captioning sponsored by macneil/lehrer productions >> woodruff: american airlines, the nation's third largest carrier, filed for bankruptcy today in a move to cut labor costs and reduce debt. good evening. i'm judy woodruff. >> ifill: and i'm gwen ifill. on the newshour tonight, we assess what the chapter 11 filing means for air travelers and the industry. >> woodruff: then we get two views on the obama administration's campaign to crack down on the sale of counterfeit goods online. >> ifill: margaret warner has the story of very different elections in two african nations, egypt and congo. >> woodruff: we examine a bloomberg news investigation of secret low-interest loans made by the federal reserve to rescue big banks in the wake of the financial crisis.

>> ifill: jeff brown profiles legendary jazz saxophonist sonny rollins, still performing at age 81. >> you really feel that you're not satisfied? >> oh, no, no, no. i'm far from satisfied. that's why i'm still practicing. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: moving our economy for 160 years. bnsf, the engine that connects us.

>> intel. sponsors of tomorrow. and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> woodruff: after 81 years of flying, american airlines landed in federal bankruptcy court today. the company filed for chapter 11 protection against its creditors. >> it's a challenging day. >> woodruff: the announcement came from tom horton, the new

american airlines chairman and ceo who took over after gerard resigned last night. horton spoke at dallas fort worth international airport near the company's headquarters. >> no company ever wants to face a restructuring like this. we've spent ten years trying to avoid this. >> woodruff: american was the last of the so-called legacy carriers. united, delta, northwest and u.s. airways to file for federal bankruptcy protection since the 9/11 attack. the chapter 11 filing in new york city cited nearly $30 billion in debt, just under $25 billion in assets, and $4 billion in cash reserves. horton cited an array of factors in the decision. >> we also were dealing with a very uncertain global economic climate and high and volatile oil prices. if you look at our labor costs

and compare it roughly to the average of the other big legacy carriers, the difference between our contracts and theirs is about $800 million a year. that's a big number. >> woodruff: the airline's pilots made major concessions in 2003 to keep the company afloat then. but this time negotiations with the unions that represent american's 78,000 workers had stalled. today the president of the allied pilots association, dave bate, issued a statement saying, quote, while today's news was not entirely unexpected, it is nevertheless disappointing that we find ourselves working for an airline that has lost its way. ult mountainly significant job cuts are expected and stockholders stand to be wiped out. but american said it will be business as usual for air travelers. except for possible schedule reductions. and its frequent flyer program

will be unaffected. at washington's reagan national airport, those miles earned were on tim's mind as he left for las vegas. >> i'm a little bit scared because i've flown five million miles with american airline. i'm a very good customer of theirs. i hope i keep my miles. i'm really very surprised about this. >> woodruff: and others? >> yes, she is a frequent flyer. >> reporter: they were heading for miami beach. >> if they're not able to get their finances in order i think it's pretty much a shame. i think other airlines are able to keep their books in order. >> woodruff: american now has 18 months to reorganize under the process. we take a closer look now at what's behind the american airlines bankruptcy with ben mutzabaugh. he covers the aviation industry for "u.s.a. today" and writes a blog called "today in the sky." it's good to have you with us. >> good to be here. >> woodruff: i read this is the 7th largest bankruptcy in u.s. history by number of employees.

american said they tried to avoid this. if that's the case, why did it happen? >> it's not a surprise that it happened. it was kind of surprised that it happened now. they've been fighting for almost a decade to avoid bankruptcy costs. unlying other airlines like delta and northwest like united that filed bankruptcy after 9/11, american has worked so hard to avoid doing it. but they got to a point today where they thought that they had kind of... they had seen the writing on the wall. they felt like they were running out of options. they were having a hard time with their labor groups who want raises and they face a lot, a lot of debt. they decided to do it now while they still had $4 billion in cash reserves that would give them some options once they go ahead with the bankruptcy process. >> woodruff: was it felt that this bankruptcy was inevitable and perhaps they should have done this earlier? >> a lot of people say that. inevitable might be a touch strong. i think a lot of people thought it was likely but that it was maybe far enough out in those people's minds that they might be able to find some, you know, magic holy grail to get out of i.

