when he bailed out aig, you are facing opposition. -- when he bailed out aig, you were facing opposition. why did you did it? what is your reaction? >> we took the action. i do not know where you get the idea that our advisers were against it. they were not. you know, when the lessons i've learned -- before i became chairman, alan is a professor. one of my major interest was economic history. i read a lot on the great depression. i took to lessons from the great depression. one is that monetary policy needs to be supportive of the economy. it was incredibly tight in the 1930's. the the other lesson was that broad based financial crisis is destructive to the broader economy. this has been learned over and over again in many other contexts. it is important to try to prevent a systemically important and critically interconnected firm from collapsing in the middle of a broad panic me. the whole system was under a lot of pressure. we are doing our best to prevent a disorderly collapse of a financial firm. there is no doubt in our mind that we needed to do what we could. the tools were very li

aig stopped insuring them. >> charlie: why? >> aig figured out there was a problem. they knew. >> charlie: was this when hank greenberg was there had he was gone. some argue he would have recognized the risk and done something because he was an obsessive manager. >> we'll never know the answer to that. what is true is that aig smoked out there were problems with the securities they were insuring quite early. they stopped insuring them but what they didn't do was hedge their risk. in other words, the risk they held they just kept. >> charlie: paid some of it with counter parties. >> none. not until it was way way too late. they were very -- >> charlie: asleep. >> yeah. very asleep. meanwhile so merrill lynch -- >> charlie: because they were making money. >> has it machine going and don't want it to stop and put triple-as on their own books and they built an exposure from $5 billion to close to $50 billion in the space of the year without any top executives realizing what was going on. that is astonishing. >> charlie: all this risk exposure was going and people at the

but that was a goldman deal. >> you read his mind. >> they rescued aig so the aig could pay the money to goldman sachs. >> i think aig was more powerful than goldman a few years back. then it flip flopped. let's have this conversation. we've been asking people coming to our show, given the enormity of the budget deficit, how do you deal with this longer term? >> they have the means test social security. >> explain what whatever that mean. >> it means well to do people would get little or no social security. it is ridiculous for well to do wealthy people to get social security just because they've paid into it. we are in an economic emergency. they shouldn't be able to get it. smith medicare should be means tested. >> can i jump in? what you're suggesting is a radical transformation of the contract that was made between the government about these program. i'm not disagreeing with you. >> yes. i think the contract has to be renegotiated. because we simply can't afford to pay it anymore. and i think they should be making serious cuts in reopportunity dante government agencies them do the

insurance giant aig has come up with the money to pay back the loan. it raised $37 billion for the sale of two foreign insurance units. those sales will be added to previous money the company raised to repay $100 billion in taxpayer funds that aig received during the financial crisis. >>> back to the world series it has been a long, long time since the giants won the world series. consumer editor tom vacar looks back at how different things were back then. >> reporter: the last time the giants then of new york won the world series america was a very different place. there were 123 million of us. the entire federal budget was just $71 billion. the national debt just 271 billion. unemployment just under 3%. and what you could buy for a dollar then cost almost $8 today. the average income was $22,000. a home was just over $10,000. rent averaged $85 a month. car prices averaged from 1550, . 17 cents a gallon. u. s. mail was how we communicated 3 cents a stand. a quart of month 23 cents. loaf of fred 21. t bone stakes sold for 95 cents a pound. cereal 20 se

when he bailed out aig, you are facing opposition. -- when he bailed out aig, you were facing opposition. why did you did it? what is your reaction? we took the action. i do not know where you get the idea that our advisers were against it. they were not. you know, when the lessons i've learned -- before i became chairman, alan is a professor. one of my major interest was economic history. i read a lot on the great depression. i took to lessons from the great depression. one is that monetary policy needs to be supportive of the economy. it was incredibly tight in the 1930's. the the other lesson was that broad based financial crisis is destructive to the broader economy. this has been learned over and over again in many other contexts. it is important to try to prevent a systemically important and critically interconnected firm from collapsing in the middle of a broad panic me. the whole system was under a lot of pressure. we are doing our best to prevent a disorderly collapse of a financial firm. there is no doubt in our mind that we needed to do what we could. the tools were very limit

