that had the total exposure of counterparties and derivatives to aig. there were tens and tens of counterparties on the derivatives, it may be hundreds. there were thousands of other counterparties at stake in this context. no one but have been willing to individually volunteer a concession without it being extended to all of the counterparties in similar positions. it is a simple thing. it's like flipping a switch. either the firm is able to pay and avoid default, or eight courts default and downgrading collapse. >> is your view -- is your view that aig is from? that they appear to be quite -- the seem quite convinced that there was an opportunity to negotiate not redefault, but a concession on the part of the major parties the chair mentioned? >> the real world does not work this way. you can't run a strategy on the hope that people will be nice and decided they are going to voluntarily give up a set of contractual obligations and if they are unwilling to do it then you're only choice is that you not pay and take -- >> so your concern was the default

aig is effectively -- >> aig was not a bank. i'm out of time and i've done it to myself again. i apologize. >> this is very important to have come important debate to have. >> go at this, mr. secretary. >> [inaudible] [laughter] >> go ahead, mr. secretary. >> and you know this, i know you understand this. financial the institutions the concourse has recognized for a long time needed a different type of bankruptcy regime than we have four other companies. now, aig is not a bank. but in affected operate as a bank. it borrowed money, it operated on a leveraged and without capital to support that. for the same reason we have a different type of bankruptcy for banks for many, many decades. we need one for complex financial stopper lee just like banks. now, in bankruptcy you have lots of choices. you can negotiate all sorts of different treatments in this context and we still would be helpful for the country. we want is a bank type of resolution regime that gives the choices that we've had for banks and four in a sense colossi bankruptcy's the we did not have that for complex large f

. -- aig. aig. i read the november 17 report of the inspector general for the troubled asset relief programs report. as you know he was quite critical of the actions that you took, in negotiating with the ultimately with counterparties for the aig financial instruments. now, i was struck by two quotes in here. he says that the federal reserve and treasury officials defended the rescue of aig on the grounds of the company's failure "to pose considerable risk to the entire financial system and would significantly intensify an already severe crisis in contributed to a further worsening of local economic conditions which has been the standard story for well over here but the report also states that you told sigtarp that "the financial condition of the counterparties was not a relevant factor in the decision to see to it that goldman sachs and other counterparties were paid 100 cents on the dollar. i have to say these two statements appear to be at odds with each other. >> let me try to explain. systemic

we pick aig and aig alone. and backed up 100% on the dollar in repayment. ..of that storm to protect the economy from that failure. now looking forward in the future, we do not want a system looking for work the, this is why we need resolution authority but we do not want investors in the future where the firms these particular firms to live with the expectation. that is the challenge by financial reform is so necessary. now, chairman, nothing would have made me happier in that context to have a different set of choices, but until all of the land the authority we have for the tragedy of the country we had no other choice. it's been a kid did have a choice before you moved in and that is it could pay 90 cents on the dollar, 85 cents on the dollar -- >> i don't know why this is so complicated -- >> it is complicated. >> but it's come down to the nature of choices. you either prevent default because the fault would be cataclysmic or you don't. when you provide -- when you prevent default, you are doing so so they can meet their obligations to everyone the of cont

they really did not see aig gunning. aig is a terrible illustration of how firms can exploit the loopholes in the financial regulation. aig which has a fascinating history of its own at this point is a series of strong insurance companies on top of which has been built a casino. at the casino is where people are betting on the default of other companies, and it turns out that they've taken all lot of bets that the house doesn't have enough money to pay off the people have placed bets. post because they were counting on the good credit rating of the insurance company and when they lost that they were in trouble. >> guest: so they couldn't borrow money to pay off and they haven't set aside enough money and their counterparties, the people who placed their bets for every big name you could think of, goldman sachs, a way to bank and others. from what i know it was very -- it was only on the friday before that weekend that they realized aig might actually be a problem and i described in the book how tim geithner is a quick co

we do not want any more aig's or lehman brothers. we want a well-established system that can be used to wind down these companies and let creditors take losses, but without destabilizing the whole economy. >> i am concerned we will not reestablish the kinds of proper approaches and principle of moral hazard until we end tarp and provide an exit strategy and decide how we will proceed with fannie mae and freddie mac. would you agree? >> i do agree. they have to be addressed, but under the current situation, the tarp was used to bail out companies and make them whole under a well-designed resolution regime. many creditors should lose money which would create market discipline going forward, which is what is needed to avoid the moral hazard. >> the recent quarterly report states there is $317 billion of uncomplicated tarp funds available. do you support letting this expire? >> it is appropriate to begin winding it down. we should clarify what additional needs are still remaining to make sure the financial system is still stable and will

this was a problem with aig. aig had sold so much of this insurance that the government decided that if they didn't save aig that people would get -- it would upset the system because so many people have relied on those injured. most other credit default swaps of people have been paid off and there's a process for selling them. so you get what ever your loss as you can come you get paid on. so some extent credit default swaps have helped protect some of the people on this thing. the problem is the house of cards on which they were built was bigger than some of -- the people who are writing the insurance could afford to make the claims. that's basically the short and to. people so injured to didn't have enough money to make claims, if they couldn't pay the claims the world to come to an end. so you and i are making good on those claims. >> last question. >> you said earlier that the great misconception that sort of led to this whole financial crisis was the false assumption that housing crisis would never go down.