obviously that didn't turn out to be the case. they did surprise a lot of people by doing it now. people would be like, yeah, we knew it was coming. now here it is. that they did it now is very surprising. >> woodruff: and the reasons the ceo gave, he said not just the debt. he cited the international financial or economic picture. he said global finance. he talked about the rising price of fuel. was it all of those factors as well? >> i think that's believable. you look at lot of conditions. we might be looking, some people say, at more economic woes heading into next year. if there's a double-dip recession with the unrest in the middle east, what if there's another spike in oil especially like we saw in 2008. there's a lot of uncertainty for the airline industry. and american is particularly vulnerable. if any one of those things went off the chart, they would feel it really quick whereas their competitors would be able to wait it out a little bit or a lot longer than american would be. >> woodruff: now that this has happened, ben mutzabaugh, how is the airline going to change? >> that will be interesting to see. largely it will be business as

usual. they probably over the long haul or at least over the next few quarters will probably get rid of their least fuel- efficient and most expensive planes or void leases and renegotiate leases for aircraft. what is remarkable about this is you look at the industry since 1978 we could finally be headed for the consolidation that everyone has said was coming for years now where speculation is u.s. airways and american might somehow, might be forced to look at a merger with each other to keep up with united and delta. if that happens that leave us three large carriers that is a far cry from where we were at deregulation. >> woodruff: i don't want to get too far down this speculation road road here but what would that mean for air travel? >> i think there are things that customers will see that is not specific to american. i think we're going to see fares continue to creep up. the airlines have pricing power right now. i don't foresee anything that will change that in the next year two. we've all gotten used to these

packed full flights. i think that's the new normal. >> woodruff: you're saying deregulation can be blamed for a lot of this. >> we're paying lower fares than decades ago. they're still historically low. this is coming full circle and striking the right equilibrium. >> woodruff: and back to american in terms of how it will change. we saw the speculation today that employees will be cut. they will have to cut back the work force. what about number of routes? how would that be affected? >> probably thin them out. i don't foresee any big service cuts. a route that might have, say, eight flights a day may drop down to six or really weak routes they might drop the non-stop flight to new york but still offer connections to it via chicago, that type of thing. you're really right. the employees i think are going to bear the burden of this bankruptcy. a lot of them are going to lose jobs. it will be interesting to see what the new contracts that they get with management are probably going to be worse. the big question, if i was an

american employee, what is going to happen to my pension. >> woodruff: exactly. for many people watching, the question is what about for travelers, for people who have tickets right now? >> not much to worry about. stay abreast of what's going on. your frequent flyer miles are safe. your flights are safe. >> woodruff: they are safe. >> no one can say what's going to happen two years down the road but as a result of this bankruptcy, flights are safe. miles are safe. there will be very little impact to the traveler based on today's news of a bankruptcy filing. >> woodruff: if you're a flyer, a frequent flyer or not, you really are not going to see much of a change. >> no. obviously the big story gets a lot of headlines. it is em emblematic of what's going on in the industry. the brunt of this will be felt by the employees and not the travelers. >> woodruff: we will leave it there. ben mutzabaugh, usa today, thanks very much. >> my pleasure. >> ifill: still to come on the newshour, cracking down on fakes online; voting in egypt and in congo; loaning billions to big banks; and saxophonist sonny rollins.

but first, the other news of the day. here's hari sreenivasan. stand-and-and poors downgraded its ratings but one notch. including citigroup, goldman sachs, j.p. morgan chase and wells for owe. the shift reflects new criteria that better take into account shifts in the worldwide financial industry. home prices are falling again after managing small gains in the spring and summer. the standard and poors/case- shiller index reported today that prices fell in september in 17 of 20 cities that were surveyed. at the same time, consumer confidence rose in november to the highest level since july. on wall street, the stock market had a mixed reaction to the news. the dow jones industrial average gained 32 points to close at 11,555. but the nasdaq fell more than 11 points to close at 2515. republican presidential candidate herman cain is now reassessing his run for the white house. he spoke to staffers today after an atlanta woman claimed she'd had a 13-year affair with him.

