>> the following is presented by skye bridge media. editionme to a special of wall street week. today, we are going to hear from ben bernanke. i am gary kaminsky. we are bringing you the best moments from the interviews through the gentleman who let us through the 2008 financial crisis. >> this show has never been about solely investments. we have talked about anything that affected people and their money. from times square in new york city, the new wall street week.

southern beginnings and a british private school. larry summers and ben bernanke came from different backgrounds, but both love the baseball, harvard, and the white house. >> what was your childhood like? works a small southern town. economically challenged. agriculture and textiles. town, myle -- grandmother moved in 1941 and started a drugstore. the were sort of like practitioners for the town. people would ask them about different and things of that sort. i worked in the drugstore. it was a good experience in many ways. a chance to see how people live

in a small town and how hard it is to make a leaving -- living. >> you talked about the struggles. how did that set you up for later in life? >> my father was the town pharmacist. he gave people credit. a lot of people could not pay. he would talk to them about what they could pay. it was a tough time. a lot of economic challenges, even today. did that, years later, shape your thinking about interest rates? the availability of credit? a smallther was businessman. there were competition. store and the borrowed money to build a bigger store. they had to get a bank loan.

he needed to have access to the credit. >> years later, that did have an impact on you when you are thinking about availability of credit? >> credit is critical. you cannot make an economy work without credit. that was my concern. credit was going to freeze. people were not going to get a the kind of financing if they needed it. >> you got yourself into harvard. this is a fantastic burke -- courageen bernanke, the to act. let's talk about this. you got yourself into harvard. have?sort of jobs did you could earn enough working

to pay part of your cost at harvard. i was a construction worker. carrying cement and sheetrock. when i was a college, i worked south of the border, a tourist -- >> you grew up in a small town in the south review got to cambridge and said you felt comfortable. tell us why. mr. bernanke: i was bookish. i loved ideas. cambridge, massachusetts, they are in the small city. it is a place where you can learn about practically anything. you could study swahili. french history. book, thele the courage to act. where did you come up with that? my wife suggested it. there were tough decisions to be

made. high-stakes. they were made under tough uncertainty. people at the wed. treasury,y, members of congress. often, the toughest part of the decision.the we had to do what we had to do. >> where did you grow up? >> i grew up in suburban philadelphia. had two younger brothers. came from a family where both my parents were economists. someone said, since one of my brothers is a lawyer, the other brother is a psychiatrist, they had a lawyer, doctor, and someone for the family business. >> i don't know anybody in philadelphia who is not passionate about schools.

is that something you grew up with as well? i grew ups: passionate about the 76ers. 45 years in boston has moved that a bit. have seen how the websites do, i still check out the phillies and eagles. >> what kind of kid were you? >> i would not say i was the wildest. i didn't do my homework reliably enough. club and mathhess club and stuff like that. .r. summers mr. summers: i'm not sure i exactly had role models. i came from a family of liberal parents.

i went to england for a year because my father was on sabbatical. because it was england and traditional, they insisted on interviewing not just a kid but the parents as well. my mother and father and i were there. me, the headmaster asked me, who my favorite president was. i said, franklin roosevelt. said, franklin roosevelt? i said, yes. he caused us to win world war ii. the guy continued to express that he was shocked. father, almost lost his temper. wasaid, franklin roosevelt elected by the american people four times. a set ofad served with conservative people in the war who hated roosevelt.

supposed roosevelt was hated by the american people. far from it. did go to that school because my mother successfully restrained my father. i grew up in a wonderful household. family. i would hardly call myself a rags to riches story. in that sex, i'm not sure i'm the classic american dream. but i feel incredibly lucky to have had the set of opportunities that i have had. it makes me want to give something back to the country and that is why i have wanted to be in public service and to work in government. >> hello.

