said when the question comes up, i don't doubt for a second it was the official story is i believe, i think it was done by bin laden, 19 hijackers, the question that remains unknown about the event is always been the real role of saudi arabia. i'm saying that 15 of the 19 were saudi. part of the 9/11 commission was not being released. but most importantly, if america was actually serious about fighting terrorism, which it's not, it would deal with saudi arabia. saudi arabia is one of the key global sources of terrorism and america prefers to felash it rather than criticize it. >> i got my one clap. >> to sort of close all of this,

the way that bush and cheney were able to exploit the horrors of 9/11 have not been totally investigated. the kinds of crimes that were justified of 9/11 -- >> which continue. >> drone bombing in yemen is still linked to 9/11. 60 words in the authorization for the use of military force is justification for bombing people who were toddlers when 9/11 happened. we do live, it's a cliché but we live in an existence in terms of how all of these things are

justified. i want to thank anthony very much for writing this book, for the work that he does, smart questions from audience and most of all to books for publishing the book and buy the books. thank you all very much. [applause] [inaudible conversations] >> and now on book tv after words, former federal reserve ben bernanke discussing his book

the courage to act. 2008 financial chris sis and explains the steps taken to revive the u.s. economy. he's interviewed by sherro brown, ranking member of the senate banking, housing and urban affairs committee. >> prim -- impressive book. >> you kissed ana good-bye. >> that's correct. >> impressive in length and detail and impressive in recall. this book was on the stands, was being sold by october 2015. so not much more than 18-months process. how do you do that?

>> i started right away as you pointed out. i left the fed on saturday and monday i was working on the book. i had lots of federal, the federal reserve let me see my emails because i managed by emails. i had dozens and dozens emails every day because it was useful to go back and seeing sort of real-time what was happening. i had other types of material. i had a wealth of material and i could sit down and bang out a draft. i should say i had some help from david skidmore, which is a public affairs person who took a year off to edit and help me with the research. you know, i got a really quick start and i was done at 14 months. >> some of the most dramatic economy times in history.

you probably didn't have much to reflect on your life. so as you wrote over that 18-month period what did you learn about yourself? >> writing the book a big purpose was to think at leisure through the process. in that respect it was very useful. you know, i think one of the things i learned there's a lot of hindsight bias. we all create a story about what happens. this had to happen, that had to happen. you realize that you're in the fog of war, you know, you -- as things are actually happening, you're always trying to make judgment about balance, one risk against another, so i saw myself as a risk manager, somebody who was trying assess involving chaotic situation and finding the right way forward but it was

a very difficult to know at any gich -- given time what was really happening. >> i remember seeing a line with somebody be proud of the man i've become. you don't strike me as a particularly ego-scentric person. >> i think we made mistakes particularly in the period running up to crisis. it took us 2007 really to recognize that the thing was getting quite -- quite severe. after that, we were aggressive and broadly speaking we did the right things in efforts to stop the crisis and help the economy

resoever. yeah, many -- like in my war plan, the first contact of the enemy, all of the sudden the plans were disturbed. there were lots of things that we would have done different. once we determined that we were going to hit this thing aggressive, i do feel we got the main things right. >> let's talk about you and your background. i know people are interested in that and how that informs ben bernanke, federal reserve, small-town jewish kid. >> yeah, right. >> as you said in the book and to me before, dodger fan because of sandi cofaks. >> right. >> you worked at a place south of the border. i know the diner that my wife and i go to in cleveland. i don't know south of the border.

everybody does because all of i95 points to it. you were a middle-class kid. not poor but not rich. what did working in south of the border do for you? >> it was and is a place where the economic situation is tough and people have to work hard. i worked as a construction worker. i worked in my dad's drugstore and i worked for two summerses in south of the border and i got appreciation for how hard it is to put food on the table and pay the rent, particularly if you don't have a lot of education. it was a good experience. i was both part of and not part of. we were a jewish family. most of the town was southern baptist and quite different whoir -- who orientation. my father offered credit to