several other women had already accused cain of sexual harassment. in a conference call today, the candidate said, "we have to do an assessment as to whether or not this is going to create too much of a cloud in some people's minds." cain has denied all of the claims made against him. protesters in iran stormed the british embassy today. the action grew out of protests organized by groups that have the iranian government's official backing. we have a report narrated by bill neely of independent television news. >> reporter: international law is meant to protect embassies, but international law was missing when a mob stormed britain's embassy. iran's police are obliged to stop this, but there they are in their riot helmets, and they're not pulling down the protestors who have already scaled the gate. dozens got in, furious at british sanctions against iran's nuclear program. it was broadcast live on a iranian television. millions watching as the mob

smashed its way through the embassy, breaking windows, throwing pet roll bombs, removing a portrait of the queen, ransacking offices and scattering documents. the iranian reporter sounding as anti-british as the crowd. >> unless british officials change their attitude towards the iranian nation and stop their domineering and hostile policies. >> reporter: a second british compound six miles away was also stormed. cars set alight. diplomatic quarters and a british school attacked. at the embassy, six staff members were held by the mob and released only hours later. the royal crest was kicked down. the police seemingly helpless. in the commons on the right of screen, the foreign secretary was handed a note to say britain's embassy was being trashed. he called it an outrage. >> we hold the iranian government responsible for its failure to take adequate measures to protect our embassy as it is required to do. >> reporter: he promised serious consequences.

the embassy staff are unharmed, but hardly wholly safe. >> sreenivasan: in washington, a white house spokesman condemned the assault on british diplomatic sites. later, the iranian foreign ministry said it regrets the incidents. pakistan will boycott an upcoming conference on stabilizing afghanistan. the decision today was the latest fallout from a nato air raid that killed 24 government soldiers on saturday. it happened early saturday in the region known as the mohmand agency, just inside the pakistani border with afghanistan. in a statement today, a top pakistani general called the attack a "deliberate act of aggression." nato has said it was unintended. the man who killed 77 people in the norway massacre, anders breivik, was declared "criminally insane" today. breivik has confessed that he set off a bomb in downtown oslo last july, then opened fire at a youth camp run by the governing labor party. he has said he did it to protect norway from muslim immigration. if a court accepts the "criminally insane" designation, breivik will be kept in a

psychiatric institution instead of prison. the los angeles doctor convicted in the death of michael jackson has been sentenced to four years in prison. dr. conrad murray received the maximum possible term today for his conviction on a charge of involuntary manslaughter. the judge called him a "disgrace to the medical profession." jackson died of a drug overdose in 2009, mainly from the use of a surgical anesthetic as a sleep aid. those are some of the day's major stories. now, back to gwen. >> ifill: we look now at the government crackdown on the online sale of counterfeit goods. the justice department used cyber monday, the biggest online shopping day of the year, to shut down 150 web sites that were allegedly peddling fake shoes, sporting goods, and handbags. but was this the right approach? joining us to discuss that are steve tepp, chief intellectual property counsel at the u.s. chamber of commerce. and larry downes, author of "the laws of disruption," a book about law and innovation in the digital age. what is the scope of the problem that the justice

department was acting on? >> the scope of the problem is unbelieveably huge. rogue websites, those dedicated to the theft of american intellectual property, our creative and innovative products, get over 53 billion visits every year. that's nine visits for every human being on the face of the earth. they've been estimated to do at least $135 billion in harm to legitimate businesses. the products they sell are made in completely unregulated facilities and can often be not only shoddy but harmful to consumers' health. >> ifill: is it a problem that's growing or something which... or is technology allowing it to feed on itself? >> it's a massive problem that's growing every day. because many of these sites are located outside the united states where there is no remedy. for the sites located in the u.s. or at least where their domain name is registered in the u.s., dot-com, dot-net, then our enforcement agencies

like immigration and customs enforcement and the department of justice who are both doing fantastic work on this protecting the american people can go to court and seize those domains with a court order. that's what happened yesterday, and that's 150 domain names that will not be used to steal american jobs, to harm american consumers today. >> ifill: larry downs, was the government correct in moving in on these websites? >> well, of course we don't know how correct they were. they use a procedure here that is is legally dubious and it's been challenged in order to seize the domain names under civil for fit you're law. we don't know the details whether or not this is adequate. if what happens afterwards is the site owner, if they want the domain name back they have to sue the u.s. government in u.s. court to try and get the sites back. >> ifill: do you agree this is a big problem or is the government overreacting to the problem? >> well, first, it should be noted that, you know, what we're seizing here is is not the website itself just the domain name. it's largely symbolic. what happens is the site is

still there. it can be accessed directly from the i.p.-address or what often happens is the site comes back later under another domain name. whether that is effective or not it doesn't matter. the point about the data is it's pretty clear that most of the data about the scope thf problem-- and i agree that it is a significant problem-- but the data is extremely poor, outdated. most of it has been discredited. congress in a pending legislation is asking for a study to determine how bad and where the real problems are coming from, something they want to do after they legislate. >> ifill: it sounds like you're saying two things. one that is that issue is knocked down one place and pops up another and the pob lem itself there's no demonstrable way of saying that the problem is as bad as the government says? >> i think it can be demonstrated. it just hasn't been demonstrated. i applaud the idea of an actual study that would show the credible data and credible research methods just how serious the problem is. more to the point, where the real problems are.

