in mind was making sure the economy kept functioning. he was willing to do whatever it took to get that to happen. the central part of the crisis as you know going back to 2007 septembert peaked in 2008 was the financial sector froze and the feeling was we had to do something and do something quickly to get that moving. that did mean that some people were bailed out. there is no doubt about that. i remember being asked on tv, are you not worried about the moral hazard and my response was of course we are worried. the issue is one of the consequences of not dealing with it right now and i think the president and all the people in his administration felt that was the primary concern. >> what would you say? there were a lot of bailouts. some of main street got bailed out. usually when people say that it is more frustration with how our

conditions, they do not seem that good. the unemployment rate is still high and we have not had growth for long time and it is hard to dispute that that is true. it is hard to figure out what else would we have done, how would we do that? >> let's take this ontologically and it would be more fun to have you talk about what the bush administration did. of 2007.ing the first -- the biggest shock is bear stearns goes under or is sold with a lot of government subsidy to jpmorgan chase. what should we have done that we did not, have put us in better shape? >> let me say something quickly on the previous point. just wars have unintended victims, and appropriate bailouts have regretted beneficiaries.

nonetheless, it is the case that if you look at the shareholders of fannie and freddie, while leman, theychovia, are zero. at bank of america, they are down 90%. once you look at the vast majority of the ceo's and wealth, gone. you could overstate the extent to which everyone was billed out. every buddy tends to remember their own prescient comments better than they remember their own not-prescient comments and i of that.to be guilty from 2000, from the beginning of 2008 onward and

violently after bear stearns had failed that the system was very substantially undercapitalized, fragile, and at risk. there were variety of junctures at which substantial capital could have been raised before bear stearns failed, and in the before lehmanwell brothers failed when very substantial capital could have been raised and if you look at capital raising by the major financial institutions, if you look at suspensions of dividends by the major financial institutions emma there was essentially none. and it is sent me that is a major failure on the part of their management and not need to shore up the defenses and it does seem to me that it is a failure of the

regulatory community not to have used the authorities they surely possessed and the moral suasion that was surely at their disposal to have pressed for very substantial capital raising. it is not that it was impossible to tell from the stock market potential for substantial fragility. it is not that it is inconceivable that suitors could have been found for leman in may or june. they could have been found at attractive tore managements who had been by the previous environment. if you look back, that was a moment when both the private and the public sectors, it seems to

me, missed an opportunity to take steps that could have at least very substantially attenuated the declines in output, and he goes to an issue which i have to say i am still concerned is with us today. the sec issued a report the week after bear stearns failed in which they said that it was well-capitalized the day before its failure. you interpret that? i would interpret that as suggesting that current definitions of regulatory capital are flawed as an .ndicator of fertility something similar is true with respect to the capital ratios as reported and judge i regulators for a variety of the other institutions that failed or found themselves in serious

msuble. we have seen and an argument and productive argument around raising capital ratios, and raising liquidity standards and i think that is all very stillo the good but i worry about carrying on the dialogue in terms of a concept that was professing that institutions were so well- capitalized when they somehow were not invulnerable which is all that you really care about. >> you are there. larry says you made him the mistake between bear stearns and lehman and not making them raise capital. many people wish could have been done during that time and having some sort of resolution authorities. not failed and look what happened to bear.

that was pretty incredible power. i do not think that was realistic. when i think back to five years of, between the announcement tarp and its enactment, one of the things is we were trying to describe why the problems mattered for main street. it was still the other dialogue. connect ands is rewinding to june or something did not seem to be a problem. level iirness at one take your point that it is much easier to see these things with 20-20 hindsight. it is much easier to sit on the outside and write op-ed's about the bold steps that should be

taken that it is to undertake them on the inside so that is completely fair and i do not .hink anyone should be faulted everybody did the best they could and the country in both administrations was very well served. by the people who had positions of responsibility. that said, you said no one in june could have realized how serious it is. i refer you to my op-ed's and of others of plenty people who were saying that the system was undercapitalized at that time. nobody had to go up to the hill to cap institutions on the shoulder and say that their

regulators were greatly concerned about their situation. that there regulators would call on them to suspend dividends if they did not take steps to raise capital. no authority on the had -- on the hill -- think he was doing a lot of things, shoring up the system and between hank and bob steele and others saying you need to raise more capital. those are a regular message. >> when obama comes in and discovers that the economy is a heck of a lot worse than he had believed or his economists had led him to believe with their great crystal balls, one thing they did was what seemed at the time substantial fiscal

