in bed with wall street. this week nomi rins, all the presidents bankers. and at the former wall street executive's explicit multigenerational relationships to the political worlds that are the basis of power and influence in the u.s.. the program is about an hour. >> host: welcome. i am pleased to have a wall street insider and renowned journalist, author and speaker, nomi prins at chase manhattan

bank, lehman brothers, bear stearns, director of goldman sachs with a distinguished career on wall street has only distinguished herself further by sharing her expertise by the written and spoken words. widely sought after by the outlets she's written a number of acclaimed works including other people's money it takes a pillage and black tuesday. she joins me to discuss the most recent work all of the presidents bankers they had their alliances that drives american power. welcome and congratulations on such a study of this book as we take a look into washington, wall street and the families that have had such an enormous impact on our nation and on the world. >> thank you so much for that lovely introduction. >> host: my pleasure and it was easily done given the fabulous career that you have had both on wall street and now off of wall street and the very

world so it is a pleasure to have you. let's dive right in. this is incredible and unparalleled written history in the relationships between wall street, the large banks that have dominated the nation in washington. what motivated you to take on such an incredible amount of effort and exercise to produce this book lacks lacks >> host: >> guest: a slight bit of insanity and begin 1030. they have a scene that has been researched nothing near the research i did for this book on the fixed bankers on the 24 wall street one noon to this the markets that are crashing around him in latthem in late october y themselves. and a fellow named tom lamont who is the acting chair of the

morgan bank at the time, the chair jack morgan was gallivanting around the world and five other bankers together in the most powerful families and bankers running the most powerful banks on wall street say we need to do something to save the new market and in the next 20 minutes to throw in $25 million each. to boost its market falling all around them. we start to notice while today we have six banks and i look back in time in the cursory analysis there were six ranks 100 years ago in the panic of 1907 and they were all largely the same banks in the first part of the century now similar legacies. but i started to say what is the relationship? and i was fascinated in the general work i'd done in the political association of thinkers and so i decided to do is take a look at the history in

period and look at the real relationship between the fixed bankers, whoever the most important one was at any point in time in the nations history during the century. i didn't know that every single president from teddy roosevelt to barack obama had strong associations but certainly with a subset through documents and letters and phone calls and other forms of communication as well as social connections through clubs and other types of places where they would meet. >> host: clearly the relationships are everything and whether people want to promote the relationships or not let's take a step and go behind the scenes. you know, could you take us into your research where did you go, who did you meet to unearth some

truly incredible material? >> guest: i decided to go to all of the presidential libraries to make the research very easy and start from the president out whether they had associations with particular bankers do every period of time i wanted to make sure i had the appropriate historical events that would have occurred at the time. i used to joke with my editor and i would say i don't want to forget about worl about world wi happened or vietnam so what i did as i had a sort of outline of the major events that happened in each president of course and treasury secretary. and i went to all of these archives, all the presidential archives that existed. i was at abilene kansas at one hot august working with the archives of president wade eisenhower from where i went to independence missouri to look at the archives of the president truman. i started actually in austin

with lbj. i find that period critical in changing the attitudes so i really just dug in deep and i didn't know. i have to submit the freedom of information act to unearth certain documents from the more recent but hadn't been unearthed it. it really took my projects too hard and spent some of her own time trying to look for documents going through the boxes that i had it's almost like a race. there could be anything in a box. it could be anything from letters about why did you drop

the atomic bomb to the letters from bankers saying thank you very much for your support and writing back saying i couldn't have done it without you. there's all sorts of things you find and you get into this mold of being in the time with those people going through this and endends aroundends out for docun sort of typing everything up while you're there and then going on to the next location. >> host: were there any libraries that you deem to be somewhat reluctant to share information? >> guest: from fdr to the ronald reagan era, there was a certain code under which everything is classified for the finance information on economics, personal relationships and it's a very clear code with very clear identifications and easy tax-exempt.