anybody he felt he could trust. so the whole experience was one of getting to know really, you know, ordinary americans facing economic challenges. >> can you tell us stories about your grandmother in connecticut and you would sit talking to her about the depression. you and i were born more or less same year but we had parents or grandparents that talked about the depression. your grandmother then living in connecticut talked about the paradox about the shoes. the great thing about that story, i'm sorry to press on your own story, is that fortunately for the country you had talked enough about the depression, if i'm not putting dots together that shouldn't be connecting, that led you later to graduate school in economics and studying the depression. maybe that may have informed

that. talk about the paradox. >> i used to sit on the front porch in charlotte with my grandmother and she would tell me stories about her youth in the 30's when she was living in connecticut. and the story she told me was that she was proud because her children were able to go to school and able to wear new shoes every year but lots of the kids in town didn't get new shoes, in some cases didn't have shoes. i said, why not. the shoe factories had shutdown in the depression and fathers had lost the jobs and therefore there was not enough money to provide shoes for the kids and i was six or seven year's old and i could see something wrong with this. all they had to do is open up the factories and produce shoes. she said, no, it didn't work that way. for some reason it's not happening.

the system isn't working. it was a real puzzle to me. i was interested in all kinds of things but when i came back to graduate school i found it to be what would be the wholly grail, the most important puzzle. >> my guess the term paradox of the shoes will go into some kind of economic history. let's go to 2007, i came to the senate in january of 2007. i was put on a committee that leader reid was called sleeping agenda. but what it means that in the first half of 2007 there were more foreclosures in the zip

code i live in than any zip code in america. it seemed to me as in 2007-2008 until -- at least until the spring of 2008 that there wasn't much attention with the fed or the housing crisis was -- caused a whole lot of reasons. in cleveland it was lending and -- and obviously what was happening with manufacturing declining manufacturing. why did the fed sort of missed this in some sense? why -- why was the government overall not cognizant that there were places, ohio, had about the middle of the poir had more foreclosures all over the state? why did we not see how serious

that was in. >> i don't quite accept your characterization. i spoke about foreclosures a number of times before the crisis. some foreclosures are unavoidable, but in some cases it seemed like that there just wasn't enough effort being made to modify mortgages and to find a solution whereby people could stay in their homes. so we thought about it, of course, partly from a economic perspective. empty houses, affecting local tax revenues and the like, and the fed did pay attention to that issue. >> i would argue and i heard the

statements but i would also say that consumer protections that -- to stop lending in some -- and some of the responsibility and authority that the fed had particularly prior to you, and i'm not casting dispersions on any fed, but i think that you were more in tune than predecessors had, at least immediate predecessor but i began hearing from people in cleveland that on consumer protection that the fed was particularly there for us. >> well, your use of the word predatory is critical. i talked about it in some length in my book. at the time -- in my book i have to go back sort of at the time that i was at the fed. some extends back to the 90's, some of the issues, debates. one of the big distinctions was

made in washington. i'm not blaming anybody in particular. one was predatory lending, illegal lending that got people in trouble almost immediately. legitimate subprime lending, good development, people of more modest means -- exactly. to get into a home and participate in the american dream. quite honestly, one of the reasons that there wasn't more aggressive effort to police sub prime sending was the fear of cutting that off. again a distinction with predatory lending, already illegal. it was a question of enforcement. you can debate about enforcement versus subprime lending. >> let me take it from a different angle. in page 94. i also don't think that key fed

staff, you spoke about how good the staff was and i would agree with that. i don't think the key fed staff were captured in the sense that they perceived it to be in their own career or financial interest to go easy. they were, however, open to arguments, regulatory burden should not be excessive in the competitive market forces would to some extent enter poor lending practices. i work at an institution where lobbyist are pretty present from environment regulators but some of the same people. now it's half time, they were going to go lobby the regulators. i'm at a place in the senate where lobbyist cop at you regularly over time in part because you and i and our staffs and your regulators back when you were noncivillian tend to

hear from the most elite in society and over and over and hear the same song that it's easy to get socialized. lincoln use to say, staff wanted him to stay in the white house and win the war and preserve the union and free the slaves. no, i have to go out and get public opinion back. or francis goes out and said go out and smell like a flock to parish priests. fed are less likely how many regulators that know people who had home foreclosed on. >> one of the features about the federal reserve system is they have 12 reserve banks and one in