but because of the possibility that have aig could not pay. so clearly, making derivatives safer both this terms of the operational sense in terms of the way they're traded and protecting against counterparty risk is an important part of this reform. i agree with proposals that have been made that derivatives that can be standardized, that's quite a few of them, and are accepted by central counterparties for clearing on those institutions should be traded on a central don't party. it would be an organization that, by taking margin and holding capital, essential lly insures against don't party risk. a much more transparent situation. people will know what outstanding issues look like. no credit of false swaps. there's confusion about who owes what to whom. i do think that strengthening the infrastructure generally, but in particular, making sure derivatives are traded on an exchange is an important step to making the system stronger. it sighs into too big to fail in a couple of ways. if you get rid of the count counterparty risk, there's less r

they really did not see aig coming. aig is a terrible illustration how firms can exploit loopholes in our financial regulation. aig, which is a fascinating history of its own at this point is a series of very strong insurance companies on top of which has been built a casino and the casino is where people are betting on the default of other companies and it turns out that they've taken a lot of bets that the house doesn't have enough money to pay off the people who placed bets. >> host: because they were counting on the good credit rating of the insurance company basically and when they lost that they were in trouble. >> guest: they couldn't borrow money to pay things off and they hadn't set aside enough money and their counterparties, the people who placed the vets were every big name in banking you could think of, goldman sachs, deutsche bank all of them. and from what i know, it was only on the friday before that weekend that they realized aig might actually be a problem and i discovered in the book how tim geithner

we pick aig and aig alone.lar in repayment. .. >> you are telling me that these counterparty obligations, these financial instruments that are bought by very sophisticated parties will be treated effectively like deposits in checking accounts. >> absolutely not. >> they end up effectively with 100 cents on the dollar. >> you have to distinguish two things. first of all, there is no other way in the context of that storm to protect the economy from that failure. looking forward in the future, we do not want to have a system in which looking forward -- this is why we need resolution authority. a system looking for work the, this is why we need resolution authority but we do not want investors in the future where the firms these particular firms to live with the expectation. that is the challenge by financial reform is so necessary. now, chairman, nothing would have made me happier in that context to have a different set of choices, but until all of the land the authority we have for the tragedy of the country we

is a aig, aig was 80% owned at that time. by the federal government. but i just want to say -- let me say that i disagree -- >> i just want to say, let me just say that i disagree. mr. chairman, going through that period of that time, when they were talking about the bonuses, virtually no reporting on the county party issue, and the fact of the matter is that we allowed 100 cents on the dollar, with little or no negotiation, it just is -- i have raised the issue with others before. i do not understand that, and most americans do not. it is billions of dollars b and it is hard to imagine that we could not negotiate with any of the counterparties. >> we did not have any leverage. they would say, "you are bankrupt." >> aig, if they would not have done that, they would have been in trouble. >> that is all true, but most of the firms were foreign. we had no authority or leverage over them. >> you are the chairman of the federal reserve. >> i do not abuse my supervisory powers. >> certainly not, not in that case. power. >> apparent

but the fact of the matter is aig, aig was 80% owned at that time by the federal government. >> i wantto just say, let me say, and i disagree with my friend and colleague from kentucky about the conclusion of what happened under your nomination. going through that period at that time with all the headlines about the $168 million in bonuses that went out to aig and virtually no reporting whatsoever on the counterparty issue. the fact of the matter that we allowed 100 cents on the dollar to go to the counterparts with little or no negotiation, i've raised the issue with others before, i don't understand that at all and most americans don't. that was billions dollars. one company alone was $12.5 billion. it's hard to accept the negotiation that we couldn't negotiate with the counterparties at that time. >> we had no leverage. if we didn't pay off, they would say you're bankrupt. >> wrote a check to $180 billion to aig. >> to aig. >> that counterparties would have been in trouble, too? >> that's all true. >> what's the deal? >> most of the firms were foreign. we had no authority or leverag

and finally, other relative documents, the bailout of aig, bank of america, citigroup, bear stearns, lehman brothers, general motors, chrysler, cit and gmac. instead of those documents, what i got in return was a folder full of paper that printed off the fed web page. just in case anybody was wondering, those documents did not provide any new or useful information. that kind of response is not only disrespectful to the senate, but it raises the question of what they are trying to hide. i think we should know the answers to that question before we move forward on this nomination and every member of this committee should demand the same. while it turns out we actually may have an opportunity to find out some is of the information. i hope every member of the committee listens to this. earlier this week i was informed that despite the fed's refusal to provide individual senators or the public with the information i requested, they have let committee staff of this very kesse some documents related to the aig bailout. when my staff asked what was in the documents, we were informed that we