for example, one of the principle men who sank aig was joe kasano. was eventually removed from the company bup let's take a look at the results of that. he got to keep his $600 million that he made while running the financial products division. and the american taxpayer got stuck with a $182 billion bill. casano wasn't gambling with his own money. he was ultimately gambling with your money. but when he lost your money, he got to keep his earlier winnings anyway. but even if taxpayers aren't involved, it's the shareholders that take the hit. not the executives. do you know that none of the privately held financial companies crashed during the 2008 financial collapse? it's because the partners were invested in their companies. it was their money and they didn't want to lose it. so they didn't take the same kind of risk that the publicly traded companies did. you see? that makes sense. that's why we have to change the system. i call this the casano loophole. it isn't just about aig or goldman sachs. it's about the whole system. it incentivizes corporate

aig representatives to discuss the funding. he later met with aig officials to close that deal. aig did not donate because of the perceived headline risk. the respondents listed in get to the center from david rockefeller who donated $100,000 from his personal funds in tribute to the respondent. the respondent in directly received gifts from private entities and individuals when they donated money to the center at his request and in his honor. e respondent received updates from both the city college and his staff on the status of funding for the rental center. he kept track of what was going on. he focused his energies and his time on private sector fund raising for the rangel center, particularly after a $3 million earmark that he requested which fell through in 2006. these facts are uncontested. they are in the record before you. they clearly and convincingly established that the respondent violated counts 1-8 in the statement of alleged violations. his financial disclosure and tax issues -- the uncontested evidence in this r

he later met with aig officials to close that deal. aig did not of a because of the perceived risk. the respondent is soliciting gifts from david rockefeller who donated $100,000 home from his personal fund in tribute to the respondents. he indirectly received gifts from private entities and individuals or when they donated money to the center at his request and in his honor. the respondents received updates from of the city college and his staff on the status of funding for the rangel center. he focused his energies and his hot on private-sector fund- raising. particularly after a $3 million earmarked that he would sell through along with other earmarks' in 2006. these facts are uncontested. they are in the record before you. they clearly and convincingly established that the respondent violated counts 1-8 in the statement of alleged violation. the financial disclosure and tax issues, when the uncontested evidence establishes that the respondent repeatedly did not get his financial disclosure statement and tax filings correct. he has admitted as much. gosh when it comes to the negl

that amount is from funds used to bail out insurance giant aig and automaker chrysler and gm. >>> apple's ipad is expected to take a big bite out of the personal computer market. a research firm predicts tablet devices will account for 10% of the pc market by 2014. the firm also cut its forecast for pc shipments next year from 18% to 16%. experts say it's an early sign of the wild popularity of the ipad as having a real impact on the computer business. >>> and the kardashians want out of the debit card business. the reality show sisters lent their name and image to a prepaid debit card just three weeks ago. the so-called kardashian card was aimed at young adults, but the card has come under attack for high fees that far surpass other cards on the market. on monday an attorney for kim, khloe and kourtney asked the company behind the venture to immediately stop using the sisters to sell the product. the company said that it will comply. betty? >> all right. thank you so much. ashley morrison joining us live here in new york. thanks. >>> straight ahead your tuesday morning weather. and in sp

when he bailed out aig, you are facing opposition. -- when he bailed out aig, you were facing opposition. why did you did it? what is your reaction? >> we took the action. i do not know where you get the idea that our advisers were against it. they were not. you know, when the lessons i've learned -- before i became chairman, alan is a professor. one of my major interest was economic history. i read a lot on the great depression. i took to lessons from the great depression. one is that monetary policy needs to be supportive of the economy. it was incredibly tight in the 1930's. the the other lesson was that broad based financial crisis is destructive to the broader economy. this has been learned over and over again in many other contexts. it is important to try to prevent a systemically important and critically interconnected firm from collapsing in the middle of a broad panic me. the whole system was under a lot of pressure. we are doing our best to prevent a disorderly collapse of a financial firm. there is no doubt in our mind that we needed to do what we could. the tools were very li

he later met with aig officials to close that deal. aig did not of a because of the perceived risk. the respondent is soliciting gifts from david rockefeller who donated $100,000 home from his personal fund in tribute to the respondents. he indirectly received gifts from private entities and individuals or when they donated money to the center at his request and in his honor. the respondents received updates from of the city college and his staff on the status of funding for the rangel center. he focused his energies and his hot on private-sector fund- raising. particularly after a $3 million earmarked that he would sell through along with other earmarks' in 2006. these facts are uncontested. they are in the record before you. they clearly and convincingly established that the respondent violated counts 1-8 in the statement of alleged violation. the financial disclosure and tax issues, when the uncontested evidence establishes that the respondent repeatedly did not get his financial disclosure statement and tax filings correct. he has admitted as much. gosh when it comes to the negl

