to track and calm the fires of the panic and this includes them having much more room to reform. but they are a good natural experiment in the cost of the alternative strategy. it's very painful and it was not just be a avoidable fiscal austerity, but if you live with panic light conditions for a long enough. max time, which they did for two years, they are on the capacity of businesses to expand and borrow. to hire people and retain people in other things, it's a good national experiment. so people who like the alternative should go live in spain.

>> beating fannie and freddie can be reconstructed and how in one? and you think it's ironic that some of the institutions he had been treating favorably are now suing you. >> i do think it is ironic. you know, this is a recipe that most people view as way too generous and unjust and unfair and yet the government is being sued for making too much money for the taxpayer on the largest and most riskiest things that we did in these cases the institutions and i think that they will be reformed? yes, at some point, i do. and i think that it will take a while because you can't really do anything now and it's a very

risky reform because as he written about alec it was part f the coalition of well-intentioned housing advocates and banks. a pretty powerful coalition a little bit of left progressive market and we called it the housing industrial complex and they had a strong grip on the local system. so i always felt the least when i was there that it's not good to rush this because if you tried to rush the reform process, the risk has he strengthened the hand of that coalition and they tried to re-create a set of conditions that were probably not dispensable. and a badly designed generous

subsidy for housing was a bunch of bad incentives. so i think it's okay to take some time. the housing market has a long way to go to heal. private capital is not really coming back in that market. the economy is not that strong still, so it should be a gradual process and you want to run it legislative process that maximizes the chance that this regime is dramatically better than the one that you had before and that might take some time. >> so this could be a short answer or a long answer. i'm going to ask the question. what about the current controversy about high-frequency trading? >> well, i think that it is a

necessary just desirable level of attention to a problem that has no obvious easy solution so it will take a long time to get on a better framework and so it's worth the attention. some for the controversy and attention and hopefully it produces some changes to make those markets and have a bit more integrity and a little bit less risk of catastrophic damage. >> in the book you write that you're quite pleased with dodd-frank. he felt that it really did make a difference to go along ways making this financial system and you also write about this and someone would like you to comment on why this guarantees

authority and why this is problematic. so can you talk about that in the context of some of the things that aren't so great about dodd-frank? >> let me just describe two of the most important things they heeded. we did put in place a new frame for consumer protection, better accountability, it will be better, it won't be perfect but better at the stuff that happens. against the risk of future financial crises we have much better authority to impose much more undertaking much more broadly. and so the ones that existed a flight to about 40% of this and they were too thin. but now they are much more conservative and probably much more broadly, that is a much more restricted bank on consolidation and we have forced big banks to hold much more

capital and this is a systemic surcharge. and it's better to dismember large institutions like bear stearns and aig and others. those are all good things. but in this extra deeply populist moment in washington, they took away some of this that was so important to protect from the much worse recession. they took away the guarantee authority and i think less consequentially do a lot of tightening up for stuff that i recommended. and i felt that the fed shouldn't be able to do specific interventions like this. so if you want to do for specific things, that should be less of this in the government. it was one of the most effective

things that was done to limit the force of this and it's the only way that you can break. what happened was congress got caught up in the belief that in finance the fire stations cause fires and it's not true. it just doesn't happen that way. they got caught up in this belief that somehow if you limit the tools available you make fires less likely and that is not true. and so that is where the condition that authority and what that means them is that it's so deeply unpopular, it will be late like it was this time and that is going to be a very costly thing. but if you look at the reform

these core reforms limiting risk are very powerful and they are very well designed. and they have the chance of buying us a long time of relative stability. not permanent. because those people as they become more confident, this will be migrating around the constraints. but the reforms, i think, are really pretty good. >> i think we have time for one last question. are you still doing your taxes their? [laughter] >> i have a good education and the complexity of the tax system and generally believe in paying for advice.

[laughter] >> thank you all very much. [applause]

[inaudible conversations]

[inaudible conversations] [inaudible conversations] >> good evening. thank you for coming. i'm liz huettel, deputy director of event at politics prose book store. we are we're in at the throes of another dynamic season of events. please check out our webs for more information weapon also host event at our book store and we offer wide range of cultural trips-literary classes and book clubs, please stop by and visit us.

but tonight we have the honor of welcoming leon panetta. mr. panetta has a long and storied career as a public servant. in 1976, he was elected u.s. congress, where he represented california's 16th 16th congressional district for 16 years. he acted as president clinton's director or the united states office of management and budget and then as his chief of staff from 1994 to 1997. he founded the leann and sylvia panetta institute for public policy, and in 2009, he became the director of the central intelligence agency. from 2011 to 2013 he was the 23rd united states secretary of defense under president obama. tonight m-panetta comes to us with a new memoir, "worthy fight." hexanes his life and political legacies with a focus on his time as secretary of defense himself unwavering sense of moriality and belief in the exhausting work of public

satisfies radiates off every page. as david writes in the "washington post," panetta comes across as man who has never shirked a fight he thought was right. tonight he will be in conversation with michael -- mike allen with o'politico. he is the man the white house wakes up to. he has written for publications include "time," "washington post," and "the new york times" nice. , as bob woodward declared you don't have to do anything else, just read mike allen. they will be in what promises to be a lively conversation, roughly 40 minutes. afterwards we'll invite you to join in with questions. ladies and gentlemen, mess help me welcome leon panetta and mike allen. [applause]

>> thank you very much. welcome to all of you here. someone point out this is more expensive than hbo and on-demand. so we'll try to make that worth why. mr. secretary before we start here, do you want to say hello? >> i'd love to say hello to my rabbi. jeremy bash. who is my chief of staff and his lovely wife, robin. [applause] >> and jeremy's parents are here as well. thank you for coming. >> want to thank politics and prose, and this amazing setting. welcome to those in balcony. we appreciate as we kick off, secretary, you have been out for a week now, talking about worthy fights. you have another week to go, you're about to head to california. earlier today, did you get

tougher questions from the readers at gw or at costco? [laughter] >> guest: costco was kind of tough. people are shopping big. shopping for big things there, and they want you to deliver the best product you can, and i told them, read the book. >> host: pretty good. so, mr. secretary, as we heard, in the introduction, you have worked in city government, federal government, you have been a republican, democrat, you're a lawyer, an army intel officer, you have been longtive assistant, special assistant, executive assistant, which in as -- director of the u.s. office of special rights, congressman, white house budget director, white house chief of staff, so what is left on your bucket