there are a lot of questions yet to be answered about the loans that the federal reserve made to aig., quite frankly, firmly believe that the loans were made in clear violation of the federal reserve act. these loans were not adequately collateralized, resulting in the federal reserve bank of new york having to exchange debt claims on aig for equity stakes in two insofrl vent insurance underwriting units. now, senator bunning, as he mentioned, put in his questions to chairman bernanke for the record a number of document requests, all sorts of very relevant, very important things, transcripts, minutes, legal opinions, economic analysis regarding these specific loans and specifically federal reserve act action 13-3 and similar actions with regard to aig and some other firms. the chairman declined to provide -- chairman bernanke, that is -- declined to provide senator bunning any new information in response to that request. instead, he basically provided a defense of further secrecy of the federal reserve decision-making process and a few links to their website. now, as senator bunning m

but because of the possibility that have aig could not pay. so clearly, making derivatives safer both this terms of the operational sense in terms of the way they're traded and protecting against counterparty risk is an important part of this reform. i agree with proposals that have been made that derivatives that can be standardized, that's quite a few of them, and are accepted by central counterparties for clearing on those institutions should be traded on a central don't party. it would be an organization that, by taking margin and holding capital, essential lly insures against don't party risk. a much more transparent situation. people will know what outstanding issues look like. no credit of false swaps. there's confusion about who owes what to whom. i do think that strengthening the infrastructure generally, but in particular, making sure derivatives are traded on an exchange is an important step to making the system stronger. it sighs into too big to fail in a couple of ways. if you get rid of the count counterparty risk, there's less r

there are a lot of questions yet to be answered about the loans the federal reserve made to aig.elieve the loans were made in clear violation of the federal reserve act. these loans were not adequately collateralized, resulting in the federal reserve bank of new york having to exchange debt claims on aig for equity stakes in two insolvent insurance underwriting units. center bombisenator bunning metf document requests of important things like transcripts, minutes, legal opinions, economic analysis regarding these specific loans and specifically federal reserve action 13-3 and actions with regard to aig and other firms. the chairman declined to provide senator bunning any new information in response to the request. he basically provided the defense of further secrecy for the decision making process and links to their website. it is my understanding that chairman bernanke has now agreed to allow certain committee staff in his office to review some of the material related to aig. some committee staff has reviewed that and will not share it with all committee members and our staff. .

a think it would be frightening if we believe, for example, if aig had been allowed to collapse. i am not trying to advocate that bailing out aig was a good idea, but i think that if it had been allowed to collapse the ripple effects of that world wide would have been frightening to all of us. even if that was a medicine that we ultimately needed the medicine itself would have been very destructive. there's something about economic crisis that there's a capitalist democracies into very difficult places. we flail at it. we hope that we are doing the right thing. economically it is very difficult to prove. so my answer to your question, is it the wrong thing or the right thing, well, it seems to exist in some places outside right and wrong. most importantly the only thing that we don't have to do, it doesn't seem, as you could say, there are lots of historians that say what hoover did with the banks and with the refusal to intervene actually made things worse. hoover's policies certainly exacerbated the existing circumstances. that doesn't seem to be happening now. we are in what s

and finally, other relative documents, the bailout of aig, bank of america, citigroup, bear stearns,lehman brothers, general motors, chrysler, cit and gmac. instead of those documents, what i got in return was a folder full of paper that printed off the fed web page. just in case anybody was wondering, those documents did not provide any new or useful information. that kind of response is not only disrespectful to the senate, but it raises the question of what they are trying to hide. i think we should know the answers to that question before we move forward on this nomination and every member of this committee should demand the same. while it turns out we actually may have an opportunity to find out some is of the information. i hope every member of the committee listens to this. earlier this week i was informed that despite the fed's refusal to provide individual senators or the public with the information i requested, they have let committee staff of@@@@ we were told that this could not be told because they were protected. members of the united states senate, members -- that is a

i think he made a mistake in the way he did the aig thing. on the whole, what he has done has been constructive. i guess i would say this. he gets partial blame for the fact that the crisis arose, although more went to alan greenspan. but he gets a lot of credit for the way he coped with it. >> larry: ron, what do you make of the selection? >> i think it's pretty neat. he is the most important guy in the world. and anybody who can create trillion of dollars behind the scenes and spend it with no oversight, i mean, that's pretty important. and he is a counterfeiter. he's the chief counterfeiter of all history. and i would say that's very good. and i like it because it draws attention to the fed. because the source of so many of our problems come to the fed. the business cycle comes from the fed. this to me is a real delight. i don't have to agree for the reasons that they, you know, gave him man of the year. >> larry: a negative man of the year. >> yes, it's very important we understand why he is so important and powerful. >> larry: tanya, wer