i am accountable with the automotive cases that i am with aig because it leaves the automotive cases however quickly they happen, however fast to happen, happen at least in accord with a transcript and some transparency. and we understand exactly who was get what it seems the example that has been adopted by the dodd-frank bill because i really see the resolution authority as being more like aig and less like the bankruptcy cases. so generally speaking, going forward if we are worried about solvency, bailouts, what role bankruptcy place you should be very concerned about the resolution authority and dodd-frank because it is far less transparent than a bankruptcy process would be. it's also perhaps going to be even more value destroying any bankruptcy process would be. so i have a lot of concerns in that regard. maybe i will stop there in -- >> i have a question. just a straightforward on the ground question. could you explain how he referred to but could you explain to them and i include myself in that number, dodd-frank. you just criticized, what is it? what does it do? how does it

for aig. ots had for theirs but it was a little bit of the firm but there's no federal agency had ownership or felt responsibility to go out and figure out what's going on. and there's at least two agencies at least certainly treasury, the secretary -- the share of the fsok and the systemic oversight over the whole system and the free safety of the system. and they're not going to find every problem or avoid every crisis but at least there's a responsibility and ownership and the ability to gather the information. i know we're going to get to it later but i worry about once we get the information and once there's a problem what can they do about it? but that's -- that's a second issue. >> i certainly don't envy the governments and the regulators in the position they find themselves in right now. if you think about sort of what we've been through for the past couple of years and the idea of -- out of dodd-frank saying, you know, never again as secretary wolin we want to make sure there's no mor

controls turning programs into contribution plans, selling off fannie mae, freddie mac, selling off gp, aigu can bring the fiscal situation back into control quickly. you will get such economic growth you will have huge increases in revenue. we can really change america and make it back into the dream that we all really hope it will be. we can do that john: i hope he's right. that's our program and the battle for the future.

aig said it's raised $37 billion from the sale two of insurance units.he money going towards repaying that government bailout it got two years ago. >> and up next, 7 on your side's michael finney ask a surprise for a buyer of a foreclo closed home received. >> when he went can a smartphone be its own guardian angel ? can it keep an eye out for itself, literally show and tell you where it is when you don't even know yourself ? droid can with lookout mobile security, one of thousands of free apps for the droid x and droid 2 by motorola. available on the ever-expanding android market. when there's no limit to what droid gets, there's no limit to what droid does. >>> there are thousands of tragic stories of families losing their homes to foreclosure. >> there are families moving into those homes, who often end up with challenge autos many discovering problems related to property taxes and this can be a complicated process. >> this shows how complicated and how consumers have to watch out. the new owner of a foreclosed home entitled to refunds, however, no on

controls turning programs into contribution plans, selling off fannie mae, freddie mac, selling off gp, aigou can bring the fiscal situation back into control quickly. you will get such economic growth you will have huge increases in revenue. we can really change america and make it back into the dream that we all really hope it will be. we can do that john: i hope he's right. that's our program and the battle for the future. i'm john stosseló;7

meantime aig swinging to a third quarter loss. the bailed out insurer rolled down -- and took charges tied to repaying rescue ploafns ceo is selling assets and planning to raise funds from private equity investors to repay tax pairs. staying with earnings, kraft beat expectation buzz missed on revenue but that rose because of high prices for product pppedz food companies say they are increasing prices to cope with rising costs, wheat, dairy and sugar. >>> elsewhere, serious says it's trying to make the holidays as stress-free as possible for shoppers. the retailer is now offering in- store pick up options like wal- mart and sears to go app for smart phones is available and a lot of free shipping promotions. before i go, quick check of the markets. stocks are fluctuating throughout the session. jobs report pushing shares higher but stocks are lower. i'm courtney donohoe, now have a great weekend. >>> at&t -- customers are blocked from some popular cable charges. 2.7 u-verse customers no longer get channels such as food network and