stimulus. with the benefit of hindsight was that the right thing to do and was it of the right size, shape, and design given what we know now? >> i think it was not. the obama stimulus is not the first stimulus, it was the second. the first is under the bush administration. that happened with check that one out in may 2008. we studied that rate we studied the effects of that stimulus. they were modest success and that is consistent with the historic evidence. the reason that everybody was groping for a stimulus solution --this is we were virtually everybody was desperate. not that we felt that this would necessarily work but everyone felt we had to try something. >> this is in the bush stimulus? >> in both times. >> you would say do not do fiscal stimulus? >> looking at it at that time everybody felt

it was necessary to do something. the question is did i believe it would have been effective question mark i do not think it would have been affected. i do not think it was particularly effective and it was the wrong strategy. what do i mean by wrong? it was a short run strategy rather than a long-run strategy. we are sitting here five years later. this is a long-run. at this point we have not put in motion the kinds of growth policies that are necessary to get us moving. stimulus is not a growth policy. stimulus is a stopgap policy at best even if you believe in stimulus through national income, keynesian, you pick it. it is not designed to encourage long-term growth. encourage long- term growth are structural. things like the regulatory structure, things like economic trade and the budget structure. >> the economy is falling and a nine percent rate. is noting with stimulus

the right medicine then, when is it the right medicine? >> it is not the right medicine. that is the point. >> my perception of the kind of problem that washington is capable of dealing with is a problem that the right answer is everyone gets a quarter of what they want and they staple it together. at the time -- >> at a high ratio. idea.h that as opposed to there is for different things and only one of them is correct and we have to orient around deciding which one is correct. when we come in and need a stimulus, we thought the economy was shrinking at 3.5% and everyone is looking at each other saying this is going to be horrible. it was minus nine percent. there was a division of opinion at the time. is this the v-shaped recovery

where we have a huge downturn and we will come rapidly back, is this going to be long extended, painful deleveraging, is this something that we will be able to get a bunch of republican votes on. those camps turned into should this be short run oriented, pulling out of 2010 and two 2009, should this be long-term stuff like infrastructure or structural things? could -- should this be tax cuts? what ends up happening is some commendation of all of those. we will do a little of this and this. you act, short run oriented things like hash for clunkers, version of buyer tax credit, given it was not a be-shaped recovery we should not have oriented as much of the money 2011d moving from 2010 or into 2009. you would do more on the long- term structural side.

argument that turned the stimulus into tax cuts, we are going to look back and say that was not that effective. the momentt -- at when everyone is deleveraging they took the tax cut and tried to pay down debt and it did not get that many republican votes so some parts of the stimulus would have been better off moved into others but the thought that we should not have been doing as much as we could when the economy is shrinking nine percent to me is borderline nutty. would say a few things. first it was clear that the economy was demand-constrained and the priority had to attach to increasing demand, not raising the supply potential of the economy and that would be the case for a number of years. second, i think the policies that were enacted probably were as good as could be done given

the political constraints and prevailing attitudes at that time. third, in retrospect, it would have been better to have demandd on a longer-term expansion program. that was not politically planetary at that moment because there was great concern about the deficit and so stimulus had to be a short run before we deficit reduction which was seen as essential by republicans and by a substantial number of democrats on the hill long-runrning it into not a politically viable strategy at that moment. we put as much infrastructure investment into that program as we could convince anybody was possible would actually move

into to three years and that was the political constraints that we were operating on. deficit reduction. there was a judgment made which think was -- >> you had to worry about deficit reduction long-run. >> we could have put $5 billion in infrastructure in. the spending would have been coming in 2013 and nobody had an appetite for increased spending in 2013 because it did not solve the problem in 2009 and it made a deficit problem. term infrastructure program would have been desirable if he did not come at short-term of doing stimulus. and not agree with austin

the extent of his concern about the tax cuts. i think more of it was spent than he does. insofar as people took their tax cuts and used them to pay down debt, that accelerated the deliver gene process which accelerated the recovery. i think that targeted tax cut relatively well advised strategy. i would say one other thing and there will be plenty of my colleagues who would not share this judgment. retrospect, the set of judgments that were made to try to do complicated structural things at the same time we were doing stimulus. broadband, health

information technology, the more ,omplicated structural things trying to do the mall once am i do not think the results of those efforts have been enormously successful either in providing stimulus or with respect to their stated objectives which came from conflating them into a framework that was doing them very rapidly. this will be the last. there was a clinical judgment made which i thought was very reasonable at the time that it was made. that exposed turned out to be wrong. that judgment was if you frontloaded large amounts of stimulus and he wanted to get as much stimulus as you could, if there was a need for more stimulus later, congress would be happy to provide more funds for stimulus.