sort of in the same way that aig got the money. so -- i mean, from the crisis china was -- the unemployment grew and, you know, their g.d.p. slowed down seriously. so the world kind of like has shown us that they are willing to bail us out the same way that the government showed to aig they are too big to fail. so i have a problem here and i just don't know -- i haven't made up my mind, but i think, you know, why to change their behavior of the -- why to lower our income and ability to buy things if that is going to, you know, evidently that's going to hurt china if our -- you know, you're suggesting that we should kind of slow down our consumption. that's not in the best interest of a lot of countries out there. china depends on us -- >> i'm not suggesting we can't count on, you know, an unlimited supply of credit from china. what i'm saying it's somewhere between here and infinity is a point at which any rational creditor will say, you know, that's just too much. now, that point could be far off. that point could be decades from

be put up while the traders the market has moved against, so we never get enormous exposure is like aig has. a thing for a free of regulation of derivatives by bringing everything we possibly can end on to regulated exchanges would certainly help. i do think there are additional problems because these institutions not only remain too big to fail, but i think they are too big to manage and too big to supervise. >> the gentleman's time has expired. >> the wonder if we can continue on touch for a moment. when you talk about the appropriate regulation of derivatives requiring a margin to come up. is five not the case today requiring -- is that not the case today requiring a call on a daily basis? >> that is not the case with any of the over 600 trillion dollars in over-the-counter derivatives. it is only the case on the regulated futures and options exchanges. >> how difficult would it be to create the system. we have an enormous financial regulatory system already in place, yet we're being asked to create another new superstructure. is there not the capability today to do just what you're

[inaudible] why did the federal reserve and save aig? he made that decision?would also tried to talk about the expansion. [inaudible] [laughter] [applause] >> i bet you thought when the former governor was called on, that he was a plant, right? [laughter] as you know, the federal reserve and the treasury and consultation -- we always bowed to the president and congress whenever possible -- attempted to avoid the systemic collapse of our financial markets, our financial system. we were extremely concerned that the collapse of these large interconnected firms in a disorderly way would have adverse effects on the broader economy and the global economy. i think the evidence is that we saw following lehman that we were right. the collapse of these firms is very destructive. we're very consistent in their best to save and protect the system from the collapse of these firms, all of them. the reason we did not say lehmans was not a conscious choice, but as i have said many times in public, given the aloud -- the limited powers that we have, the lending authority again

these include aig, bear stearns, citigroup, lehman brothers, and merrill lynch.deposits to insure their investment. consequently they severed liquidity crisis when the creditors became aware of the magnitude of the investment losses. these liquidity crisis for the modern version of bank runs. computer clicks replaced queues of depositors withdrawing their money. last the goal had prevented commercial banks -- glass- steagal had been in commercial banks from these problems. i have a number of questions for the panel. what changes should be made to the risk-capital standards for banks? should congress require all banks to spanish standards? should they be established for other like a highly leveraged financial institution? should all banks and other highly leveraged financial institutions be subject to simple limits on leverage in addition to any risk based capital standard. should fannie and freddie be restructured or fully privatize? should any of those funds to be transferred to the federal housing administration and the place transparently on the federal budget

he actually defended the actions on aig.hs he said that this was not something that he wanted to do and he was of said he had to do it, but he said that they did what he had -- and had to do to keep the economy from going through another depression. he was pretty defensive on the aig part. host: why is ben bernanke so scared of an audit? guest: a very good question. we have been talking about that a lot. his concern is that at the fed is subjected to audits of its monetary policy you will have lawmakers calling for audits with congress looking over his shoulder, demanding audits every time a decision is made, and that that could influence policymaking. what he would argue, and i am here to tell you what he is saying, not arguing his defense , is that the fed is audited on many other levels already. he is fighting hard to avoid having interest rate decisions audited. host: what is an economic model -- bubble denn how are they created? guest: one of the really problematic issues between economic and financial bubbles is how th

[inaudible] why did the federal reserve and save aig? he made that decision? [laughter] i also tried -- i would also tried to talk about the expansion. [inaudible] [laughter] [applause] >> i bet you thought when the former governor was called on, that he was a plant, right? [laughter] as you know, the federal reserve and the treasury and consultation -- we always bowed to the president and congress whenever possible -- attempted to avoid the systemic collapse of our financial markets, our financial system. we were extremely concerned that the collapse of these large interconnected firms in a disorderly way would have adverse effects on the broader economy and the global economy. i think the evidence is that we saw following lehman that we were right. the collapse of these firms is very destructive. we're very consistent in their best to save and protect the system from the collapse of these firms, all of them. the reason we did not say lehmans was not a conscious choice, but as i have said many times in public, given the aloud -- the limited powers that we hav