i think they're shortly after the film argo came out and there have been researchers for that goofy looking up information about the hostage crisis into this system that could actually look digitally added a lot of documents. not everyone worry had that. now you have e-mails and everything needs to go through security clearances and it's in a different code. so it was a lot harder to find information. they look at the prior libraries so they knew the difference between. they are still outstanding and the clinton library and the george bush library and of course the george w. bush

library just opened, so i didn't have the opportunity to look at anything there with obama still in office. they started to sharpen in terms of the nature of some of these relationships where you started to realize this goes deeper than perhaps either your self as well as the public would have imagined. >> guest: becaus >> guest: because i didn't really start at the beginning, kind of worked more on geography and flight patterns i was doing a little bit of jumping back and forth and so for example, i go to the lbj library and i would see his relationship with sandy weinberg was the chairman of goldman sachs at the time and then i would be at the fdr library and see how they have been very close friends because of something that he had said in

the 60s we were both fdr men at the time so it's good to have you on my team again although he wasn't in office anymore. and i think for example to see the beginning of the relationshiprelationships and as starting in the middle of history and going backwards playing catch-up in the middle and going to the same bankers to see what the relationships were with all of the president in between. when i saw them in many instances if you had a relationship with one president, you had a relationship with money. going back i mentioned how tom lamont was the chairman of j.p. morgan during the crash of 29. i knew that from black tuesday. but i didn't know and i found this out at the library in hyde park where i grew up as well, certainly not on research he had rented out his townhouse.

so the tie that happened after the crash it into the great depression when they started way back they had both gone to harvard, they had both been involved in the trend in harvard paper over there. tom labonte had been one of the editors have a very young editor when he was at harvard, and they had a long history which then lasted for severa through sever. and so, you just kind of -- there was this affect where it wouldn't necessarily be history going forward but it was history going backwards into there were a lot of relationships in between. >> host: so the relationships really went from only the business and political but to the social as well. >> guest: winthrop aldrich that ran with roosevelt and was also the cutback in 1930, so yes

there was all that going on back then as well. and fdr also was interested in that and so of course jpmorgan had a tremendous fiat at the time as the equivalent that we have now with larry ellison. there are social gatherings going forward for example in 1938. fdr had at this point appointed a well-known family name, joseph kennedy two b. the first head of the fcc when it was created and also appointed him to be the uk ambassador in the late 30s after joe kennedy was the head of the fcc. so now he is off in england having a coming-out party. very lovely social events for his daughter kathleen who unfortunately died down on another kennedy tragedy but john f. kennedy was at that event and the david rockefeller was part

of the financial strength and was also there and in fact he somewhat dated kathleen kennedy for a moment at the time and so the ties of the connections were through all sorts of social events that people wouldn't be involved in. >> it's not just the social and the individuals but as you were eluting to the strength of the families as well. and those family ties that run deep come of morgan and rockefeller and kennedy -- >> guest: james roosevelt and the father and j.p. morgan, the evidence lee famously powerful j.p. morgan created together among a few other established families the metropolitan club of new york, which is a very exclusive club where these men could get together and talk about the affairs of the day and decide things in a very strong and tight environment.

>> host: it is on the loyalty almost. >> guest: even when you think about it in terms of today what is used for the throne of the hierarchy of the other terms that were used even in the industry and banking today. who is the heir to the throne and a j.p. morgan chase. so, even the terminology has that sense of the monarchy to it, and certainly back in the beginning of the 20th century and throughout a good portion of it there are three or four families that were the most instrumental in running the top three financial institutions in the country that also have the tightest personal and financial connections with the president over the time. although in some cases the difference is that people don't get elected they are the family appointed. one of the other families that were running the national city bank back in the early part of the 20th century and of course national city bank is what we know of as citigroup.