cleveland. i mean, your concern is -- is not wrong at all and, but i think what was happening well before the crisis was that there was a perspective that was shared not just by the fed, but others that the financial system should be more -- less regulated so it could be more dynamic. we know now that there were a lot of problems with that. if banks had sufficient capital that you didn't have to watch them too carefully. regulations shouldn't be to burdensome. >> was not done right either. >> i'm not debating you. >> i understand. let me ask you in a different way. why did tarp with bank bailouts work better than what we tried to do with other homes, particularly your conception if

you will and pushing through congress to a bunch elects in congress that didn't want to do them, why did that work better than what we should have been done or tried to do for homeowners? >> first, we needed to stabilize wall street because we were afraid that the effects of collapsing financial system on the economy would be catastrophic so we effectively worked to stabilize wall street. the treasury lead -- this wasn't a federal reserve responsible. treasury lead effort to do modifications and refinancing, working with fannie and freddie. i was aware of all that was going on because actually on one of the committees created by the tarp bill to use the money and i got regular reports and i understood what was going on.

all i can say was that there was a lot of effort. i frequently heard from president obama, what are you guys doing, you need to do more. i don't really -- i don't have a satisfactory answer than say it was hard to do. people didn't respond to your calls for refinancing. they -- they redefaulted often in many cases after the mod if i can cases were done, records were incomplete, a lot of refinancings and mod if i if i - modifications didn't get done but i shared the frustration. >> you were all in front of maybe not all in front but spoke to congress many times in banking committee in which i served. i know you didn't show it in your face, but i understand from your book you were not necessarily having the time of

your life. many of us accuse you and the fed, or so pred ces -- predecessors that criticism could come back on a lot of institution. this is what you wrote. although i would testify over a dozen of times i always disliked it. why is that? >> i didn't think that it was really about in many cases, it wasn't really about informing you know the oversight comoity, it -- committee, it was about the committee make leading questions or speeches. there was a lot of conflict involved and i'm the kind of person who doesn't like conflict so it was unpleasant. i certainly did it. i testified almost 80 times while chairman.

i acknowledged the necessity and the fed needs to be overseeing and transparent as possible. it doesn't mean that i had to enjoy it on a personal basis. >> it doesn't mean that. the fed chair testifies twice a year by law once to the senate banking committee then the house financial services and then the other time in reverse gives a report. it was required by hawkins legislation that had something that makes us different from european central banks. it's important that the federal reserve has a dual obligation. >> right. >> one is to combat inflation and the other one is to fight unemployment. in europe it's only to try to restrain inflation, not to fight unemployment. i would complement you and some of these questions may not sound like but i would complement you and you seem to take the employment side of that dual mandate as seriously as you took the inflation side as you did

something that past chairs may not have done. i also credit the fed chair to take that equally seriously and perhaps your time itself or the paradox of the shoes. let me talk about the first time you and i with the cast about ten others had a serious sobering conversation. it was september 19th, 2008, in the book you refer to the calls you needed to make that day, to people like me. i got a call, i was in ohio, an industrial town east of columbus, small city. i got a call from the majority leader at 12 noon, this was september before the 2008 election when mccain and obama posed each other. >> yes. >> all those things had happened

or were about to happen. >> right. >> i remember how sobering the call was. first you spoke to us outlining the problem and secretary got on the phone and said we need legislation. my recollection is he said it'll be a 3 to 4-page bill. we need you to pass it immediately. one of the things that i do in hard votes, i just write reasons to be forward and to be against and talk to staff and i remember writing at the top of the page, best vote i'll before cast, worst political vote i'll ever cast. it was painful. nobody wanted to. i'm not an exactly wall street guy nor i think are you frankly, but i also knew what was best to my country. republicans opposed it in the house. overwhelming it went down. the stock dropped 700 points and then we went back and fixed it. >> i remember that all very

well. >> you write about it in some detail. from the time -- what you did with tarp that clearly worked and in my state what came with the auto ces cue, disturb rescue in your book, the conversations i watched with you talk about a leihman brothers, chapter 18 to financial crisis to satisfaction of you in treasury and the others. it's hard to forget, although it's easy to forget the details.

