host: the comments of the former c.e.o. of citigroup as he testified yesterday before the financial crisis inquiry commission looking into what happened with the financial bailout of wall street and banks and what led to the

crisis. we want to ask you on this friday morning, if you were to question one of these bank officials, one of these wall street executives, what would you ask them? here's how you can participate. 202-737-0001, our line for republicans. 202-737-0002 for democrats. and if you're an independent, 202-628-0205. you can also join the conversation online at c-span's twitter page and also send us an email to journal@c-span.org. here's how the story is playing out in the "financial times" as he apologizes for losses, and inside is this story, saying that for nearly three hours mr. rubin, the former treasury secretary and director of citigroup, and chuck whins, who you heard just a moment ago, the former chief executive, did manage to work they are way through questions from this commission. indeed, even though technicians had to be called in to fix the hearing room's air conditioning

system halfway through the session, mr. rube and inmr. prince did not break a sweated in answering the commission's questions until, that is, just before the end of the hearing when the commission's chairman -- by the way, the former california state treasurer, and bill thomas, the republican co-chair, former chairman of the house ways and means committees, showed that they had some sting left in their tail. in response to protests by mr. prince and mr. rubin that they could not have monitored the company's catastrophic expansion into complex mortgage scoorts, a former california state treasurer said, this the two of you in charge of this organization did not seem to get a grip of what was happening. and then there's this photograph that we want to bring to your attention that's in "the washington post," the new york teams, and in the "financial times," is chuck prince and robert rubin, again, claiming that they did not know the company's catastrophic expansion into the complex mortgage securities. you can see just one moment from that hearing room that took place yesterday in memphis, tennessee.

also this morning, from inside the economy and business section of "the washington post," as citi executives apologized to the crisis. again, robert rubin also testifying before this committee. one of the points we want to bring to your attention is that mr. rubin offered a lengthy response, noting that he did not oversee the firm's day-to-day operations and pointed out that citigroup traders viewed the a.a.a. securities at the heart of the crisis as posing only minimal risk. mr. rubin left the government back in 1999. at that time, president bill clinton lauded him as the most effective treasury secretary since alexander hamilton. and then this note that mr. rubin received more than $100 million in compensation during his tenure at the firm, even as it tumbled toward a massive government bailout in the fall of 2008. we'll get our first call from our republican line, memphis, tennessee. good morning to you. what's your name? caller: peter. host: peter, good morning. caller: thank you for taking my call. it's interesting that citigroup

was featured on the discussion in the hearing, because if you go back, and people tend to want to bring george bush, this goes way back before george bush. a lot of this originated when citigroup and travelers merged and that only happened because one of the ring leaders of the collapse in 199 -1999, was fishing with the companies and banks and brorge firms taking down the depression that kept banks in high-risk security firms, insurance as each other's business. and about wlin signed the bill in 1999, republicans, of course, were behind it, but the democrats all voted for it too

in its final form. >> sure. >> and greenspan was behind it, and robert rubin helped make it happen. host: let me jump in, because what we're trying to get to, and your points are important and valid, and we're going to hear from alan greenspan, but if you were questioning alan greenspan or robert rubin or chuck prince, what would you ask them? caller: i wouldn't ask them anything. i'd get san ford up there, the head person up there at travelers and citi and ask him first, and then i'd ask greenspan. i said, you were warned by a number of people not to take down the glass steeg he will protection that was prevent this kind of collapse that was in place since the depression occurred. host: thanks for the call. appreciate it. maryland is joining us. good morning to you. caller: yes, good morning. i have a couple of comments. i would first ask -- i guess

mr. rubin, probably all of them, why in the world would they even devote these type of exotic loan products that they knew would be deceptive in nature? it would end up as much a mess and do absolutely nothing, but the economy and people lose their home, that's the first comment. the second comment would be in reference to mr. do you go an. now, he indicated that he hadn't gotten, i believe, a lot of complaints from people concerning the u.s. national. i know that's not true, because i complained to him personally. i support a letter to him personally back in 2006 and probably 2007. and also, there was a group,

and we had all sent complaints to the federal trade commission because dugan was the commissioner or director or something like that. host: yesterday on the "washington journal," the co-author of this story this morning joined us, from the business section of the "new york times," again, focusing on this financial crisis inquiry commission that has been holding a series of hearings this week. by the way, all of them available on our website at c-span.org. and his take is this, "the two men who steered citigroup into the eye of the financial storm offered a striking contrast on thursday." citigroup's former chairman had said, first apologizing repeatedly for the billions of dollars in losses at an institution that ended up as the recipient of a $45 billion taxpayer aid. but robert ruben, the former treasury secretary, faced withering questions from the

panel. this financial crisis inquiry commission, for his spare expressions of remorse. here's more from rob are the rubin yesterday. >> the final cries, as we all know, has taken a it shall toll on millions of dollars who lost their homes, their jobs, their savings, and their confidence in the future of our economy. better understanding the causes of the crisis is essential to protecting our nation's economic future and to effective financial reform. i hope that my experience at goldman sachs, the national economic council, the treasury department, citigroup, and as chair of lift, our nation's largest inner city development organization, can be helpful to this inquiry. host: back with more of your phone calls. again, you can join us at twitter. al is on the republican line, joining from us lincolnton, georgia.

good morning to you. caller: good morning, steve. the question i guess i would ask is how could they have not known? because fitch ratings is about the only organization to have taken an in-depth look at these, and they found that there was almost universal fraud in all the transactions they looked at, so i don't see how they couldn't have known. and besides, beginning in 200 or 2004, it was about 9,500 appraisers that petitioned the government claiming that there was fraud. the f.b.i. warned the government in 2004 about the fraud. the mortgage appraisers research institute found massive fraud going back to 2000. and there just were a whole host of folks looking at this thing and protesting. host: from the "new york times"

this morning, again, more reaction to rob either rubin's testimony, and this from a former california state treasurer, a fellow democrat. he did not buy the argument put forth by robert rubin that he was not involved in day-to-day activities. he said, "you were not a garden-variety board member. i think to most people, chairman of the executive committee of the board of directors implies leadership. certainly $15 million a year implies -- let me repeat that, certainlied sad million a year implies leadership and responsibility. and there's this from one of our viewers online on the twitter page, saying, rubin took in $100 million, but, of course, yen what was going on. these things are complicated, he said. john is joining us from carol stream, illinois. good morning to you, democrats line. caller: good morning. host: what would you ask these financial leaders? caller: well, you know, i voted

republican, i voted democrat. i can't believe that the whole u.s. is so ignorant. i don't believe that for one minute. i traveled through india, through taiwan, australia, around the world, and involved with importation and different types of manufacturing. the core problem is not fair trade. it's not a theology of a republican or democrat of how we get there to help people. i believe most good people want to help other people. and if they want to avoid a state like india, we have to not grow our bureaucracy to do that. we have to tariff for the quality of life. that would include both countries that did not look at e.p.a. or osha or have those services to look at the

ecological situations, but also the healthcare. if they don't have that, then we would source those -- we'll call it spectrum services through knowledgeable manufacturing sources in america. host: thanks for the call. coming up later, a conversation with dr. greg wagner from the mine safety and health situation. one of the developments since the morning newspapers, actually within the last hoyer, according to the associated press, officials say the rescue teams have been forced to pull out again from the coal mine in west virginia where four miners are missing after that explosion that killed at least 25 people. according to safety officials, the rescue teams were heading to a refuge chamber, where they hoped to find the missing miners, but those rescue operators then discovered signs of fire and smoke in the mines. they were then ordered to retreat immediately. this, by the way, is the third time sense monday that the rescuers have been pulled back because of the dangerous conditions. another story we want to bring to your attention from afghanistan, nato officials

confirming that a u.s. air force aircraft has crashed in southeastern afghanistan, killing three service members, as well as one government contractor. they were injured and taken to a military base for treatment. taliban spokesmen claiming the militants shot down the aircraft, but nato is saying only that the crash is under investigation. again, that aircraft killed three service members happening overnight in afghanistan. back to your calls. the focus of the first 45 minutes is on the financial crisis inquiry commission. what would you ask some of the people who've been participating, including robert rubin and alan greenspan and chuck prince, the former c.e.o. of citigroup. john is joining us from pennsylvania on the independent line. good morning. caller: hello, steve. host: good morning to you, john. caller: i would get phil gramm in there and ask him why did he insert and who was he inserting

it with, when the commodities futures modernization act was done, the word "credit default swap" by putting swap in there, it made it illegal for anyone to regulate a swap. that, to me, is the problem in this whole thing. and i would get him in there and just grill him and grill him in who was complicit in that, because that's what really exacerbated this beyond belief. host: harold is joining from us westwood, new jersey, republican line. good morning to you. welcome to the program. caller: good morning. i'm still trying to figure out what i would ask him, but essentially what i would say to them is, gentlemen, do you believe in the constitution of the united states? do you believe in article 10, where the states have the right , all these basic comments and things, how dare you take our

country down for your financial gain. i certainly would like to ask them, do you think president bill clinton is responsible for this month? who do you really think is responsible for this mess? was this the democratic congress going at way back when they forced banks to loan money to people who obviously could not -- now, additionally, do you think you should give back as restitution all the money that you took on the very, very suspicious circumstances. i would additionally ask them, do you believe in god? host: thank you for the call. this from joe. again, the conversation onlean at twitter.com/c-spanwj. i have zero confidence that the treasurer from california leading a government panel will

come to any correct conclusions. one of the individuals from these hearings is richard bowen. there's a piece from the wowl street journal, it's called, "meet a city group whistle blower." he was in charge of the company's consumer lending department. he basically was worried about the fact that 60% of the roughly $50 billion in prime mortgages that citigroup bought and sold annually were defective. here's from his testimony earlier this week. >> these mortgage loans were not made by citi. they were made by other mortgage companies and citi purchased them. and it was my responsibility to make sure that these mortgages met citi's credited policy standards. during 2006 and 2007, i witnessed business risk practices, which made a mockery

of citi credit policy. i believe these exposed citi to substantial risk of loss, and i warned my business unit management repeatedly during 2006 and 200 about the risk issues i identified. i felt like i had to warn citi executive management, i had to warn the board of directors. about these risks that i knew existed. host: and morely from the hearing this week, and we had a reporter joining us yesterday from "the washington post," writing for the "new york times," referring to bill thomas, the vice chair of this financial inquiry commission. at one point, he, mr. thomas, used the hearings to channel the wide spread public outrage over the disconnect between the rewards that wall street reaps while the economic teetered. and at one point, he seized on

the widely cited notion that mortgage lenders had no skin in the game, which is what mr. bowen was talking about as well, when they made questionable loans because they were able to sell the loans quickly to banks. michael is joining us from new york. good morning to you on the democrats line. what would you ask some of these banking and wall street executives? caller: what's their bonuses they're receiving at this time? host: robert rubin earned about $100 million over the last eight or nine years. caller: yeah, you take a look at all these big, fat bonuses that all these fat cats are walking out with, and you looking at the working people across this country that are paying those bad, faulty debts they handed out, and now here we are, we've got a plummeting crisis here in our economy, and i think the biggest thing that we could send a message to obama, if i say anything, we need to create industry and jobs in this country and stop the outsourcing. it's a big part between the banks, all this orchestrating

going on with their benefits. i mean, we need working people to benefit here. host: another twitter comment from a viewer saying the g.o.p. acted as if they were snoozing under their desks for the last 14 years. a couple of headlines from the "detroit free press," a lot of attention on the healthcare debate and congressman bart stupak, a michigan democrat, calling reform his greatest legislative feat. at home, says the headline in the "detroit free press," congressman stupak is at peace with the health vote. and another head lean from "the boston globe," and this is in many many newspapers around the country, as president obama and his russian counter part signing the agreement yesterday in prague. by the way, the president is en route back to washington. he'll be back to the white house around 1:00 this afternoon. he left the czech republic about 1/2 hours ago. joe is joining us from columbia, south carolina. good morning to you. caller: good morning. make no mistake about this, republicans and democrats are pretty much equally to blame.