i am larry summers. >> david rubenstein. >> david petraeus. >> i am watching wall street week. >> i watch wall street week. i'm pleased to be on the brand-new wall street week. i hope you are, too. >> wall street week is sponsored in part by a coward. an unobstructed view. >> imagine a business built on the premise that straightforward financial advice is the thing to do. rising above the discord of an industry compromised by conflicts of interest. hightower is the new blueprint. we live by the fiduciary standards. a legal pledge to put our clients interests first. not because --

>> i was done. >> i was tired. astarted looking around for business i believed in. i wanted to do something more green. >> they help me create a business plan. >> they taught me -- unimaginable -- >> i am here. free business mentor at score.org. >> dr. ben bernanke steered the country through one of its worst financial storms. he talks about being the chairman of the fed during the crisis. people --ke: miss most people a good crisis started when bear stearns collapsed. is that about right? x i do. before, we knew house prices

were high. they begin falling into thousand six. we also new subprime mortgages and others were not doing great. what we did not appreciate was this was going to trigger a big, broad financial crisis. we only began to see inklings of that in 2007. of the fedbers having communication with the executives? >> i talked to executives regularly. did people on wall street not have that clear of a vision of what was happening. i can remember being in the city when it was evident lehman was going to collapse. feels like yesterday to me. tell me about that night. >> we were worried if it failed, it would cause a financial panic

to go up another level. create a huge problem for the economy. we tried really hard to save it. same strategy we used with bear stearns. we brought potential buyers to new york to try and get a deal done. too many losses. in the end, it failed. we tried really hard to save it. put it into the context of history like the panic of 1907 are the great depression, 1929. your opinion of the sorts of impact it has.e >> the federal reserve was created precisely for the purpose of addressing banking panics. it was a situation where people lost confidence in their bank. there was no deposit insurance

between desk before 1934. people would line up and the bank would fail. -- scaryas a scale thing. people were going to the banks and taking cash at atms. banks inr local atlanta, they were actually running out of cash because of the amount of money coming through atms. >> the whole week, both sides lehman, aig and other companies in trouble, we had a run that week on the money market mutual funds. a lot of people have accounts at money market mutual funds. people lost confidence in those funds. the first thing we tried to do was be of last resort. running away from risk every way they could.

from liquidity. everybody wanted the whole cash. nobody wanted credit or other kinds of assets. we would ultimately lend funds to different kinds of markets. sure firms had the funding they needed. >> up at the congress, the first big meeting to discuss the crisis. tell viewers about that meeting. we determined we were going to lend money to pay bills. basically, the whole company. why it was essential to protect the system. the senior center, rubbing its chin. nothing you have heard here tonight constitutes congressional approval for what you are about to do. this is your call, your decision in your responsibility >>

the crisis you said was about a $90 billion problem. when it started to contagion, if you well, it became a bigger and bigger problem. you masterfully stepped in and took measures to stop it from being broader. tell us some of the measures. >> in the old days, it would have been just the banks. in a modern system, you have banks and also security steelers. there is another type of market where cash is lent to companies. if you want to finance your inventory, you borrow on what is called a commercial paper market. the fed stepped in. commerciald stopping paper. >> you were comfortable because you have a longer-term view.

>> we did ultimately because we are a public institution. with loan was paid back interest. we turned over profits to people. there were so many products created by the investment banks to be sold. are you surprised there has not prosecutions of one would have thought against these institutions? >> that is pretty much what has happened. ofbillions and billions dollars. cases, individuals have not been held responsible. my problem is with the prosecution strategy. you yout to talk to about the future. curious what i learned and what

you should be thinking about. >> you have to look at the system as a whole. you can be looking at each individual piece which is what was happening. you also have to look when things are going well. sometimes there is a risk building up under the surface. you have to pay close attention to that. in the end, you have to make judgments and find out where the risks are. >> richard fisher. worried, it might be difficult for you to make difficult decisions. >> it is tough for anybody to make hard decisions. >> he says you worry super empathetic person. >> i try to be empathetic. i think it is important for policymakers to look at the people behind the numbers. these are really people with real jobs.

real jobs and families. what we all did, my colleagues and i, the right thing for main street. that is what we were trying to accomplish. they were too big to fail, that was the concern. is that still a concern? >> we are making a lot of progress. hold bigger buffers. if they lose money, they are losing their own money. for a long time, before they ever get to the point where there is concern about the solvency. if they can shut a firm down without creating a broad panic, they will be more inclined to do that. >> sign-up for the free wall street week newsletter. where we recap each week in the markets. week.com andreet sign up today.