8 plus million jobs. many industrial good union paying jobs and in my part of the country but everywhere, but you write over and over how the economy needed fiscal help. you got that fiscal help from the late bush years with the stimulus, tax cut stimulus that you supported. i think you thought it was inadequate but important. in the beginning of the obama administration another fiscal help bill, stimulus that you said was probably inadequate as many thought voting for it. why did you -- here is my question, sorry for the long intro to it, spending money to fight and help you with the monetary policy, you were appointed three times by president bush a republican, i

don't know a lot about politics except what i read in there, pointed by the bush administration. why was it so hard for the two of you to convince republicans to step up on the fiscal policy to grow the economy? >> well, i think that people had the wrong idea basically. there's this fear of deficits. the deficits were very large not just because of fiscal programs because the economy was in deep recession. that generated a deficit as well. there was a lot of fear about what that would do and whether it was going to lead to very high interest rates or inflation. in europe we saw in uk we also saw even a more rapid turn. don't ask me to defend it. i think it was entirely wrong. >> i'm asking you to explain why. >> i said so at the time. i think there's a kind of -- there's this kind of simplistic view. it's the same as the family.

i remember getting this question in the house financial services, my teenage daughter if she overspends her credit card, we cut them up -- >> the question is why are you giving your teenager a credit card. >> that's another question. it's a very important distinction. the differences is that in a deep recession government spending or tax cuts can help the economy recover and that in turn reduces the deficit by increasing tax revenue. sometimes the disease is better than the cure. i say so in the book and at the time, we turn too quickly and in particular the federal stimulus

that we got in 2009 was to a significant extent offset by the craks of the -- contraction of the state and local level. all those budgets were deeply cut. that was offsetting to the extent that was happening in the level. >> well, that's interesting what you said about the local level because in the regan years when the economy began to come back and job growth happened significant job growth, part of that was fueled by job growth and government in state and local level and federal level. since this most recent awful recession since we've had job growth for 60 consecutive months and auto rescue, but we've had a drag on that with local, state and federal, federal hiring, so there are fewer with the

criticism of obama administration, there are fewer government jobs which you used the word head wins a number of times. you were doing everything you could and congress wasn't. let me use your words. economic slump, public spending can replace private spending. with the economy still in free-fall with short-term interest rates near zero, the economy needed fiscal help, tucks cats to promote private spending or both, i'll say so so beit. that was rather amusing, some of us. i wasn't endorsing a candidate. i was endorsing a program just as i supported president bush stimulus that passed in 2008.

so one of the things you had just said that you said so at the time, my biggest frustration as a senator on the banking committee can ben bernanke, my biggest frustration was to get you to talk more pree -- precisely about what we needed to do. in an ideal i would have want you to return to republican critics and pass the transportation. i know that's an unfed-like-thing to to do. why couldn't you be more stronger in your words even though predecessors may not have acted that way, but this was not ordinarily for them? why didn't you do is that?

>> you think that would have worked? i did say quite often that we needed to be less now because this was the time that we need today get more jobs and think about long-term balance instead. why wasn't it more explicit? i'll explain. the explanation that i was concerned about overstepping essentially, violating the implicit contract that congress doesn't make monetary policy. that's true. so i try, you know, my general rule -- and you can think this was wrong and you may be right, but i'm just saying to explain my general rule to talk about the direction of policy, the fact that we needed more fiscal support and tried to stay away

from issues because that was the kind of thing as far as i was concerned congress could work amongst themselves. i wanted more fiscal support but i was reluctant to say it has to be infrastructure versus a tax cut. i felt that if i did that, i would do more harm than good and i would give a reaction. >> but you say so many times how shocked -- maybe it's not your word, unfair to use, specially tea party to defend as an institution, blaming the fed when they weren't blaming fannie and freddie. let me ask it in a different way understanding you weren't going to say you should pass this six-year transportation bill, you might want to think of income tax credit, something

that had to bother you precisely was the whole idea of every year or two a group of members of congress often in republican leadership threatened to shut the government down or go up against the debt ceiling. did you speak about that? >> i did. i think that was an easy call. some small benefit to offset the fact of overall economy. the debt limit, people may not understand that the debt limit is not about constraining government spending, it's about paying the bills for spending that occurred. not spending bill is a dead-beat thing to do. and i was very clear about that. i spoke about that quite often, of course, i let the treasury take the lead because that's their role, but the fed was

