what they did was 800 snls failed back 20 or 30 years ago. all the assets fell. it was easy to get rid of the mortgages and all the liquid assets. and then there was a very large chunk of assets which were 13 hole golf courses, 40 story skyscrapers of which eight had been built. and we could see the erosion and the maintenance cost of maintaining all of this stuff eating away and overseeing our taxpayer dollars going down the drain. what they chose to do is to bundle all of the stuff in billion dollar groups. a billion dollars back then was a lot of money. and they hit the market. they just basically said we are

going to sell them. and, of course, we expected 50 cents on the dollar and that's what we got. >> why can't we do that now? >> basically because what happened back then is the congress was up in arms but one very interesting thing happened. all the people on wall street are looking at this process whereby these funds had bought cheap and all of a sudden were making a ton of money. what happened is that immovable inventory of unsaleable assets was cleaned out in a matter of months. and i think that particular action by the rtc probably saved american taxpayers a very large amount of money. >> could we do that today to clear our housing mess? >> it would work but i see no evidence of any political willingness on either party to

move in that direction. >> you got away from monetary economics and fed discussions there. you migrated away. >> really? >> you did a good job of migrating. central bankers have been tasked with beingardue s. do they need to say to other institutions, no we at the ecb aren't going to do this. you are going to find the courage to do this. we need institutional courage. did the central banks have to say no someday to the task at hand? >> basically central banks were prohibited from doing certain types of things. and i would say that -- to lend

virtually to anybody under any conditions it was very -- it was an amendment to federal reserve very rarely used and it was the only vehicle that would enable a quick response to occur. and so the federal reserve has the fiscal agent of the treasury did accumulate lots of assets on

his balance sheet. what i hoped was going to happen very quickly is that the treasury would take over those assets on to a subsidiariy. >> because it would require the appropriated funds which is ridiculous because it is one of the flukes in the unified budget accounting system in which if expansion alone by the federal reserve it does not require appropriated funds but exactly the same use of sovereign resources by the treasury does. the only difference of whether the assets are held on the federal reserve or the treasury's balance sheet is the fact of the accounting procedure. and the inability or unwillingness for treasury department to go to the hill to get appropriatuations for that

is what created a big problem for the federal reserve because they were involved in fiscal actions which is not the role of the central bank should be. >> you and others but you in particular have been criticized for not raising rates in 2003 and 2004. jeffrey lacquer says in 1994 you did get out in front with preemption. when you see the global debate today, not the fed but the global central bank debate today about when we raise interest rates, what data and you as a great student of data, what data should any central bank study as to know when to raise interest rates? >> well, it basically is of necessity involved in the forecast. all central bank actions presuppose an outlook which you are addressing because obviously the impact of monetary policy

drags out over time and you have to try to infer what is going on. in other words, the issue of the question of lowering rates in 2003 which we didn't which i think was the right thing to do, insurance against the type of deflation air forces we are looking at now. it never had any impact on the money supply. it had zero impact on long term rates and had no effect in retrospect that i could see. even such a student and critic of the federal reserve said that the performance of the federal reserve was extraordinary and excellent. >> did it fuel the leverage that led to this housing boom? >> no. i think the housing boom comes out of a different force. it was low interest rates that induced the housing boom but it

was low long-term interest rates. remember housing is a long-term assets and mortgages are long-term. it is not effected by overnight rates. and indeed what caused this extraordinary housing boom was the remarkable change that occurred after the fall of the berlin wall. and all of these very large so-called third world countries which are under one form of socialism or another -- >> had to buy the long term paper. >> they decided looking at what happened to the soviet system, they switched in china and became the most capitalist economy in the world. and the extent of the growth in china is really a tributet to capitalism if i may put it that

way. but effectively what that was doing was creating a huge increase in income. remember that the rate of increase in the developing worlds gdp from 1991-92 forward and from 2,000 forward, that was a huge increase in the developed world's gdp which got so large they couldn't spend it. it was all savings in the market place and pushed lo down globally. >> 75 basis points. >> no, no, far more than that. what it was, however, was it is important to recognize is the housing boom is not an american phenomenon. we were sort of somewhere in the middle. there were 20 countries who always had big housing booms.

