charlie: welcome to the broadcast. the headlines this morning a that there are t giant on walltreet who emerged as huge finaial vict turs. they're j. morgan chase and goldmasachs. we'll talk abo what it mns in terms o the sector andhe economy th floyd norris of "the new york times" and dens berman of the wall street journal. >> this isa phenomenally good time to be runnin a bank. phenomenally goo competition is down. spreads are up. the ople whoant toorrow don't have much choice but to accept wt you're offering. they've been able toraise their

fees on credit cards and other places. the new buness is likely to be exemely profitable. >> it's the rhetorical divide beeen wall street d main street. it's stillaving an effect on washington's need to bng in wall street t solve some of its own problems. hedge funds dot want to g volved, don'tant to touch it. >> charlie: then a look to prident obama's speh substitute naa last night. we talked to the president of e naacp,enjamin jealous. he talked abo pason about the scho system across the countr he talked compassionately out the stice system and healthcare and you have a sense tt mebody whis a former civil rights lawyer, former counity ganizer as president and that's what peoe needed to hear because these are tough times and at gives them hope is wn theyeel like the present gets it and he's going

toight for em. >> charlie finly where is crises in iran going. we talked to moshe who teacs at duke universities. >> wean see thepproach of the leader and the approach of the second man in public d eir journey. it's different. there is a gap again the government in iran. >> charlie: the ecomy, president obama on re and a fridaysermon when we continue.

captioning sponsored b rose communitions from our studios in new rk city, thiss charlie rose. >> charl: two wall street ant firms report a subantial earnings ts week, goldman sachs has a quarterly profit of $3.4 billion the largest in the bank's 1 year history. j. morgan chaseollowed by reportg a $2.7 blion profit in thequarter. both banks received billions in government loa last year b the funds were recently reid. despite ese gains help the rest of e banking sector remains in estion as the recession continues. the banks havereceived billions in government aid such as citigrou

joiningme is floyd norris the wall strt tim and denn berman of the ll street journal. i'm pleased to haveboth of them at this table everybody isalking about this. tell me thesignificance of these two firms. this is a phenonally good time to be runni a time, phenomenally good. competition is down. spreads are up thpeople who want to borrow don't have much choe but to accept whatou're offering. they've been able to rse their feesn credit cards. they've ised their fees in lots oplaces. so t business they're doing now, the new business is likely to be extrely profitable. nowhe troles the old business. if youeren't stuck with the old business, this would be a wonderfutime be a bank. i wish i could become a big bank instantly withno, you know, with no storical assets. u can just do soell right now. >> crlie: so what's that me. >> unfortunate, places like

ba of america and citigroup have aot of bad asse. bofhem reported profits, thanks to selling asss and doing interestindeals that n't haveanything todo with operations or with continuing things. the numbers they putut were really pretty discraging. >> charl: what do you think about these earnin and what do you think abou b of a and cigroup. >> most stking really was their scussion about th losses i commercial loans, commercial rl estate los. wee talked two years abo the redential losses a the mortgage sce. now bankruptcies acrs the untry, the losses a really piling up on the commercial sector. companies going bankru, loans going bad. and most distressing part of it was those commercl real estate loans. effice buildings aroun this country are getting big a they have the potential t bevery

very big. for b of a maybe less so siti but b of is big as for regional banks tt made lot of loa to those mmercial projectsver the last few yes. i'm with floyd here. we're sting on the green rm and we were not happy campers. the discussion, even ough the positive parts of the rults are so riddled with modifiers, it's like annglish acher's delight see how these guys structe their hopeful ntences. i can re one o them for you if you'd like. it was such a grt example of obfuscatoin. basicallcredit card losses. he said some of what we're seeing in ear stage delinquency probly has a seasonal component there are two modifie right there, were ctiously optimistic that ose tnds, if

sustained, could eveually staize losse >> charlie: fe modifie. >> about fiv or six th is the ray of hope. that's thetatement. >> chaie: so is gdman just sily doing evething right an doing everything better than everybod se and followed by j. morgan or as well as j.p. moan. >> well ked off what floyd was saying, they wer able to extract themsels in the sub-prime mark earlier than the rest of their rrors and they don't have a consume lending busine. they're nots exposed to the consumer. so they can help companies write their bt, charge nice big fees on that because the's not much coetition and make a lot of moy. i think the threat for gdman going forward rember they brought their levege down. you recall th whole system wabuilt on the high amount of leverage. goldn cut items leveragen about half. in thebility for companies and e government issued debt declines ovetime, goldman is going to have a harder me makingoney in the future.