engaged in that pretty consistently. >> was the -- okay. let me go on a different place. only one of the things that happened that was concern to some of us at least in the country, i think maybe house in senate is the increasingly consolidation of a small number of large financial institutions. i believe 15 years ago, something like that the largest sixth financial institutions made up about 18% of gdp. by 2010 and large part because of what happened with sixth largest institutions, by 2010 almost 60% gdp hasn't changed much then. most of the consolidation was leading up not as a result of

frank. bloomberg calculated that they have 80 basis points, eight tenths of one percent advantage when they borrow money because of the financial markets, they are too big to fail and so they are at low risk to lend money to, that gives those big banks another reason to get bigger at the expense of smaller banks who can't compete as well. bloomberg said $80 billion. something like that like that. should we be concerned about that, that those six or seven largest banks upwards of $75 billion, others say too big to regulate, some say too big to jail in a humorous sort of way. should we be concern about their power?

>> absolutely. but putting that aside -- so what i would just say is that dot frank and also the capital agreement that we had internationally has -- is moving us in a good direction. there's two things i would just say in general, one is that the new capital rules there are a lot of costs imposed because they are big. for example, the very biggest banks have to have more capital than the banks that are the most big. the biggest firms are -- >> higher percentage of capital. >> right. biggest firms are potentially subject to this special fed oversight surnd rules. supervision is tougher. on the other side we have the

liquidation authority which is moving in a constructive way which would give the ability to unwind a failing firm in a way that it could be done without bringing down the system. what you're seeing in the news is companies talking about shrinking. ge capital, ge is investing because they don't want to be created as systemically important. there was a paper today, a discussion was saying that aig should break up to avoid capital oversight from being systemically important. there's been discussion about shrinking and simplifying. on top of that we have the living wills, the practical effect of that is that they have to show why they could not be --

why it's a necessity to have the size and complexity that they have and in the hands of regulators and this is not going to be the case all of the time, in the hands of regulators who are focused on this problem, i think the tools are there to move us in the right direction. >> let me talk about the living wills for a moment because i was going to ask that. the pronouncements perhaps don't move markets -- [laughter] >> give us a little prediction, if not exactly a prediction that the fed is now looking at these -- all these big banks, the fed is saying to them, if you don't -- if you can't be unwound without either government infusion of a tarp-like government infusion or go through bankruptcy you're going

to have to divest. give me a prediction. i'm not asking what banks. you think the living wills will precipitate -- do you see that happening in any of these banks? >> i think it can happen. the alternative would be that is a termination that they can be unwound safely. i would point to another recent development, which is the fed imposing the total loss absorption that can be convert today capital should, you know, should they come close to failing. they are going to be more expensive than other bonds.

so, you know, the trick here is to simplified, downsize and decomplexfy if that's a word. on the other hand, it's often lost. they do provide services, they do provide a lot of jobs, so you don't want to -- it's not really feasible to break them out in community banks as much as we like community banks. how can we get them to move in the direction, and i think the best way to do that is to make the cost to be big and tougher to be big and also to take away the funding advantage by making a plausible case that, in fact, -- >> you argue most of that advantage that gao or bloomberg might have cited, they didn't cite them yesterday. this was a small number years ago. you're arguing that much of that

has been -- >> i would note -- again, this is just a piece of evidence. some of the bond-rating agencies are no longer assuming government support when they rate the bonds of large banks. i'm not saying the problem is solved. i think things are moving in a direction and dot frank did provide that allowed regulators to get to the right place. >> are you concerned about dot frank that there's an effort to move up, 500 billion, strip away a number of the powers from stock, coordinating of all the coordinated panel, if you will, of the fed and treasury and fdic and others. are you concerned about that from the legislation -- >> some of the language is about gutting and replacing and eliminating dot frank. i think dot frank has been

constructive. i don't think you need to defend every single clause. there are some things that are less effective than other things. i hope we can come to a situation where we can make a rational review and decide where changes can be made and so on. but i would certainly oppose any wholesale attempt to roll back because for the most part it's been constructive. >> we don't debate making adjustments. we work together on an insurance change on something called the collins rule. >> right. it's not too much of a center, not a lot of card nation going -- coordination going on. >> one proposal is to eliminate title to the resolution

authority and just strengthen bankruptcy rules. if leihman brothers did that, was that lesson in part not to do that, i assume? >> what bankrupt cri does, the goal is to protect the creditors, to make sure that the bondholders and so on get as much return as they possibly can. unfortunately that was not the main public purpose. at the time when leihmann collapsed, we were concerned about the overall system. they ended up losing a lot of money, which is fine, goes away from the idea that it was saved, but anyway, the trouble with bankruptcy laws is that they are not on a prin -- principal purpose in a financial system.