the question is not with the united states. >> i want to squeeze in one question. i know peter cook has questions, as well. i believe there is a job opening at the bank of england. everybody else is being considered to being the guv of england. would you accept a job if it were brought up now? >> i would ask the current governor who is a good friend and extraordinary good central banker to stay in place. he is doing an excellent job. >> a few great questions submitted to us. i'll try to squeeze at least one or two. movements on the risk curve are obvious as people search for yield is real. as rates rise doesn't the bursting of the bond bubble have the potential to be much broader than the 2008 financial market? >> it's extraordinary difficult to get something which was worse

than the impact on the market that followed september 15th, 2008. and as far as i can see bond price prices didn't move like equity prices can move. the sizes of the capital gains cannot be equivalent in that respect. that is not to say you can't have a real -- i think if you are going to look for the criteria of what type of things we are looking at go look back at 1979 and 1980. >> let me squeeze one more in here. this is a quote. this is the shabby secret of the welfare status tirades against gold. deficit spending is a scheme. gold stands in the way of this process. it stands as a protector of property rights. if one grasps this one has no difficulty in understanding the status antagonism for the gold

standard. the writer suggests you wrote these words. looking back over 45 years could you give us your thoughts on that essay today. >> i thought it was very perceptive, myself. >> did ron paul write that question? >> that was not submitted by ron paul. >> i had a very interesting conversation with ron paul when he was complaining at a house hearing that the federal reserve should be going back on the gold step. i said the american people have chosen to have a money standard because they want a welfare state. you cannot have gold standard and the welfare state at the same time. you have to make the choice. we have made a decision as a society that we'll be dealing with the welfare state. now, i also told him the normal practice of the central bank is to replicate the actions that

the gold standard used to do when it controlled. this is the gold standard before world war i, not subsequently. i think the markets today are telling us something very important, namely that gold is a currency and has to be a zero sum gain. but gold is the only one of them that doesn't require somebody's credit to authorize it. there is no name associated. gold is acceptable for reasons in all the years i have watched it i never fully understood what it is about human nature that attached to this particular metal and it has never changed. >> i have asked my wife that question. thank you very much for the

time. this conversation will continue on bloomberg television. thanks very much. newt gingrich announced the end of his campaign today. the former house speaker won only two contests in south carolina and his home state of georgia. his campaign is reported being more than $4 million in debt. you can see his comments at 8 eastern on c-span. and while congress is on break c-span 2 and c-span 3 are featuring special prime time programming. book tv prime time tonight with american soldiers who served in iraq and afghanistan including the story of an ill fated special forces unit and the autobiography of the most lethal sniper in u.s. military history. although tonight here on c-span 3 american history tv prime time

looks at two battles of the civil war with the battle of fort donaldson and at nine shiloh battlefield. this marks the 150th anniversary of the civil war this year. the senate judiciary committee on human rights held a committee on racial profiling in the u.s. law enforcement against african americans and. this hearing will kmoo km to order. our hearing will focus on a civil right issue that goes to the heart of america's promise of equal justice under the law. protecting all americans from the scourge of racial profiling.

racial profiling is not new. at the dawn of our republic roving bands of white men known as slave patrols subjected african-american freed men and slaves to searches, detentions and brutal violence. during the great depression, many american citizens of hispanic descent were deported to mexico under the mexican repatriation and during world war ii, tens of thousands of innocent japanese americans were rounded up and held, confined in interment camps. 12 years ago, in march 2000, the subcommittee held the senate's first ever hearing on racial profiling. it was convened by then-senator john ashcroft, who would be appointed attorney general by president george w. bush. and in february 2001, in his first joint address to congress, president george w. bush said that racial profiling is, quote, wrong and we will end it in america. end of quote. we take the title of today's hearing from the promise

president bush made that night, 11 years ago. in june 2001, our former colleague, senator russ feingold of wisconsin, by predecessor's chairman of the committee held the senate's second and most recent hearing on racial profiling. i was there, there was bipartisan agreement about the need to end racial profiling. then came 9/11. the national trauma that followed civil liberties came face-to-face with national security. arab-americans, american muslims, south asian-americans faced national origin and religious profiling. one example, the special registration program targeted arab and muslim visitors, requiring them to promptly register with the i.n.s. or face deportation. at the time i called for the program to be terminated. there were serious doubts if it would help us combat terrorism. terrorism experts have since concluded that special