part of the reason for the judgment to frontload was a was exble judgment that post wrong. if you made a mistake and wanted more spending you could get it that if you made a mistake and you have too much spending you would never be able to undo it. >> i will change the subject a little bit. the advantage of the panel is you could say given everything i know now i might have done something differently. one place which we're thinking about is housing. given where we are in the housing market five years later, how slow the recovery was, how many people are under water. of hindsightenefit which you did not have a the time, is there something we could have done differently or more? >> that is the right question. i can imagine two moments. i do not think it was feasible.

imagine doing some massive housing bailout. idea was totally unfair and the tea party sentiments that came out afterwards would have been there in 2008. one could imagine doing that. in january of 2009 they could have done it. there is a sense in which the new administration was prudent when in retrospect they wish they could have been imprudent. they could have gotten away with it. >> i was thinking if we thought about one sector where there was evidence of overheating, it would be housing. most of the real economy does not show any evidence of overheating.

the question would have been back in the early 2000's and throughout that time, were we too lenient on our regulatory policies with respect to housing, with respect to mortgages and i think we were. i do not think there's any denying that. you got a lot of growth out of it and that was the positive aspect but it did have it. >> once the crisis hit and have -- we have these people under -- >> we thought about it, the obama administration thought about it and it did not work. they retracted their policies on that and it was because they were essentially not up to the task and i do not blame them for it, either. at that point it was too late. let me go back to what we talked about earlier. i want to pick up on a point. the point here in terms of going forward, housing, you name it.

we have to think about what it is that we want to do in terms of moving the economy. even if you think it is on the demand side. even if you think it was something that needed to be done immediately. the key issue is whether the kinds of policies that we saw 2009g out of late 2008 and were those that would err the economy over the long run. the key one to me is taxation of capital. if you are threatening to raise taxes on capital, if you're slowng -- threatening to raise down, that is not a strategy consistent with high productivity growth and it is not a strategy that is consistent for the long run. if i were going back and saying what did we do wrong, that is where it would be. >> that is the opposite of what we did. we had major tax investment --

incentives for investment. one of the critiques at the time which i disagreed with. other said we had made the cost of capital to cheap so people were replacing jobs with machines. i kind of do not think that that was our -- ask you had a $25 trillion market which drops to 2020 and dollars -- $20 trillion. there are a bunch of people underwater and there is a rubicon to be crossed and are you going to write down principal or not? was 750 billion dollars of negative equity in the system. 750 billionould eat dollars. someone has to eat it. this is not one you can count on a wedge or people staying in

their home and continuing to make their payments even though they are underwater. banks could not accept $750 billion of losses. the government, there was no way they would accept $750 billion of write-downs. anybody who says they should ise done more write-down being way overly simplistic. we thought all about that. depression at the meetings in -- prescient at the meetings, wanting to do everything we could on housing, fully well identified this was going to be one of the [inaudible] .iggest we did not have money to do that. >> you could not have. >> i'm not saying you should have but you could have. >> anyone who speaks with complete confidence about this is a full. l. a foo

it may be that there were some better design that could have done this better than the one we found or the one the bush administration found and certainly the ultimate outcome has been lousy. a great deal of what is said ,ith confidence is frankly fatuous. here's the problem. there is a huge number of people who are underwater. it is terribleay for mr. paulson, it is terrible for the bank. it is terrible for everybody. if we just rode his mortgage down, the bank would be better off. he would be better off and his community would be better off. why can't they just get it done? it is easy to see that and someone came to my office every three days to say that. i did understand that completely. here's the problem.

the problem is that for every seven paulson, there were mr. wessel. >> so paulson is a deadbeat and mortgage.y my >> he and the bank were doing fine, he was doing all that. if you announced a program where everybody who stopped paying their mortgage could get a lot essel wouldthen mr. w stop paying, too, and you would spend a lot of money. you might -- you would be doing an unjust thing. why should all the people who bought houses badly get money relative to the people who decided to rent or who did not overpay for houses? the problem was, how did you target the mr. paulsons without inducing a vast wave of defaults els,he part of the mr. wess

and it was cautioned about setting off an epidemic of mail your key in defaults. prudent policymakers should have been cautious about that. in the end, what happened was we did not have any massive wave of voluntary defaults and we did not reach as many people with our housing assistance as we would have liked. was there an outcome available that was better? perhaps there was, perhaps it was not. but you want to have a government that is prudent about the possibility of setting off a vast wave of defaults and philip, with great respect, if you're confident that $200 million -- $200 billion could have been moved without setting

large set of problems and there were easy, feasible mechanisms, you have the confidence that goes well beyond anybody whose lifetime has been spent near the world of mortgages. rejoinder. that, so thatay is a strange way of phrasing that. what is remarkable to me and this is across the is seeingations, the problems and addressing them but too late. -- this started in november 2008 and put into action of may of 2009. that was the right policy, it took time. program reached enough people. it was not effective until h.a