>> charlie: graham bally ote -- the worse crise... a come of victors towering...is that the reality, ese two banks will fr over the rest of the financial seor. >>of thebiganks, they're the ones tt look theest now. there's no questn about that. and we suspect, we've seen -- now j.p. moan has substantial real state export and substantial crit card exsure d they discussed that this week and those numbers sounded a littlecary out the ture. the belief right now is of the management of those two firms, managed to getnough right that they're going be able tdo very well in the current environment and the historic assets are not going to prove to be good probms. >> charlie: re goldman shs traders taking the same kind of ri as they were before.

listen to a columnist in your paper. goldman is very good at what it does. rtunately what it does is battedor america. secondlyt shows that wall street'sad habits that has cause thfinancial crisesave t gone away. third it shows that we're rescuing a financial system without reforming it. washington has done nothing to prott us from a new crisesnd in fact has made another crises more likely. do you aee with that. i don'tagree with that by y means. don't think we've rescued the financial system. we kept the banks from failin whate don't have is a functioning finaial system right now that can provi the minimally necessy credit for this economy, without goverent guarante. there are very few home mortgages beg issued now that are not purchased by faie or freddie which are owned by the government no the is very little

securitization of any kind going on that is not in se way cked by the goverent. weeed to find a way to get private creditunctioning well and we haven't so far. was better than it was during lehman brotherand that's a nice boos to the ecomy. but it's not clear yet that they have anythg to do to fix it. >> maybe we can turthe focus back to the goldm question. there is an answernd the aner is that they are taking greater risks the whole ncept of value -- >> charlie: tha they did before or than the rest of the financialector. >> than goldman did before. >>harlie: greater rk than before. >> is a technical indicor of how much a financial companys taking on a given day. goldmas was higher than it was before. so they're taking bigger risks andthey're making bigger

profs. now, whatkrugman says, ihink there's somhing tot, right. we're not reforming at theime th we are callg back on some of these things but keep inmind what happened after the great depression. the securities acts ware reign in 13 and 1934. great depression starts t of th crash 1929. so that's fouro five years after e occurrence. the's something to be sd for taking a little bit of timeand making an lightened decision with a bit of hindsight because i think we saw in sarbanes-oxle in 2002 a quick rush for companies to report infortion and thinkthe resultf that habeen pretty ne. >> charlie: hey should wait and they should thinkarefully about at they're going to do. they shouldn't have a sense of urgency about rerm. >> there shod be an urgency t i don't thi we shod necessary have acomplete plan in placeess than a year sin the lehman blow up. but there is no doubt in my mind that there needs to be major

reform and ion't think anyo -- >> charlie: hat would that major reform entail? >> well, the capital risks taken by banks. this actuallyis a hidden threat of the banks. that's not being discuss the much right now. that threat is that the regulators wilsay hey, you got this mh capital, y know, o del going forward is that you're goi to haveo have more capital on reserve. there uld be internatiol regulations that sugst that. so it cod be to the banks that they just have to squirrel more away. ey have to have the coensation system. don't know if you want a gornment mandate to it but a comprehensive industry way of making sure people's incentis are aligne that's ctical. d i think reform - you can go on and on. reform ofhe ratingsgencies is another place to start. one of tse is a discreet muiyear project so expect the govement to have reformed it. >> charlie: don'tyou think