that's the difference between bankruptcy. it's about protecting creditors. i'm all in favor of protecting creditors in general. that's why i would prefer to see a liquidation authority, which is specifically dedicated to the proposition that the main objective is to protect the overall system. >> perhaps a more personal question. don't move markets. understanding and it was sort of amusing in this book how you went from 2002 you were -- you

joined the administration as -- as a fed governor then and then became president bush's economy adviser and when you went back to the fed, your language had to be much more precise than ever in your life. how did that work at home? how does family react to some guy that has to talk that way? do you talk differently? >> i talk totally differently. [laughter] >> i've been accused by my wife and sometimes after the various kinds of things talking like that at home. >> do you cite the good of the american people? >> not necessarily. >> i understand the pressure that was on you during all of that. >> i just want to say my home life was tremendous relief to me. my wife is really good at giving

a little bit of a sanctuary where i can unwind and relax a little bit and think about something else for a change. that was important for my mental health. >> i assume for the country ultimately. in page 42 of this book you talk about a book you were writing in 2002 when you got the call that changed your life to go to washington and be appointed to the federal reserve as a governor. you're working at a book called the age of delusion and how central bankers created great depression. you were 120 pages into this book, if i recall. >> right. >> what will the next ben bernanke -- not your book, what title would they give to a similar book describing the lead-up, not the solutions or issues you worked up, but the lead-up to this -- >> the lead-up would be

something like flip at the switch or something like that. one of the aspects of the 90's and the early 2000's was that things looked awfully stable overall and underneath the surface risks. that lead to what we ultimately saw in 2007 and 2008. i guess that would be -- in terms of the period before the crisis, i would identify, you know, excessive confidence in some ways as being the problem. in that respect when you asked me about the future, i always have to say, but we have to be sure we have to pay close attention to what's happening. you have to make sure that

you're paying close attention. >> how so many people in this country, so many people in wall street and financial services were rewarded for risk taking, they got the rewards and unfortunately the public lost huge numbers of jobs. we were losing 800 jobs a month. a lot of that has come back, is of course, you know, but i had -- i was talking to tom curry and he talked about one of the things that the bank culture has changed, is that every major financial institution, at least the goal, i think we have done this fairly well, but i would like to know your thoughts, somebody that has the stature

and compensation and are pulling the firm back on risky behavior, are we doing that well enough, risk officer in board room has the authority and the support of the board of directors to tell a company, no, you can't do, that's too risky for this company and only for our economy? >> of course, i'm not sitting at the fed now and janet yellen is testifying about these issues. it's an ongoing project to make sure all of this is going on. before the crisis, they had risk officers but they were not necessarily, you know, at the table as you say. they weren't given enough attention by the board. >> they weren't taken seriously. >> or serious enough. it's a big part of the strength and supervision to make sure that the risk officers have very high profile and report to the board, that they do have the information they need, the banks are able to assess their own risks. one of the problems was before

the crisis, we would ask the banks, suppose house prices drop 20%, how would that affect your portfolio. get back to us in a couple of weeks. they couldn't give you an answer to that kind of question. now you can only pass the stress test, not only to show that you have enough capital but you have the systems and the ability to monitor risks and assess the risk. i don't want to say that problems are solved but things are moving in the right direction. the other thing i want to mention is another aspect of bank supervision has to do with structure. one of the problems is that people are paid bonuses on the quarter's results, you can take a lot of risk and earn the money and move onto another company and the effects are felt down the road, there's a lot more now regulators are insisting on compensation packages that allow

