes of course. >> here is my question. if we put wall street behind bars and say shut these people down wouldn't you agree that it would be extraordinarily difficult, almost impossible for businesses like yours that higher tens of thousands of people to get the money that they need to grow their business? how are we going to run a capitalist free market system if we don't have wall street? >> clearly we need ways to raise capital. that is the purpose that wall street has. unfortunately it doesn't always follow that purpose and that is why so many people are angry with it. wall street and the financial community need to remember what their purpose is and why they exist and i think they have forgotten that. >> are you more angry right now at wall street or big

government? >> i will go with big government. >> remember you are under oath. no more questions. >> you may be excused. thank you. [applause] he wants me to move the witness chair. is that ok with the rest of the jury. right. very good. would you like to call your next witness? >> yes. me we have mr. george gilder? [applause] please be seated over here.

please sit down. i have a copy of the latest edition of wealth and poverty. do you swear to tell the truth, the whole truth and nothing but the truth so help you wealth and poverty? >> i do. >> thank you for being with us today. the prosecution's case is focusing on the fact that many of the deregulation that occurred in thes and 90s lead to behavior is that nearly bankrupted the nation. is it your view that if we go back to the legislative era that preceded those that companies would not be able to get capital from the capital markets as has been alleged? >> i believe during the heyday of venture-capital and private equity and hedge funds that the united states led the world in

industrial creativity and job creation. we were the pioneering exemplary capitalist forces in the world and today wall street has gone off a cliff and he epitomized by charles prince and citibank saying he has to dance as long as the music plays but the music he is listening to is the government. and that is true of all of wall street and wall street has stopped funding the kind of companies that steve more cited and is now involved in all sorts of currency speculation on debauched dollar and incestuous relationships with the treasury and the fed and unless it is

entrepreneurialism not capitalists. [applause]] i think mr more's concern is companies be able to get the capital that they need to expand and create jobs. i don't know if you read an op-ed published in the new york times in 2006 analyzing the problem on wall street. it was his view that the real turning point came when the smart people started going to wall street. it used to be see students from harvard who ran wall street. they were happy with the 30 foot sailboat and a four bed room moment in greenwich but then the bond guys came to wall street and they were so smart that the people in charge it and know what they were doing and before anyone knew what happened the whole system collapsed in a heat. do you think if we went back to the system of regulation that made derivatives outside the legitimate field of play we would be closer to a system

where the main job of the financial services industry would be to match up good business plans with people with money to lend? >> i doubt it. i noticed that companies that bat against all the fake scam, securities and some prime mortgage concoctions were mostly hedge funds and 80% of hedge funds leave the u.s. regulatory structure and register in the cayman islands. the u.s. is so hostile to creative finance that people have to go outside the united states seeking better regulatory structure so i don't think that we are underregulated in the united states. i think we are overregulated and this overregulation transforms

what would the entrepreneurial capitalists institutions into extensions of government. and you get jon corzine as the epitome of the incestuous capitalist senate and fortune in come to represent wall street. i prefer a private equity people. what mitt romney did was superb and michael jensen has studied the effects of private equity in the 1980s and nearly 90s and finds them overwhelmingly positive. this was a time when the u.s. was creating forty million jobs and this was a time when wall street managed some 43,000 m&a transactions. it wasn't bad for the economy then.

it is bad when it is all embroiled in government shuffles. >> 30 seconds. >> and housing finance. >> time for another question? >> if you could do it in a couple seconds. >> the prosecution has not proposed putting wall street behind bars. what we are exploring is the possibility of a different set of governing rules for wall street. if you have ten seconds what would you say those should be? >> put jon corzine in jail, i guess. [applause] >> thank you very much. mr moore, your witness. >> you have written eloquently in your best selling book about the virtues of capitalism. i learn my respect for capitalism in your book many years ago. i wanted to ask you this. can our system of free market capitalism that you have been talking about, can that really

continue to flourish without wall street? >> i think wall street is a place and it has come t economize a series of great big banks too large to fail and incestuous liam broiled with the treasury and the fed and the white house and that system should act. i think that -- [applause] -- and they should have been allowed to go broke. >> let me interrupt you right there. you talk a lot abo are will concede the point there is too much of an incestuous relationship between wall street and the people who are supposed to regulate them and the congressman who are supposed to oversee them. is the solution to this incestuous relationship more government and more regulation? >> absolutely not. >> the next question is about