they married one of the rockefellers and together they produced by rockefeller then ran citibank in the 50s and 60s, so these lines were sometimes on the money or connected. >> guest: when you combine all of them is a game of thrones and ends up in an incredible book. let's go back towards the beginning of the book. set the scene for us please. we go off the coast of georgia to a place called the jekyll island. what happened, who came out of it and were the motivations of the people truly pure and sincere? >> guest: what happened is in november of 1910 there was a meeting that was called by senator nelson aldrich was a

very famous and powerful political family that integrated into being a financial family and as the senate finance chairman was tasked with trying to create a central bank that would appease the public as well as pass in washington and the reason for that is there had been a panic coming major banking panic in 1907 an 1907 io years before that which teddy roosevelt had asked j.p. morgan to get his people together to try to save the market. it's a little bit different today. the government worked to save the bankers than calling them to try to help the general economy, and after j.p. morgan got a bunch of friends together to decide if they could live or die and how much they had to back them up, he was a little afraid and thought i don't want to have to do this exercise again.

i would prefer a central bank as well. so they adopted this idea to help subsidize or stabilize them so that they wouldn't have to put their own money and whether or not they had caused a panic. and from a governmental standpoint, teddy roosevelt and didn't talk about it so much but when taft came in as president, he very much pushed this idea of having the central bank and the family was close and they basically decided that they would do these expeditions into europe to see what was going on with the bank and friends and see if america could duplicate something that was more american but still enable them to have a powerful bank and also to back that emerge in carinthia that was going to be the most powerful currency. so fast forward a few years into the fact finding they went around quite often as the head of the national city bank p. dot dot and it seems more beneficial

level. j.p. morgan said you need to do this somewhat privately and nelson was hit on madison avenue. he was in new york discussing things with bankers and lived in new york as well and he got hit on 60th street by this madison avenue car he needed to have his meeting at the estate and rhode island. now he's in new york and they have a club membership at the jekyll island club off the coast of georgia and sponsored which is something i found out myself after i went to jekyll island they sponsored this again to work together in secrecy to bash out of this idea. now the sort of cloak and dagger

stuff i think it's a little bit exaggerated. i mean it wasn't like you have covered up thhavepaparazzi stard to jekyll island it is really at the time it was off of the coast. you couldn't get there. you certainly couldn't drive their. so it was a pretty secure place already. and that is where they bash out of the plant. and at the end of bashing out the plan, nelson is going to go back to washington to present it to the senate and what happened is he wasn't feeling well from the trolley car situation after what had occurred was two of the the bankers that had been at the meeting, frank was the number two at the national city bank, and david is and who was one of the senior partners at the bank actually presented the plan to washington, which i didn't know

either. this was something i discovered in the book. so they actually went to washington to present the findings. the federal reserve act was passed ultimately under woodrow wilson looked a little bit different from the plan. but it had a lot of similar aspects created this idea of the central bank and the concession that would be close and has continued to be close to the wall street banks and then there would be the federal reserve, which the president would appoint the chairman and so there was kind of this idea of a balance of power and everybody was happy and there's a whole bunch of stuff in the book about all the maneuverings at midnight until that finally did get past. >> host: clearly the federal reserve is a lightning rod given the quantitative easing programs

but right from the outset it has been promoted as an independent institution. in your opinio opinion can it be independent given the nature of the relationships exclusively in the book lacks >> guest: no, it's really naïve to think that it can be independent. one because of the very structure it has been burbank's that they need in the federal reserve banks to serve only shares in the federal reserve as a full entity. that's number one. there is a sort of event ownership. but beyond that, the philosophical relationship which is the strong one that started back in the jekyll island and has gone through today has been very strong as the first head of speaking very strong he was one of those that had been at the jekyll island so he got to be the head of the new york fed, and paul who was another of the men at the jekyll island was appointed by woodrow wilson to

be one of the governors of the first federal reserve command from the beginning through world war i. so, from the get-go there was a connection between how it was established, why it was established, and the appointments that were allowed and physically done by the president at the time and that really hasn't changed. there's never been a suggested appointment that's come through that hasn't been accepted by congress who was supposed to have an extra say in this. it's always been a slamdunk situation. terri summers recently took his name out of that for the most part, his stoically every time a president wanted to someone as the helm of the federal reserve, it happened. and from the beginning, these people tended to be bankers particularly on the new york fed, which is the most powerful component of the system.