for so-called club acts if the investment ends up losing money that you either not get or pay back the money you received. so trying to create a longer term perspective and broader sensitive prospective. there's a change in the culture. again, i don't want the claim the problem solved but the direction is very clear. >> you see on institution where you last taught had a reputation to sending people to wall street to design the most extraordinary complex financial vehicles, various kinds of cdo's, are young people are less likely to do that now -- >> there's still a lot of interest in finance in princeton and elsewhere. the best and the brightest are not necessarily heading to wall street at least in numbers as

they did in 80's or 90's. >> i would like for them to come to ohio and lead high-tech manufacturer. perhaps a little different balance than we've seen in the 25 years. >> again, i don't know whether it's part enough but there's been a shift in where college graduates are going. >> i have two more questions for you, one is we talked about my frustrations and you answered the question well, i thought, i still had the frustration that you weren't prescriptive enough as much as i would like for you to in what we need and congress needs to do. you don't have those -- any of those straight jackets on today. give me your advice on what policies should be doing to move this economy to go forward?

>> we need to fix immigration, in particular i object to the limits on high-skilled immigration. that needs to be rethought. skills in training, really critical for growth and also income distribution. and i think the government needs to keep a sound role in r&d technology. the government has the ability to fund science. okay. >> research, sewer. >> the private sector is going to move the economy but the government's job is to provide foundation in some sense for that and it's just been really hard lately as i'm sure you appreciate to get bipartisan support for sensible programs, and there's a lot that can be done to help -- productivity games have been anemic in the last years.

wages have not groan as much as we would like. there's a lot of things that can be done to make the economy vibrant. >> sure. what are the things you can do -- what are the most important things we should do about wealth and inequality? union representation, it's clear that the kind of unions of wealth inequality, issues of workforce training, issues -- what's a couple of things? >> i want to caution that this is a long-term friend. i just don't buy it. i don't think that's true. these are long-term trends associated with globalization. it's not going to be easy to revert that, you know, that oil tanker. i guess the main tools that we have is tax and transfer policy.

the other is the skills and training, make sure that everybody has access, has the opportunity to succeed in labor market, and we haven't succeeded in doing that. the inequality in our educational outcomes is, you know, in many ways parallel in economy and distribution. >> what do you mean reference to tax programs, tax policy? >> so i am really going to -- this is congress' decision. clearly one tool that you have as a legislature to address inequality is -- is tax rates on income wealth, corporate taxes. i'm not advocating a particular tax rate. that's really not my rool but i-

role but it is a tool that congress has to look at. >> it's not your rule but you're an extinguished economist. just thoughts generally on everything from -- i would just like to hear your assessment of what we are doing right and wrong, everything from earned income tax credit to state tax to corporate tax to the personal income tax. >> you mentioned two areas, earned income tax credit and other credits that reward work, reward education, that those are constructive and they avoid some of the trade-offs that you worry about that you simply create a tax on benefits by taking away benefits that you go to work, for example. corporate taxes, that seems like an area where there's a lot of

bipartisan agreement, closing loopholes, addressing territorial issues. there are areas that progress can be made for sure. >> i'm working with a couple of senators and speaker ryan. i'm hopeful that we can come to some agreement on territorial tax so that we can give incentives to companies to bring overseas dollars back home and get tax rate of 10-11%, and that money goes to long-term infrastructure and at the same time so that doesn't -- minimum tax from then on. >> right. instead of being a one-time thing, you want to make a transition to a mar -- more rational system. >> that's part of what we are trying to bring. >> great. >> my last question is about

baseball. you can sort of compare eras but obviously not always and you're lucky enough to sigh -- see whether some thought it was a perfect game. my question is this and i represent ohio, as you know, and in the southern part of my state, pete rose -- i'm not asking your opinion whether they should be in the hall of fame. jackson who played for cleveland, some of his best years for cleveland. understanding what they have on their creaser, there's a story of the new york yankees, they were playing the cubs, the cubs won the world series in 1907, my

team the cleveland indians would have been the longest team for not winning series, how fair was it that the first base men for the new york giants was this young rooky star, made one mistake, how fair is major league baseball when it labels him -- >> i remember like it was yesterday. this is interesting. they had a neighborhood play. there's a runner sliding at you. you don't have to touch second base. ..