this looming tax increase. how did this attack on wall street because people get rich on wall street, is there anything villainous or that we should disrespect about people getting rich on wall street? >> yes. if they extract it from the taxpayer. >> but wouldn't that be a result of the fact -- were you in favor of the bailout of big banks? were you in favor of the bailout of the auto companies? >> no. >> of a ig? >> no. >> 3 win favor -- >> i was in favor of keeping greenberg head of aig. he provided actual oversight and could have prevented $2.7 trillion -- >> seems to me -- >> overregulation of aig. >> will raising the capital gains tax make the capital

markets operate better? >> no. >> will raising the dividend tax make the economy work better? will raising taxes on small business make the economy better? >> absolutely not. imposing a 3.2 at fa stacks on medical instruments -- >> okay. we were supposed to overcome all of these problems with wall street that we have been talking about with the dodd-frank bill. in your opinion does that bill accomplish what it was supposed to do or was it actually made wall street work place? >> makes incests legal. >> thank you very much. >> with time to spare. you guys took it on a road. that was like vaudeville. do you have any further

witnesses? >> no. >> helped the defense. >> we are going to make the best case we can in some asian. >> thank you. >> i would like to take this right to the jury right now. i am just kidding. i would like to call my first witness, steve forbes. >> very good. [applause] >> mr. forbes, will you be seated please? i have a copy of how capitalism will serve as. free people and free-market the

best answer in today's economy by steve forbes. please put your hand. do you swear to tell the truth, the whole truth and nothing but the truth so help you my best book? >> i have a better book coming. it can be ordered from amazon. >> thank you for being here. i am under the understanding that you own a yacht. >> yes. >> does that make you any will person. >> it makes me a person other people would like to be. >> please tell -- >> as my father likes to say money may not buy happiness but it sure helps. >> let me ask you this question. do you think getting rich is an evil pursued in this country? >> i think real entrepreneurs get rich by providing the need and wants of others and

providing services. you get rich that wapner problem with the. if you get rich through crony capitalism that the problem. >> to you think wall street had a period of access as the prosecutors are alleging and people were paid on wall street and are bunch of greedy people? >> to save could read caused the crisis is like saying gravity causes airplane crashes. doesn't explain very much. we have a situation. there were excesses on wall street. but why did it suddenly happen? it happened and you hit on it in the beginning of the trial because of excess money creation by the federal reserve. you could never have had a housing bubble without that excess money. and it is government that fails here. wall street being entrepreneur responded to the crazy

alice-in-wonderland conditions that washington created. you want lower salaries. not so many smart people. start by having a gold backed dollar. no more volatility in currencies. a lot of trading profits and opportunities go away. >> you think people on wall street who make millions of dollars and even billions of dollars, do you think that is excessive? should we have a policy in america that restricts the pay of ceos of banks and wall street firms? >> and free-market absolutely not. i don't want politicians determining who gets paid what at the end of the day. they get paid more and the rest of us get shafted. what should be determined is what does it take to get the talent needed. sometimes you pay the talent and it doesn't perform. we see that in sports all the time. get the talent that can run these organizations some of these organizations you have to pay of one way or the other.

many do it not for the pay but because they want to get something done. they get rewarded soviet. john mackey of whole foods done very well. i like going to his stores at least in the lead get to the checkout counter. >> we heard from a witness for the prosecution making the case that it is more difficult that the great companies that i mentioned, walmarts and googles and microsofts and apples, you can't get those kinds of companies financed any more on wall street and the era of great american entrepreneurship has almost come to close. >> i don't think it has come to close. it had detour. you want to know why we don't have more ipos start with sarbanes oxley which came out of

government. not free-market. and in terms -- what wall street did during this whole period, massive rise of derivatives and crazy instruments came in response to chronic instability in interest rates, currencies caused by mistakes made by the federal reserve and others. when you have chaos in the markets people going to take a chance to make money off of it. that is what markets are about. or try to hedge themselves against it. one of the things that is wonderful about wall street, finance as a whole is extraordinary adaptability and creativity george gilder mentioned. hedge funds and the like were able to provide gains to pension funds at a time when markets were stagnant and you see creation creating new instruments of the time. crazy instruments created in recent years were in response to the chaos created by government.