>> host: it remains a fascinating topic and again, all of the calls for transparency relative capacity, so there's certainly more that is always to be studied there. >> guest: and the book of secrets of the temple is something that inspired me. i could have spent more time on the relationships in the earlier years but he did such an exquisite job on that i have it. >> host: obviously have been studied extensively the president as well as the bankers, in your opinion -- had there been a couple of president either that really stood out in your eyes as just being truly magnanimous in the way that they've executed their office or on the other end of the spectrum, you know, woefully weak and far too willing to turn over the rank of the cover to the bankers?

>> guest: before the crash of 229 we have the succession of presidents from harding from calvin coolidge through herbert hoover, all of whom just allowed the bankers that were their friends also to do what they wanted to do because they believed this was important after world war i not just for financial power but for america's emergence as a political superpower that if you have banks that could expand that could basically do what they said they needed to do to become strong themselves, and that was good for america in general which is a theme that continues to exist through today and it was specific because of the emergence of america the superpower. calvin coolidge didn't do anything to support this. he was famously talking about how the business of america is business. also, the treasury secretary -- actually, the treasury secretary

that served for harding and coolidge and hoover come and room allen, was himself a banker and himself the leave to doubt it was important to allow the banking communities to do what it needed to do which meant not having any rules and the ultimate result is that it tremendous amount of speculation after world war i that ultimately led to a tremendous crash that ultimately led to the great depression. so they have relationships but they didn't really try to use them to get anything back from the bankers. going through history, lbj was someone who didn't come from the same establishment as some of the main bankers in his time but he was such a master politician that he understood how to sort of stroke the personalities and the conditions of the people in the power in banking at the time as well as get stuff done.

so he was very much a man about -- i will not restrict you. i will not worry about your competitors in the smaller firms who think you have to much power. i'm not going to play into any of that. i will let you do what you need to d do do the unique about me support my great societ great sb say anything negative in the press. you need to be on my side. and that even continued into the beginning of the war there were a lot of bankers that helped raise money and they subsequently turned against him when things started to unravel towards the end of the second term. but he just knew how to use the relationship to work for a broad public interest as well as allowing the idea of the financial strength to continue, said he was good at doing that. not having as many long-standing connections as someone like fdr that also did a lot of that when he worked on his policies.

>> host: let's stick with that topic. in the 20th century, we had the two great wars. we had the korean crisis and then also, the cold war. you know, what sort of a role did the banks and the bankers play in terms of the nations involved and both pre- and postwar? >> guest: it goes back to the thomas will launch relationshipk during the end of world war i. first morgan bank itself worked with wilson and the treasury secretary to finance 75% of the private investment that went into funding allies for the war related arsenals and so forth. so there was already a very strong alignment between the morgan bank and the white house. a very regular, very much an idea that's money that's needed to go into the war effort was going to be consolidated through

the private bank. and then of course there were the bonds where individuals across the country were asked to invest in the war in america and so forth but ultimately that helped them grow because they had new customers after the war. and in the second world war, the sort of try to do the same thing. there were different people at the home of the banks and at this point, winthrop eldridge who was running chase stepped into the forefront because of his relationship with fdr. the chase bank became as well as the citibank there was a relationship with the vice chairman with morgenthau was the treasury secretary during world war ii that allowed the institutions to continue private financing of the war but also a much larger blanket approach to getting individuals to buy the bonds and take out accounts in the banks of the same tim at tho that's the way they sort of combined helping the country expand their presence into