foreign sites? in particular countries? using particular techniques? the more we know about where the problem is and how big the problem is, the better job we can do to try and both regulate and enforce our laws. >> steve tepp you say that the numbers haven't been proven that they're just out there. >> well, the studies are there and they're recent. the 53 billion visits was a study produced at the beginning of this year. another study earlier this year showed that 19 million americans have jobs that rely on i.p.-intensive industries. this is a huge part of the american economy. 60% of u.s. exports are from i.p.-intensive industries and $7.7 trillion are output from i.p.-intensive industries. >> ifill: why can't the private sector regulate this on its own simply by, if you are the person who runs the sneaker website that's being treated, the counterfeit property being sent out, you sue. you knock it down not getting

the government to do it. >> if we can find who is behind the website and if they're in the united states, yes, they're breaking u.s. law. in fact they're breaking international law. those remedies are available and enforceable. the problem is even if the website is registered here with a dot-com or dot-net address, the operator or the servers may be anywhere in the world. they may be very hard to find. among the great things that immigration and customs enforcement and the department of justice are doing here is it's not just seizing a domain name which is critically important by the way because even if the website comes back these sites are designed to deceive. they look legitimate. if your website is constantly changing its domain name because it's being chased around that's a pretty good indication that it's not a legitimate business. they've followed up these seizures with for fit you're going all the way through the full court process, full due process as in any other federal court case and there

have been hundreds of arrests and hundreds of convictions. these are criminals who want to steal our jobs, steal our innovative and creative products. they're selling dangerously defective products into the american market all just to make a cheap buck. >> ifill: larry downs, if the government should not be using a blunt hammer as a solution, what do you seg jest? >> well, i think, you know, first of all congress over the last 20 years has greatly expanded the protections available both civilly and criminally for copyright and trademark enforcement including several bills aimed specifically at problems having to do with the internet. there's ample evidence that those new laws and those new procedures are proving both effective and cost effect tiff. that's one of the big problems with what's going on now is there's no real cost-benefit to this. we're tinkering with the internet's infrastructure. some proposals would go further and require i.s.p.s to remove certain domain names with significant security and engineering problems that

haven't been addressed. all of this is done entirely in a one-sided process where, you know, of course there's... you know, here in silicon valley we create a lot of jobs. we add a lot of economic value. silicon valley is not part of this discussion. the laws that are being enforced is really a very one- sided way without any real cost-benefit. >> ifill: how about laws in the pipeline now in both the house and the senate? are they not using the correct approach in your opinion? >> i think they're not. ber they are both throwing a lot of spaghetti against the wall to see what will stick. they introduced a lot of new civil and criminal enforcement powers. they changed the standard of liability for third-party websites. they tried to change the way in which private parties can take down content that they don't like. they give the department of justice the ability to require internet engineering changes that security experts and internet engineers have soundly condemned ever since this process started a couple

of years ago. >> ifill: when you first hear about this, this feels like a good consumer news you can use protection. but he says they're just throwing stuff out there. >> this is critically important to protect the 19 million american jobs and american consumers because in addition to the rogue websites that are based in the united states or at least have those domain names that are enforcement agencies can reach through the existing court process, there are many rogue sites that are based entirely outside the united states. they're ripping us off and laughing all the way to the bank. the legislation pending in congress, rogue sites legislion is designed to cut those sites off from the u.s. market, to create a court procedure, full due process, so that a judge can rule. these sites are dedicated to the theft of american intellectual property. and there's a campaign of 350 companies, trade associations, and professional organizations from every corner of the

country, from dozens of different sectors of the economy who support rogue site legislation. >> ifill: is it at least worth it for public awareness, larry downes? >> i agree that's significant but it also sent a very bad message about how the u.s. is willing to tamper with the internet in ways that when foreign governments do it in political speech we object. now i'm not saying that censorship but it certainly doesn't look good for the u.s. to be tin tinkering with the engineering of the internet in ways we don't like it when the foreign governments do the same thing. >> ifill: thank you both very much. >> thank you, gwen. >> thank you. >> woodruff: at different ends of the african continent today, millions of people are voting in two different elections-- one in egypt, the other in congo. margaret warner has our story.