it was his decision, not congress, to give the noun aig. the kbe of intervention of bailouts began in september. so the description of his impact, yes. on the whole, what he has done has been constructive. he gets partial blame for the crisis. but he get ace lot of credit for the way he coped with it. >> larry: ron what do you think? >> i think it's unique. he is the most important guy in the world. and anybody who can create trillion of dallases behind the scenes and spend it with no oversight that is pretty important. and he is a counterfeiter. and it draws attention to the fed. this to me is a real delight. i don't have to have agree for the reasons that they gave him man of the year. >> larry: a negative man of the year. >> yes, it's very important we understand why he is so sbornt powerful. >> larry: tanya, were you surprised at the selection? >> i have to say w all due respect to senator paul, i think that this was -- here is a man who had to come on board and run, manage things when when were on the precipice of disaster. you can cal

host: goldman sachs field the aig gambles. firm says the problems were hidden in some of these financial products that aig had a cause a downfall. guest: goldman sachs is one of the biggest beneficiaries of the a.i.g. bailout. a.i.g. turned the bailout cash to their counter-parties -- goldman was one of the top beneficiaries of that bailout money. for months after word officials involved refused to say who the counter-parties were. it was suspicious and weird. we were trying to get the information for a long time after the a judge a bailout. several months later they finally put out a list of the counter-parties. xdgoldman sachs were on the list and so were several foreign banks. host: next up, fla., on the line for democrats. caller: good morning, all that i can say is from what i hear america it is nothing but a big, the tangled web of confusion. my feeling is that we were in such dire straits that the only way obama was elected, him being african-american, is that america is looking for a scapegoat. we're talking about too

american home mortgage, brook street securities, we charged hank greenburg and another official at aig. just in the recent past we have gone vigorously after those individuals who we believe were heading in company that engaged in one form or another of fraud or wrong doing particularly with respect to mortgage and mortgage related products. we're working on streamlining the processes and making ourselves more responsive. but we are reinvigorated and rededicated to that effort. >> but you do feel that you have the tools to be able to do the job that needs to be done? no legislation or anything is required in order to be able to move forward with this aggressive approach that -- you know, the word around here is robust approach. >> robust, yes. well, we have a number of legislative proposals that we have presented, particularly involving hedge fund registration, the creation of essential clearing party for derivatives transactions. more and better information on exactly the kind of trading and activity that goes on in some of these over the counter and opaque markets. in addition we've

could mae understand what really ppened, why did lehman brothe, why were ty alloweto go and why was aigrescues. wh were the decisions in he relationships between all of thescharacters and howid that< fluence the ultiate outcome. and i think that actually b taking that approach, was able to hopefully get at the human drama of th. to get the fallibility of the people. wheyou get into a scene you actually the is a sne where hank paulson literallyis vomiting because of the so of emotional turmoil that is all king. you really do get to s the ad hoc nature withhich this whole crisis was nfling and -- enveloping an how theyere trying to rescue the system. >> porter: john cassidy yochose to go back a explorehe underlng economics of the cris. why tha >> well, probably becae i'm an economic journalist an partly because i knea lo of people, arew included would be providing reting narratives of what happened. i li to think that andrew provides the fly on the wall view, and i provide the view from the orbing satellite. what i am ting too is explain how the difrent bits of the story fit tether,explai

they benefited from all this money that went to aig and the others, all these big banks and investment houses are doing tremendously well. and i'm in new york today, so i can attest to that. but yet the little bank, the little bank owned by people throughout this country like the publisher down in sarasota, they're on the ropes because they can't get the money that the big banks that helped elect president obama got. and i can assure you that in -- if mccain had been predicted to be the winner of the last election, mccain would have gotten the same money that obama got. it makes no difference democrat or republican, they bribe them both. so that's why we are at a state of revolution, and that's why i want you to read the book, "whores," because we need to wage that second revolution or we'll have no country yet. >> host: larry klayman's been our guest, he's been joining us this morning from new york. thanks for being with us. >> guest: you're welcome. thank you, god bless. >> larry klayman is the founder of the public watch dog organizations judicial watch and freedom watch. to find ou

host: goldman sachs field the aig gambles.e firm says the problems were hidden in some of these financial products that aig had a cause a downfall. guest: goldman sachs is one of the biggest beneficiaries of the a.i.g. bailout. a.i.g. turned the bailout cash to their counter-parties -- goldman was one of the top beneficiaries of that bailout money. for months after word officials involved refused to say who the counter-parties were. it was suspicious and weird. we were trying to get the information for a long time after the a judge a bailout. several months later they finally put out a list of the counter-parties. xdgoldman sachs were on the list and so were several foreign banks. host: next up, fla., on the line for democrats. caller: good morning, all that i can say is from what i hear america it is nothing but a big, the tangled web of confusion. my feeling is that we were in such dire straits that the only way obama was elected, him being african-american, is that america is looking for a scapegoat. we're talking about too