that's what volker is focing on >> i think he's all over the ple. >> i've talked to him in recen weeks. one of the thing that ce out of th was a feeling of of some nd of a system risk regulator. and the obama adminiration wants it to be the feder reserve. there's a lot of resistance. charlie: half tir pors. >> give the fed more pow. some peopl say well the f had two jobs. it had to regulate banks a it had to do monetary policy. and in the last cyc, you can argue whher it did one of them wors th the other or vice versa. but it clearly didn do either of them ve well. d so why do you want give em more power. that anrgumenthat is basically named by someone on the hill. was made one of the reform coissions running around now headg by the forr chairman of the scc i'm not sure how that's going to co out. there's a lot of lile squabbles gog on in the

details. >>harlie: let me raise a broader questn. wherare we in terms of the recovery, to economic recovery? >> there's a lot of optimi now that we' hit bottom. i'm not at all sure is true. think what happed is y had a recession tt had arrived due to a lotof factors and then suddenly we have lehman hit. and lehman produd a total credit crun and worsened the recession dramatically. the credit haseased a litt bit now. and that, if you will, foot on the throat has been remove whichelps but it doesn't bring you back to the health -- it doesn't get ridf the health probms you hadefore th put your foot on the throat. therefore i don't think we're about to gounder recover

certaiy not an impressive recovery. unless we have those training whls i don't think recovery can be called. because people are not willing to take rks on eir in. particularly in th banks tt are issug is really key to the confidce and the flow of the system. soeep an eye on those tining whls. >> charlie: ow do they know when to retract the training wheels. >> welpresumably when there's enough demand in the pvate markethere their dls are getting done that don't require that government help. there was one deal which s done, i bieve late las week that was sor of the grn shute of wall street but that wasne deal. >> charlie which deal was that. >> it was a dl to securitize, i think it was a bunch ofld, very old prime mortgages that was done by credit suisse. >> generally mtgage are okay. >> i think the might have been 2003, 2004. the generalerception is

loans made in 2004 or earlr were gerally okay. >> charlie: what e the bas doing aboutthe toxic assets? >> well first they got congress to force the regulator to le em conceal how bad they were. >>harlie: they got cgress to low them toonceal ... >> rig. they put pressure on the acunting regulators. >> a committeshowing wonderful bipartisanship. we approved bipartisanip and they cald the head o the financial accounting staards bod and every congressman in the room, republican, democt, man, woman, every o of them screamedt the fasb people and told them they must changeheir rules so that the banks wouldn't ha to write their assets down to whathe banks deemed to be unreasonably low levels and fasbidn't cave quite as much as the banks wand them buthey caved. so now we're seeg -- and one of the frustrations is y can see it only the quartly

repos. you couldn't s it in the numbers that came out thiseek, you got to wait until they file the sec. they were able to use this to admit loans were worth a whole t less than they're carrying them for but not take e decle on to the bance sheet or the income atement. to do that they have to make sure the loans don't trade very mu. and to some extent it's frozen the market for data aets which is a very bad thing. the troue is we dot know how bad the assets are. we don't kno what people would pa for them. the governm ent's efrt to get a mark going appears to be failing. >> chaie: the public/private finance >> pipipp. my favorite acrony >> charlie: why arehey failing. >> welthe bank don't want to sell. >> charlie: at the prices they're offering. >> well theanks don't wan to se and the buyers psumably hedge nds who are being with

government throagz -- throwing cash at them, they don't want to be hauled up in front of congress two yrs hence and said is it true you made a billion dollars trang off ameran bad fortune, is that true mr. hed fund. at's been rlly ieresting tely is the rhetorical divide between wa streetnd main street is still havi an effect on washington's ne to bringin walltreet to sve some of its own proble. hem funds don' want to get involved don't want to touch it. >> they've givenhe banks enough money they don have t sell. they receive so manyillions that they canarry this stuff for a whe. was it a mistake t give all thisoney to the bank. >> whout arranging to do something about the tic sets, in retrospe it may

