>> sent january 6, 2000 21, more than 1000 defendants have been arrested in nearly all 50 states and the district of columbia. those arrested have been charged with a long list of felonies and misdemeanors, including salting, resisting, or impeding officers or employees of the u.s. capitol . over 518 individuals have already pled guilty to a number of offenses. over 60 people have been found guilty have -- have contested trials. in oath keepers trial found people guilty of felonies and misdemeanors. to understand more about the judicial trial process, we ask a juror on this recent trial to tell us her obrvations. >> hear from a juror in the oath ers trial on this episode of book notes plus.

>> there are a lot of places to get political information, but only at c-span do you get it straight from the source. no matter where you are from or where you stand on the issues, c-span is america's network. unfiltered, unbiased, word for word. if it happens here, or here, or here, or anywhere that matters, america is watching on c-span. powered by cable. announcer: washington journal continues. host: back with us once again is mark sandy. in the months since we last chatted with you, we've seen the federal reserve have a serious interest rate hikes. is it working? guest: good to be with you, i can't believe it has been three months. that went fast. nice to be with you.

yeah, i think they are working. the intent here is to slow economic growth so that it quells the painfully high inflation. but i think the effort that made progress because growth is slowing, inflation is moderating. it is a long way to go, but hopefully we continue to see inflation come back in over the next few months, the next year. yeah, i think the efforts are working. i will say, there are some negative side effects to the hiring rates, and one of the most obvious is the pressure on the banking system. i do think one of the reasons why we saw this stretch of failure recently in the past few weeks is related to the interest rate hikes. but all in all, i'd say that the efforts are working, yes. host: when it comes to what percentage we should be using, a

half-point, a quarter point, any concern about their decisions on those rate numbers? >> the operating committee of the fed, they raised rates three quarters of a point to be extraordinary in an effort to get interest rates backup mortgage system with the strength of the economy and inflation. more recently, they dial back those rate increases. it wasn't last week, it with the week before. they raise rates a quarter-point and intimated that they are getting pretty close to the end of the rate hikes. they dial things back. yes, for most of the year i've been right on board with them. they've been very consistent

with the need for slow growth and getting inflation back in. it came right on the heels of that banking crisis and all the extraordinary efforts that they took along with the u.s. treasury and fbi see. on the one hand, they were doing all these things to help out the banking system and then they are raising interest rates which of course hurt the banking system. that isn't quite congruent to me. i would probably be focused on making sure the banking system is on sound ground and making sure that everybody believe the banking system is on very sound ground, and when that is established, turning back to inflation again as necessary. host: do you think we are done with bank failures? do you think what happened has shaken loose the banks that were worse-condition, or are there more to come? caller: i'd be surprised if there was another failure or two

or three, but i think they will be small, i don't think they will be a big deal. given all the support that the government has been providing for the system, most significantly with the failed banks, silicon valley bank, signature bank, they stepped up and they said regardless of whether your deposit amount is below the guaranteed deposit or above, your money is good, it is going to be guaranteed by the government. once the government did that, i think we should all feel confident of the banking system is safe, that our money is safe, that we would get that out when we need it. there may be other failures, but i don't think we should be at all worried that we're not going to get our money out at this point. >> the banks that failed, in front page story in the washington post.

silicon valley bank decisions, your postmortem here, what is the most important cousin learned from the two big banks -- lesson learned? guest: the federal reserve who was the regulator silicon valley bank is doing a postmortem detail, trying to figure at exactly what went wrong here. generally when you have things like this happen, it is not one thing you, it is a series of things. hopefully they can identify that more carefully and use that as a basis. but one thing i think seems pretty clear to me is that the regulations that were put in place after todd frank, after the financial crisis, some of those regulations were rolled back for banking institutions at less than $250 billion in assets.

svb didn't need to do many of the things to make sure that they are safe and sound. they have to digest all the losses on the lending. liquidity, risk management. i do think it makes sense for regulators to make sure that banks of smaller sizes, $100 billion in assets do need to go through the more rigorous kind of examinations and testing and hold more capital just like the big guys. they could cause problems as well. host: questions from viewers when we have you one. let me give the numbers. (202) 748-8001 for republicans to call in. (202) 748-8000 free democrats. independents, (202) 748-8002. a question we always ask when you are on as well is your thoughts on a recession on the horizon? do you see that happening in

2023? guest: when i was on three months ago i probably said recession risks are very high, uncomfortably high because we are in a world of client ration and rising interest rates. but some really good policymaking by the fed and a little bit of luck, we should be able to navigate through without much economic downturn over the next 12 to 18 months. i still believe that to be the case. it makes me more uncomfortable. the risks are actually higher. otherwise, recession will occur. a soft landing, not a recession. a recession is a broad-based industry, persistent, more than a few months decline in economic

activities. that is an economic recession. anything that is not bad, will call a soft landing. i would go as far as to say that does not really feel like an apt description of what is dead ahead. even if we don't go into a recession, it is going to be very uncomfortable. we are going to see some job loss, we are going to feel uncomfortable about it. soft landing doesn't cut it for me. i'm not sure i would use that word to describe it. one of my colleagues turned -- coined the term slowcession. not a recession, but an economy that is not going anywhere fast. host: taking your phone calls for you, independent, good morning. caller: yes, i wanted to ask -- first i want to say thank you to c-span and i appreciate this program. one of the questions i have is