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economy. solution for growing this great nation. about slow worried growth and then you became a distinguished policy advisor. what steps were taken? are we different today than we were were? works there are some things that become cliches because they are true. one of them is the u.s. cannot be in it wastes of prosperity -- and away sis of prosperity. clintontrue when bill was coming to office. the end of the 1990's. we were worried about what was happening. it is true right now when you've got a lot of trouble in europe.

when emerging markets are moving more towards submerging and less towards emerging. >> talk about fiscal policy for a second. what would you put in place now? infrastructure? programld embark upon a of infrastructure investment. which would initially be financed by borrowing. was evidence the economy was overheating, would be financed by an increase in the gasoline tax and the carbon tax. pay,xtra money people because of excessive potholes, works out to a 47 gallon

gasoline tax. >> it is crazy not to make these investments to do adequate investment. >> one problem people do not understand is the difference and bad debt.ebt what you are calling for would add to the deficit. would ber opinion that good debt for the society? x yes. think about this. deferred maintenance is debt. borrowing money in order to do things today when they are cheap rather than agenda ration -- a generation from now is reducing the burden. it is not increasing the burden. >> i think you could articulate this, the counter argument someone would say, be at the tea party or seminoles, what would it be? >> it is hard for me to make the counterargument because i'm in

support. >> $19 trillion in debt and climbing and we cannot afford to do this kind of thing. get the government off the backs of the people. chance tonot had a hear your perspective in terms of a result of quantitative easing. the income disparity. asset prices have benefited such a small portion of the population. how do you square that in terms of, it was necessary? >> we've got a huge opportunity to push the economy forward. if we do, there would be less and financialary access to drive the economy forward. we do need to push the economy forward. a better way was to do it than with extraordinary easy monetary policy. >> is necessary because the

policy was not in place. certain excess, rather -- like high-end prices, they would say that is one of the negative byproducts. medicines that are necessary for your health. to have adverse side effects. it has to come on the fiscal side and structural side. if we had the right immigration policy, it would spur residential investment. that would mean more private investment. it is not all about the private sector. it is about having more investment friendly policy. >> feeling good about pfizer? johnson and johnson? they are all components of the

health care sector which includes over 50 stocks in the s&p 500 to add diversification. why invest in a single stock and you can own the entire sector? risks andg the rewards. visit us on the web. you can join millions of americans turning off the old media. we are in over 40 million homes. we are available online. you can watch us anywhere in the world. just download the app from your iphone or android. do it today. find out why millions are tuning in. >> wall street week is sponsored by morgan stanley

capital. >> cheeseburgers and harvard yard, these are a few of the favorite things of the great economic minds of larry summers and ben bernanke. one of the things we do, we play word associations. come up with a word. we get your reaction. hawaiian shirts. you always wondered why cannot have hawaiian shirts and still do a serious job. it is hot in washington in summer. >> hawaiian shirts. >> what is the perfect day? >> getting up, putting on my jeans. driving to an institution. reading and writing and working on research projects. >> favorite meal? >> cheeseburger and fries.

>> you had sleepless nights. that is keep you up at night now? what's i like to see my dog which jumps on the bed. i sleep pretty well, thank you. >> your first reaction? if you could have dinner with any three people who are alive? >> franklin roosevelt, winston churchill, albert einstein. >> favorite part of the day. >> dinnertime. >> best thing about the harvard campus. >> harvard yard. >> 2016 election? x democrats. >> strong leader who history will remember well. >> your history. >> he fought hard to make actions better. and bernankethank and larry summers for joining us today. that is it for today. you can check in with us at wall

street week.com. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> the preceding program was paid for by skye bridg, >> the preceding program was

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