>> should wall street or government be on trial here? >> thirty-second. >> big government. >> thank you. >> your witness, mr. frank? >> i wonder if i could follow up on the issue of crony capitalism by focusing in on one particular example. i refer to the goldman sachs purchase from a ig of some $12 billion of credit default swaps to insure against mortgages that they would get a payment in that amount if the mortgages went belly up. goldman at the time knew or should have known that the only way those mortgage bonds would go into default would be is if there is a radical decline in housing prices. also should have known that if that happens to aig which was unregulated and failing credit

default swaps had no reserves to pay out the insurance that goldman sachs would stand to collect and yet they pay a lot of money for those insurance policies. do you think that was because they knew treasury secretary paulson would be presiding over the decision about how much they should be reimbursed in the event that aig western with bankruptcy and receive the 100% payout. is that an example of what you mean by crony capitalism on wall street and what should we do about it? >> it is two parts. should goldman sachs of the 1 hundred cents on the dollar? absolutely not. should have been treated like any other creditor, in terms of why you have this crazy thing with these default swaps and the like it is because of hubris, not greed. they actually fought with these fancy financial instruments,

using complicated mathematical equations they could do away with risk and therefore even if you had default on packages of mortgages that had enough reserves because of sophisticated instruments that they would be covered. what happened was like looking at the extra sign over there. if something happens week over the experts. they forgot the fact that 2,000 other people are going for that exit so it did not work. they should have learned that from the long term management capital disaster of 1998 but they went back to the drawing boards and thought they could inshore totally against risk which is why they have these 40-1 debt to equity ratios. that wasn't bad mess. they overestimated their brilliance and should have been allowed to pay the price. >> in your estimation the problem isn't a structural one. it is that there slow learners.

>> they are innovators. not all innovations work. some do and some don't. some have to be refined. commercial paper which about medium and large companies to get out from the banks and the 60s and 70s. when penn central went down commercial paper market dried up and scores of companies nearly went under. that didn't mean commercial paper was bad. what grew up out of that was you want to sell commercial paper you had to have a bank line of credit so if there was a problem you could get bank credit and cover it. new things come along. like highways when cars came along we had to learn about speed limits and car inspections and insurance and a whole array of things. innovation talks about what the web has done to video and audio distribution. still trying to figure that one out. >> you disagree with alan

greenspan's assessment on reflection in the wake of financial crisis when he testified before henry waxman's committee in the house, he said, quote, i made a mistake presuming the self-interest of organizations was best capable of protecting their shareholders. >> he should have amended that statement. i made a mistake by not doing what i knew when i was a young man but forgot when i came to the federal reserve. and that is have the dollar backed by gold. we never would have had these excesses in the first place. [applause] >> one last question. do you acknowledge the existence of situations in which private actors, incentives lead to ways that are in conflict with the public interest? >> depending how you define public interest if somebody commits fraud you don't need new laws on that and that is

entirely wrong. [talking over each other] [making noises]] deciding whether to invest hundreds of millions of dollars in a computer program that will execute stock trades just seconds more quickly than the existing methods. is the game they proceed from that investment privately on par with the games society will get if they all make the same assessments? >> everyone went into pcs and most like atari did not tell about it. if you think you are two seconds quicker go out and try it and we will be writing about you being on a lecture circuit talking about your new career opportunities. >> wrap up. thank you very much. thank you for making that sound.