american home mortgage, brook street securities, we charged hank greenburg and another official at aigwe believe were heading in company that engaged in one form or another of fraud or wrong doing particularly with respect to mortgage and mortgage related products. we're working on streamlining the processes and making ourselves more responsive. but we are reinvigorated and rededicated to that effort. >> but you do feel that you have the tools to be able to do the job that needs to be done? no legislation or anything is required in order to be able to move forward with this aggressive approach that -- you know, the word around here is robust approach. >> robust, yes. well, we have a number of legislative proposals that we have presented, particularly involving hedge fund registration, the creation of essential clearing party for derivatives transactions. more and better information on exactly the kind of trading and activity that goes on in some of these over the counter and opaque markets. in addition we've sought legislation regarding nationwide service a process and some other thing

also in the news this morning is from "the washington post" -- aig to complete a deal to reduce debt to the fed by $25 million. . . caller: what was the motive? what was the cause? when you look at a crime, you look for a motive. i have been on this since day one -- truthers people looking for the truth of 9/11 -- almost all of them, including myself, did not start out believing that 9/11 was an inside job, but certain inconsistencies were coming along, and when you look into it, you discover more and more questions and answers. you get into the original pact that the basic premise of the crime is a lot. who benefited? you ask why? indeed, who did it benefit? it certainly was not the afghans, it certainly was not the iraqis -- host: i am running out of time to tell me, who benefits? caller: politicians who can promote war cou. when you have for, people get behind you. host: those guys get together and created this conspiracy to murder more than 2000 people? caller: it goes deeper than that. when you look at the premise of what happened that day, what the government told us turned out

we watched no negotiations go on with aig and huge bonuses paid back, coming out of the pockets of everyamerican taxpayer. we watched our leadership nor thousands and thousands -- ignored thousands and thousands of job losses each month, continuing to pursue a stimulus package, a cap and trade bill, a health care bill, when men and women were losing jobs by the hundreds of thousands. we have lost 700 million jobs in the last year plus. i was disappointed when we did not fund the transportation and infrastructure bill that would have put thousands of people back to work. the stimulus bill did not have verification in that. we did not know if we are putting americans back to work or non-americans back to work. a lot of disappointment. i was willing to discuss it. i was willing to work with anyone that would listen to me. i did not find a had a place of the table. >> the state party called on parker griffith to return thousands of dollars of democratic nations -- >> we will be happy to do that. absolutely. >> [unintelligible] water you going to give to your district -- what are you going to

also, aig confident of repa ying aid. joining us on the phone right now is the managing editor of cq. we have been getting our viewers' reactions. give us the back story. guest: harry reid, the democratic leader in the senate, has tried to shop proposals to deficit. both said he needs. he tried two plans to incorporate this health bill that they're considering th. he found a note that he did not have the 60 votes for either of these. at a meeting yesterday afternoon, they came to that realization. now they will have to come up with yet another compromise. they're going to the white house to talk to president obama. host: says in the newspapers that senator joe lieberman will be at the white house meeting. guest: he threatened to filibuster any bill that had a public plan. he announced figures opposition to the medicare expansion. they were trying to nullify the liberal wing of the democratic party by trying a much expanded government role. neither of those wash with the most conservative members of congress. if they hope

bang that it -- a big bank that is getting into trouble, or for that matter, an insurance company like aighat is getting into trouble, there's a way of quarantining them so they do not infect the rest of the financial system. if we get this package passed, then we will have the safeguards in place to be sure this stuff does not happen again. but i want to tell all of you, and anybody who is watching or listening, not surprisingly, a lot of the banks and financial institutions are fighting this. because they want to basically just go back to business as usual. they want to do the same things that they were doing. and you are already starting to see some of these bonis payments coming out. it is liked suddenly, they have forgotten that we had to yank them out of the fire. it is very important that we get financial regulatory reform done. we're hoping that we can get it done early in the beginning of next year. but the banks are going to be pushing back. he will start seeing ads and in fact, i think they have already started putting that out, saying, well, you know, florists and bakeries are

i want to ask about aig. can the national debt ever be completely paid off when every dollars loan with interest? where does the money come from to pay the interest? guest: 0 ultimately, we pay our taxes and there are other sources of revenue for the government. remember, i know this sounds hard, but it was back in the early 1990's when we actually had some fiscal responsibility and we were running surpluses. the government was net positive. so would it have been nice if we -- it would have been nice if we put some of that back for a rainy day. expenses went up, as you know, in the 2000's. we got involved in a very expensive war and now we are in deeper and deeper trouble. host: memphis, good morning to you, on our democrats line. caller: i'm so excited to be hearing elizabeth warren thi morning. i have a quick comment. i do have a special problem because i was a mortgage broker. also, i have a quick solution that could possibly help. i am so happy to hear her say that the investors cause a lot of the spirit