have been. >> charlie: becse nobody's seen anything like this therefore they had no placeto goor a predent, right. ving said that, what about a stimulus, for example. do we need a new stimulus program. >> the economy hasn't absorb what wasupposed to be coming, first of all. and seco of all, we are in a position wre even if you adde the stimulus to the ecomy, pt the threats to the confidence and the federal budgetould bring intest rates how the of whack thatouldavets own painl effect. people stay stimulus and maybe krug ugman is argui for stimulus now. >> charlie: he is. >> on the earth edge of the precipice with fear tha it's going to grow to a terrible proportion of th gdp people won't want to lend to us. >> charlie that's the

issue -- >> we're down -- have suspicion that' a loer termssue. thetimulus plan when they signed it, it was fairly clr at they didn't do it very well. >> chaie: they being the congress. >> they being the congrs. they putork intot, they put prograthat weren't going to spend money quickly into it. so as a result, a lot of it hasn't come in, but i continue think theeally portant issue is getting the financial system fixedhich th haven't. onceou're goi to do that, you aren'toing to get rapid growth away. this masse overload of debt that many of us have is going to take time to work off. and stimulus won't change that. >> charlie: so no one expects anything good to happen in 2010. >>h, people think we'll have growth in 2010. charlie: at level of grth? >> not high. >> higher than we'reaving now.

>> charlie: china is reporting 8%. >> china reporte a good second quarter thiseek. one of the remarkable things about thechinese data is that it used to be that their electricit usage prett well acked their gdp. and now gdpis doing a lot betterhan electricity usage. >> charlie: what does that say. >> some people ink i says theyake up gdp money. charlie: oh. >>ere are a couplehings to keep an eye out for. people need to think about ge pital. this is a lar capital. >>harlie: de reported earnings yesterd. >> the ge capil business did not do wl. pele think about ge as an industrial company but inse it's oneof the country's largest banks. >> charlie: more than 5 of returns or something. >> yes. that's an important thing, to focus on. the overall budget numbers, the budget projections and the unemployment projectio are all

faoring int obama's rep rep -- reputation of running the country and what he'sdoing. >> charl: isn't creating the job. there are questions opening up abo the credibility his projections. we all want tre -- >> charlie projections havito doherefore with the credibility of his assumptions. actually, they wereondfully phrased. he pmised to create or save a certain numb of jobs. now we can count the number of new jobs. we cannot count the numberof jobs that would haveeen lost but for his actions. and that's the savings. whatre weeeing in the emplment numbers is the mber of peoplelosing jobs is down. but th number of pele getting jobs is also down. unemployment, if you're unemployed now,ou're pbably on avege, you've bee

unployed for longer than any time since world war ii. long term unemployment is becoming a real problem and it's cause nobody wants to re. and of course late last year we had the probl that credit was so tight, that a compa that wanted to hire probabl couldn' find the mon to do it away. so it's, you know, again, the issue right now is less job lost than the failure new searches. >> there's one hope. >> charlie: l's hear it. >> things havegone so badly for so long, one bad occurrence after the next. the roll of the dice that comes up craps, right maybwe're due for a pitive piec of economic ns. >> charlie: what wou that be. >> a real change. well, you could have the unemploymentigures show a

sharp reversal. you cou have business spending ck u you coul have better sense on a buet, perhaps a better word out washington about a more realisc budget. somethg that saysey, it cannot be that bador that long. maybe we're just due for an upsidesurprise. so maybe not- >> excuse me we did have thi week for a little while, inte which has a story of being optimistic put out so optimistic. their business is gwing and the stock market near the top of its rece range. it's not shong great fears >> charlie: what does that say? >> pple think that the recovery is coming. >> charlie: but are the rit. >> i have my doubts about it, but i'll go along withhat. >> charlie this the wall