for a second day voters acrossed egypt lined up in overwhelming numbers for a chance to make history. >> i think it's a good experience for all egyptians to have a true election and to give his voice to the one who deserves it and to begin a new time of democracy. >> warner: for some, that meant a wait of seven hours or more on monday in the country's first parliamentary election since president mubarak was ousted last february. voting hours were ex-extended to midnight in some precincts to cope with the crowds. >> we were surprised at the high turnout of voters. it was higher than expected. >> warner: the voting procedured peacefully both days with no reports of violence at polling places as had been feared. generals of the ruling military council said the voting validated the way they've managed the political process since mubarak left office.

but just last week they faced huge protests in cairo by impatient egyptians accusing the

eastern region is still controlled by militias and rebel groups. for more, we go to scott masstick in cairo, director of the international republican institute's middle east and north africa program and heads an observer team monitoring the elections. scott masstick, thank you so much for being with us. you've had members of your team out in lots of polling places for the last two days. on balance what's your assessment of how it's gone? >> well, thank you. it's a pleasure to join you tonight on what was really a second historic day for egypt. we have had observers out both days, and what we've noted since the start of the day yesterday is really an unprecedented level of enthusiasm among voters to take part in this process and what we see as an important effort on the part of the election workers to try their very best to administer the process in a fair manner. >> warner: there had been reports of some problems at

different polling places. what have you all observed or had credible reports of? >> well, you know, i think it's important to provide a little bit of context here. this really is the first democratic election egypt has ever held. what we saw both days was large numbers of people showing up to vote and just the night before the election started, there was great uncertainty about what would happen on the day of the election. a number of judges that i talked to administering this process actually expressed to me that they were afraid of what would happen the night before. the fact that so many people turned out thus far and that the mood is so overwhelmingly positive i think is important to sort of couch the election in what is this first phase. there were a number of places that opened late on the first day. that was largely because

ballots arrived very close to the start time. in a couple of instances there were political party supporters out campaigning in a way that the egyptian doesn't allow. but again for this being a first democratic election in the country, i think that egypt is off to a pretty positive start especially when you consider what was going on here just last week. >> warner: how is the superior organizational muscle of the leading islamist party, the muslim brotherhood's party, freedom and justice? i gather that's really been quite on display at these polling places. what can you tell us about that? >> you know, in the different polling centers visited by our witnesses, we noted that there was a freedom and justice party presence at most of them including with party agents

that were inside polling stations which is allowed from the egyptian code. and also outside interacting with voters. so based on that what we saw was what appears to be a great deal of organization for the election by the freedom and justice party. other parties were also out. we noted a number of other parties doing... observing the party agents, interaction with voters outside, assistance to their voters to tell them where to vote. but definitely among the parties the most prevalent that we saw was the freedom and just at this time party. ... justice party. >> warner: there seems to be some suspicion-- at least we've read reports of it-- caused by the long lag time between the very first voting in one part of the country and when the final make-up of the lower house is known really in mid january. what are the opportunities for

fraud or manipulation of the vote tabulating that you all will be on the lookout for? who is in charge? how secure are the ballot boxes? how secure is the whole process going forward from today? >> sure you know, i just came from a district counting center. and witnessed firsthand the arrival of ballots there. they came on buses with election workers on the buses as a means to ensure that there was ballot security during the movement of them, they were escorted by the military to the district counting place that i saw. and now the process of counting gets underway which is obviously a critical part of the process going forward in a positive fashion. there a long time that will pass before there is ultimately a result of this election. at the same time though the country will continue to go

through different parts of this election from now until the end of january. so it's not as if the vote was today and then there's a long lag time with no elections. there's a system that egypt is using is a bit complex but there's a history here of judicial supervision of elections. there's simply not enough judges to hold the election in one day. my understanding is after the counting tonight, they will move a ballot to governor at a governor at holding centers. those ballots are under the supervision of egypt's election commission. and i think we have to see what happens with the counting process, how it transpires. obviously with the overwhelming interest in taking part in the elections, egyptians now are enthusiastic. i think that raises the level of hope and expectation that the counting will go well. so i hope that's the case.