it all started in 1998 where they went out and enacted policies making people be able to buy homes on the low-income side. then on the high-income side, individuals are to blame too. they went out and acted willie nilee and bought homes and traded up, traded up, borrowed on those, lied on their loan applications, thought that houses would never go down in value, just like the tech bubble and that burst. they rode this bubble up and bursted it, and then they turn around and say, hey, who's to blame? this is ridiculous. in this case, it was dncht than the tech crash because they had all these stupid mortgages out there. the derivatives side never never really happened if people had not ultimately gone out and failed on their loans. the derivatives side just made it worse. but when you tell people that -- when the public demands from the government that they give them, give them, allow interest-only loans, and then they turned around and say, well, how did this happen? well, you you elected the people that turned their backs and let corporate america run

roughshod and demand those congressmen give them what they want. we ended up with the repeal of glass, and citigroup and bank of america, wachovia, too big to fail, and look who we got. we're the ones who elected people like bankee frank. why isn't he up there telling everybody what his porpse were enacted, the same ones that helped freddie mac and fannie mae go into this decline, by telling people they had to make loans to low-income people. host: i'm going stop you there. thanks for the call. others want to weigh in as well. we're asking about the financial crisis inquiry commission holding hearings this week in the rayburn house office building. among those testifying, robert rubin yesterday. earlier in the week, alan greenspan before the committee. >> didn't the federal reserve system fail to meet its responsibilities, fail to carry its mandate? >> i'm going to yield two

minutes for the response for overtime. >> first of all, the flaw in the system was an inability to fully understand the state and extent of potential risks that were at yet untested. we didn't see what those risks were until they unwound at the end of the lehman brothers bankruptcies. and i had always presumed, as did everyone in academia, regulatory areas, banks, presumed that risk potential was. having failed there, that means we were undercapitalizing the banking system probably for 0 or 50 years, and that has to be adjusted. host: alan greenspan earlier this week testifying before the committee. back to your phone calls. shawn is joining us from vancouver, washington,

independent line. good morning. caller: good morning. i'd simply like to ask these two masters of the universe, mr. rube and inmr. prince, i'd simply like to ask them if either one of them is familiar with the novel by george orwell, "animal farm." as we all might remember in "animal farm," whenever the fat pigs that ran everything decided it was convenient for them to alter the rules, they would simply alter the rules and expect everyone else to not catch on. so here we are 30 years into deregulation and deunionization, americans have no job security, no vacation time, and these fat pigs have the gall to come on television and try and explain away their crimes. these people are so proud of their immodesty, they don't even realize how utterly tasteless they are, how utterly immodest they are. the american people are eventually going to wake up,

and i think reading "animal farm" might be a good place to start. host: have you been following this inquiry commission closely? caller: oh, sure. yeah, i remember they were calling for a return of the hearings about a year ago. they seem utterly toothless, just like the financial reform that's being debated is also going to be utterly toothless. but in a sense, maybe that's a good thing, because we'll have another bubble, and it will, of course, explode just like the mexican peso rescue, long-term capital management, the asian contagion, you know, savings and loan bailout. it's like we're just going to keep building up these bubbles, and eventually the american people are going to catch on and the fat pigs are going to alter the rules to conveniently, you know, deviate from the ideology and people are going to explode. host: john, thanks very much for the phone call. paul dwyer will join us later.

we'll be talking about some of the very issues that we've been focusing on, as well as the broader issue of the u.s. economy. the other story that's getting attention this morning, and we focused also yesterday with our live coverage from prague, on the front page of the "atlanta journal constitution," as the russian and u.s. presidents toast each other following the agreement that was signed yesterday. and there's a piece this morning by peter baker looking at what this all means. he writes, the celebratory mood and the majestic guilded hall in prague castle marks the stubborn division on matters like missile defense and european security. mr. obama avoided any public criticism of russia's human rights record, and while they resolved to seek even deeper cuts in nuclear weapons, such an atreatment would be much harder to reach eastern one that they signed yesterday. the overthrow of the government in kyrgyzstan likewise could quickly test the new bond, given the two countries have

vied for influence there in recent years. also this morning, charles krauthammer as this piece this morning, nuclear doctrine consists of thinking the unthinkable. it involves making threats and promises and retaliation that is cruel and zktive beyond imagining, but it has a purpose, to prevent war in the first place. charles krauthammer saying the naive take is stunning. he conclusion with this point, seeing that americans retreat, they will rethink, rfering to our enemies, and some will arm. there is no greater spur to hyper proliferation than the furling of the american nuclear combrell umbrella. next is kathleen joining us. good morning, democrats line. caller: good morning. thanks for taking my call. what i'm calling about is i always liked robert rubin when he was with the ford motor company. he did a great job. somehow when they get with the banking, somehow they lose their thinking somewhere along the line. but you have to say it just sent one person or two people

on these banking things that do all this. it's a whole conglomerate. they're all in on it together. but you know, when president clinton was in office, he had our country in a surplus for three years. when george bush took office, he had a surplus to work with. he should have followed and kept the surplus going. you know, i heard yesterday that if that had happened, we would have been out of debt as of this year. this country would have been free of debt. but as it is now, we're in a war, he gave tax breaks to all the rich people, and where did we end up? we ended up with a big quagmire. true, people bought homes they probably couldn't afford, and they thought they might as well buy a home and at least get something out of it. but when things started going down in 2004 and 2005 and up to 2009, and everybody, even an average person could see that that was going to happen, so i don't know where these guys were with all these big educations, but i think that

president obama is trying to bring the country back. but you know, you hear people who seem like they only have language that can only use two or three or four or five-letter words. they don't seem to be able to listen to someone who can speak well and maybe turn this country around and put us back on the right track. host: kathleen, thank you for the call. we're asking what question you'd pose to the financial leaders. another story from this morning, "the wall street journal," benjamin netanyahu is skepping the nuclear summit gathering here in washington next week. the israeli prime minister has decided not to attend the obama administration's high-profile summit here in washington that will focus on nuclear terrorism and will instead send a deputy who oversees nuclear issues. mr. netanyahu concluding some muslim states were planning on making israel's nuclear weapons an issue at the conference. that will take place here monday and tuesday. by all accounts, for those of

you who live in the washington, d.c., area, traffic gridlock is expected as the security intensifies beginning send evening around the convention center, the white house, and elsewhere here in the nation's capital. alex is joining us from new york, independent line. welcome to the program. caller: good morning, steve. host: good morning. caller: a question and then a prediction. host: sure. caller: the question that i have in mind is this. why would greenspan and rubin and the gentleman that's in charge of finances right now, the financial advisor from harvard, why, when brooksley born, who was with the office that regulated these over-the-counter complex derivatives told that these things were going to crash, like the junk bonds of the

1980's. they more or less phased her out, pooh poohed her, and more or less decapitated that whole institution that regulates these. host: you're talking about lawrence summers, former harvard president. caller: correct. host: the connection in all is this is tim summers, and tim geithner, are viewed as prote jays by robert rubin, and that word is used in the "new york times" and "wall street journal." caller: correct. the thing that bothers me, they knew this was going to happen. you know, you cannot go through a fire and not say, if we have to go down this road again, what were our first mistakes? that would be my one question. and my prediction is this, we're not out of the woods yet. this financial tsunami, that was just the first wave. the second wave is going to be, as the states start to more or

less declare bankruptcy, because they're going to have to now levee higher taxes at the county level to pay for medicaid, which is a 90% of new york anyway, is 90% of our taxes, our local taxes. i would like you to ask that man from bloomberg what belfs that and how that's going to impact this whole deal. host: ok. we'll bring it up with paul dwyer. from "usa today," speaking about taxes, value added tax gets a closer look by the c.b.o. the director of the congressional budget office said yesterday that his agency is studying a value added tax as part of its "strategic planning for a future in which policy makers must fix a $1.5 trillion budget deficit and overall debt of $12.5 trillion." he said many people in congress are interested in it.

it's the valued v.a.t. tax, which is used in many industrialized countries, especially in europe, as a type of sales tax in which each stage of the production process is taxed. the keanlt of raising huge amounts of revenue for the government, but it is lothe by many republicans, including dick armey, who heads the anti-tax group freedom works. also this morning, front page of the "wall street journal," as the focus continues on the greek economy and a greek bond prices, which is spreading. this is from the front page of the "wall street journal," the concern over the potential electric bidity shortage in greece's private sector banks, fueled a sharp selloff in the greek debt and the equity markets on thursday, suggesting that the european union's efforts to defuse the crisis with a vague promise for international monetary rescue have all but failed. that's the i.m.f. markets signalled fresh worries that the greek banks have having the trouble meeting immediate funding needs after the country's top four banks on wednesday asked athens for

access to emergency government liquidity. greece's banks had been widely viewed, according to "the wall street journal," as one of the few bright spots in the country's troubled financial infra structure. back to your phone calls. if you were to question these financial leaders, what would you ask them? arthur is joining us from mount vernon, new york, republican line. good morning. good morning, arthur. you're on the air. we'll try one more time, if arthur is there. caller: hello. host: go ahead. caller: i would like to know what these financial giants think they're doing to the economy of this country when they're slapping small businesses with massive penalties and interest on small loans and putting them out of business. they are ruining the country. host: thanks for the call. next is carl from kansas city. good morning to you, carl. caller: i have a pet peeve on this issue. i agree with most of the

callers. i would like to say they're trying to blame the lower, middle income people for taking advantage of mortgages that were offered, and like interest-only loans and stuff like that, and saying that a few ghetto neighborhoods in cleveland brought down the world is like passing the buck and trying to find somebody convenient. what really happened in here is these people were house sitting for a real estate market that was going up, so that these people who were holding the paper couldn't lose. they were letting these people baby-sit whole property that was going up. if they couldn't make the payments, they were going to win f. they made the payments, they were going to win. they were going to win in any case, but they did not foresee the drop in the property value. so at $300,000 mortgage turns into a $250,000 value, nobody wants the monopoly money, and the whole system falls. i'm tired of them blaming poor

people for trying to take advantage of something that was offered to them which was a scam. host: thank you for the call. another comment from this viewer saying blaming bankers for lending you money to buy a home you could not afford is just plain stupid. for the next couple of days, we are in new orleans covering the southern republican leadership conference. and last night, the event kicked off with a number of speakers, including liz cheney. also speaking over the next couple of days will be the governor of louisiana and former vice-presidential candidate sarah palin. last night newt gingrich among the speakers. the story this morning is front page in the "new orleans times-picayune," gingrich rallies the troops. >> this is the most radical administration. and i began to realize after a year of watching them that if you think about the group that meets together in the white house their experience is the corruption of springfield, and

the radicalism of wall inski, and it comes together in a format, and then they meet with their colleagues, pelosi and reid, and you have a perfect unrepresentative left-wing machine dedicated to a secular socialist future. host: newt gingrich live yesterday in new orleans. phil barrow is covering the story for "new orleans times-picayune" in new orleans. he's joining us live on the phone. thanks very much for being with us. caller: good morning. host: what ultimately doonk will come out of this conference? guest: well, i think it's sort of a three-fold purpose. obviously the people that attend these conferences are the most energetic members of the party and some of the big donors are in town as well. they're also testing messages for 2010, you know, aiming at the national media and at people out there that are watching c-span and checking it out in other media. and then for some of the

speakers, i would say speaker gingrich included their auditioning perhaps for future campaigns in front of that same group of very important donors and national media that are as much a part of presidential politics. host: chairman of the republican party has also been back in the headlines. his chief of staff resigning this week. he will be speaking to the gathering. how much political capital does he have among these party faithful? guest: well, i talked with the chairman of the louisiana republican party, who incidently backed ken blackwell for chairman, not michael steele, and he was still supportive of the chairman, but he said michael steele needs to be frank and he needs to reassure us that he can take us forward. and that's about as plain spoken as a party operative is going to be. the reality is most voters don't know who the party chairman is, and if rank-and-file voters start to hear more and more about michael steele, you know, it takes they are eye off the ball

for republicans in a year where the landscape is otherwise very good for them heading into november. so i think for steele, he just wants to try to calm the waters as much as he can so that he stops being a story, if that's possible. caller: one of the comments from mary matalin, who introduced liz cheney in her remarks that began the remarks last night, was a reference to the 2012 republican convention. is new orleans one of the cities hoping to get the convention? guest: there's a group of national g.o.p. committee men and women that traveled this week, and knowing they were looking at western cities. i honestly don't know if new orleans is on their list. i can tell you that would really be kind of an odd -- it's odd enough to have the republicans here right now. this is -- louisiana is an increasingly red state, and new orleans is an increasingly blue city. so, you know, i don't know if we would be at the top of their list. host: your 38-year-old governor also addressing the gathering. what are his political plans in the future? guest: he would tell you he's