also, more broadly in this context, i am more comfortable with the automotive cases ban in with aig, right? because at least these happened in court with a transcript and some transparency. we understand exactly who was getting what in those transactions. a id is not a very good example, but -- aig is not a very good example, but it seems to be the example that has been adopted by the dog-franc bill -- dodd-frank bill. . >> thank you. as i said in the video, i am not sure why i won this award. i am is simply a representation of the youth around the globe in the roots and shoots network. we were doing actions together changing our communities and changing our world. it is altering our individual futures and our future as a generation. it is an inspiring to me to travel around the country and the world and seek used everywhere i go working in their communities to help might future that to help the future of my children and my children's children. that is what keeps me going everyday. it is an honor to win this award. thank you. [applause] >> i would just like to say one more thing. i w

>> yeah, steve, you obviously saw it very close as you were the lead lawyer on aig. >> one of them. [laughter] >> yeah, one of them. let me ask if you were a treasury like now, what all would be going through your mind? if you had to give one piece of advice to treasury right now, what would it be? >> i think -- that's tough. there's so many big issues right now out that they have to deal with. i think part of the advice is to, you know, focus and get a few things right. you're not -- the legislation requires a pretty aggressive time frame. there's nothing you can do about that. on the systemic risk counsel with which treasury chairs, i think there's a need to put in the time to really think through those issues and try to get them right, and in some ways, you know, priority number one to get solid answers that give certainty to the market place because it makes it difficult for companies to operate with uncertainty and you don't know what the rules will be. picking those two things and working them and growing out from there i think is naturally what has to happen. that's certainly

he's become aig conservative but remembers why liberalism once sold. in the days of pat brown you had an education it will system that went from berkeley to the local community college and smaller schools in between and the state college system in between. there was something for everyone and the coastal areas kept open for public use and a highway system it's within the liberals began to dedicate programs and said, y know, well means testing in stez of having programs for everyone. the great thing about infrastructure is is it for everyone and they'll support if if it means pat brown and building things for everyone not certain programs which drives the middle class people through the roof and it's a point liberals ought to listen to. >> chris has gone all cementy on me. >> i love cement because it cracks all the time and you have to replace it which is very much a democratic notion. >> charlie: that's what happens when they come to this program, they go to a place they haven't been before. but chris, in your own home state of pennsylvania the preside

aig was regulated. aig financial was regulated by one regulator. leverage -- >> hold on -- [ everyone talking at once ] >> out of control, you know? and i think the president's been way too light on them. >> i want to move this conversation on to the latest cnn poll, which we asked the cnn opinion research corporation poll, how's the economy today, good or poor? only 18% said good, 81% poor. how will it be a year from now? 52% say it will be good, 46% will say poor. those seem to be, james, pretty high expectations for the president, if 52% think it's going to be good a year from now. if it's not good, there will be a lot of disappointed voters out there. >> yes. yes. if the economy doesn't get better, people are not going to be happy. absolutely. there's not much argument there. some of the things that are coming out here recently, they're actually pretty good. actually, the stock market has really liked this president. it's been pretty robust at the, you know, after march of 2009, i guess it is. the stock market always likes democrats better. the

if you look at the report, there's still aig difference between a spanish speaking immigrant and english speaking native born in terms of thr satisfaction with the county. >> at firsthe policy allowed officers who suspected someone may be an illegal immigrant to ask about their immigration status. it was later changed to require checks for anyone arrested. critics of the policy commend the police for reaching out to the hispanic community. and while the reportsays the policy is not affected most types of crime, there was a substantial drop in aggravate add salts. >> a uva hasonclude there'd was a direct connection between e cracking down on illegal immigration and a drop in violent crime in our community. >> the autho of this study even put in a disaimer about the accuracy of its findings. that's because there were a number of factors in play when the legal immigration policy went into effect, including the collapse of the economy, the housing market, and the constructi industry. in woodbridge, jane watrell, ne 4. >> stewart plans to lobby for the state of virginia to pass a similar w st