.r.p. 2. seeing the problem and diagnosing it and taking time to get a policy solution. is 2013, the economy has been growing for four years. forly 3 million out of work a year or more and still looking, not counting those who are not looking. we are far from potential. is there nothing we could have done in 2008 or 2000 night or since then that would have put us in a better place now? if we cut capital gains tax, we would be better? rex there were a lot of things we could have done. >> pick one. single most important thing we could do is reduce taxes on investment. not tax capital. this is not controversy over. this is standard, mainstream

economics, the book finance economics. most people think we should not be taxing capital. huawei overtax it. we have distortions ealing with debt versus equity. with debt versus equity. are thinkingf we about -- we would be more on trade. it was actually a major accomplishment for which they deserve credit. i wish they would have been more aggressive in laying out the future. they seem to be moving in that direction. >> let's be serious. tradell for free agreements. on the high-end estimate, it is

a 10th of a percent of gdp in the year. it is way under half a percent. i am all for it, but it is just not big. can we understand what the rules are. on equipment you buy yourself a new car. the first year you buy the car you get to deduct the whole thing from your taxes. the interest rate at which you could borrow is lower than it since then history

war. the idea that the high cost of discouraging investment i have to say is ludicrous. they sayask business they did not have any orders. we could debate the right type of tax reform going forward. the broad sweep, if you want to take an argument , i think many people overdo this argument, but the argument this is not a moment for a big regulatory push andad business practice that you need to be careful about the tendency that always

exists in the new democratic administration for new regulations to be coming from 11 different sources, and that may -- iurage some assessments think that argument tends to be but i understand that argument as a legitimate concern, and it's something that needs to be a focus of economic policies. idea that it is cost and taxation, that is a standby for one side of the aisle, but it has the single least possible moments in the last 60 years. >> i want to respond to that statement.

larry, i think it was back in 2009. i know that is when you were concerned about this. i'm not. i am thinking about what we need grow the economy into the future. you may argue in 2009 it was lack of demand. guarantee if you look at the evidence, you can pick any evidence you want -- capital taxation is the most extortion ary taxation, and if we want to grow the economy, we have to think about moving to a more efficient tax system. i think fundamentally we wouldn't differ so much, but i am thinking of what is the best policy, and i agree regulation is important, but for me the number one concern is what do we do to motivate capital?

>> there must be some professor whose name is associated with this that we know from not having enough capital, not enough supervision, not enough liquidity, and then we thereact, so do you think architecture, that we have gone too far? >> we have gone too far in some ways. frank, andk at dodd it doesn't make any sense, but on the whole with additional capital and liquidity requirements, i wouldn't say it has gone too far. had doddsurprising we frank in the aftermath of the crisis.

to me the mistake is the regulators had lots of hours before. it wasn't that dodd frank gave them something they didn't have. they had the authority back then. they just didn't use it. >> have we made it too hard to get credit in 2013? this circle where business people would come to the white house and say, we cannot get credit. and that's why we can't grow. bank says, we didn't tighten the standards. they didn't want any credit. we went back and forth. then they both agreed, let's blame it on regulators, but we talked to the regulators, and they said, we haven't applied any standard to the banks.

it's hard to say. it feels like it used 75% of tightness of credit has nothing to do with government regulation. it has to do with everybody just came through such a horrible time that they pulled through the lines of credit, that they are not willing to land at the kind of rates they were before. some comes from regulatory, but we do have to move. at three but are we don't want to mess anything up in the short run, so let's not discuss that until way in the future, i think the chances are we would never do it. >> it back. that suggests were not starving the world for credit on the general basis right now.

i think there are issues in the mortgage space where there is , and itle capital today think there is a danger that in the name of preventing the of the 2003-2006 period we will take steps that lead to too little mortgage capital availability. it issiness credit, mostly in advance. >> this has been unprecedented for monetary policy as well. $3 trillionwith worth of money printed to buy bonds, did it to something good? was it worth it? >> my view is the first wave was effective, and it is very important. i believe the fed responded responsibly and admirably.