[applause] >> mr moore. >> i call my next witness peter schiff. [applause] >> welcome. if you will sit in the witness chair, please. please place your hand on the real crash:how to save yourself and your country. do you recognize this? >> swearing an oaf to myself. >> swear to tell the truth, the whole truth and nothing but the truth as you tried to do in this book? >> absolutely. >> guilty, mr moore. >> thank you for being here today. let me ask you this question. is it a crime if wall street loses money for their investors? >> it is not a crime.

it is unfortunate for their investors and a lot more money is lost on wall street because of government regulation. >> you were involved -- you had some interchanges with people from occupy wall street, the movement that helped bring my clients to trial. i wonder, the sentiment of the occupy wall street people who think they ever misguided. >> i thought they were misguided. that is why i went down there and this trial is misguided. is not investment banks, the federal reserve banks. the federal reserve are the biggest counterfeiters of money. they are the big destroyers of capital. their financing massive growth in government spending and the federal reserve working with congress that have corrupted wall street and resulted in crony capitalism and i want to let the people at occupy wall

street their anger was misplaced. i shared their frustration. government and central banking and central planning, not capitalism. >> did you get the message across to these people? >> i don't think so. i did get it across to hundreds of thousands of people who saw the encounter on youtube. >> if i could follow your logic to its extreme, maybe these people should occupy washington. >> that is what i said. you saw the clips. asia of the pie-occupied pennsylvania avenue and the white house and the supreme court. there are a lot of institutions that need to be occupied but not wall street. of course wall street made a lot of mistakes. they were all on alan greenspan's alcohol. president bush often accused

wall street of getting drunk. i agree they were drunk but so was main street. the whole country was drunk. alan greenspan was the bartender. he liquor everybody up and of course the blacks stupid when they're drunk. you should see how people were acting last night over at -- >> my final question for you. this is important. [talking over each other] >> he missed out on a pretty good party. the essence of my defense of wall street -- >> a hangover you get from that alcohol wear off. >> at least when wall street makes bad decisions the people who lose money are the investors. isn't that the way it should be? >> that is the way it should be but not the way it is. >> this is the point i am getting at. we created this protective bubble over wall street and over the big banks with too big to

fail land all these bailouts. so now we have a system that wall street has almost been incentivized to take the big race because of fannie mae and freddie mac and too big to fail. isn't that what is really putting investor money and taxpayer money at risk. >> something called moral hazard and all the too big to fail banks instead of failing are even bigger and they are still going to fail. now it will cost even more because we have taken these troubled banks and made them even more toxic. we simply numb the pain of the stimulus of novocain but it will wear off. >> we got rid of too big to fail and wall street bailouts and big bank bailout wouldn't wall street be a healthier place and with investors make more money and would mom and pop stores get access to more capital.

isn't government protection they provide what george gilder called an incestuous relationship between government and wall street the core of the problem? >> absolutely. part of the problem is so much money, wall street isn't fulfilling its function as an allocator of scarce capital. it has been turned into a casino with zero present interest rates. that destroys capital because capital comes from savings and underconsumption and no one will say the return on savings are zero so instead of having legitimate savings we counterfeit money out of thin air and see it through the economy like wall street but that is not producing legitimate economic growth. >> you think -- [talking over each other] >> they paid too much taxes along with everybody else. but particularly the rich. >> the rich pay at least their fair share? >> no. they a lot more than their fair

share. >> thank you. mr. frank? your witness. >> thank you. is it your view that the high paid days on wall street have lured the best and brightest to go there in disproportionate numbers? >> yes although i don't know they are as bright as they think they are but they are there. >> 44% of princeton after graduating class took positions in the financial service industry in 2007 and they are very bright. whether they are as bright as they think they are as another question. can you think of anything useful of having all that talent on wall street has accomplished? >> we mentioned some of the great success stories. >> what were those? >> companies like apple. they are able to increase their scope, their scale because they are able to tap into money through public offerings but i would say that we are wasting a

lot of talent because the government is subsidizing wall street to the detriment of vote real economy and those subsidies need to end and when that happens if there is not so much government money and federal reserve money flowing for wall street one of the things the occupiers were so upset at is they perceive that government was fair sale because the rich were buying into it and that is true but the problem is once you give the government the influence to peddle you can't blame the private sector for trying to have that power used for their benefit instead of by their competitors to their detriment but the solution is to take power away from government. if we do that then there won't be these oversize profits on wall street and fifth maybe we will have more people from princeton or uc-berkeley, maybe they will do something more