running for re-election in 2011 and has no plans beyond that. i think the reality is if you get elected governor of any american state in your 30's, you're probably thinking several test moves ahead. and he's certainly -- today he'll be sharg a stage with sarah palin. other national figures, rick perry is speaking today. i think governor jindal is trying to lay the ground work for a future presidential run, and also people speculated that he could be eyeing for the number two spot in 2012. host: two potential candidates there will not be there, tim pawlenty from minnesota and governor romney was in new hampshire earlier this week. guest: right. at one point, organizers have said -- i'm not sure what the status is this morning -- pawlenty still may speak by video tomorrow and romney has gven lip service to the idea that if he can squeeze in a stop in new orleans, if he can

make his plane touch down in the city, they'll make sure there's a spot at the podium for him. i would be surprised if romney shows up. i guess that does kind of clear the field. host: bill barrow, who is covering the story for the "new orleans times-picayune," thanks for joining us. we're going to pull up a website from las vegas, also this story this morning in the "new york times." two nevada republicans calling for instant to bow out. the dateline is washington, but the essence is this, senator john en sign's political trbles worsened thursday as more republican colleagues from his home state of nevada saying that the ethics investigation surrounding him have threatened to damage the party statewide. two republican leaders in las vegas calling thursday for mr. en sign to resign, this coming a day after representative dean hemmer, a republican from northern nevada, also saying that the ethics inquiries were causing "real problems" for party members around the state. if you want to read the piece

from the former chair of the clark county republican party and also the former treasurer of the clark county republican party, they have posted also their claims that senator john ensign should leave office. he is up for re-election in 2012. in this mid-term election, the current senator, current democratic leader, harry reid, is up for rehe collection in what is a close race and some polls showing harry reid behind. but again, on the republican side of the aisle, more and more republicans, including congressman heller, calling for senator john ensign to resign because of the ethics inquiry into his marital infidelity the and some of the payoffs by his family that even senator ensign has quermed are accurate. we're going to take a short break on this friday morning. when we come back, we're going to turn our attention to the economy and also to mine safety, as the "washington journal" continues. back in a moment.

>> in advance of the upcoming nuclear security stomachity, anita them son, director of the international atomic energy agency, will discuss the agency's program, which includes supporting better border controls and monitoring the trafficking of nuclear and radioactive materials. that's live on c-span at 10:00 a.m. eastern. and the southern republican leadership conference is meeting in new orleans, and our live coverage of the oovept continues today with appearances by louisiana governor bobby jindal, texas governor rec perry, and former vice-presidential candidate sarah palin. you can watch it here on c-span beginning at 1:00 p.m. eastern time.

>> what in the world is more ridiculous right now than american politics? >> for the past year, using clips from various media outlets, including c-span, the gregory brothers have become viral hit makers, with auto tune the news. we'll talk to them sunday night on span's "q&a." >> the financial crisis inquiry commission continues its work this morning as they question former executives for fannie mae. you can watch the proceedings live and uninterrupted on c-span and c-span.org beginning at 9:00 a.m. eastern time. >> "washington journal" continues. host: we want to welcome paula dwyer from bloomberg business week. thanks very much for joining us here on c-span. a recent cover story, it was not our fault, really.

and i want to ask you, this is a reference to goldman sachs. there's one line in the piece that you described the firm's 32,000 employees as seen as an army of gordon geckos who pumped up the housing bubble. can you explain? guest: well, that was our attempt to portray the way goldman sachs is being viewed by its competitors, by the broad public, by regulators, by a lot of people around the world, and that was why the company reached out to "business week" to tell its own story. they wanted us to hear their side after having been pretty much in a bunker for the last couple of years and not explaining what it did during the crisis. but because of that lack of explanation, people were able to draw their own conclusions, and they thought it was time for them to fight back. host: so they came to you? what did you learn? guest: we learned a lot. we weren't able to get them to completely cooperate, but they did make a lot of their

officials available from their chief financial officer to some of the people on their trading desk to their chief risk manager, and we learned that they had an interesting story to tell. of course, we're not saying that everything that they told us was exactly true. we weren't able to talk to their clients. they wouldn't reveal who their clients are, although the story does say that one of the biggest hedge fund traders, the one who did the deal of the support are you, john paulson, whose hedge fund made $20 billion during the crisis, is one of the goldman's cloonts. we learned that -- probably the most important thing is that goldman is saying that it did not take a big one-way bet on the housing marketed. in other words, they dent shorted the market. and when they did short, it was because they took a long position for a cloont like john paulson, and then they needed to hedge that exposure. and so they want you to believe that they did not bet against

their own clients. they did not bet against the homeowners who lost their houses. host: again, another quote from the piece, and again, this is the april 12 edition of "business week." it was not our fault really. exclusive enters views with the brass at goldman sachs, come out of their bunker to swear they didn't sell america short. is anyone buying it? so the quote i want to read to you, from william black, who is he? guest: he used to be a regulator. he worked for -- during the previous housing crisis at the federal savings and loan insurance corporation, and now he is a law professor at the university of missouri. host: in the quote, he said, every game has a sucker, and in this case, the sucker was not as much a.i.g. as it was the u.s. government and the taxpayers. >> yes. what he's talking about is that, in the bailout, when a.i.g. was bailed out to the tune of $1 2 billion -- $182 billion, goldman sachs also received bailout money, which

it has paid back now with interest, so what he was saying is the taxpayer ultimately had to pay off a.i.g. counter parties, so the people who were on the other side of those credit default swaups that a.i.g. sold. when a.i.g. was bailed out, that money went through a.i.g. out the back door to goldman sachs. and that was taxpayer money, and so that's what mr. black is referring to. host: so when you ask the question, is anybody buying it? you have hank paulson, pond by george w. bush, the treasury secretary, former head of goldman sachs, involved in all of this. we've been watching the testimony of robert rubin with citigroup, earned $100 million over the last eight or nine years, former treasury secretary. and you have people outside of wall street saying, what is going on here? guest: yes, and you have bob rubin proteges now running the treasury support, larry srms in the white house as the chairman of the national economic

council, so it allows people to believe that goldman sachs had friends in high places, that the bailout was arranged because they wanted it, and that's what -- that's a conspiracy theory, though. you can't prove that, and goldman doesn't want people to believe that, so this was part of their attempt to convince people that they had some kind of fix in with government officials. their point of view is that they actually did not need a bailout, that they were completely hedged, that their exposures were covered. when a.i.g. failed, or when a.i.g. was rescued, it weand allowed to fail, the accident positive sure that goldman sachs had came to $10 billion. of that, they already had $.5 billion of a.i.g.'s money because they were making these collateral calls every day. they were testing the price of the securities that they were hedging through a.i.g., and whenever the market price fell below the agreed upon price,

then they would collect cash from a.i.g. and so goldman sachs' main point is we already had a.i.g.'s money, we did not need that bailout, although they now concede that were a.i.g. not saved, it would have wrecked the entire system possibly with goldman sachs included. host: a couple more points on the piece and then we'll get to phone calls with paula dwyer, washington editor for bloomberg's "business week." first of all, goldman was not a public company until is the 99. what changed? guest: well, lot of the big investment banks wanted to have more capital so that they could finance their clients' activities so that they could do more trading, you know, use their capital, put it to work to make bets in the various markets. and as long as you're a partnership, you don't have a lot of that capital, and so they went public, and it was controversial. it caused a debate within. that has resulted in the company's changing from being much more of a

relationship-based company to a trading factory. it's a huge trading monstrosity now. host: so that was part of the big change about 10 or 11 years ago. it also received in a new corporate office. guest: well, that just happened. they're just moving into that office now along the hudson river. host: and you paint some color in this piece as well, because you talk about taking elevators accompanied by a series of well groomed handlers, and then escorted to a conference room to meet who? guest: well, that's robin, the writer of the story. he is a former goldman sachs analyst. he worked there for two years. host: and has concerns of his own. guest: well, yes, he d. he does not work there anymore obviously. he wanted to become a georgist, and so he left after two years. -- become a journalist, and so he left after two years. so part of the story is written in his first person because he had a nice feel for what the culture of goldman sachs was, and it is very but tonned down, and it is very

security-conscious, especially these days. that's a combination of the post-9/11 ooshes, but also people at goldman sachs who feel a little bit like they are under siege, and they are very careful when you come in their building, there's no signs that goldman sachs is anywhere. host: so i go back to the earlier point, do you buy what they're telling you and your colleagues? guest: well, i do think that i learned a lot, and i hope that readers of the story learned a lot. but if they don't let us talk to their clients, if they don't let us talk to their chief executive officer, if they don't make their traders available, you know, the people who were on those mortgage desks trading mortgages, it's hard to know. you know, we gave them a fair shake. we listened to them. we explained what they wanted to explain. then we tried to truth squad it with people in the market, people who are skeptics and some people who do agree with goldman. so we lay it all out.

and, you know, it really is up to 9 reader to decide. host: that was an earlier edition of "business week." the latest edition has the president playing basketball. it's playing better than you think. who says? the market says. guest: yeah, mr. market says. that story says that all the money is lined up behind the economic policies of the obama administration. and the interesting thing, though, is that individuals don't feel that. the polls that bloomberg and other organizations have done don't pick up a lot of comments out there, and it's probably because of the job market. there's still a lot of people who are either unemployed or underemployed, and their houses haven't risen as much in value. they can't take money out of their houses to fund their kids' college education and so forth, so people don't feel as wealthy, but the markets all say that what this

administration has done in concert with the federal reserve is working. host: this morning's front page of the new york timedse, an analysis piece, why so glum? numbers point to a recovery. and in the body of the story, he's saying that the 2007-2009 recession ended last august. guest: it probably did. we don't know for sure. there is an academic organization that will pronounce when it ended, but it probably did end around july or august, and most economists agree with that. but the end of a recession doesn't mean suddenly everyone feels good. it just means that things aren't getting any worse than they are. and the healing has started. and it's pretty clear the economy has turned a corner. everything is pointing in the right direction, so employers are hiring again. consumers are spending again. the stock market is up. the bond market is -- has been on a rally for a long time. oil prices are going up, and

that's because companies are manufacturing more and people are traveling more. so everything seems to be pointed in the right direction. the administration, however, is not jumping for joy because, first of all, there are a lot of unemployed people, and they don't want to look callous by saying, ok, happy times are here again. but they also know that politically they can't be out there congratulating themselves until unemployment comes down. it could take a long time before that happens. so it's a very r.f.k.y proposition for them to -- r.f.k.y proposition for them to start celebrating at a time when there's still a lot of unhappiness out there. host: one final followup, and then we'll get to your phone calls. you can join online at twitter.com/cspanwj, and the conversation is going on there, or send us an email, journal@c-span.org. or give us a call. one or point about this recovery. there was a recession in 1990-1991, slow recovery. a recession in 2001, a slow recovery. and what floyd north is saying today in the new york teams is

the last real robust recovery was back in 1982. guest: right. unless oar a srn age, you don't remember that. i do. he was just starting out, and i was changing jobs, i got married, he had a child, and i don't really remember how bad the recession was, but i just do remember that things all fell into place. i was starting to raise a family and start my career. but if you're under about 5, you don't really remember -- under about 45, you don't really remember how bad it was. unemployment was higher than it ever got during this recession, but the recovery was very robust. later on, in the 1990 recession, the 2001 recession, we had the so-called jobless recovery, because technology and overseas competition convinced companies that they could make do with fewer people. and so every time there was a

recession and they laid people off, they did not hire as many people back when the economy resumed growing. host: our guest is paula dwyer, a look at the last two "business week" covers dealing with goldman sachs. goldman sachs reached out to this bloomberg publication to explain their side of the story. and the recent cover,, "the hot hand." these are the issues. thomas is joining us from albany, new york. welcome to the conversation. caller: thank you so much. good morning to you. host: good morning. caller: i have one comment and a question. i do remember the 1980's recession. and i do remember how desperate things were in those days, and i would suggest that the root cause is not root cause of what we're facing today. now, i would also suggest that if goldman sachs had an effective risk officer that they would still be in good shape had that risk officer

done his job and had the executives listened to that risk officer. and my question is, why is it that with all of the financial dealing at this stratospheric level that there continues to be this miscommunication about how financial institutions affect the economy in general and why is it that they are unable to communicate that to the people who are really affected by it? that is, the the 95% of people whose small spending supports the economy. host: tom, thanks for the call. guest: well, that's a lot in just that within caller, but let me first say that one of the things that this administration that we can't really give them credit for is reforming the financial system. and there are a lot of much needed reforms that are still working they are way through congress, and we still can't

pronounce the administration as having done a good job on that. so point one. point two, goldman sachs did have a robust risk management system, and what they want the world to understand and believe is that their risk management was superior to everyone else's on wall street. they were doing something called mark to market, and it's one of those technical terms that banks and other financial companies debated all the time, but they were basically marking, valuing any security that they held at the day's price. so at the end of every day, they would go out and test the market value that they had on their markets of all of their securities. if it had changed, they would either mark it up or mark it down. of course, in 2007, during the housing crisis, they were marking down a lot. other banks weren't doing that. true banks, like citigroup, don't have to do that, because their accounting rules are a little bit different, and they

refrain from doing it, because if they mark it down, then they would have to mark down everything in their housing inventory, and it would make them look less successful, less profitable, and they did not want to do that. so goldman is saying that's the difference between us and everybody else. we were disciplined, they were not. host: annapolis, maryland, republican line, good morning. caller: well, i disagree with things are really different than they were back in the 1980's. we're just in bad shape. the financial industry, the financial interests have taken over washington, and they're setting the rules. and unless the regulatory guest was just talking about regulatory financial reform, regulatory reform that had not been decided how that was going to work out, well, the way it's going, you've got the same people running things that were running things before.