it is accredited to the bank as well for what they did. i think a were very affect of and helpful. my sense is we have reached rapidly diminishing returns. i don't believe the economy is a field -- is healed sufficiently that weekend the clara victory. the reason to stop buying assets is not that the economy is in better shape but because the economy is no longer particularly affected. >> they should stop or they should it stop? >> i would be inclined to taper but not because the economy is strong. i don't believe the policy is working. >> do you want to share or not? don't filibuster. if you don't want to, don't do it. >> i think if 10 years ago you the in the economy

unemployment rate is going to be seven and a half percent or above for four or five straight be twogrowth is going to percent for four or five straight years, and inflation is well above the target, any shouldst would say you list monetary policy in that environment. if you plug in a formula that says what should the interest rate be, it says it should be negative to in a half percent. all the fed is doing is what it should be doing. >> let me ask each of you quickly, and then we will turn to the audience. of my concerns is we have done damage to the potential economy,te of the u.s. that rates will increase. you think we have dented the

growth rate? >> i don't think so. they are just as innovative as they were in the past. >> i don't think we permanently reduced the growth rate. i think gdp as far as one can see will be on the order of three or four percent lower than it otherwise would have been. is anesent value of that spectacularly high cost of this episode, which is why it would anythingreading almost to mitigate this. >> i think i agree. if you look at data, it looks like we have herman at the reduced the growth rate. reducedve permanently growth rate.

if you ask if the fundamentals are still there, i think they are. significantly depreciated physical capital. our ability to create technology is still there. headline in a joke paper the onion. serious nation demands new bubble to invest in to restore prosperity. i fear we can get into that. the 2000 expansion was fueled by a bubble. we cannot get into that. we are going to have slow growth for some time, because that was overstating what the growth was. think all the fundamentals are there. >> i think you all agree are and -- all agree and are on class half full. here are the rules.

state who you are, and remember a question and with the question mark. woman in the front. why doesn't somebody else raise their hands so the next mic can go to someone else? someone over here? in the back. well you are both policymakers but also academics, how much policies were enacted during the time you were in the administration were in accordance with your academic bearings, and how much of it is pressure up elliptical environment? in other words, the term in retrospect or wisdom of hindsight is used a lot. how much hindsight is foreseeable but was not the politicals of

environment and other pressures? >> i can say a few words on that one. these are two very imminent economists. one here and one at harvard saying, the only thing you needed to do at lehman was change the bankruptcy code or turn that into equity, and you are done. that is the up to smith's -- obtuseness of the way the government works. >> it was very slow. make work hard at it. we around of phone calls to academics. we are basically trying to keep people on board.

they said, the financial sector are is too big. i thought, this is a tough way to do it. don't you think he should cushion it? work toll the academic pair you as a policy maker? >> no. has beenmacroeconomics in dynamic for 25 years. was unconnected to any aspect of the problem. there were important academics who had written things that were influential. they were people like canes -- , they hadindleberger mostly written for a long time before.

surely the training we received influenced what we did. i would say most of what passes as contemporary macroeconomics did not make a positive contribution. >> i agree and disagree. we didn't spend a lot of time thinking about real is the cycle theory while trying to conduct economic policy in 2007 and in 2000 and eight. -- 2008. we think differently about problem's in government than the rest of our colleagues do. at economic advisers, there is a lot more between those groups and between me and the people in

the bush administration. when you see economists starting to think about policies, beware. we are bringing logical arguments to the table, and those usually went out in the long run. >> i will just say it is surprisingly infrequent that in most policy was about what the right policy -- the argument that you may want to do that but we cannot do that. >> jim mcdermott. mcdaniel. i am a partner. my question goes to root cause of the problem.

there seems to be almost a that a fundamental problem if not the fundamental cause of the crisis was the marketleveraged mortgage and the housing bubble. we know government didn't , but whatthat in time was wrong with the private sector are? this was funded primarily by private investment. how is it? we know what the buyer's motivation was -- we know what the seller's motivation was, but what was the buyer's motivation, and why didn't they recognize whatwere purchasing quickly became toxic asset?