getting new customers but by the time you got to the cold war all of these customers are there and the policy of america under truman and under eisenhower was to make sure that the communism could not prevail basically throughout the world and that capitalism would be the domina dominant. and in eisenhower's doctrine he basically states that america would stand ready to fight from a military perspective or economic perspective or what he said was a trade perspective in order to protect its allies effectively, the ones that were on the sort of capital side of the creation. that helped the bankers and now they ha have a military support. and at the beginning of the cold war the expanded into cuba and they nationalized banks and and expanded into beirut because it was going to be a stronghold and all of this was done with the

protection of the u.s. military. so the whole idea of the international aspect of banking happened particularly with these major banks were the connections they have the president and the policies and they were also on the pulpit to promote his policies. winthrop eldridge went around the country talking about the truman marshall plan and helping the countries that were on the side of the u.s. and so forth and open trade and free trade. so, there was an extensive alignment among the people that knew each other and had similar interests and used each other to expand. >> host: it's fascinating stuff. so you talk about that sense of alignment. and clearly coming out of the depression there was this anti-banker look what you just did to us in terms of speculation. working our way that went into world war ii where there was a sense of collaboration can and now it seems to have come full

circle again. so i mean, it's this cycle of these ups and downs. you know, are the bankers in your opinion -- how do they balance that profit motive and incentive, versus national interest tax >> guest: yes and that is a big cycle. the fact that he's working with fdr for example to test the glass-steagall act, which tremendously reformed thinking and reduced the ability to speculate with other peoples money and with depositors funds was interesting to me because he wouldn't assume that on the surfacsurface that would have b. but under the surface it does make sense because if we have a more stable economy for everybody, then a banker that understands that is good.

but j.p. morgan chase is the most powerful bank in the world and in the united states so the fact that winthrop coverage pushed the bank to be split up in the 30s because i' on the one hand you want to take over his competitors had sort of be the guide and have the banks that did that and have the government backing. but it worked. j.p. morgan chase exists today. they were out of doing food drives and raise money in congress after world war ii to help the chinese that were impoverished and so forth, said there was a different mentality of what you could do for the country as well as balancing what you want them to do in terms of your own power.

it's nothing remotely like that. you can't imagine jamie diamond running the food drives to help anyone. so it is a different form of patriotism versus nonexisting now. and als also but not demanded fm the presidency. then there was this idea of high will do this for you and all of you do this for me this will be good for the country. and now there isn't even an expectation. there isn't any demand to have that kind of relationship. >> host: was there a point that the palett the balancebalae relationships?

>> guest: it happened in two stages. one in thi of the period of ali, eisenhower where the need of the political and financial needs and the individuals were all on the same page and very closely connected in conference and everything. you had jfk come in and he did a family base. he certainly had relationships with the people that were rising at the major banks. but a little bit standoffish about the idea of asking for favors and as a result, they were not as nice to him publicly. in fact, in 1962, david rockefeller had a famous set of letters published in life magazine at rockefeller and jfk on the surface looked like they were being collaborative but if you read the text it sounds like david rockefeller is critical.

in particular with respect to latin america, jfk didn't want to fully have latin america open to the private interests of individual companies. he thought that they should be strong rather than simply pushing the leaders to the open. as david rockefeller and other people that were coming into the folds of the major banks at the time saw this a as a term of ths opportunity. you havyou have the commodities. it was next-door, branches were coming up left and right and they really wanted the government to support much more of the private and others and they kind of thought like a america should be strong on its own so that was a kind of divergent but then of course he was fascinated and lbj came in and as i mentioned before, he had a -- first of all he was much more about the private interest internationally. he supported with the bankers wanted to do and he had many

more personal -- he knew how to stroke their egos. there was a lo a lot of back-and-forth between weinberg and david rockefeller and members of the national city bank and in and out of the white house. he had these monthly dinners in washington where he would invite very particular members of the financial and other types of business communities to make them feel like they were on the same side and even after kennedy was shot. there was a tremendous support. he has more public support in the press and on wall street because they thought that he would be supportive of what they wanted to do. so again it got back to connected. nixon was a bit more like jfk which a lot of people wouldn't say. but from the standpoint of coming you know, this collaboration, he didn't want any part of that. two points during the presidency