it's not going to change. they don't have the guts to stand up -- you know, they're bought and paid for. if they don't structure things the way volker wants to and some of the other senior financial people in this country that, you know, know how things work, we're going to have a worse situation than we just recently were trying to get ourselves out of. .

address the root causes of the financial crisis and housing crisis. because i see that congress is working on this, i guess i'm a little more patient than the callers are. but i do see the danger signs that they are detecting. and i think they are very smart in that. they are detecting that there are some tough proposals that were on the table, they keep getting whittled down and weaker and diluted and even president obama, who proposed this rule called the volcker iule that would stop big institutions like goldman sachs and citigroup from using their own capital to do

trading, called proprietary trading, even the white house has backed away. they are willing to accept that legislation would allow regulators to write rules that would restrict some of that proprietary trading rather than have congress banning it outright. so, little things like that are going on. it is very technical. it is very difficult to understand and many people are not watching it. so, the powers should be worrying in with their members of congress because i think they need to hear from them. host: who is harley schwartz? guest: the person at goldman sachs who is the co-head of their securities division. a very powerful position. overseas their stock trading, bond trading commodities, currencies, and it is the part of goldman sachs that is responsible for most of their profits these days. host: you write the firm's mortgage related investments only accounted for 2% of overall revenue? guest: that is what they said.

that is a new number. they had not ever revealed that. a during even the bowl of subprime mortgage business, when everybody thought things were great, they are saying it never really got above -- it was chump change, never above 2% of revenue. guest: -- host: let me explain it -- for those who don't know how the process works. you call up the bank, the giddy the loan, you get the mortgage and the monthly statements. then what happens? guest: a lot of things happen. that loan is sold by a bank. it might not be a bang but just something called a mortgage broker. the mortgage broker then sells it to a wall street firm. and that wall street firm, like goldman sachs or citigroup or maryland, they take a lot of the mortgages, pull them together into a bond. it is called a mortgage-backed security. those bonds then get sold to investors. it could be a mutual funds,

pension fund, an overseas bank -- and a lot of them did and that overseas with bank of switzerland or deutsche bank. and then that bonn gets traded around -- the bond gets traded around. the relationship with the homeowner does not exist. a servicers enzi estate appeared just someone who is hired by the investors to make sure you pay your mortgage so that they have their income stream every month. and other things happen to it, because then that the bond has to be protected against risk. so that is where the credit to default swaps, ind. that is where the mortgage insurance as written by companies like aig, and that is where all the trouble began because you had a bond as an underlying instrument, the credit protection insurance was written on top of that, and sometimes insurance was written on top of that and it was getting farther and farther away

from the homeowners. and when the homeowner started to default, everything started to crumble. >host: when your 400,000 home is worth 200,000, you are stuck in a home or default on mortgage. who ends up paying the price? guest: the reverse part of the problem. because homeowners are trying to negotiate a lower monthly payment, or negotiate down their principal. the servicers, who are there to protect the bondholders, the investors, are not allowing that and that is where a lot of the loan modifications have been the occult to work out. -- difficult to work appeared would not loan modification is under a federal program, that is the taxpayers. host: when congress comes back next week, we will hear more from chris dodd, barney frank, as they try to reinstate the so- called silos to make sure that trading and investments are not

costing taxpayers money. guest: yes, but i don't expect a lot to happen on that. i actually don't expect them to do a lot on preventing wall street banks from using their own capital to do proprietary trading. a lot of what is happening -- and your callers are picking up on this, so they are take -- staying on top of things. i am impressed. they are largely differing to regulators. writing regulations saying, you figure it out. make banks put aside more reserves in case of the rainy day. you decide how much proprietary trading they should do. and you decide what is a too big to fail bank. and you decide what to do about that. so, it really is, it is a very complicated piece of legislation and i am oversimplifying here, but a lot of what they are doing is giving great leeway to the regulators and that means we really have to have really smart regulators and history has not shown that we have had a really smart

regulators. host: we will come back to the issue in a moment. paula dwyer is our guest from bloomberg business week. liz from upstate new york. caller: when all of this started, about two months before it began i remember calling in and saying to you that i think what is going on is not sustainable. prices for food was going up -- people who were making 60, $70,000 a year were buying houses that cost 250,000 up to $500,000. who in their right mind would think somebody who had a combined income of 60,000, to $70,000, could afford a 300 or $400,000 house? i knew it was unsustainable at the time. my next concern for our economy is on the state level. i lived in new york state. i hear every day our governor

tell us -- and the amount keep going up, but we are currently i think $9 billion short in our budget. now, what is going to happen is they pass this health care. they have put i don't know how many people on medicaid. and we pay for that through our county taxes and from what our county tell us, 90% of our taxes goes support that bill. now, if you are adding that many people to the roles and you are cutting education, what is going to happen? so, the federal government does not raise my taxes but no local raises my taxes. they are talking about -- but the local raises my taxes. they are talking about doubling. guest: i think a lot of people taxes are going to go up. i cannot speak on what is happening on the state and local level, not my area of expertise. but the caller is correct that a lot of states are having trouble making ends meet and that is where some of the biggest

concerns are -- california and new york are prime examples. there are also problems with the health care bill in the way that it was financed or will be financed, not necessarily through higher taxes -- although some of the very wealthiest will have higher taxes -- medicare payroll taxes will go up. but the way it will be financed is by making cuts in medicare. and up until now congress has tried to make cuts in medicare and every year has pulled back on that. so we will see if they actually make those cuts in medicare in order to finance the big expansions that will bring in uninsured people and allow them to have subsidies. host: talking about the u.s. economy in general, goldman sachs in particular. the subject of two recent cover stories in "business week." "it wasn't our fault, really,"

it is the recent cover story. and "the hot hand," to the most recent edition. a twister comment -- guest: that is so true. and if the banks had kept some of the mortgages on their own balance sheet, they would have been much more on their guard to make sure that they loaned money to people who could pay it back. but because the new alchemy of modern finance allows them to move those loans off their balance sheets right away -- i mean, within hours, sometimes -- and they would receive fees just for originating a mortgage, for the banks it was a win-win. so, part of the legislation that is being considered in congress

right now would require banks to keep some of the mortgages on their balance sheets. maybe that will make them think twice about lending money to people who can't possibly pay off the mortgage when their income just would not sustain it. host: after spending more than two decades for business week, paula dwyer work for five years at "the new york times" as an editor. arkansas, republican line. caller: i have two questions. host: how about one at a time? caller: i want to make sure you can answer both, all right? i can't hear you. first off, i am concerned when you say goldman sachs or aig or somebody paid their money back -- obama is not getting that back to china where we got it, he is using it as a slush fund. he is saying, what is he going to do -- pay it back. get it where we don't of china so much money.

host: we will take that and then follow up. guest: well, i think the caller is confusing a number of things and i don't mean confused, i just mean that this is the fault of the media that we don't explain these things as well as we should. but obama is not using that money as a slush fund. it could only be used for certain things. when a bank like goldman sachs pays it back, aig has not paid all back but they are selling assets and paying some of the back -- it goes to the treasury. the treasury can then either pay it out again to another bank or some of the troubled institution. about as far as that money had gone was to auto companies to bail them out. but it is not a slush fund. it cannot be used for any old purpose. number two, when you say payback china -- but with a tiny village of words is china is buying -- the way that china relationship

works is they are buying the securities so, yes, they are financing our debt but our debt is so huge and we can't possibly pay china back with the tarp money that banks and auto companies are reaping treasury. it is nowhere near enough. host: back to you in arkansas. caller: i do want to ask that other question but are heard with my own ears and saul obama say he will use -- can't he just used the money? he was talking about the being paid back and he said i want to use it to help someone sell -- guest: i know what you are talking about. host: hold on, diane. guest: i know what you're talking about, diane. the president said he would agree purpose some of the money to help small business. what he did is he got congress to pass a law that allowed him to take that money and lend it

to small businesses because they are the engines of growth and the ones that create jobs. but he got congress's permission to do that. he did -- did not just the look on his own. caller: i was not just confuse them. ok. are we ever -- i was not just confused, then. ok. are we ever going to go back when they are not bundling our money, when we buy a home, will they do we be able to pay landmark finance or whoever mortgage was three to begin with, is it ever going back to that or are they always going to take it and bundle it and what ever they have been doing? guest: that is a good question. there is a system of mortgage finance -- that is the way things work. fannie mae and freddie mac, these very large a federally chartered companies were the ones doing that bundling.

and a lot of the wall street firms decided that was profitable and we want to be like fannie mae and freddie mac and they got into this business " securitization. just bundling mortgages into pools and selling them off to securities -- as securities to investors. a lot of people are spending a lot of time rethinking our system of mortgage finance and no one knows yet what to do. we know we have to do something about freddie mac and fannie mae because they are wards of the state, getting bailed out. the private sector mortgage finance system is still paralyzed. completely frozen. not working. and so, if the federal government backed away from it, it would collapse. state to the. that is still being worked out and it is a real tough one. host: talking with paula dwyer from bloomberg business week. kathleen wright -- guest: i do not know if they are

smarter but they are certainly in a better situation than we are in terms of their own national balance sheet. we are now in a situation where they are our banker -- we are a sovereign nation, so we don't do what china tells us to do and vice versa, but because they are financing our day -- debt, the united states has been very -- has to be very careful not to get in a bad relationship. china does peg its currency to the dollar. the upshot is their currency is probably cheaper than it should be on the free market and that gives an advantage to their own domestic manufacturers and exporting industries. does it make china smarter? no. it just means that china has a huge currency surplus because they don't allow the currency

but -- to be traded on the open market. they have a very tightly controlled yuan, so they are not a free market and sell it allowed them to a mass of this cash and it has to go somewhere and it goes into the dollar. it also means they are not going to do something like sell off their dollar-based assets over night. but they are not going to flood the market with that. that is going to hurt them. so we are in a bit of a bear hug with china. whenever we do and whatever they do is to tread carefully and not harm that relationship. host: another question -- can you speak to how these and investment firms were "in bed" with the rating agencies cooking the books? guest: those are a lot of strong terms. the rating agencies, i do think, were one of the culprits in the whole crisis. this isn't the first time. the rating agencies have a model in which they are paid by the

issuer of the bonds to break that bonds. they know that if the bond isn't rated highly, like a triple a, that the issue were will be unhappy and they want that issue were like goldman sachs and morgan stanley, they want them to be happy. so the whole business model is flawed. a lot of people recognize that, and that is another thing congress is addressing in the regulatory reform legislation. the rating agencies are lobbying to stop that. and i think -- i hope that congress will really clamp down on that because it is not the first time it has happened and we should have learned our lesson the first time around, and we didn't, so it happened again. host: albert, welcome to the program. calling from the democrats' line from indiana. good morning. caller: good morning. yes, i would like to ask a question about pfizer. how can they build citizens out