related to the rule and why the fed seems to go from these really radical control approaches of having a stable interest rate staying with that. that's the question i have, thank you very much. host: could you do that? guest: i was just testifying at the house budget committee last week on the budget and the fiscal situation and a stanford professor was on the panel. he is an icon in monetary policy. and it is pretty simple. obviously very thoughtful and insightful, and the federal reserve when setting interest rates, that they should look at the unemployment rate as a benchmark for have the job

market is going. look at inflation, because there are the mandates used to set interest rate policies. inflation is low and stable. inflation expectations, what people think the future of inflation will be. and that formula can be used to determine the appropriate interest rate or monetary policy that the fed should set. in fact, historically, most times the fed does that. it doesn't mechanically calculate using the womb, and effectively that is where they land when cutting interest rates. there are times when the actual policy, the actual interest rate diverges from what it will say, and that was certainly the case a year ago. you may recall back early last

year, the interest rate the fed controls was at zero, and the literal interpretation of it would say the interest rates have been 2.5%. i would say the schedule is later raising interest rates and that would be one reason why inflation is so high today. one caveat and then i will stop. this is of course the pandemic. the pandemic what this massive shock to the economy that throws everything off the rails. the federal reserve, it is hard to remember that long ago, but we're still pretty nervous about the pandemic and the fallout. you may remember the omicron wave of the virus through 2022. the fed was saying look, they may be saying this, but it does not account for the pandemic. if you account for the pandemic, we should air on the side of being over the accom

i thought it might have been a more contentious hearing. i did not find that. i found that everyone's was quite thoughtful or vain trying to think through the differences. just talking about the different types of policy that could be used. on the spending side to try to rein in our future buffet -- budget deficits and get a grip on long-term fiscal issues. guest: slightly younger mark sandy on the panel in 2008. it was government assistance for the automotive industry. viewers can see that. it was five hours 41 minutes according to the timer on the c-span website. guest: [laughter] can you imagine? think about that. host: i do three hours a day. no, i cannot imagine.

rhode island, democrat. good morning. caller: thank you so much, c-span, for all you do. i have three questions. first is listening to c-span last week. somebody talked about the spread of interest that generally spread between the banks get the money for with what they basically sell it for is two points. the person who was talking, is it three points now, it should come down at some point. here we have the bank making an extra point while we are going through this economic difficulty. the second question is, why absolve banks who are making -- who have left assets? why do they get a pass on mismanagement? last is, i still do not understand who is paying for the bailout with these banks. it has got to come down to the consumer at some point.

the banks are the worst people in the world to do business with, because they are always going to make their money. thank you again, c-span. i am waiting for your response. host: mr. zandi. guest: great question. in terms of who pays, most directly it is the banks themselves. the fdic, who is coming into resolve these failed institutions and payout depositors and other creditors, polls that money out of the deposit insurance fund, the fund that has been established where banks contribute into that for this very purpose, to pay for failed institutions. clearly, the banks will then try to pass at least some of that along to their customers. they will eat some of it in the form of less earnings, lower profits, probably affects the pay of their executives and

other employees. ultimately, it likely also ends up in lower deposit rates for lower depositor and higher -- costs for lenders. the cost is borne broadly by customers on the banking system, which is for most of us. having said that, the calculation you have to do here is -- if the fbi did not step in and resolve these institutions and the government had provided that kind of strong backstop, what was the counterfactual? what would have happened? a couple of weeks ago, it felt uncomfortable. it felt like the banking system could come under extreme pressure, deposit runs and ultimately, the cost to all of us would be even greater because the government would have to step in, provide more support. there would be more failures. the cost to us would be even greater. no good choice here, i think

policymakers made the least bad choice they had. ultimately, we all bear the cost of that as customers of the bank. that is to the first question. to the second observation question about, why not regulate banks -- smaller banks with less than $100 billion in assets? they are regulated, they just do not have this extra level of regulation that the banks right now under law, $250 billion or higher. the thinking is, the smallest institutions fail, no big deal. they are not so-called systemic, they are not going to take out other banks. they are not going to be a bigger, economic problem. it is ok. they do not operate the same kind of earnings and margins.

they operate on thinner profit margins. if you put these extra cost on them, they may not be able to operate. they may not be out there doing what they do. one of the keys of our financial system that makes the u.s. financial taking system so different than other systems in the world is, we've got a lot of small institutions. we have 4700 fbi say -- fbi c insured institutions. that makes us stronger as an economy. those small banks cater to small businesses that the bigger guys would not -- i will give you one example and i will stop. when i started my company 30 years ago because i ultimately sold it to moody's, i was a start up. i started with my brother and a good friend. we got to a size where we needed a loan. i knocked on the door of the local regional bank. great bank. my bank today. i said, can you give me a loan? they said, we cannot.

here i was, a young guy. i had no assets. the local bank, the president's daughter was -- on my daughter's soccer team. he said, i will give you a loan. all you have to do is promise to pay me back and secured by your home and i get personal guarantees. i got that loan and it worked out very well. that is where the small banks come in. they are really important to small business, which is key to innovation and we don't want to overburden them if we don't need to. in this case, i don't think we need to. host: was that economy.com you were talking about? guest: yeah, back in 1990 it was regional financial assistance.

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