that for the record so we can compare the information that we have it came from the ig -- aog and -- aigand frankly, it did get blown up in iraq. thank you for the additional facts you have done there. let me finish up. unfortunately, if i allowed myself to, we could be here for another couple of hours. i have that many questions, but there are more hearings and we can cover many subjects through these hearings. let me ask each of you to give yourselves a grade on how well you are coordinating contracting in afghanistan. let's assume there was an "f" in iraq -- and if you think you deserve more than an "f" in iraq then you're grading on a different scale than i am. in the end, it came together, but in terms of how the logcap haven't and all of the construction confusion and the lack of accountability, you know, maybe a d minus. where you think you are now in terms of how well you are integrating, according to my train and overseeing contractors? mr. campbell's? >> yes, ma'am, i can start. right off, i would say about a "c." i think we have done a good job on the front end, where we have

hank paulson met with the entire board of june -- the entire board of aig in 2008.counting on this building broke mess. they took all of their stocks out and the taxpayers pay for everything. were you aware that they had this tarp written? guest: whether or not they had it written as a bill before the crisis occurred? i know that treasury had ordered certain studies to be made. they do this all the time. they do this in the pentagon. at the treasury they have contingency plans for everything. , that was of the first situation where we knew that we were headed to a financial disaster. when there was a failure in of breath the secretary ordered a study as to what could be done under the of this in law to a large extent i have been involved in drafting the legislative plan. we started with a small bill and ultimately it was increased to where it eventually had over 4 under pages. so, i do not doubt the veracity your statement might be correct, but i do not think it is poured into the matter. -- pertinent to the matter. we are pulling out all sorts of information. we st

hank paulson met with the entire board of june -- the entire board of aig in 2008. they're counting on this building broke mess. they took all of their stocks out and the taxpayers pay for everything. were you aware that they had this tarp written? guest: whether or not they had it written as a bill before the crisis occurred? i know that treasury had ordered certain studies to be made. they do this all the time. they do this in the pentagon. at the treasury they have contingency plans for everything. , that was of the first situation where we knew that we were headed to a financial disaster. when there was a failure in of breath the secretary ordered a study as to what could be done under the of this in law to a large extent i have been involved in drafting the legislative plan. we started with a small bill and ultimately it was increased to where it eventually had over 4 under pages. they were inserted by the legislateors in the congress when we worked on the rescue plan. i don't doubt the veer asity -- i'm thinking of his name now, our friend from the "new york t

derivatives, most were saying we have to regulate derivatives, aig, assets traded in the trillions ofdollars and that led to the meltdown and bailout and they say let's regulate derivatives. there is an end user exemption in the house bill you could drive a truck through. anyone who wants to trade on regulated derivatives can. so there -- anyone who wants to trade unregulated derivatives can. guest: this reminds me of a scene out of a spaghetti western where the army is putting the throne of rome, that imports come up for auction. the level of corruption we see in the triangle between the two congressional committees, big contributors on wall street and larry summers at the white house is so pathetic that it makes me cry and worry about the future of the country. host: let us hear what our viewers have to say. you can always reach as by e- mail as well. brad on the republican line. caller: i believe what the obama administration did not address along with the bush administration was job creation. a lot of problems in a lot of countries it is caused by unemployment. if you don't get pe

led the charge to destroy brooksley born's attempt to regulate credit default swaps, which blew up aig and resulted in billions of >> of losses to the american taxpayers. and why did he do it? he said, if you cannot have brought -- you cannot have fraud in financial markets that are this sophisticated. which is what greenspan said, which he did his may at call on. -- his mea culpa on. who is expert in fraud, the fbi or the economist at the fed? pretty clearly, the fbi, and they have chosen to put in place someone who has been wrong on every step of the way in regulation, and explicitly follows alan greenspan's's a "there is no fraud, there is no reason to regulate." >> i will also be brief. i am a co-director of the campaign for america's future, a center of progressive ideas focused on kitchen table issues. where one of 17 groups ranging across the political spectrum that have issued a letter to the senate judicial committee urging it not to vote bernanke's nomination at to the floor of the senate without first investigating but his record and his current views. demanding an investiga

ig -- aog and -- aig and frankly, it did get blown up in iraq. thank you for the additional facts you have done there. let me finish up. unfortunately, if i allowed myself to, we could be here for another couple of hours. i have that many questions, but there are more hearings and we can cover many subjects let me ask each of you to give yourselves a grade on how well you are coordinating contacting in afghanistan. let's assume there was and f in iraq and of using duty serve more than a f in my rack your greeting on a different skills than i am. i think it was an f. in the and it got better, but in terms of how it came back and how long cat happened and reconstruction happened and confusion and lack of accountability may be d. what do you think you're great as in afghanistan right now in terms of how well you are integrating, coordinating, monitoring and overseeing contractors? >> mr. campbell? >> yes, ma'am, i can start. right off i would say probably about c, and let me put that in perspective. we have done a good job toward the a and b range o