street jrnal cit client scramble toecure life lines wi credit marketstill frozen, cit shops for investors. so what's happening to cit? >> the thing these happening to cit, this weekend they're going toock everyone in e room and say -- well the bond holders, the debt lders at cit andhe company itself. the government haspparently washedheir hands, we'll e if they come in and help orot. they're going to try to se the coany. cit is an iortant bit of politil theatre for washington. yes suggest say b of a but we drew the line at cit. they're not as systemically as important to e to the economy. if you go dn to sevth avenue here in manhaan in thegarment district where lots of peopl have smallbusinesses sell and trade, selling an trading othes, those people rely on

cit. they useo if factor their inventory theyet money now for inventory coming in lar. there will be pockets of ecosystems o industries that ffer quite mightil >> charlie: why >> retailers, rniture mafacturers, people like that. >> the other side ough is cit has en in trouble for quite a while. and ey've beenutting back on their n lending very heavily. they've been cutti a lot of these pele off already. so i'm not se how much addition damage there is left to do but it's quite clear tt e cit was reckles in their lendg. it's also pret clear they were not as reckless as aig was but aig had the good judgme to be reckless in a way that cld destroy the economy and cit simply didn't figu out how to do that. >> the had the goodortune to go big enough --

>> not on to beig enough but to be dng it to enoughther important people. one more garment manucturer going unde doesn't scare the economy too much. every big banks goi under. yes, goldman sachs goi under, yes, that scar me. aig picked well. >> whenou form your bank, y shouldake sure you have a lot of importantounterparties. >>e'll hire you to help o. >> charlie: tnk you floyd. thank you dennis back in amoment. stay witus. charlie: predent obama addressed a 100 anniversary celebration of the naacp. he stod as potent syml. bere a roaring cro the president dressed the barrier that african americans sll fa today but he added that t in of discrimination is felt

all across america. >> african american women pa lessfor doingthe samework as colleaes of a different color and a differen expwrernd. tinos are made to feel unwelcome in tir own country. by muslim americans viewed with suicion simply because they neal -- kneel down pray to their god. still denied their rights. >> charlie the preside singled out education a civ rights issue of special importance. devoting the half ofis speech to that toc. >> african arican students ar laing behind white classmates in reading andath. an achievement gap that is growing in states tha once led the way in t civil righ moment. over half of all african american studentsre dropping out of school in some pces. there are ovcrowding assrooms and cru ling

schools and corrors of sha inmerica, nil with poor children. not just my children, brown and white ildren as wel the statef our schools is not african american problem, it is an americaproblem. because if black an brown children cnot commiee, then americaannot compete. >> charlie: joing me is benjamin jlous, the youngest person to lead the civil rits ganization. i'm eased to have him at this table. thank you. analyze the speh for me om yo perspective. >>hat was powerful and what didn't get repted in l of the papers was he spent theulk of that sech tking about the structural inequities in our society. >> charlie: we heard somef those in the clip. >> right. it w reported here. didn't make it into all the pars. >> charlie: ight. >> he talk about the fact that blacks are incarrated five

times the rates of white. and did soith passion, which is a od sign because st of the silent killer, if u will, of this generation of black people who are growing up is that mass incarceraon. my genation w told young man, young wom, all the big victories have been won. your job iso work hard, play anywhere and to prosper. we came to age to fin oursees in the most incarcerated generation in this planetnd the most murdered generation in the country. and to have a sting president talk with passion abou that sue and e need to address the disparities in the justice system is important. >> charlie: youave atrong feeling that that ought to be top of the agenda. >>es. in part -- rht now, ste

budgets are all rinking. but t rock is wt we spen on prisons, what we spent on jai. that part doest shrink. in thetate ofcalifornia right now, thepend250,000 per chilfor the californi authory. think about th for a second. it's absolutely insane. but until we can stop using prisons to solve social problems, her in nework when ey dropped the rocandgot rid of the rockefeller drug lords, start sendg poor addis to rehab instead of to prison, you know, en we won't see that, you know,frankly we just won't he the dlars for hools. >> charlie connect the first african american prident to thispeech. significance showing where his head is, showing whereis heart is, showing the same kind of