for example, though he did suggest that david rohde or shoulrohde ofownershiprohde ofoy secretary and walter rivkin should ask them to become treasury secretary, they said no. but also you can ask them personally. lbj would get on the phone and have an invitation, they would be buddy buddy and he just didn't do that. they had gotten together and that we can take the policy from here and they actually pushed nixon and people in the cabinets to get off the gold standard which happened in the beginning of nixon's presidency and all sorts of other things but now they started making demands without feeling that they needed to give anything in return. and there is a lot of stuff on the book that event evolves into the middle east oil an middle el sorts of other things that came out of that disappointmen does . >> host: was it your sense

that the bankers felt i have more power wearing currently situated that one might think they would have whether it is the head of treasury or elsewhere in washington. >> guest: they had gone through this expansion, they were still going through it. there was consolidation in the banking industry because none of the president have gotten away from having the consolidation and concentration happened. so there was more lucrative power influence as well as the money sampling. money wasn't even really the thing. it was about the influence and power to not have to work on this sort of public and having access to petrodollars in the middle east was also a big point of departure in all of this because all of a sudden you don't necessarily need the backing of the military to open up branches you just have all of

this money that you can refund around the world which it turns out it went into the form of debt in latin america and caused a debt crisis that was bailed out by the government. so it started to really dissect. >> host: let's stick with the theme of the bailout. obviously we had a massive bailout in 2008 and the american public is never again. we camped do that. we've taken care of that so we will never have another bailout. whether it was the bailout in the world debt, savings and loans, mexican bailout, long-term capital management, can you talk about the role that all of those bailout had in terms of behaviors within the bank's? >> guest: those bailout were

open invitations to having another crisis because if you risk money and it either isn't yours to begin with to take that risk, or you know someone else like the government to the taxpayers is going to have your back and you're consolidating and merging and increasing your base of the deposits and of the capital that you can work with because you're getting more and more citizens money as well, you tend to do things that are stupid and that are reckless and that are illegal or a combination of those things. the snl crisis was an example of the deregulation in certain types of financial instruments and services that enable the lots of speculation about time and mortgages as well that leaves all repeated in the subprime crisis more recently. but the third world debt crisis and showed the bankers tha thaty

basically stonewalled washington. we have all of these billions of dollars on the hook. these countries are right next to us. if you don't help us for the worltheworld think of it is supo be the independent institution can help us. everything is going to go to hell into the american people will suffer. so it is this idea and if you don't help us, the american people will suffer. so help us, but we won't help back. it's manifested by all of these bailout. and the president from ronald reagan to push through clinton to obama who really got on board with that -- >> host: and didn't really play that card. >> guest: that doesn't happen in the you're still dealing out the banks in particular because the weight of the federal reserve works. the federal reserve continues to buy securities from the bank

supposedly for six years after the crisis happened that is a tremendous amount of help. they are always helping israeli pm or digit that of the mortgage securities by the bank. it would be very different stability of the overall economy rather than the big bank. >> host: let's compare and contrast if you could the regulations that were put in place during the 1930s in the 29 crash versus what we have seen here post-2008 dodd frank. what is your take on that? the act that was passed after fdr came to power, this was a very clear line between the speculative version of the services and things the bank could do and the deposits that it took and the services that are provided to regular individuals.