registration wasted homeland security resources and, in fact, alienated patriotic arab-americans and american muslims. more than 80,000 people registered under that program, more than 13,000 were placed in deportation proceedings. even today many innocent arabs and muslims face deportation because of special registration. how many terrorists were identified by the special registration program? none. next wednesday, the supreme court will hear a challenge to arizona's controversial immigration law. the law is one example of a spate of federal, state, local measures in recent years that under the guise of combating illegal immigration, have subjected hispanic americans to an increase in racial profiling. arizona's law requires police officers to check the immigration status of any individual if they have, quote, reasonable suspicion, close quote, that the person is an undocumented immigrant.

what is the basis for reasonable suspicion? arizona's guidance on the law tells police officers to consider factors such as how someone is dressed and their ability to communicate in english. two former arizona attorneys general followed by 42 other state attorneys general filed a brief in the arizona case in which they said, quote, application of the law requires racial profiling, close quote. of course, african-americans continue to face racial profiling on the streets and sidewalks of america. the tragic, tragic killing of trayvon martin is now in the hands of the criminal justice system, but i note that according to an affidavit filed by investigators last week, the accused defendant, quote, profiled trayvon martin and, quote, assumed martin was a criminal, close quote. the senseless death of this innocent, young man has been a wake-up call to america. and so, 11 years after the last senate hearing on racial profiling, we return to the

basic question, what can we do to end racial profiling in america? we can start by reforming the justice department's racial profiling guidance, issued in 2003 by attorney general john ashcroft. the guidance prohibits use of profiling by federal law enforcement in, quote, traditional law enforcement activities, end of quote, and that's a step forward. however, this ban does not apply to profiling based on religion and national origin and it does not apply to national security and border security investigations. in essence, these exceptions are a license to profile american muslims and hispanic americans. as the nonpartisan congressional research service concluded, the guidance, quote, numerous exceptions may invite broad circumvention for individuals of middle eastern origin and profiling of latinos. today congressman john conyers and i are sending a letter, signed by 13 senators and 53 members of the house asking

attorney general holder to close the loopholes in the justice department's racial profiling guidance. congress should also pass the end racial profiling act that i welcome the attendance of my t welcome the tanzaniaancattendan senator cardin of maryland who has taken up this cause from our senator fine gold. he's here to testify. let's be clear, and i want to say this and stress it. the overwhelming majority of law enforcement officers perform their jobs admirably, honestly, and courageously. they put their lives on the line to protect us every single day. but the inappropriate actions of a few that result in racial profiling create mistrust and suspicion that hurt all police officers. we'll hear testimony to what has been done in a positive way to deal with this issue by

superintendent of police. that's why so many law enforcement leaders strongly oppose racial profiling. racial profiling undermines the rule of law and strikes at the core of our nation's commitment to equal protection for all. you'll hear from the experts on our panel today. the evidence clearly demonstrates that racial profiling simply does not work. i hope today's hearing can be a step toward ending racial profiling in america at long last. senator sgram running late. senator leahy is out of the senate this morning. but was kind enough to allow me to convene this hearing. and i'm sure will add a statement to the record. i'm going to open the floor to senator graham when he does arrive. for the time being because we have many colleagues here who have busy schedules of their own, i want to turn to the first panel of witnesses. at the outset, i do want to note that i invited the department of justice to participate in today's hearing, but they declined. we are honored to be joined by our colleagues from the senate and the house.