>> warner: scott masstick of the international republican institute, thank you so much. >> thank you. it's a pleasure. >> warner: now to voting in congo. now we turn to the east africa correspondent for the wall street journal. he joins us by telephone. solomon moore, thank you for joining us. tell us how the voting went today. was there the same degree of violence that you saw yesterday? >> the voting today was a little calmer. we didn't hear as many reports of violence as we did on the first day. the crowds, of course, were much more thined out today than yesterday. but today you had another element kind of entering into the poll with four opposition candidates coming forward and saying that the results should be voided. this is before they would be announced on december 6.

>> warner: what evidence has there been of outright fraud? >> well, various opposition candidates have come forward with ballots that were filled out even before the vote took place yesterday. there were allegations that there were trucks full of fraudulent ballots. they were ghost polling stations, polling stations that were supposed to be set up but that were not. there have been allegations by human rights groups that backers of kabila in the east were holding ballots captive and only allowing kabila supporters to vote. >> warner: amidst all this, what appears to be the mood of the voters, people you've been able to talk to? >> a lot of exuberance. mixed with frustration. you have voters yesterday going out to the polls on time only to find out that the polling stations were not set

up yet. i even saw voters chiding election officials on their tardiness. but huge crowds. lots of people going out, standing in line, standing in the mud, standing in the rain, getting to their polling stations. a lot of them being turned away from polling stations because their names were not on the roles and going from polling station to polling station trying to find a way to vote. >> warner: given what some of the opposition candidates have been saying and the political climate there, how do you assess the prospects for the results being regarded as legitimate? >> that is the question here. the opposition has been chipping away at that credibility with allegations of widespread fraud for the past two days and even before the vote began there were questions about the legitimacy of the vote because of how

badly organized the election was. they were getting the polling boxes out across the country. all the way up until the vote. so obviously there are going to be questions about the legitimacy of the vote. the credibility of the vote. and on december 6 and even in the run-up to that, that is going to be the debate of people here in congo. >> warner: with the prospect for violence. solomon moore of the wall street journal, thank you for joining us. >> you're welcome. >> woodruff: next, new questions about the money the federal reserve provided to banks in the wake of the financial crisis. "bloomberg" magazine published a report this week detailing loans made by the fed in 2008 and 2009-- loans that totaled more than a trillion dollars on a single day in december, 2008, and more than $7 trillion in

loans and other commitments to saving the financial system between 2007 and 2010. the extent of the loans to specific banks was not revealed to congress at the time. the article also says banks earned billions of dollars of profits on these loans, and that a number of wall street firms borrowed money even as they publicly told investors that their financial position was strong. the fed has defended the actions, saying its assistance was critical to saving the financial system. we look at this more closely with one of the reporters who has been investigating this for bloomberg news, bob ivry. thank you very much for being with us. >> hi, judy. >> woodruff: what did you learn about the scope of what the fed did and who the recipients were? >> it was a lot bigger than we thought, judy. compared to tarp. tarp is the treasury program that helped the banks get through a tough time in 2008.

and that was lending up to $700 billion. in one day the fed had loans out totaling $1.2 trillion. so that one day in december of 2008 just completely dwarfs the much better known tarp program. >> woodruff: and the recipients? >> well, the recipients were saying things that in public about the health of their banks. jamie die diamond, the ceo of j.p. morgan chase and kenneth lewis who was the ceo of bank of america both made statements to shareholders at the time about how healthy their banks were. we can now go back and look at what the... some of the data that the fed kept secret for this long and say that both of those banks were borrowing tens of billions of dollars from the fed at the time. >> woodruff: how much difference did all of these loans make ultimately for these institutions? >> an economist that we spoke with, dean baker whom you might know, said that the

banks could be categorized or put into two categories. one is banks that desperately needed the cash in order to survive. the others, more healthier, are ones that got below market rate loans and he called it a gift. we don't blame the banks for taking loans that are below market rate. that's what they do. that's what you and i certainly would do. we calculated that the banks that took the below market rate loans made about 190 banks and together they made $13 billion from these below market rate loans. >> woodruff: did it allow these banks to survive? >> well, the fed cannot be faulted for acting with great dispatch and with everything in its arsenal to save the financial system. like everybody else, i like to get money out when i put the a.m.t. card in the slot. that's certainly thanks in great part to what the fed did. what we're really taking a look at is what happened