as i've mentioned before, the key thinkers of the time which were mentioned that came in to run the national city bank after the predecessor also was on the same page as fdr. one of the things i found in the papers is that they have meetings. perkins was on the white house three days after the inauguration talking to fdr about how he would split up his bank first. he would tell his shareholders this is how it is going to go. and he did. before the act was actually signed in the summer of 1933. so, that's what happened. there was a fine line between the traditional services. the bankers were on the same side. the population was on the same side and things became stable

for many decades. you contrast back to what happened in the 2008 crisis, which has been a much more expensive crisis for the general economy cover the actual unemployment levels, not the sort othoseassorted tagline unet levels and for what we love and the bailout that the subsidies that have been given since. the dodd frank came along and did nothing remotely by dissecting the speculation from the depositors into the traditional banking activities. the deposits and loans, nothing. it's really, really long. it has lots of pages. and it is absolutely nothing significant. so, it is a huge difference. >> host: do we have the political will? to have the estimation to take

on the battle? >> guest: president obama basically says it was a sweeping reform. so if you can look at something that wasn't sweeping reform and compare it to something that was a sweeping reform and say that with a straight face and have the treasury secretary say that with a straight face, then no we don't have the leadership that either would do anything or hasn't done anything to stabilize the situation can get is pretendinit is pretending ths purchased more dangerous than not doing anything. and i don't see anyone coming into play right now with the potential that we have that are being debated in terms of who might run for the president in 2016. so we do not have a leadership that is asking something of those relationships. even if they are less tight or less about family connections.

even if the we have more lobbied between there is no demanding and there is no giving because there is no demanding. >> host: that is incredible. just a couple of quotes from the book. what is your take on the following quotes? first off, who controls the money supply and controls the nation? we have a money supply that the federal reserve is technically in charge of both what it has done in its policy as it has bought over $4 trillion worth of securities from the banks into treasury bonds that go through the banks on which the fed pays interest to the banks. they have the history of the fed and the best the control is

maintained by the banks that give them money. you couple that with the fact that today there is concentration and capital in the hands of fewer banks and fewer banking than there has ever been in the country. and you're not just controlling the money supply the capital. the deposits of the country that are insured resides at the top six things. 96% of the derivatives exposure, six banks have a 45% of the derivatives exposure in the world. forget the political financial phone calls to the white house visited invitations. that is a tremendous amount of capital to be in charge of. again, we have only emerged --

and when i say emerge we have only continued on from the crisis of 2008 to have these sort of worse statistics than we had a before and have the banks bigger than they were before controlling more than they did before and that is a scary possession. >> host: obviously the elephant in the room was too big to fail, what is your take on too big to prosecute and trust plaques >> guest: too big to fall in the rain in. and as you said before, there are no leadership at the highest echelons to do anything about that. >> host: that's troubling. in chapter 16 you right into this really grabbed me no longer was there even a pretense of alignment with domestic concerns or collaboration with the white house. so, take that quote relative to what we had coming out of world

war ii. i mean, that is a pretty strong statement. >> guest: i don't remember if i said directly in the 70s but that quote came from or that i was referring to. but the fact is that this alignment that we have usedthe government for what it's worth we used to have this relationship where we would get into there would be give and take and we don't need that anymore. we just -- the government will receive it into a position of having less power as the consolidation of the capital became more and more concentrated the powerbase shifted back to wall street and had done that way in a panic of 1907. that is when teddy roosevelt had asked them to save the country. and even in the late 1890s,

the morgan bank had more money than the treasury department. then it was like real money. now it is leveraged capital. itit's also worth of more complicated money. and with broad power. >> host: into that very point, the power and often times power is equated with often times arrogant. there is a quote in the latter part of the book that really grabs me and some people in the public have heard this. that's why i'm richer than you. >> guest: but that's jamie and i amend in a call. basically what it means and what it says is that, you know, this isn't about a greater good or a public interest.

it's not even about the profit motive being sustained by something reasonable. it is about my ego and my power and you bring that into vacation and that is part of why it is all so much more dangerous now. there was a photo that ran chase back in the 30s as well that had quite a big ego and he was checked out when winthrop eldritch came back in after fdr. and he didn't work to run the bank anymore. and so, there was a humanity that would'v sort of existed aft depression and into the works but it doesn't exist whatsoever anymore. >> host: that's truly troubling. early 19 hundreds we have the six large banks dominated the marketplace. we still have now fixed large banks but in the interim, there has been endless numbers of