productive with their lives. >> will be productive if more of them went into engineering, medicine, research? >> better off if a lot of people skip going to their universities altogether. i don't think -- you can learn more on the job from people who are doing things instead of from people who were in competent enough to do things that they ended up teaching. >> that would be me. so let me see if i understand your responses to the questions correctly. if the government, has given wall street the power to write the rules in their own interests which in turn has resulted in enormous paychecks for them, that has drawn a lot of talent into walls the. whether it needed a degree we

will put to one side. can we then agree that you are a witness for the prosecution whose case is based exclusively on the idea that government needs to take away the power they have given to wall street to create these enormous things drawing talent into the industry? >> not quite. we need to take power away from government and then the power will leave wall street. but the people who should be on trial are the government operators that made it all possible. wall street is just playing the distorted deck that it was dealt but if we stop that and level the playing field and have a free market and take away the subsidies and guarantees and go back to sound money and let interest rates go up so that there is real capital funding productive uses of resources and if we get the government, and congress can't run these huge

deficits if there's no one there to print the money to finance. >> thank you very much. you may be excused, peter schiff. [applause] >> any further witnesses, mr moore? >> how much time do i have? ladies and gentlemen of the jury, it was george washington who once said government is the first disaster. >> he gets his closing first. [talking over each other] >> to get my closing statement. [talking over each other] >> am i out of order? >> you are out of order! go ahead. >> george washington said government is a fearsome master and we learned that with wall street. what we have learned in the last hour or so is that yes, wall

street made mistakes. and yes there were excesses on wall street and people should pay for those mistakes of the people invested in these banks who made the mistakes themselves but government stepped in and became so involved in everything wall street was doing that it corrupted wall street. we created as eisenhower basically said beware of the military-industrial complex we have become a government wall street complex and that is not working for taxpayers. it has not worked for investors and it has not worked for companies. what i would submit to you is the villain here is government. the villain here is the politicians. i am not the only one saying that. even prosecution's own witness says the government is the root of the evil here. if we could get rid of what george gilder called the incestuous relationship between government and wall street we

could solve some many problems and we could see a bull market expansion we have never seen before. i truly believe that and i believe if you hold my clients guilty and ruled that the problem in america is wall street and not big government she will be doing a great disservice to the future economy of this country, we will have government directing the investment. we know what happens when government direct investment. look what happened with solyndra? we have 10,000 solyndras if we have politicians rather than the people on wall street. one last point if i may. the root of this financial crisis was the collapse of the housing market. what brought down so many banks and insurance companies is how many financial institutions have over investment in housing and left out the question why did that happen? why was there such a massive

overinvestment in housing. because of fannie mae, and federal rules, federal bank regulators were the ones who commanded that these banks or mortgage backed securities the best investment they could make federal regulators commanded those banks that they had to hold those mortgages. those federal regulators and federal rules are responsible for bringing -- my message to you is if we can restrain government and put a muzzle on government and get rid of all these regulations. and the economy will flourish again. mom-and-pop investors will make money. we will all get rich and weaken drown it in a bathtub. [applause] >> time for your three minute

closing statement. >> i agree with the defense contention that government is a big part of the problem. government sold the ability to make rules that benefit wall street enormously, and into the casino. and the casino drew a lot of talent from very useful sectors of the economy and the government really does need to be reined in. they deserve a full measure of blame. the practical question is pragmatic. what should be the rules that govern -- is important that you understand clearly that the housing bubble wasn't an accident caused by give -- big government stability exclusively although governments to pity certainly played a role. there was a housing bubble and financial crisis. the roots of it were when the

regulation, enable lenders to bundle their loans into securities and sell them to other investments. once they sold them they no longer had a strong stake in whether the loans stayed. if people default on mortgages or not they had already gotten there pay day out. so lenders became much less vigilant in their scrutiny that made loans to people they shouldn't have made loans to because they could sell their mortgages and bundled securities downstream and when that happened banks who insulated them from risk started taking much more risk in lending practices. when i bought my first house i had to put 25% down. my kids put nothing down. they get low-interest teaser loans and balloon payments after a few years. many people were critical of homeowners for bar wing too much and getting in over their heads, john mccain in particular was