teacng the country as he did inis racepeech. >> he ca there last night and he spoke to a room full of people who care deeply about civil rights, aut human rights. it where bla but not clusively black. and he spoke like somedy who ts it in h heart. he could he at o point, wh i drive through harlemnd i see men on the street corner i think to mysel therefore but the grace of god go i. and so just in that simple statement acknowleed the power that hig rates of joblessness in our communities have on the destiny of the people on the street corners. he talkedith passion about the school systems a how they're failing ki across th country,alk about passion wit e justice system and talked wi passion about the need for healcare and you got a sense thate really d have sebody to form a civil righ lawyer,

former commuty organizer as president. and that's what peoe needed to ar because these are tough times and what giv them hope is when they feel li the president gets it and is going to fight for them. >> chaie: here's the ld com, "the new rk times" put the picture here and basically said he encouragedarents to teach their children that your stiny is in your hands a don't you fget that. >> rht. now 20% of the speech. if you readsa today, they actually talked abt his speech in equities. that was their subhead. >> crlie: re's the lead pagraph of the new york sometimes, shary stoleberg. president obama delivered a fiery sermon to black america on thursday nht warning black parents that they must accept their own responsibilies by puing away the x box and putting r kids to bed at a reasable hour and telling black chilen that growing up poor is no reason to get bad grades. lead paragraph. >> exactly. alof that's true, but inhis

spee, that came out aut, you know, two thirds down through the speech assort of,ou know, important secondary or tertiary note. and the fixatio of many mh of the mnstream is sort of the flip side of the negativ storiethat they runn bck kids all the time. >>harlie: why do you think that is. whats it you think e majority of the ess, what's the why for wt you say i the reality. >> because i think part of that is that, you know, that's the easy sry to writ pa of that fits rightn with the steotypes. anit gives a reporter -- the yo don't have to engagwhat's wrong inhis society. you don't have to engage the urgent need for change. the present talked about that for the rst two thirds or the quarters of e speech. he talked about the structul equalities in our society and need to eagethem and

smantel them. d for us to take responsibilityor ourselves a our chilen. all of which is very tru all which is very good b that wasn't the main ory last night. >> charlie: so is there, i mean did youome away with this that he has a deep commitment to keep race at the forefro of change? >> what weame away with is he has a to keephange at the foreont of his work and change at the forefront what the congress atts to do. what he's ve clear about,f you f the problem tt most afflict black and brown peopl you actually fix the country as a ole. we haveought for, to raise the floor in this society. we haveought for ack people because historally that flow was defined by the w that black ople were treated. but each time we raised the fla, we actually improved the

country for al people. ju take our first issue, right. 100 years ago we were founded here in manhattan, to end lynch mob justice. when we shamed the countryut of th practice, we made life better for blacks, forcatholics who were the second most scrimite, for jews, cowbo. that's partly what he was talking about last night. we engage the issues and most december pretty afflict black d brown peopl and life gets better for allpeople and the cotry as a whole. >> charlie: jee jackson sa that's the las years of fighting for equity and accession i think becomeshe next century struggle. >> and he's very right. 're at a moment where we're

shifting fm a century old civi rights struggle to a push that is as muchbout realizing man rightss it is enforcing civil ghts. right w, all black ks can go to the same schoo too ten it's the same bad school. so we're fighting for theood schools. black pele can work wherever they wanttheoretically, but the reality ishat we have millions of children in thi country who are neglected not because the parents n't have a job but they have too many jobs. yet within each of tse, t way that black people ar treated is often despate. so principal it's easier in this country for white man with a criminal recd to get job than a black man withonday. pager wrote a book called marx, a professor at princon, that was the concluon.