in keeping with the practice of this committee, first we will hear from members of the senate, then members of the house, a practice which i loathe in the house, but now that we're running a show i'm afraid that you'll have to live with it, my house colleagues. each member will have three minutes for an opening statement. your complete statement will be included in the record. the first witness is senator cardin. former member of this committee, senate sponsor of s 1670, the quit racial profiling act which i'm proud to sponsor. senator cardin's second appearance before the subcommittee. he testified dwred firefightyes first-ever meeting. we're pleased that you can join us today and please proceed. >> senator durbin, let me thank you for your leadership on this subcommittee. the fact that we have this subcommittee is a testament to your leadership in making clear that civil -- human rights are going to be a priority of the united states senate. so i thank you for your leadership and thank you such for calling this hearing. it's a pleasure to be here with all my colleagues, but i particularly want to acknowledge

senator conyers and his extraordinary life leadership on behalf of civil rights and these issues. congressman conyers was a mentor to me when i was in the house and still is. and we thank you very much for your leadership on this issue. senator durbin, you pointed out that the nation was shocked. if i could ask unanimous consent to put my entire statement in the record along with the list of the many organizations that are supporting the legislation that i filed, s. 1670. as you pointed out, senator durbin, the nation was shocked by the tragedy that took place in sanford, florida, the tragic death of 17-year-old trayvon martin. a very avoidable death. and the question i think most people are asking, and we want justice in this case. we're pursuing that. we have the department of justice investigation and very much want to see that investigation carried out. not only to make sure that justice is carried forward as

far as those responsible for his death, but also as to how the investigation itself was handled. but i think the question that needs to be answered is whether race played a role in trayvon martin being singled out by mr. zimmerman. and that of course would be racial profiling. an area that we all believe we need to get rid of as far as the legitimacy of using racial profiling in law enforcement. in october of last year, i filed the end racial profiling act, and as you pointed out, carrying on from senator feingold's efforts in this legislation. i thank you very much for your leadership as a co-sponsor. we have 12 members of the senate have co-sponsored this legislation including the majority leader, senator harry reid is a co-sponsor. racial profiling is un-american. it's against the values of our nation. contrary to the 14th amendment to the constitution, equal protection of the laws. it's counterproductive in

keeping us safe. it avenues wasting valuable resources that we have and has no place in modern law enforcement. we need a national law, and that's why i encourage the committee to report 1672 to the floor. it prohibits the use of racial profiling. that is using race, ethnicity, national origin, or religion in selecting which individual is to be subject to a spontaneous investigation activity such as a traffic stop, such as interviews, such as frisks, et cetera. it applies to all levels of government. it requires mandatory training, data collection by local and state law enforcement and a way of maintaining adequate policies and procedures designated to end racial profiling. the states are mandated to do that or risk the loss of federal funds. the department of justice has granted authority to -- to make grant to state and local

governments to advance the best practices. as pointed out, it has the support of numerous groups. and you'll be hearing from some today. let me conclude as my statement will give the details of the legislation. by quoting our former colleague, senator kennedy, when he said civil rights is the great unfinished business of america. i think it's time that we move forward in guaranteeing to every citizen of this country equal justice under the law. and s. 1670 will move us forward in that direction. thank you. >> thanks, senator cardin. i might also add that we're at capacity in this room, and anyone unable to make it inside the room will have an overflow room in dirksen g 50, two floors below us here. senator graham suggests that we proceed with the witnesses. next up is congressman john conyers, the house sponsor of the end racial profiling act, ranking member of the house

judiciary committee. serving in the house of representatives since 1965, john conyers is the second longest serving member. i think second to another member from michigan if i'm not mistaken. congressman conyers testified at both the previous senate hearings on racial profiling in 2000 and 2001. congressman conyers, we are honored to have you here as a witness, and the floor is yours. >> thank you, mr. chairman. and to your colleague who is another former house member, if i remember correctly and senator ben cardin, as well, all of you are working in the backdrop of a huge discussion that has been going on for quite some time. when i came to the congress and

asked to go on the judiciary committee in the house and that was granted, emmanuel seller was then the chairman who did such landmark work in the civil rights act of 1964. and then we followed up with the voter rights act of 1965. and from that time on, a group of scholars, activist organizations, civil rights people, and americans of goodwill have all begun examining what brings us here today and accounts for the incredible long line that is waiting to get into this and the holding room today.

i come here proud of the fact that there is support growing in this area. just yesterday we had a memorial service for john peyton known by most of us here for the great work that he has done and in civil right not just in the courts and in the law but in what i think it is the purpose of our hearing here today, namely to have honest discussions about the subject so that we can move to a conclusion of this part of our history. and so i'm just so proud of all of you for