afterwards and the secrecy that surrounded the loans that they made during this time. they kept that... they kept the details of the lending from the folks at treasury who put thog tarp. and they... and nobody that we spoke with-- senators or congress members-- knew anything about the details of the fed lending when they were debating and ultimately passed the dodd-frank legislation. >> woodruff: we know that you and bloomberg news went to great lengths to get this information. there was a freedom of information request that went all the way i gather to the supreme court. but we did at the newshour talk to fed officials today. they say the extent to which this was hidden was secret is being overstated here to some extent. they're saying that they made weekly reports about the amount of lending and then ultimately the information came out after the dodd-frank bill was passed into law. >> they did disclose the information in aggregate form. meaning that you just got a

lump. this particular program, for instance, lent this week, this amount of money. what we didn't know before very recently was that a bank like morgan stanley took $107 billion in one day or that bank of america or citigroup were borrowing on a single day at their peak almost $100 billion. so all that is now public. that's because bloomberg and bloomberg news sued the federal reserve to get this money. to get the data on the money. we wouldn't have known this without it. and the fed and the biggest banks together defended the lawsuit right up to the supreme court. >> warner: one of the other arguments one hears in defense of the fed is it's been their practice to keep the names of institutions they loan to private because if it's known that these institutions are weak and depending on this kind of support, it could fundamentally undermine them.

>> two things on that, judy. i think that most of the time, in normal times, if a bank is disclosed as having... being so weak as to have to go to the lender of last resort which is the federal reserve in order to get a loan, not being able to get a loan anywhere else, that could be a stigma. that could be a sign of weakness and counterparties and investors could pull their money. but you had hundreds of banks from three continents around the world accessing the federal reserve for emergency loans. and the courts have ruled that the public interest in knowing where tax payer money went and who it went to and how much it went out is... outweighs any sort of stigma or sign of weakness that could possibly affect the banks. >> woodruff: one other argument one hears in talking to people defending the fed is that the role of the federal reserve is, after all, to be the lender of last resort. to make sure that the banking system in the united states stays strong and healthy and

that it was supporting these banks that were the recipient, after all, of treasury, of tax payer money. >> it is the role of the federal reserve to be the lender of last resort and to make sure that the banks feel comfortable if they need it. if they had a short-term money problem to come to the fed and to borrow the money. it is the role of a democracy, however, to keep track of where ultimately tax payer money goes. and where it is spent, to whom and what those people say about it in public. these are publicly for the most part pub likely traded companies and if they investors we're healthy and doing fine at the same time that they're in dire straits that they need hundreds in some cases tens of billions of dollars in loans from the fed that's an issue too. >> woodruff: one of the things you write about in the article is the effect all this had or didn't have, i should say, on thousand the dodd-frank financial reform legislation turned out. briefly explain how you saw that.

>> the role of the federal government and the federal reserve during the crisis was to make the biggest banks even bigger. we have this problem that's the shorthand for it is "too big to fail." that is, they're too big to be allowed to fail. if these banks fail, then the financial system in general around the world is threatened. and so hence, we would have more bailouts. what the congress essentially did was vote not to break down the biggest banks into smaller pieces and make them more manageable but to in essence keep the biggest banks bigger than they were before the crisis. so:00 senators and congress members that i talked to, some of them said it would have changed the atmosphere of dodd- frank debate and maybe made some members of congress more likely to vote for stronger measures, to make sure that we don't have these banks that are too big to fail and whose employees can be victims of

moral hazard meaning that they take riskier bets because they know that they'll be bailed out if they have losses. >> woodruff: quickly, interesting that barney frank the chairman of the banking committee said today that he supports what the fed did. but it's an article with a lot of information in it. thank you very much for joining, bob ivry of bloomberg news. >> thanks, judy. my pleasure. >> ifill: finally tonight, washington's kennedy center for the performing arts will bestow its kennedy center honors on five of the nation's leading artists this coming weekend. jeffrey brown recently had a chance to sit down with one of them. >> brown: he's known as the saxophone colossus. ♪ a 1956 recording sonny roll

ins made when he was 26 and a title he continues to hold as one of the all-time greats of jazz. at 81, roll ins is a living link to giants like charlie parker, john coltrane and miles davis. all of whom he knew and played with. and to the harlem neighborhood where he grew up, where jazz was everywhere. >> music all over. when i went to public school, they would pass by the famous cotton club. you remember that. >> brown: sure. >> we walked by going to school. i was just immersed in it from the beginning really. >> brown: it was everywhere, but you're essentially self-taught. >> i consider myself a primitive because.... >> brown: what does that mean? >> i've had to explain that a lot.