three years ago a book cameut, a repoame outrom ucla, most bla men for all emplors do criminal bacround checks on all ople who apply because most black men ar criminals but most emplors think all a. so for him to also talk abo th painof conversation do really validate that, there's a lot ofeople w want to say, you know, weave alack president, get him over. and the reality is that we're rely just getting started i mean we may endthis problem within the next hundred years. we've g a long way to go. people can permanent a the barrier but the goais for there to be no more barriers. charlie s what actio does the naacp, most african amicans want from this president? >> w want him to make sur that

we get this economy turd around. all of us do. that there are more jobs an we also want ensure that there are good jobs. right now wee pushing to support themployee for choice act for instan because the reality er the las decad is mo people's wages d not go up and yet the cost of living did. we're pushg for good schoo. we want to see no child lt hind. some peopl say w need sool reform, some people say we need more dollars for schools. we need both. we wan no child left behind to live up to its name. he tald last night about the disparies and crackcocaine versus powdecocaine. and the need to change it. black pele are 13% of the people in ts country who use

crack cocaine. 13, 14%. 85% of th people locked up for having smallquantityities, they're locked up foruse. >> charlie: aican americs. >> yes. and the punishment i a hundred times different thant isor powder. to get the same punish maniment r having half a kilo of powder you ve to havewo rocks of crack. it insane, it's insane he talked aut that. we're pushing foromething called end racial profiling age because this president knows and all people of color in thi cotry know we're justnot treated fairly. >> charlie: is it fai to say that thispeech reassured the african american community fm l spectrum that he underood thate was of them and that he had not footten that agea. >> this speech assured all peop of color,ll people who suffer discrimation, including the gay community tt he cares

about rigs, that he car about discrination, that he's going t do, you kn, to rebuild the civ rights division but he's going to deal with the struural inequalities. that's part of his mivation. it's easy, you know, the sort o unemplment rate that the country's seeing now were going on in the black community two years ago. so wewant some assurance if you'reoing to dump billions of doll in ts community, y fix -- you don't bail out main streetyou sort of help out the country right now. we wanto see theisparities reduced. and to hear the president tal about th wit pax is exactly ght on. >> charlie: this the person responsibility aspect of it that you spoke to earer. ro tape. >> government prrams alone won't get our cldren to the

omised land. we need a new mind set, a new set of titudes, because one of the mosturable andestructive legaciesf discrimination is the way we've internalized a sense of limitation. how s many inurommunity have come expect little from theworld and fr emselves. >> chaie: you don't disagr with any of that. it's important tosay that. u're just saying there are these institutional issueshat have to be addresd. >> that's ght. that shouldave been paragraph 12 n paragraph one. >> chaie: in the new york times. >> yes, exactly. presidt and ceo o the naacp at 36. >> yes, thank you >> charlie: tnk you. back in a moment. stay wh us.

the crise in the aftermath of last month disputed elections. today form rang president challenged the coury's leaders in a smon at tehran university. it said the government h lost the trustof its people and called for theelease of detain protesters. candidate mavi attended the prayers in his first public appearce since the election. he aey figure in iranian politics. there's a report that waa numberf peoe are arrested. joing me now is moshe katabar. he joins me from dukeniversity where he tches and i'm pleased to have him on this broadcast for the first time. weome. >> thank you >> charlie: soell me wt yo think of sanja's sermon and what does the suggest tous. >> it was one of his best

sermons i have heard fm him. i remembe that he had also two otr rmons before i support of hotony d also another -- of the supreme leader before. it was thebest one. and i think the majoritof iranians dez --im. what i hear from his sermonhe emphasize the release of all prisoners, and als he emphasize the that e majority of iranns areoubtful abouthe results of this ection, this eventual election. and we need to mak tm coident to this election, to e results of this election. this ection began in good way that ha been finished in

ry bad way. so i think he suggeste that see government, the persister below the law. and also he emphasized the rit of the people and he mentioned that t prophet mohamme said to one of his bestompanions, if you areot supported the majorityf muslims, it means that you can not bethe ruler. he said dictly to the leader that if you feelhat youre not supported by the majory of citins according to the prophet, cording to islamic rule it mean you have som difficulty, yo are in a cris. so think he suorted the een movementin iran regarding to his restriction as the