of billions of billions of dollars and only did find $2 billion -- only get fined $2 billion? guest: the drug company? i'm not sure what it is that they did, caller, can you explain? caller: i heard it on cnn news -- i do not know if it was wrecked -- rick chaves or not, but pfizer was bilking the public out of billions and billions of dollars and were only going to get fined $2 billion. that is a big fine but not for the amount of money that they accumulated. guest: that is a big fine, much bigger than most against corporations. i don't know if you also saw that toyota was fined about, $16 million or $20 million, it is

pretty low compared if you are correct with the $2 billion. corporate fines can be quite low and often don't deter misconduct. host: >> it is melinda from a patty johnson, ever -- next up is melendez from arizona. caller: as someone who lost my trucking company while the oil prices doubled, allowing people to buy futures on the oil markets who were not taking the lid rate is really just a scam. and then also, a little different subject. i have a subjection that the fda could set up a very -- suggestion that the fda could set up a program locally, give micro loans, bill -- people who are collecting unemployment all of the money at once or people could use of their own money

since it takes so many different people from the board room to the mailroom to run a company, that they could set up a program where they put together -- just an example, 200 people with $5,000 each to buy up existing buildings or so forth and start building solar panels or whenever for the green and a jeep. and then go to the sba for the equipment loans. we could put a lot of people back to work. host: thanks. guest: i agree, i think micro loans are a good idea. they work and other countries. why not try them here? i don't know if it is ever been tried? actually an excellent idea in terms of the oil companies, it is my understanding that another part of the government, the commodities futures trading commission, that oversees the wheel market, at least the part of the business traded on exchanges, it is trying to stop

some of the speculation in the crude oil and putting limits on the positions that accompany that is not actually taking physical possession of oil can take. the caller might find some relief there, but it may be too late for her. host: talking about the economy and wall street investment firms. this is a viewer going back to the earlier point about goldman sachs -- guest: well, goldman sachs officials were sitting here next to me they would say they were not manipulating anything. we get in between customers who want to buy on the one hand and the customers want to set up -- and those who want to sell on the other. we are a market maker and we get fees from the flow going both directions. there is a securities and exchange commission that

monitors all of us at all sorts of regulators. we are not manipulating markets. we are just doing what our customers want to do. that is what they would say. host: i know you are the reporters covering it -- but i get back to the point. do you believe them? guest: i don't feel that i can pronounced yes or no. i really can't, because i don't have enough information i would like to have been able to interview their clients, to look at their books and records. i would like to have had some experts who are accountants or people who are derivatives traders go in and give them the 20 questions that i am not smart enough to ask because i don't know enough about their business. and do that kind of forensic journalistic exercise. until then, i think i could only be in a position where i let them tell their side of the story and then i passed that

with experts -- test that with experts. i really don't feel i am in the position of saying one side or the other is correct. host: you sent to the outraged by the american people? guest: yes, i do. oh, yes. host: kevin, good morning. caller: i have two questions to ask and i will hang up after i asked them. but now i've got about five of them. but it is ok. i'm going with two. the practice of cutting up mortgages and then forming financial instruments, when did that start? were there any regulations stopping that? and when did it go into practice when it did? also, when we came to the crisis part, there were still questions on how much was this stuff worth. i have yet to get really an

answer from anyone on how much of the mortgage industry it actually went bad. it seems like the government gave in these financial companies all kinds of money before they even know -- knew what their losses were born to be. host: talking about packaged and bundles. caller: mortgage-backed securities. host: thank you. guest: first point, the mortgage securitization business has been going on for a long time as a said earlier, fannie mae and freddie mac, which were set up by the government, fannie mae back, i believe in the 1930's, as a result of the depression, to make sure that people lived in an area where there was not a lot of economic activity and so the local bank did not have the cash to provide mortgages, fannie mae was set up to make

the mortgage market national merit for a long time it worked. indeed, other countries were trying to figure out how do we have our own fannie mae. they may was so busy that they started freddie mac, which does exactly what fannie mae does. when wall street jump in, i think that is when it started to go bad because they realize that they could make a lot of money. it did not really matter what the quality of the underlying mortgages were. that started, i guess, around maybe the early 1990's but really got going in the mid- 1990s. on the second question, the government did put a lot of money into financial companies before they knew the extent of the losses. the caller is correct. but then they did these stress tests. in the spring of 2009 -- they put a lot of money into this system as an emergency. they did not want the system to collapse. then they did a stress test. those tests, as a result, some

of the banks still needed more capital. and instead of putting more federal money in, what the federal government said you have to go out and get private capital. and they did. and the banks are very successful in doing that. that is one of the key things that i think a lot of people have missed about the way the obama administration handled the crisis when they came into office. they didn't use a lot of federal money -- they use private capital. i just want to assure people understand that. host: i will circle back to that point in a moment. henry from oak ridge, tennessee, democrats line. caller: good morning, steve, good morning, paula. one question i wanted to ask you, and that is about my mortgage. i went to my mortgage co., a federal credit union. i am on a 30-year fixed rate. it but i have to sign every five years or i controlled the five years over and go to 20 years or whatever. -- i can roll that five years

over, but i have to pay it three or $4,000 to do that with anime or freddie mac. my loan is secured a credit union. is it a good long? bat g-8 in november after renew it. -- back in november i have to renew it. guest: i am not going to be to -- be able to answer that question. i have to know the lot more. it sounds to me if you have 30- year fixed and you are ok with the interest rate, you should stay with and not pay fees in order to do something different. i think people should be very wary of the fees hit in an otherwise in the mortgage business. but, again, i don't know enough and i wish i could help you, but i can't. i don't want to be bad advice. host: going back to the earlier point, the most recent edition of business week. you say in the body of the story that a bloomberg national poll in march found americans by almost two to one margin believe

the economy has gotten worse rather than better. guest: people are either not reading their 41 k statements and they don't realize that the market has come back or not they are unemployed, and of course, they would think that -- i would, too, if i were out of a job, or they measure their wealth in their homes, and americans did that for the most part when their homes kept going up in gallo -- in value and they were able to take money out of it like an atm machine. they can do it anymore, and they feel that loss of wealth and that is how they measure their own prosperity. i think it could be all or some of that. but there is no doubt that if you have any kind of a brokerage account or a mutual fund or a 41 k retirement account through an employer, that your returns are better. they can't possibly not be because everything has recovered

in terms of the market. unless you are only invested in real estate, you should be seeing you are better off. if you have no investments at all, then you would not be better off. but the poll was going to a broad cross-section of americans. and so, it is mathematically impossible for them to not be better off. host: paula dwyer, thank you for joining us on c-span. guest: thank you. host: coming up later, if a child is in foster care what are the success rates for that individual to go on to college and get a job? new figures are coming out and we will talk about that in our final hour pared coming up in a couple of minutes, more on mine safety. the governor of west virginia announcing the rescue operation halted for the third time this week as rescuers tried to go after the four-, not sure they are dead and alive, but it was

halted due to security concerns. we will talk to a representative from the mine safety and health administration about what happened and what could be done to prevent it. you are watching "washington journal" on this friday morning and we are back in a moment. >> this year's c-span students cam competition ask middle and high school students to create a video dealing with a one of the country's greatest strengths or challenges. here is one of the third-place winners. [music playing] >> i am a 13 year old living in a city known as the band. located in oregon's high desert.

i live in a neighborhood that most would consider to be an average american neighborhood. three years ago when a house and my neighborhood was for sale, there would be so many buyers that a house would sell for well over the asking price. people would literally fight to buy a house in my neighborhood. today the house sits empty, foreclosure notices, rental signed an for sale signs replace yard decorations. when i moved here seven years ago my neighborhood was the best place for the holidays. at christmas, almost every house was lit up, making it a magical place. now you are lucky to see one house per street with christmas lights or even a tree in the window.

it was also the best place to be for halloween. the people all over bend would bring their kids here by the truckload. my mom would easily go through five industrial bags of candy. this year we barely got through one regular-size back. my neighborhood used to be full of kids and adults walking the dogs and planning. now there are only a few of us left. many have left in search of work or to live with relatives, or because they lost their jobs and homes. feeling the effects of the economy heavily. my friend's parents are hanging on by a thread it, looking for work and behind of their house payments. >> it will not peak until about 2011 or 2012, so we have a long ways to go. what we are seeing is just the tip of the iceberg. >> 1 people forget to think about is how the challenging

account -- economy affects more than adults. the homeless rate in kids in our school district is on the rise. according to kztv news the number grew by over 2000 a lung. the majority of these homeless students were enrolled in the elementary school level. in just a five-year span, between 2003 and 2008, the number of homeless students had already increased by 10 rows and students. the federal government defines homeless students as those students who lack fixed, regular, and adequate nighttime residents.

the schools federal program director says that this includes families that are doubled up, students living in shelters, hotels, motels, cars, or other outdoor areas or friends for one day or more during the school year. according to the schools website, 37% enrolled receive free or reduced lunches in 2008. number will most likely increase as more families struggle to make ends meet and more families rely on schools to help feed their hungry children. having proper clothing for students, such as warm coats, hats, and gloves, is also a big issue living here in bend where temperatures already dropped

into the-teens this winter. people are finding it more and more difficult in the current economy to their kids and their own basic needs met. these basic needs include shelter, food, and clothing. i'm just one boy in one town. but this is america everywhere. >> to see all of the winning entries in this year's studentcam competition visit

studentscam.org. >> let us meet another winner from the documentary competition. we ask students to give us a 5 to 8 minute video on one of the country's great strengths or a significant challenge that our country is facing. today we meet alexander from bend, oregon. he is an eighth grader. congratulations. >> thanks. >> tell us, what was your video about? >> , the economy is affecting children today. >> how is it affecting you in oregon? >> it is making it harder for people to make ends meet -- a lot of the friends are moving away so i did not have as many people to hang out with. >> why did you pick this subject? >> over the last year or so i noticed more house is going and the and i decided to ask my friends and family about why. they told me the economy is so

poor and making it hard for people to make ends meet. >> what were your thoughts on your friends leaving your neighborhood? >> i thought it was pretty sad because normally on saturday morning my parents would get a note because they would not be able to sleep in because the doorbell would not stop ringing. now there is not really people coming to the door. >> was and is an emotionally challenging subjects for you to tackle? >> yeah, it was pretty challenging, finding out about kids without proper clothing and shelter. >> is there anything you'd think the government can do to help this? >> yes, i am very hopeful that the president is making plans to help keep people in their house. >> you think there is something else they can focus on to help stop this trend? >> yes, i think if people are to look at this a bit more, maybe

they can help to bring the economy back. >> how long did it take you to do this video? >> it took me about four days because i have found out about it right before the deadline. luckily it fell on a short weekend -- i borrowed my dad's video camera and says i make movies all the time, stop motion videos, i knew how to run the software and i was able to film the video and put it altogether. >> congratulations on this, alexander, again. what would you do with the money? >> i will put most of it into college, into my savings account for college. and i'm going to keep a little bit for pocket money. >> thanks for joining us today. let's watch a little bit of his video -- what you see and don't see. >> my neighborhood used to be full of kids and adults walking and planning. now only a few of us left. many have left in search of work

or to live with relatives or because they lost their jobs and homes. those left are feeling the effects of the economy pretty heavily and had to make cutbacks. many of my friends' parents are hanging on by a thread, several jobs or looking for work and behind the house payments. >> you can see his entire documentary and all the other winning videos at studentscam.org. >> "washington journal" continues. host: dr. greg wagner, deputy assistant secretary of mine safety. as we talk about the situation at the west virginia mine. tell me why a company that had hundreds of violations could continue to operate is mine? >> they continue because it is their legal right to. the mine safety and health administration has responsibility to oversee the safety and health of the mind. it is the mine operator's

responsibility to create a workplace free of recognized hazards and monitor the work was continually. we have a right when we see a violation to issue a citation, like a traffic ticket, and if it is serious enough, we can ask and require that miners withdraw from the mine. when the problem is fixed, the mind can continue to operate. host: above the washington post -- the mind avoided harsh penalties. your agency ordered the evacuation from upper branch coal mine 64 times since november of 2009. guest: that is right, we have been there aggressively enforcing the rules. if you see the violation of health and safety standard, you

are cited, and if it is serious enough it is ordered closed. if there is a corre the problem, you do have the possibility of shutting it down for the entire month to protect the miners. but after the problem is corrected then the miners can go back in and it can continue to operate. host: that was one of the issues in the conversation earlier this week from senator jay rockefeller of a senior agency or administration does not have the authority it needs to do what it needs to shut down the mines. what needs to be changed? guest: that is something we are looking at now, situations where there is a chronic disregard for health and safety standards, whether there is some way to reasonably trigger a shutdown order. this is something we are in the midst of explore. host: don blankenship, head of the massey co., bear indications he earned $33.7 million annual salary in 2008.