it means sort of that when i got... when my mother let me the second saxophone, i went into the bedroom, you know, and i just started playing. i didn't know what i was doing but i was in a zone. i was already doing something. >> brown: in fact, rollins was a sensation even as a teenager. he performed and recorded with leading players of the day. his first album as a band leader came in 1951 and many more followed. >> playing with those great people like charlie parker and miles davis and all those giants, i wasn't afraid because i felt that i belonged there. >> brown: you felt you belonged with them? >> yeah. but i was still in awe of them. i mean, i didn't feel i was equal to them.

but i felt that especially they accepted me. but i saw that i was where i was supposed to be. so it was quite a wonderful experience in a way. >> brown: one of the things that people have long admired you for is the ability to-- i always say this phrase-- find fresh musical ideas. what does that mean? how do you define a musical idea in jazz? >> well, jazz, as you know, is an endless source of ideas. because you can use anything. you can play-off ra tick arias and incorporate them into jazz. gypsy or european classical and you can incorporate it into jazz. you can use anything and jazz it up, as they used to say. >> brown: show tunes. >> show tunes. i know all these show tunes.

it's great because they're still there. they come out at strange times. >> brown: where does the improvisation come in? >> well, improvisation is something which is highly misunderstood these days. ♪ i think my friend winton marcel us explained it very good. improvisation is really not so much remembering things-- and this is what i do when i play. i forget things. when i go on the stage, i want my mind to be a blank. so that i can... things can come into me without my knowing where they came from. >> brown: are you surprised by what comes out? >> sometimes i'm surprised by what comes out, yeah. >> brown: at several key points in his career, rollins simply stopped performing and

recording. most famously he spent one of what he called his sabbaticals practicing on the williams burg bridge in new york. he later released an album entitled the bridge. >> i went away because i was getting too much acclaim. >> brown: too much attention. you don't like that? >> no, i liked it to a point but, you know, "jeffrey, i think the biggest thing that in my life that i can be proud of is that i knew inside how i was doing. whether i was playing great or whether i wasn't playing great. i shut out the people who were telling me, oh, sonny, don't go away. you're lose your audience. i said, no, i want to practice. i want to get better. >> brown: but here you are still at it. why? surely you don't need to be out on the road performing. >> it's hard being out on the road but jazz is kicked

around. it's down and getting a little bit of appreciation. it's getting a little bit of respect. so i feel that i have an obligation to jazz and also to myself to play as good as i can play. i haven't reached that point yet. >> brown: you really feel that? you haven't reached your... you're not satisfied. >> oh, no, no, far from satisfied. i'm far from satisfied. that's why i'm still practicing. >> brown: these days rollins performs about two dozen times a year. the last two albums titled road shows volumes 1 and 2 were recorded at con sers from around the world. ♪ and now he's being honored as one of this nation's foremost artists, joining other jazz greats such as ella fitzgerald, count bassi, dizzy. we started talking about your childhood in harlem. you're one of the last ones left from that great time,

right? >> well.... >> you must be aware of that. does it weigh on you? >> well, all my friends are gone. miles. coal train. monk. in a sense they're gone but not really. i'm the last guy. but in a way i'm not because when i'm gone, my music will be here. so we're all still here. we're all still here. ♪ >> brown: still here. still practicing. and still performing. >> woodruff: again, the major developments of the day. american airlines, the nation's third largest carrier, filed for bankruptcy in a move to cut labor costs and reduce debt.

republican presidential candidate herman cain told staffers he is reassessing his run for the white house, after a georgia woman claimed she had a 13-year affair with him. and crowds in iran stormed the british embassy and another diplomatic site, to protest british sanctions against iran's nuclear program. online, we have more on the historic elections in egypt. hari sreenivasan explains. hari? >> sreenivasan: we get an update on the second day of voting from an election monitor in cairo. that's on our world page. and see more of jeff's conversation with jazz great sonny rollins on art beat. plus, on our making sense page, paul solman looks at the latest housing prices. explore our interactive graphic showing ups and downs over time, and find out what today's numbers mean for business, spending, and unemployment. all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the newshour for tonight. on wednesday, we'll look at the congressional debate over extending payroll tax cuts for workers. i'm judy woodruff. >> ifill: and i'm gwen ifill.

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