sharply critical of homeowners in that bucket but that underestimates the incentives confronting homeowners. that back and recognize that the main goal of a young family is to send his children to the best possible schools. a good school is a relative concept. it is one that is better than other schools in the area and those are in more expensive neighborhoods. the simple implication of that chain of logic is if you want to send your child to a school of at least average quality have to outbid 50% of other families for a house in a medium quality school district. if banks make it easier to get money other families bid more than they were for housing. you have two bad choices. you can sit idly by and watch your kids go to school with metal detectors were a score in the 20% reading and math or you can borrow up and going over your head and hold your place in the educational cue. is a very serious mistake to

blame parents for choosing that latter option. almost all of us would have chosen that when we made a decision. it is important to recognize that no industrial country has an unregulated financial sector. when you turn them loose there is always excessive leverage and asset bubbles and financial crises that results in protracted periods of depression. the question is what should the rules be? the government is largely at fault for the explanation for why we have such bad rules and we need to get smart people sitting down at a table but to allow wall street to continue business as usual as if there's no problem is missing one of the most important economic handicapped the country faces. >> thank you very much. and now ladies and gentlemen of the jury you have heard expert witnesses and a statement about the prosecution and defense.

it is up to you to decide the guilt or innocence on supporters of wall street. it is your job to determine whether the preponderant supports the prosecution that on that balance wall street and financial service industry investment banks and brokerage firms and hedge funds have misbehaved sufficiently during the ongoing financial crisis and guilty and agreed, corruption, undue influence in washington and other forms of malfeasance. the foreman will tally the votes and announce the verdict. the jury can vote by majority vote. it does not require a unanimous decision. anyone have any questions? very good. [inaudible conversations]

>> you have two minutes to answer that question. >> prosecution charged the industry with buying a set of regulations that were bad for the country. >> should we start pacing. >> don't leave. the best part is yet to come. want me to sing for you. did you hear me last night on the street? that will be part of a reason tv

video coming very soon. ♪ >> is this anonymous? i am just wondering. >> ten seconds. you guys can exchange names and addresses and facebook friend

information after the proceedings. you have to give those to the foreman. >> madam foreman, have you reached a verdict? >> if we have. unanimous not guilty. >> by unanimous contention, stephen moore for the win. >> i am not even a lawyer. >> i will get over it. >> go drown your sorrows. mr moore, you and your wall street brothers have been found not guilty. you are therefore free to enjoy a night in the city of las vegas. and the world known as sins city where you can enjoy all the pleasures of insider trading illegal tax-free consider gambling and the ability to borrow interest-free up to $1 million in the federal reserve for any losses incurred

over the next 24 hours. case closed. goodnight. and thank you very much. thank you very much, men and women of the jury. a fine job. >> ladies and gentlemen of the jury please clear the stage. you are all dismissed. thank you so much. you are good. [applause] >> every weekend booktv offers 48 hours of programming focused on nonfiction authors and books. watch it here on c-span2. >> here's a look at some books being published this week. in falling in love with joseph smith:my search for the real profit documentary film writer jane barnes provence the founder of mormonism and her family's connection to the church.

political commentator presents his thoughts, president's plan for a potential second term in obama's america on making the american dream. in the new new deal:the hidden story of change in the obama era senior national correspondent for time magazine provides an inside account of president obama's stimulus plan and the impact it has had on the country. historian stephen counterwitz, fighting for black citizenship in the white republic 1829-1889. in good italy/bad italy why italy must convert its demons to face the future the former editor-in-chief for the economist examines the collapse of the a italian economy and what can be done to fix it. eric malware is editor of a collection of photographs taken in a japanese-american internment camp in wyoming.

bill manborough was -- colors of confinement in japanese incarceration in world war ii. look for these titles in bookstores this coming week and watch for auditors in the near future on booktv and on booktv.org. >> what are you reading this summer? booktv wants to know. >> so much to read in this busy summer before the presidential election. i am still reading robert caro's new edition of his biography of lyndon johnson passage of power. also going to read something else from that era. mark shriver's new biography of his father, sargent shriver, a good man. i read a series of books on religion and one is about discussing god with children and how to explain god to children. speaking of my own children, reading with my oldest son and going for his summer reading lists and are like to read knit command discuss books we are