flies to resorts in his own luxury jet, owns several homes. the head of the company. does that tell you anything? guest: tells me it is a very profitable company. host: what about the miners who work in these mines? guest: the profitability of the company does not tell me anything about the minors and the mines, other than that more resources could have been devoted to protecting the safety and well-being of the minors. host: i asked about the--- on average, what they earn in west virginia? guest: i am not sure what the final figures aren't now. it depends a lot of overtime. but my understanding is an experience minor can earn upward of 70,000, $80,000, $100,000 a year. these are communities where this is a very good job. host: our phone lines are open --

you can also send us a comment via twitter or an e-mail at journal@c-span.org. what you think your investigation will determine what happened monday? guest: right now we are in full rescue and recovery mode. we will begin the investigation of the causes just as soon as we completed this first phase. i can't prejudge what is going to be. it will be an absolutely comprehensive federal investigation. host: how be conducted and what you look for? guest: weast rob everything -- ventilation, route control, methane -- we scrub everything. we will look at every piece of evidence. there are fire and explosion experts. all the expertise in the mining

community and the agency will be directed towards understanding not only what the immediate cause was but what the root causes that led to this explosion. and we are going to be finding out what happened. it is not going to be fast but it is going to be thorough. host: in number of violations between 2005 through 2007, 200 and for violations by the massey energy co. and first six months of 2009, 50 violations. how many are severe and how many could be minor infractions? guest: the information i have had indicates that many of these are significant violations. they were cited as significant violations. and again, they are cited and mining is halted if they did until they are corrected if it is the most serious.

host: how dangerous is it to be a mibner -- miner today? guest: it is an interesting question. compared to what you have to ask. mining is a dangerous occupation, and as the tragedy showed, it continues to be tremendously dangerous. that said, no miner should have to give his or her life to earn a living. for example, last year there were, i believe, seven or eight months where there were no fight -- fatalities and any underground coal mines. if it can go for seven or eight months, why not nine, 10, 11, 12? it is a dangerous occupations. the hazards are known. people should be able to recognize and anticipate and prevent those hazards of causing death or serious injury. host: you have to go back to 1907 for the deadliest accident, where 362 people were killed in an explosion outside charleston. guest: that's right.

host: jane is joining us from new jersey. caller: good morning, gentlemen. dr. wagner, i am a firm believer that if massey energy had been a union organization this would not have happened and i do understand why the people of the area work for a company like massey, because they get paid a little bit more in salary, no benefits, and no protection. i was wondering, if at all possible, now that our activist in the case of citizens united -- the supreme court, in the case of citizens united, that corporations are people and they have freedom of speech in the way of throwing around and the influence our -- influencing our legislature, could it be that they could be held responsible like the people of our nation and receive the death penalty for the disorder date cause

through negligence and agreed? guest: i think that the operating of a coal mine is a large responsibility. it is not just a responsibility to the corporate board of directors or the shareholders, it is a responsibility to the coal miners. i think that corporations running coal mines and need to be responsible in what they do. and they need to follow the law. i have no idea. i'm sure the lawyers will be trying to figure out whether or not there can be individual responsibility for egregious behavior. host: joyce is joining us from connecticut. good morning. caller: good morning. good morning, dr. wagner. i come from a long line of british miners who took it out with pickaxes and shovels and spent their days on their knees. they had none of the safety regulations that they have now.

they did eventually closed the mine is down about 40 years ago and they are now a tourist attraction. the point is, i don't understand, with all the modern technology, why these things happen here. can you explain it, please? guest: i have to agree with you. i think that all explosions are preventable. we are going to try to get to the bottom of it. i can't prejudge that. we really need as through an investigation as possible to be able to understand what the causes of this tragedy are. host: from "usa today" is this story. coal mine operators just paid 7% of the fines, some up to $90 million, but only -- according

to an analysis of federal records. guest: i believe there information is probably accurate. it was probably given to them by us. i have not done that analysis myself. i think it speaks to not that they will not eventually pay the fines, but there is a lengthy appeals process that the operators are able, when they are given a citation, given a fine, they have to correct the problem immediately but in terms of paying the fine, they can delay that and delay of this violation being part of their history of violations that could be taken into consideration by the agency over time. i expect it is delays. sometimes the -- the mine operators, the chickens will come home to roost. the other thing embedded in there is that the agency, since the sago mine disaster in the

legislation put on plays after that, the agency has been much more aggressive in its enforcement activities. it has been in every mine at least four -- four times a year for underground, service, two times a year and aggressive identifying hazard and trying to hold the owners accountable. host: talking to dr. greg wagner, a graduate of harvard and also studied at the albert einstein college of medicine and previously served as director, senior advisor to director for national institute for occupational safety and health and now deputy assistant secretary for policy for the mine safety and health administration. james from eagle rock, missouri. independent line. caller: good morning. i have a question. is the inspection of the line associated with osha?

guest: the mine safety and health administration, which is an agency within the department of labor, is responsible for the inspection of mines. osha, occupational safety and health administration, is another departments of labor agency and it has responsibility for general work places. mines have been given special protections by national policy for years, for more than 40 years, because of their hazardous nature. there is an agency devoted just to the mines. so they are a sister agency to us. and we have responsibility for overseeing. host: to give you a perspective on where the explosion took place just south of charleston. in some of the news this morning, for the third time the rescue operation has been halted because of the safety concerns for those involved, trying to determine whether or not four miners are still alive and

whether it is safe to rescue them. if they are alive, how long can they potentially live? guest: following the miner act, there was a rule that they had to put in so-called refuge chambers. if the miners survive the incredible impact of the initial blast and was able to make their way to the refuge chamber, then four will be able to sustain themselves for an extended period of time within that chamber because of the availability of good air, food, water, would permit them to do that. that chamber should be capable of holding, as we understand, 15 people. the one that is still unexplored. so, three people ought to be able to sustain themselves if they were on injured in the regional last for an extended period of time. host: duncan is joining us from

tucson, arizona. good morning. caller: good morning. how were you, mr. wagner? guest: thank you. caller: i used to words the work in the minds, uranium. i was injured in the 1990's. you were talking about coal mining. we can implement technology that nasa has already implemented for rovers on march, sending unmanned rovers down there, sensors that you put -- not the coal mines all the time, because they seem to caved in two or 3 miles at a time. here is the problem. if a cop fall down, alarm goes off, and if miner of that, nothing happens until an explosion. you have these working in the coal mines as a risk. i was uranium, thank god. these coal miners, i don't know how they do it.

it tickled: mining and coal mining environment has many -- guest: coal mining has many hazards -- but i have to say that those hazards, the threats and health and well-being of individuals are well known and well characterized. these tragedies can be prevented. host: another of you were -- another viewer has a comment on twitter -- ramallah is joining us from beavercreek, ohio -- ramona. caller: good morning, everybody. i am concerned about the violations. somewhere up the ladder they had known about the violations. why don't these people or whoever they are, come in there as they open the doors -- i

know there are a lot of violations -- need to correct them now? guest: it is the operator's responsibility to correct problems, not just when we are there, not just when the mine inspectors are there, but every day. they are aware of the rules. it is their responsibility not only to follow the rules but also to get out front, to constantly monitor the environment in order to ensure that they are fulfilling their legal as well as the ethical responsibility to maintain an environment free of recognized hazards. it is their responsibility to create and maintain a safe workplace. host: with reference to the mine safety and health administration, when and why was it formed? guest: the mine safety health administration was formed after a tragedy in 1976. the original similar legislation was after a tragedy in fairmont,

west virginia, the farmington mine, in 1969. the farmington disaster actually in 1968 killed 78 and it led to the creation of the predecessor to the mine safety and health administration and a much stronger laws, not only to protect the safety of miners but also their help from black lung disease. in 1976, another tragedy and said late -- sadly, one that was commemorated last month, where 15 were killed in an explosion, and two days later, rescue teams and personnel went back into the minds and another 11 people were killed in a second explosion. that created the 1977 federal mine safety and health act that really created the mine safety and health administration as we know it today. host: which is, for obvious

reasons, why there has been concern by gov. manchin and others about this latest rescue team and that they pulled back for the third time the last four days. guest: as frustrating it is for the rescue teams, we don't permit them to put themselves in harm's way. obviously going into a mine where everything has been disrupted -- communications, ventilation -- is itself inherently hazardous. these are dedicated, highly trained teams, but we won't let them go into conditions, for example, where the atmosphere is potentially explosive. and that is what they have been meeting, increase levels of carbon monoxide that can kill you really instantaneously and explosive mixtures of methane. every measure is underway to ventilate the mine better, get the levels down so that the rescue team can make that final step to try to get to the refuge chamber.

host: we are talking about mine safety and the future of the mine safety and health administration. paul is joining us from pittsburgh, pennsylvania. caller: the morning, c-span. host: good morning, paul. caller: good morning to the good doctor. i'm a retired special spirit in the service we had generators, and they ran radios up a couple of hundred watts. and we had a communication equipment that if the air communications were disrupted, we had attachments that we could put to our transmitters that would transmit an underground signal. i noticed yesterday's, what these rescue worker -- when these rescue workers got within 500 feet of the chamber they had to go round and come back. there is no reason why the good doctor could not see that these chambers would be equipped with

these electromagnetic wave transmitters. guest: there were and are specific requirements for improved underground communications that came in following the sago and other disasters that occurred in that same time. the major challenge that has not been yet overcome technologically is communication from any point underground wirelessly through the 1,200 feet of rock and earth and coal that is on top of where the mine is in place in order to permit above-ground to underground wireless communication within all areas of the mind. -- mine. i don't think the rescue teams were pulled back due to communication at all. they were pulled back because they encountered a hazardous mix in the atmosphere.

host: this twitter question -- guest: you know, this is something that, as soon as we know what the cause and the root causes were, there will undoubtedly be multiple responses trying to make sure that this does not happen again. one of the legislators that spoke at a news conference said something that has been said many times before, that each improvement in protection has been written in the blood of coal miners. there will be an investigation, we will find out what caused it and respond to what ever it is we find is the cause. host: a rather strong question. well the owners face prison for

host: republican line, good morning to you. caller: how are due this morning? i am from the southern tip of ohio. i am very close to west virginia, about 50 minutes away. -- 15 minutes away. this is how these people live. without that, they have nothing. they have nothing besides coal mining. wouldn't it be fair to say that this mine would not have been open if it had not been okay and approved by the federal mining inspector? the mainstream media are exporting -- exploiting the people of west virginia to make a point about how horrible cold is and they want to see it done away with.

they do not care about poor people. they don't care about these minors. we do. these are our neighbors. we love these people. i wish they would stop accusing blankenship of being a murderer. do you think this man wanted this to happen? guest: i absolutely do not think that anyone wanted this to happen. that would be too horrible to even consider. no one wants a tragedy like this to happen. we know that people make choices and that mines make choices. this mine was a mine that has a pattern of significant health and safety violations that far exceed the average in the country. there are other mines that are clearly more focused on not only producing coal but maintaining the conditions in the mind that makes them less threatening to the minors, not just when msha

is present but at all times. host: could york agency had taken a tougher stance against this company? guest: our agency follows the rules and we will continue to thoroughly examine. we are in recovery mode. part of our invested station will not be the immediate -- part of our investigation will not be the circumstances leading to this but let me assure you, that every person that has had any time to touch this mine is examining actions to make sure we did everything under our power to protect the miners. host: the president is holding a meeting at the white house to look at this issue with the labor secretary and officials from york that menace -- organization. guest: i think it will be next week, not monday. he as the assistant and labor secretary to come to the white

house to give him directly an update on what we know at this point, what do we think went wrong, and what the administration should be thinking about and what others should be thinking about to make sure this never happens again. host: hyattsville, maryland, good morning. caller: dr. wagner, i want to ask you if you were aware that this particular mine closed early last week. ? one lady said her son came home early because the close the mine last week because they had some problems with the oxygen levels. if on monday, they can their and inspected the mine, and they had problems, why didn't they close it before they allowed anyone else to go back and tain?