derivatives, most were saying we have to regulate derivatives, aig, assets traded in the trillions of dollars and that led to the meltdown and bailout and they say let's regulate derivatives. there is an end user exemption in the house bill you could drive a truck through. anyone who wants to trade on regulated derivatives can. so there -- anyone who wants to trade unregulated derivatives can. guest: this reminds me of a scene out of a spaghetti western where the army is putting the throne of rome, that imports come up for auction. the level of corruption we see in the triangle between the two congressional committees, big contributors on wall street and larry summers at the white house is so pathetic that it makes me cry and worry about the future of the country. host: let us hear what our viewers have to say. you can always reach as by e- mail as well. brad on the republican line. caller: i believe what the obama administration did not address along with the bush administration was job creation. a lot of problems in a lot of countries it is caused by unemployment. if you don't get p

investments to generate positive returns unlikely we will be repaid for all over investments in aig.gm and chrysler even there the outlook too is improved and you'll see newest it mass in the report we're issuing today. we'll continue to manage t.a.r.p. in transparent and accountable manner. erier this morning treasury published or maybe sometime today not sure it is out yet. published first annual financial statements for this program. these statements discuss in great detail the operations and impact and expected cost of the program. gao provided unqualified opinion of those statements included no material weaknesses in internal controls and this is a notable achievement for the men and women who have helped put in place this very important program in a short period of time. let me just end by emphasizing as you did the importance we continue to work to reinforce the process of repair in our financial system. it is absolutely essential to make sure we establish a strong recovery that have put americans back to work and it is very important because of the consequences kre -- kre yad

and huge bonuses -- saw negotiations with the edgy and huge bonuses coming out of the pockets -- with aig leadership like thousands of jobs being lost every month, continuing to cap-and-trade bill. we lost 7 million-plus jobs in the last year, and we've not made any effort thus far -- i am very disappointed that we did not fund the transportation and infrastructure bill, which would have put thousands of people back to work. the stimulus bill did not have e-verify in it. we did not even know if we were putting americans back to work or non-americans back to work. a lot of that disappointed me. iç was willing to discuss it, i was willing to work with anybody who would listen to me, but i did not find that i had a place at the table. >> what about a call from the state democratic party to return thousands of dollars of donations? >> we would be happy to do that. absolutely. ç>> what you said people were disappointed -- what do you say to people who are disappointed in the decision of may? -- you have made? w3ç>> even though i voted agait the administration on major issues initiatives, i'

that for the record so we can compare the information that we have it came from the ig -- aog and -- aig, it did get blown up in iraq. thank you for the additional facts you have done there. let me finish@@h@@ rr@ @ @ @ @ r terms of how well you are integrating, according to my train and overseeing contractors? mr. campbell's? >> yes, ma'am, i can start. right off, i would say about a "c." i think we have done a good job on the front end, where we have put together some lessons learned. we put out guidance, training for these officers and enlisted soldiers here in the state's been trained before they go over to afghanistan on serp and serp management. i think we have done well on the front end. where we are lacking and concentrating our efforts now is more of the back end. we have systems in afghanistan that track a a contract in and systems that track the financial piece. we have systems that track with the corps of engineers do to track content -- construction projects. to what we have got to do now on the back end is link them together. that is one of the things that we do in this rev

that for the record so we can compare the information that we have it came from the ig -- aog and -- aigditional facts you have done there. let me finish up. unfortunately, if i allowed myself to, we could be here for another couple of hours. i have that many questions, but there are more hearings and we can cover many subjects through these hearings. let me ask each of you to give yourselves a grade on how well you are coordinating contracting in afghanistan. let's assume there was an "f" in iraq -- and if you think you deserve more than an "f" in iraq then you're grading on a different scale than i am. in the end, it came together, but in terms of how the logcap haven't and all of the construction confusion and the lack of accountability, you know, maybe a d minus. where you think you are now in terms of how well you are integrating, according to my train and overseeing contractors? mr. campbell's? >> yes, ma'am, i can start. right off, i would say about a "c." i think we have done a good job on the front end, where we have put together some lessons learned. we put out guidance, traini

back immediately, when you look at chrysler, general motors and, of course, 31-plus billion dollars to aighat tim geithner himself now said we will not get back it is clear that even if all of the other monies given to various organizations through a process of buying mostly preferred debt, if, in fact, all of that is paid back with interest, the offset of the nan we now know we're going to lose would barely make us whole without considering interest is anything other than principle payback. so, mr. chairman, this is the book end. we have only a few questions for our esteemed witness and we appreciate you bringing her here today, but this is not the end of presenting the american people's money, not the end of this committee's jurisdiction of ensuring that the intent of law becomes the fact in law. with that i thank the chairman and yield back. >> thank you, gentleman, for a statement, and that maybe what we can do is that with some of this 47.5 billion, that is use it to create job and job opportunities. maybe that's a good way to use it. >> mr. chairman, i would certainly appreciate a bi