>> all financial error has the same root cause. doing today what they wish they had done yesterday. drives bubbles. use it in the mortgage market. for 40 years whoever lends the most makes the most. chances makesmore more money, so you go into more securities, because what else can you learn from but the past, so people extrapolate. i would argue virtually all financial error has at its root naïve extrapolation from the past that,at getting that's why all the great investors are in some way rather in --ry in -- contrary

who reject recent experience. >> there are two over here and three over there. the gentleman on the aisle. to the panelists for coming here. i am a second-year student at the school of business. a lot has been said about wall street being to blame for the crisis, but to me it seems the for politicians are equally to blame for not taking care of the crisis after it unfolded, and we see most of them are inclined to get reelected and so forth. on theto get your view government side of solving problems for the moment. >> the gentleman over here. spoke thehm emanuel words that no good crisis should

be wasted, was he referring to the opportunity of political gain for one or the other party or the opportunity to gain for our society? the gentleman in front of you? >> i am a fourth-year english major from chicago. we talked about monetary policy. increasing lending conditions is a top priority, and do you think the policy on reserves has inhibited that and should be discontinued? >> three very different questions. does somebody want to talk about all editions? are there bad incentives for the political system? soi am the incentive guide, i will start with that. i think there are some bad incentives. the president is an executive, and everybody works for the president, and our role was to make sure the president did the

right thing. differentas incentives. i don't think we can rely on congress to do this. the incentives are appropriate for the executive mansion require leadership. >> that doesn't sound like an argument for democracy. >> i think it is. i think the congress's role is making sure the president does the right thing. leadership has to come from the white house. they have worked for a long time, and i don't see a problem, but i don't think congress is going to come up with the that wille mechanisms further economic growth. >> there is one overarching incentive problem, and that is we need a lot of money to get and hold office.

politicians are disproportionate lay responsive to those who and thathem, centrality of money in politics is by far the biggest incentive problem we have. a terrible thing to waste? >> i shouldn't say. larry might know what the actual context was. very clear. he meant it was an opportunity to do things when political obstacles became much more fluid. should debate what you do and how you should use that mandate, but his context was clear that it was an opportunity to do things, and the classic thatle was his conviction

you could do substantially more to reform regulation than you ever could have done absent this kind of provocation. the beginning in of 2009 there is a sense of missed opportunity. fiscal stimulus was needed. a differentr if kind of stimulus might have gotten some support. i know you both say republicans will oppose anything president obama will suggest, but in the beginning of 2009 many people were hoping the guy is going to bring us together, and it didn't happen. i am not faulting one side or another, but could a different set of choices have brought the country together in a way that didn't happen?

>> i have been critical of democrat parts of the recovery program, but i was there. the senate minority leader said the basic purpose of his minority leadership was to make sure the president was not reelected. i think it's not easy to make the case the administration was prepared to walk along mile to get substantial support, so i think it would have been much more difficult as the price of doing this would have been much more in the infrastructure direction but in the tax cut direction i think would have been fairly problematic. >> can i pick up on the question of said policy and seeing

interest on reserves? >> there are many helping people on the hill, so there is a sense they will say, i was there, a feeling that the administration did not walk a mile. upere was eight years of pent- spending, and it came out. the administration comes in january 20 of 2009. there are already holding up many of our economic nominations as we come in. clear thete partisanship. >> that is completely counterfactual. >> i will give you a list. >> the treasury secretary was held up for his own reasons. you were held up for reasons past. iator reid in the

think it is completely counterfactual. >> the fed used to have reserves . one of the changes is now they can pay interest, and they look at this is a new tool. >> a number of people have been the problems in funding investment is the fed is sucking the money out of the paying interest on reserves. i think there is very little evidence that is the case. the design was to keep the rate much narrower than it has been. it seems to have worked quite effectively. of that policy is pretty positive. the evidence against that is

minimal. that doesn't mean it couldn't be used to suck money out of property. if it pays for it with a rate that is too high it would do damage. >> we have to and it there. thank the panelists. we had an hour-long discussion, and nobody blamed the media for any inc.. -- for anything. the first time that has happened on anything ever. >> a couple hours ago the senate

30 to advance legislation that would ban workplace discrimination on the basis of sexual orientation and gender identity. another vote is expected this week. >> we will talk to the human rights campaign about legislation that would ban workplace discrimination based on sexual orientation. then we discuss the government shutdown and the debate on immigration reform and a look at the role third parties play in politics. david gillespie. each morning at 7 a.m. eastern on c-span. first ladies influence and image, a look back at the life of mamie eisenhower.

then eric holder's announcement $2.8on & johnson will need billion as part of a settlement with the justice department. later part of the political response to the 2008 financial crisis. >> today it is our pleasure to entertain for the first time our first lady at her belated birthday party. ♪ returns ♪happy