guest: i am not familiar with this but when a hazardous condition is identified, if it is sufficiently threatening, the miners are withdrawn, equipment is withdrawn from the mining area in order to make sure they are not put at risk until the condition is corrected. i cannot speak to what happened when on what shift but it is certainly plausible to me that if a problem were found requiring closing of that section of the mine until the problem was resolved that someone could have been sent home early. i am not familiar with that the civic instance. host: north dakota is next, good morning. caller: good morning. am i getting through?

i have a two-part question. it may be hard to believe that i am coming in on the republican line but i am wondering about how much the importance of coal to our country is having to do with the decisions relating to the safety of our miners? guest: i think we have a responsibility to protect miners who work at mining coal. as long as we mine coal, minors should not have to pay with their lives for taking goleta of

the ground. coal is used in a variety of ways, not just for energy but this particular mine has a grade of coal that is used in metallurgy and much of it is exported. these are well paying jobs but no worker, minor or others, should pay for their job with their life. host: as crews wade to resume the search, they resumed of that search earlier this morning but then pulled back for the third time because of safety concerns. the gases that are in the mineshaft and there's a photograph of some of those outside the my waiting for word on the four individuals and the uncertainty whether they are still alive. 25 miners were killed in the explosion on monday. eastlake, ohio, independent line, welcome. caller: good morning. with all due respect, this man had over $900,000 in fines

levied against him. he only paid $160,000 of those fine grit his lawyers have been -- he only paid $116,000 of those fines. he had safety problems. he is known -as the man who feels production is worth more than the people that work there. this was something that he gave a speech about. with all due respect, i know you will have an investigation, but of these investigations go on and on, you will have lawyers who will deliver this in court for months and probably years. this man will continue to run and on said mine -- an unsafe

mine, not only in the area that blew up at west virginia but he has mines all over the country. it does not make any sense that we continue to allow people because of their corporate clout and money they have to buy lawyers and allow them to continue to flounder a lot. t the law. guest: i couldn't agree more. my companies should put their money into their companies and not lawyers. we carry that message ever since coming into office to say it is the responsibility to mine operators to maintain a vigilance in the workplace and maintain a safe environment and put your money into health and safety programs and put your money into identifying and

correcting problems and monitoring the environment. do not put your money into delays and protests. that said, i want to point out that every time there is an infraction, an operator is obligated to correct the problem even if they are protesting or not paying their fines for they still have to fix the workplace. you noted that this operator does operate mines elsewhere. as do many other coal mine operators and we will continue to look at what went on and what is within our range of options, not waiting for the end of the investigation but looking within the agency for whatever kinds of at dating policies, rules, and regulations that we can do now, not waiting to the end of the investigation in order to address the problems that have

become apparent. host: funeral services will be conducted today for four of those killed in the explosion monday. we are speaking with dr. gregory wagner. caller: belowdecks -- hello? i would like to know why there is no standard between msha inspectors? i work in an open pit gravel pit. i would like to know why those inspectors -- no two inspectors have the same opinion. as far as the underground mines, there should be a standard for the people that work underground. verses us that are working in a gravel pit. therguest: there are standards

that apply to every gravel pit and it should be inspected to ensure that the rules are being followed at least twice per year. there are approximately 1300 inspectors working for the mine safety and health administration. every workplace should be inspected using the same standards with the same level of vigilance that the agency tries to provide in order to protect every minor. host: our next caller is conn, good morning. caller: good morning, how are you? i think some very well-moneyed people should think about investing in factories and west virginia to develop clean fuel for this country.

guest: the importance of being able to provide economic alternatives that are viable is critically important, to create a diversity of jobs, clean jobs. this is not to say anything about mining. we have huge coal resources and they will continue to be mine. i couldn't agree more that we continue to -- we need to continue to explore all the alternatives. host: from marshall, ill., good morning to you. caller: good morning. are you on television now? guest: i believe i am. caller: i am a retired miner from illinois. they are talking about these fellows down there who got killed from the desk, methane. many people are not aware that

you can run into methane pockets of guests at any time. you can ventilate the mine but you still run into pockets of gas. i do not understand what the problem here is. a lot of these problems with the mines today and the operators are union. if you do not go to work, you will not have a job. host: is that a factor in all of this ta? guest: the unions have health and safety committees that, to my opinion, help in the constant vigilance with in the mind. they are well trained in order to maintain and view the work environment and to be able to

interact with the employers as part of the team that is there every day trying to protect the health, safety, and well-being of the minors. different companies have different management structures and most miners are not union miners. they, too, have rights and responsibilities in terms of observation of the mine environment and identifying problems as they occur. host: our guest is with the mine safety and health administration. next caller, good morning. caller: it was not union mine because of it was, it probably would not have happened. as far as levying fines, they have the money and they have insurance, life insurance on the people that get killed and they collect on it. you have no authority to do anything. you are just another government

puppet, as far as i am concerned. these actions will continue to go on as long as profit is being made. you do not give a damn about the average minor. you were just another government bureaucrat. host: let's give dr. wagner a chance to respond. guest: i actually find what you're saying so wrong. you should be in the agency. so many people in the agency are former miners. they have brothers, fathers, sisters, mothers, aunts, and uncles who are minors. people are working round-the- clock to do what they can now and every day to do what our job is which is to enforce the rules in the mind. i am proud of the fact that last year there were three or miners killed than ever before in this nation's history. -- there were fewer miners killed and ever before in this

nation's history. that is because we have been aggressively enforce a law and identifying funds and making sure they were corrected. it is also because the mining industry has woken up, to some extent, to their responsibility to keep minors safe and healthy. we have this responsibility. we take it seriously. we are operating under the rules, as they exist, as well as weekend. host: dave, your response? caller: i don't believe him. does another example of a broken government. they don't have these problems in canada or france. you did not even answer the question about the life insurance. guest: i have no idea about that. host: pineville, west virginia, where is that in this state? caller: that is about 30 miles

from the mine explosion. host: what do you do for a living text caller: i was paid minor but now i an assistant editor of a newspaper. did anyone go in before the minors to make sure the mfn -- there should be a foreman that goes into take reads for methane and everything else. guest: that is correct. before every shift, there is a supervisor working for the company called latefire boss. part of their pre-shift inspection is to make sure that method is not a dangerous levels. host: can you walk us through the rescue operation? there is a parallel

investigation. what questions will you be asking in the investigation? guest: it is not a parallel investigation yet. it is an investigation that will be initiated as soon as the rescue and recovery operations are over. they are gathering facts now. we will ask in basic terms why this happened and what were the circumstances. host: what happened? guest: we know there was an explosion and what were the causes and what led up to it? what were the overall circumstances and the context to which is kind of crap -- tragedy could occur. we will look with a minor. we will look within the company. we will look within the agency. we will look within the laws, regulations. there is nothing sacred in this investigation. host: politicians have indicated

that there will be investigations stemming from capitol hill. what potentially could result from that? guest: we welcome everyone taking as close a look at this as they can. when the legislators as the to an investigation, there question is generally," are there laws that need to be changed that would prevent this kind of problem that would happen in the future?" it all starts with what it happen and what can be done. host: the assistant secretary for policy at the mine safety and health administration. thank you for taking these calls and questions. we will take a short break and when we come back, we'll take a look at the issue of foster care and what means for those who go through this system and when they leave the age of 18. what chances do they have of getting an education, finding a job, and contributing to the

economy and society. that is coming up for this friday, april 9. >> in advance of the upcoming nuclear security summit, the director of the international atomic energy office of nuclear security will discuss the agency's program which includes supporting better border controls and monitoring the trafficking of nuclear and radioactive materials. that is live on c-span at 10:00 a.m. eastern. the southern republican leadership conference of this meeting in new orleans and our live coverage of the event continues today with appearances by the louisiana governor, the texas governor, and former vice presidential candidate sarah

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watch it, click it, and share it. over 160,000 hours of video from yesterday for 10 years ago. every cspan program since 1987, the cspan video library, cables latest gift to america. >> "washington journal" continues. host: 1 had lined as more is"from the detroit free press." since the paper was published, congressman stood back told the associated press that after 10 terms in the house of representatives, he is retiring from the u.s. house. he was a key vote in the health care legislation. he ultimately supported the bill. s brismantupak says the attacks -- congress syupastupak says the attacks against and did not influence his decision. he is stepping down.

thank you for being with us. we will talk about your foundation. let's begin with headlines from a study that came out. let me begin by reading""the new york times said." only half of the youths returned 18 who are part of foster care, only half were employed by their mid-20's. three of four women were receiving some sort of public assistance and only six in 100 had completed a community college degree. guest: these are pretty grim results but not entirely unexpected. if you start to think about it, most parents, at age 18, do not turn their kids' lives and cut off contact and support. and yet, for the state, we as parents, when the tickets away

from their parents, we become their legal parents. at age 18, which discharge their responsibility from their 18th birthday, literally what happens is young people with no families and no support often no place to live, it is not surprising that they do not finish high school and then up in trouble. most kids in the united states have not finished high school by the time they turn age 18 and yet we expect these kids to find places to live, jobs, and find time to complete high school and achieve the things they aspire to like all kids. host: we are dividing our phone lines by regions of the country. we have one line set aside if you are a foster parent or have gone for the foster care program. you said these are troubling findings. how do you reconcile these numbers? guest: we need to find ways to connect kids to families,

especially before they are discharged from foster care. it is the emotional support more than anything that is important for these kids. we all crave families. his hard wired in human nature to want to be in a family. it is what they want most but it is what is most often missing from their lives. it is not just the support and learning how to live but it is the a emotional support and being there in troubling times and being there in good times. who'd you call when you do well on a test or you've got a job? host: more from this study conducted in part by the university of chicago and washington. 6% of those young people who aged out of the foster care system had finished the day 2 or four year college degree by age 24.

25% did not even have a high schools g ored a day the great. almost 60% of the men had been convicted of a crime and 40% were employed with a median income of $8,000 per year. nearly 40% or homeless. guest: when our kids turn age 18, would we expectant to finish high school under un if they were out in the world and fully responsible for themselves? probably not. you can trace this back to not finishing high school because that means you will not go on to any post-secondary education or college. in addition to connecting these kids to families, we have to get better at keeping these kids in school. we move them from place to place while they're in foster care and every time you move, you lose ground in school. keeping kids in the same school and keeping them on track to graduate and go on is part of

what is key here as it is with our own kids. a host: why are these kids in foster care to begin with guest:? most of these kids came into foster care at age 12 or 13. their families could not or would not support them. a lot of it you can tie to neglect which goes back to our issues, as well. there are abusive situations. all these kids by definition have at least had the trauma of being ripped away from their families and placed with strangers to live. they are very often in group homes situations. there is a root problem on that. we are focused on how we address the consequences of that. we are the legal parents for a responsible for them. they turn 18, now what? host: 1 the were upset not to remove families from -- not to remove it is from families carelessly. guest: it is part to argue with

that. living with strangers and being moved is not a recipe for a good outcome for young people. i wish we were better at it, keeping families together. no child should needlessly be removed. it should be the last act for the safety of a child to take that child a host: way. sean is a foster parent. caller: good morning. you are going through the process of everything and i have known several foster children throughout the years. the alarming study is true that many of them end up in jail, trouble, drugged. abusug abouse. it is not always a foster parent abuse. no matter how much they try to help these children out and how

they teach them right from wrong, they go back to where they were with their biological parents and remember everything that was said and done, what they saw, of who they sought to it, -- who they sought do it. -- saw thatdo it. -- saw who the do it. we are told as foster parents that we are not allowed to talk about about their biological parents. if a child comes to me and asks me why there were taken from the parents, i cannot tell them. that their mom and dad are idiots. i explained that it is because of the bad things they did. host: let me ask you how long

you have been a foster parent? guest: we are going through the process right now. i have dealt with them in the past. host: you have no foster children at the moment. caller: no, sir. host: when you think you'll get your first child tax caller: in the next couple of weeks. host: why did decide to do this? caller: we are unable to have children. mine was due to a motorcycle accident. hers is due to weigh -- hers is due to a stepfather host:. thank you for the call. guest: there is no doubt that foster parents provided an invaluable service. most kids that come into foster care, they have a good reason and know why they were removed from that situation.