governnt. he was the last reminder of the compann of ayatollah khomeini and the governmt. i thin he h his heart exam today. >> chaie: is it a direct challenge the ayatollah f control iran, for control amg theclerics in iran. >> the supreme leader in his last friday' sermon phasize thatverything is finished. an th election should be ended. but he continued and he critized the le of guaranship guardiship consul and he said they are doubtl. so w can see very clearlywe

havewo approaches to islic republican. e approach of preme leader and approach o the second man in islamic republican, ayatollah sunjani. it's a gap betwnhese seniorovernment in iran. >> charlie: how willit be decided? >> it dends on my factors, including the le of -- >> charlie: rig. >> and also pends on the situation of other governments. and also therotesters. becausas you know, the majority of iranians participate in thi last mth's and also theyant to continue thi way. and they ask where is our vote. ihink it's a very clear questionnd the supreeader

and the regime should answer the th clear question. charlie: do you believe iran is heade to amilitary dictatorship. it is two choicesn front of the regim the first one needs -- and the other is different. it's theay that sunjani and also before he advised the regi please listen to the protesters, please hear thei voice. andot so late. i think if the supreme leade list to theays of the protesrs and also the adsors, or ayatollah, i think it's the secondhoice will be happen and i hope for the second choice, not the fst choice. >>harlie: do youelieve theocratic vernment has failed in iran. this form of government

failed in iran, yes. i mean by this form of theocratic government is the guardianship- the supreme leader imagi divine right f himself and believe in absolute authority, pow for himself, that is above the conitution and allthe governments should obey him absolely, ihink this is style, ts for of regime, tocratic regime has been faile the name of the regime is sothing else. sunjani mentned today it's not sure -- superficialhen call it islamic republican, it has two terms, islam republic.

d the interpretation of islam and ignore the condart of this regime. i mean by the second part the republican part. and the protests emphasize and highligh the republic part, i mean by e republic part of the regime. so if we don't regar the republic docracy in iran it means that it will become, it will shift from islamic rublic to islamicovernment thatill be some kin of islamic kalife and not islamic reblic. >> charlie: wha should the united stes do? >> 's a hard qution because maybafter the election, the

potion of iranian governnt will be wk because they're t supported by the mority of iranians a which regime will be in front of you you can have a lo ofenefit in hi behalf. from anher point of vw, i think that iranians expec that all, from the a couries in the world, thaplease do not cut ahmadineja as t iranian president. he's not our president. >> crlie: so the united states should not recognize him. yes. i thk it's the desireof the majority of iranians. not from only united states, but from all o the world. >> charlie: so the world should get together and decla

the ection and t results unacceptable a they will not deal with iranian government? it's also, as you know, the demand of the leader of the protesrs mousavi, he said the results of ts selection is not accepted and ahmadinejad is not our present. he was illitimate a we need re-election. so i think also karobe emphasized ts point and i think the desire of majoty of iranians. >> charlie: what would happen if you would go back. >> y ask vy difficult estion. would be wh my friends, with the majority of my friends, tha are inail. >> charlie: ou would b with your frids in jail. >> i think so. charlie: doyou think this protest will get those pele

t of jail or will lead to more repression? it depends on the situation of the regime. after this sermon today, frida serm today, if they listen to the suggesons, i think all the political prisoners should be reased very soon. d in they do not liste to th and the wan to contie and rist their irritable positionno i think afte that the crises will continue. >> charlie: ow muchoes ayatollah has. >> i says hear.

it's a constitution, iranian constitution says i should be the father of all iraan citizens regardless of their opinions, their politica opinns and so wt i said that frid is notright. 's not right. and i want to corrt itand i list, i hear your voice and i think that it could have the election and the resus of the election will remi the future of the iran is the first cice. but the secd choice i he can say tha what sunjaniaid was wrong. he was under influence of the warriors and i was in the right way d i will continue. and it means that tcrises

will be contied byhe second chce. >> charlie: thank you for coming. 's a are pleasure to meet you and i ho we can do this again. >> yes, thank y so much. it was my pleure too. captiong sponsored by rose communications captioneby media acce group at wgbh access.wgbh.org