mergers. has there ever been a merger that a major bank has not liked and whatever happened to the sherman and clayton antitrust act in the world of major banking? >> guest: it all goes back to the panic that happened after 1907 that's very significant because that came about as we look at the federal reserve and then when world war i happened, what will wilson -- and it is an interesting story in the book called jack morgan, j.p. morgan signed after having a campaign on this notion of breaking these trusts that were run by people like morgan because there was a war coming on and there was all sorts of speculation in the press at the time. why are these guys getting together. whawhat is wilson doing? and it turns out to couple of months later they were trying to figure out how to finance the war and they were on the same page. and you know, we now have two

key page. >> host: in the percentage of the capital and the deposits into derivatives and assets in such few hands that it allows for ultimately manipulation and scandalous activities in the market. >> guest: which is why you need it well defined structures to at least be unquestionable and not lawyer to at least create less risk to everyone else in the general economy. i mean, that should be -- we talk about a government that is supposed to protect the citizens of the country. well it's not just about all the money that you spend on the

military. the government has and should have a responsibility to protect from the standpoint of its economic well-being. and in a situation where the concentration of wealth and power and influence in the capital is so out of whack, then the government is allowing the president or any president that is allowing that to happen is not doing its best by the american people. it is into doing what was the best iwould bebest in the intere democracy. >> host: then does it really matter who sits in the white house? >> guest: the last several decades it really has from this standpoint. you talk about all of the various bailouts and the crises that have happened in between internationally between the third world debt crisis, the snl crisis domestically versus the 2008 crisis in all of this continues to happen regardless of whether there is a republican

or democrat in the white house or treasury secretary is a republican or democrat and who is running the fed. so it hasn't mattered. >> host: it hasn't mattered. >> guest: >> host: this has been fabulous. we have three or four minutes left here. let's touch up on and try to look forward to the future. obviously a lot of unknowns. we are sitting here at a point in the nation's history which having come out of the crisis in the late kicks the can down the road. lots of issues. what would you like to see and how are we going to make that happen? >> guest: i would like to see the oval office in the issues we've been discussing today and a return of the glass-steagall act, not a pretend return to at least create structural reform because there will always be lobbying and lawyering in the personal calls and the balance

for the stability of the country versus putting everything and all of the eggs into one basket for the stability of the largest banking institution. and then a real strengthening of america from that standpoint. that's what the good to see. it wouldn't be good to see another crisis which is very likely what would happen instead because these things are not happening. i think there is a lot we can learn from our history. i mean it had very bad moment and it has some decent moments and that's one of the things i found in the book is that they worked better for the things we should accentuate and move up from there. we can criticize them but you should look at them. and things that worked worse for the general public that he should try not to do. and that was one of my main takeaways from the connection and adjusted the anatomy of how

the power relationships work between the white house and wall street in this country and how they impact policies on the floor and in the domestic basis. but also what makes sense for the general public and to the greater public interest and do that more. >> host: regrettably it seems those that have failed to learn from history are doomed to repeat it and there is a lot here. obviously leading to the crisis of over eight in your estimation, will it take another crisis to bring about some changes that we haven't seen from this most recent one? >> guest: i think there is no way that won't happen. now whether we get the changes after that crisis, i can't say. but it's astonishing to me that what happened wasn't enough and that the fact we are still subsidizing the banks that were

involved is very incredible to me and is truly we need to be in a better place. >> host: i cannot thank you enough for the work you put into this book. you have done a national service and for those watching the show please read the book, share it with friends, family and colleagues, congratulations on a fabulous piece of work. ..

with pete takes a look at the creation of words by others. this is about 50 minutes. >> thank you barbara. this is a special treat with you here today. thank you. we exited invented a word authorism for the 450th anniversary sets go acquadro centennial and we did that -- i did that fights going to be editor-in-chief at merriam-webster and they got the staff to come up with a name for the 450. whether that name is in the dictionary are not at least admit it to book and now it's shown elsewhere. this isa