this does not reduce the trauma much. foster parents of a difficult challenge dealing with young people who are in a traumatic situation. they are trying to adjust to a strange world and we ask a lot of them for very little remuneration. they provide an invaluable service and we need more of them. i wish more people would be interested in being foster parents. in many cases, they are the difference between bad outcomes for a young person and a chance of success. host: we're talking with the executive director of the jim casey youth organization. he is a former student at the jfk school of government. guest: we are in national foundation focused on you transitioning out of foster care.

we were upset a c fromasey family programs because the population is unique in the dismal options that are attached to foster care and being released at age 18 gori we have tested various strategies across the country. we try to engage youths in itself advocacy and making decisions. in foster care, we may call the decision so how do we expect them to start making decisions magically at age 18. we engage you, and its communities, and try to connect young people to opportunities. so many of these kids have the same aspirations is all kids. they want to go to college. what to do things with their lives. to many of them want to be social workers because that is all they have known. they do not think about being engineers and welders and mechanics and college professors because they have not been exposed to that. connecting kids to opportunities, connecting kids

to internships and jobs because one thing i have learned in 10 years working with these kids specifically is that they are incredibly resilient. human nature is incredibly resilient and so despite the difficulties and, as these kids can and do succeeded have the wherewithal if we give them the opportunities and connection to do so. guest: there is no mandatory therapy because each child is unique. it depends on what the situations are. very often, what the child needs is the emotional and physical support that a family provides. that is the kind of therapy that most of these young people may. and then they need the connections. where do you do the normal things of daily life? and from your family. coverage that you learn them

from your family. -- you learn them from your family. these kids are denied normal opportunities host: diane is joining us from philadelphia. caller: i am so glad that this subject is getting attention. when i was growing up, my aunt was a foster parent. one of the things that she always said was that she worried about them after they had left foster care because then they would have trouble finding a place to live or trouble with saving money so that they could get an apartment or so that they could go to community college. i am so glad that this is being talked about and we are finally looking at what we can do to help them. are there things in place that will help them get an apartment

or go to college or even save money to do the things we usually do when we borrow money from our parents? guest: one thing that jim casey does is we have 11 projects around the country and one of the strategies we have used his matching their savings. young people get money into their savings account and weak matchett for certain purchases. when we started, there was huge skepticism. these kids are poor and often do not have places to live, how can you expect them to save money? the fact is, they can and they do. like all of us, it is their money so they put money into savings account and take it out and put it in again. we allow young people to save up for a car and for a deposit on an apartment that is used with a barrier to getting a place to

live, not the monthly rent, and a car. that is controversial because it is a car and asset or liability? the most of the united states, if you do i get a car, you don't get to work or go to school and for young parents being able to take their child to child care and go to school or work or both, if you don't have a car, it is difficult to succeed in our society. we help young people do that. we believe it is having an impact on the ability to find housing, the ability to get a better job, the ability to finish school. we are working with that but especially in the climate today, it was a good idea in 2003. in 2010, in the recession, it is critical that young people learn to handle money and financial literacy is important for all us as we have suddenly learned as a result of the last couple of years. host: we are talking about foster care and transitioning

out of it forage out. guest: the annie casey foundation is our core support. we work with 13 other organizations that funds fell local committee presence in tampa, fla., indianapolis, hawaii, and omaha. we have a number of partners that fund a different parts. the opportunity passport is the savings account. the youth board teaches leadership skills and allows them to become engaged in their communities griffi. we are looking to new states and trying to interest people in our strategies and generate the resources and the public will to take on the challenges

associated with working with teenagers, not a loved part of our population. from brain development until they're 25, we are dealing with kids. it is challenging. it is rewarding. we're constantly urging people to adopt these kind of strategies and to help connect these kids to families and opportunities. host: one of those foster parents is joining us from newton, n.c.. good morning. caller: i am a retired foster parent of west virginia i dealt with teenage girls proble. i had 15 honor students out of my teenage girls. i believe that we need to keep

children in a school system by the semester because every time a child is pulled from a foster home or their environment, they are starting a. . they cannot bover. host: they will be pulled in and out of foster care regardless of the calendar year? >> yes, most definitely, very often a host:. thank you for calling in. guest: kids need stability and continuity and be able to count on things and it need routine. she is right, every time you take a child out of school and put them in another one, by the time the records transfer, we have had kids immunized or that was because the records don't follow quickly. that is a real challenge which is incredibly important that we provide in schools and families

the kind of stability and continuity that we all need to succeed in hos. host: michael is running as from tucson, arizona. caller: i grew up the 1970's and foster care predicted between then and now is that back then, they did not have the tests to netiquette present test is if they were mentally ill. it did not have the drug problem. we had children who were abused by alcoholic parents. that is where i came from. i did not get a support group here. in arizona, they had a thing called spring board. a bunch of foster kids who were runaways would get together in a house like day parents and night

parents. there were not enough foster parents to go around. i had to go out on the streets and go to work at a young age. today, you have ingenuity, the possibilities for these kids who are mentally ill figure out what is wrong with them. many kids were not diagnosed, there just abuse. host: were you able to get a college degree? caller: i have then -- i have finished school. i am successful. i am disabled but -- it seems to be the same cycle is going around. guest: unfortunately, things have not changed a lot since the 1970's. there are more ways that we can provide assistance but we do

not reach nearly enough of these young people with those kind of service says. the most support and that we could do for young people is to keep them connected to some kind of family support, a permanent adults in their lives. the kids say relationships with no expiration date for they know who is being paid to be in our lives and who is supporting them unconditionally. host: we began our conversation by asking why do they have to leave it 18 years of age. why can't they propose a higher age. guest: president bush signed a bill to provide the option for safety to keep children in foster care until 21. are only a few states that do that today.

extending foster care to age 21 is probably the most important step we can take for it will not work for young people on their 18th birthday to be taken out of a group home, given their belongings in a green plastic trash bag. we need to support these kids with families emotionally until age 21 and hopefully, permanently the rest of their lives. we'll stay connected to our families as best we can. host: jenny is joining us from louisville, ky. caller: good morning. everything that you have said, i have thought about. people do not think about older children. these children need so much

help. they love, stability,, i know it is a challenge and i have always said that i would like to get a posture project foster child and teach them what they need to know. some of the kids run the streets and when you are 18, if you love children, you do not put them out. you help them. that is what you do for -- if it was your biological child. that is my opinion anyway i am divorced so i know that more than likely, 12 years ago, i could never be a foster parent. i believe you have to be married. guest: not generally in most states, and up. host: so single-parent can adopt. next caller.

caller: i am from buffalo, missouri. i have a daughter in foster care and i hope i get a little time here. she is under the missouri lives for children families. she has wonderful foster parents. host:gary is the former head of social services and missouri. why did you send your daughter foster care to guest: dax i didn't. my ex-wife allowed her to get pregnant at 12 years old. she had the baby and her sister adopted the baby. she went to prison and a child is in foster care. i do not see her a lot. i have not seen her for several years but talked were once or twice a week. caller: hosthow oldish a guest:?

is she? caller: she is almost 17 years old. i live by myself. i am disabled and had been so since 1987. i draw social security and so the sheik. -- and so does she. she does not have the mental ability -- you'd think she was brilliant -- she does not have the mental ability to control her surroundings. but she doesn't know a thing about money. she knows how to spend it. she will tour 181 year from next

month host:. she has a 3-year-old child? caller: yes, but her half- sister, stepdaughter adopted her -- adopted the boy. but she has problems with that because she is getting motherly instincts. guest: there are services for disabled adults. i would urge you to stay in contact with the division of children services in missouri. to help per connect to the adult system when she turns age 18. there will also be a likely agency to help ascertain what is best for the child and what supports can be provided to

raise the odds of success for her child. host: do you want to follow-up on that caller:? ? caller caller: they have meetings every month to talk about what is best for her and they were talking about institutionalizing her. host: why would they do that? caller: because she does not have the ability or mine set to keep a job, she has had a couple of jobs, and she loses her temper and i'm pretty sure she is bipolar like her mother. she loses her temper and her language is better but it is not good. i talked to our caseworker a couple of days ago. host: would you bring her back to your own home? caller: i would. right now, my home was a mess.

but i have been thinking of moving it closer to her. i am disabled and i do not know if i can control our. -- control para host: thank you for sharing -- he controlr. >> control her. guest: i hope we can continue to provide all the emotional support as you go for a host: word. ward. caller: good morning. my story is long but i will try to make it brief. my wife and i divorced in 1918.

nine89 and we had one daughter -- my wife and i divorced in 1989 and we had one daughter. my wife died in 1992. there was no contact made with me. until a couple months after she had passed away. my daughter was in foster care. i spent four years and a fortune trying to get my daughter back from the foster parents who wanted to adopt her. i did not win. eventually, because of problems within the foster home, she was sent to may be a state, outside of st. louis but released to

miers customer reports to the size school. -- released to a foster home. she is a very productive, very prosperous young woman. she is married to, at the -- happy and to enter a lot of adversity from the time of her mother's death to a few years ago when she got married. she joined the military after high-school. i take nothing away from the foster parents who did a wonderful job. she takes critics he stays in touch with them and to host: made. she is in her 20's now? thank you for calling. guest: one thing we have gotten better at in the last few years

is notifying relatives and getting in touch and finding a relative who would be able to take care of the child rather than place the full child in foster care. most agencies in the united states are quick to identify parents by asking the young person who they might live with. almost always, their aunts, uncles, grandparents, cousins. it is a matter of doing the work and identify those people and tried to connect to the young person so they stay in some kind of family situation for their protection and care. host: our next call is from tahoe city, california. caller: good morning. i have basic questions to ask you. what is the basic difference between foster parenting and

adoption ? if someone wanted to adopt a child, where would they go to do so? how long does the process take to adopt a child? are there different laws in different states? how does the process work? guest: the difference between foster parents and adoptive parents -- foster care is meant to be temporary. it is meant to be a temporary care for a child and production -- and protection until they can be adopted. adoption is a lifelong connection and we encourage the adoptive -- the adoption of young people. there is a stability that entails. all states run their own foster care systems but they're all under the general rurbric of

federal law. it may go under family services but you need to look up locally. they will be anxious to talk to you. it takes some months to become licensed. if you're doing this for the right reasons, that takes a little bit of time. we all desperately need more families to step forward and say they are willing to provide the permanent and emotional support that young people need and provide the stability and continuity so that they get the same kind of out comes that we hope for our own kids. host: this-2 -- this issue is getting a lot of interest in twitter.

guest: about half the states now provide tuition waivers to public colleges and universities for young people out of foster care. we are the legal parents at least until age 18. when my kids turned 18 and they graduate from high school, i helped them in college. that is what we do. we help them get their first car and we help them get a place to live. the education part of this is critically important. there are deep reminders in this recession that those are the young people who will get some education beyond high school and then we have a better chance of success in today's economy. host: kansas city, missouri, go ahead. caller: good morning. i thank you for accepting my

call. i have been in the system. i have been a foster parent. i had to go through the program. i was interested in adopting host:. how long have you been in the system? caller: it has been about six years. host: how many foster children have you had over the years caller:? i have only had one. i did not go in the system to be a foster parent. i really wanted to adopt but they put me through all the classes of which i am thankful. that helped me adjust to becoming a parent of children that had problems. the experience that i had, i had a little girl with me that i want to adopt. i had for a couple of years. she is no longer in my home because a family member came

forward and decided that she was more interested in taking care of the child. my heart was broken. it felt like the death of a child. this child still calls me now. what i really want to say is that i think the system can better help the children with doctors. there are a psychiatrist that they see because most of them see them every week and i never really deal with the children about the root of the problem with -- what they are experiencing. guest: i would guess that probably very few kids need psychiatrists every week. when it is important, i hope that is provided. it is a very traumatic situation to be taken from her family and placed with strangers.