it's like the people who were okay with taxing people from aig, 90% on their bonuses.d never see the money from it. they want to see somebody else get hurt. this isn't a time to start attacking people and say attack the rich, those dirty rich, these evil rich. the rich are not the issue. the issue is you should be able to live in a country where you, yourself, can become rich. god bless capitalism. i said it here first. we need to be able to instill policies that keep the spending down. and allow the opportunities to fwr grow. >> i don't know if you're the first one to say that, but i appreciate the sentiment. >> maybe here. >> thank you for joining us today. >>> 22 million living americans have served in our armed forces in some capacity. we honor those men and women. 2.1 million men and women served in iraq and afghanistan. 40% have been deployed two tours. 300,000 have gone back three or four times or more. michelle o'rourke's husband is serving in afghanistan with the 101st airborne division. how many times has he been over there? >> this is his fourth deployment w

of unusual things, that made a lot of people up set such as bailing out bear stearns and bailing out aig and extending loans to banks and so forth. and so this actually resulted in a lot of criticism and pressure on the independence of the fed. will you recall there was a movement in congress about a year ago to audit the fed. and so bernanke and his staff basically took the view, they couldn't just sit there and take it. they had to take their message to the people, as it were. >> now this was in an international forum so start on the international side. because a lot of today's message was aimed at who and saying what? >> sure, so essentially the background here is that in the last few months the fed has expanded what they call their quantitative easing program. normally when they want to stimulate the economy they lower short-term interest rates but they are already at zero. so now they are trying to lower long-term interest rates by buying bonds. one of the secondary consequences of that is that the dollar falls. but when our dollar falls somebody else's currency has to go u and that

i am more comfortable with the automotive cases than i am with aig. at least the automotive cases happened in the court with transcripts and transparency. we understand exactly who was getting what in the transactions. aig is not a very good example, but it seems to be the example adopted by the dodd-franc bill. generally speaking going forward, if we are worried about insolvency, bailouts, what role bankruptcy plays, you should be very concerned about the resolution authority in dodd-frank because it is far less transparent and the bankruptcy process would be. it could be even more value- destroying. i have a lot of concerns in that regard. i will stop there unless you have or questions. >> i have a question. could you explain dodd-frank? what does it do and how does it do it? >> i will not explain all of it, but i will attempt to explain the resolution authority. irresolution authority is the new bankruptcy process -- the resolution authority is the new bankruptcy process for financial institutions. if everybody gets together and agrees it should be

also, more broadly in this context, i am more comfortable with the automotive cases ban in with aig,right? because at least these happened in court with a transcript and some transparency. we understand exactly who was getting what in those transactions. a id is not a very good example, but -- aig is not a very good example, but it seems to be the example that has been adopted by the dog-franc bill -- dodd-frank bill. going forward, if we are worried about insolvency, a bankruptcy bailout, and what role the government will play, we should be worried, because it is far less transparent with the role of government will be. i am a lot of concerns in that regard. i will stop there unless you have more questions. >> i have a question and it is a straightforward on the ground question. could you explain, you referred to but could you explain to the uninitiated, and i include myself in that number,dodd- frank? you just criticize that. what does it do? how does it do it? >> i will explain the resolution authority. the resolution authority is this new bankruptcy process that is not under the

aig fog we had early this morning -- patchy fog we had early this morning. chillier tomorrow.day, 53, good for travel. >> check the bottom of your screen for updated news and traffic information. back at 7:55 with another live update. >>> 7: 30 now on a tuesday morning, the 23rd of november, 2010. just this morning, the royal family has announced that prince william and kate middleton's wedding will be held in that building right there. that's westminster abbey. it will be held on april 29, a spring wedding for the most talked about couple in the world. kate's next decision, who will design her wedding gown. >>> meanwhile, across the pond, kind of a sunny morning here in manhattan, our plaza filled with use susan boyle fans, she'll be performing in our 8:30 half hour. >>> the latest on the phoebie prince case. she is the teenager who committed suicide after allegedly enduring relentless bullying at school. coming up her aunt speaking out in an exclusive interview. >>> and sarah palin's new book is out today and what she writes about president obama has some saying it could be

here with no federal agency head direct oversight for aig and there was a little bit of the firm, bute's really no federal agency head or ownership to feel responsibility to go out and figure out what's going on and there's at least two agencies, you know, certainly treasury, the secretary chair and the fed there's systemic risk over the whole system and the free safety of the system. they're not going to find every problem or avoid every crisis, but at least there's ownership and ability to get information. i know we'll get to it later, but i worry once they get the information and there's a problem, what can they do about it? but that's a second issue. >> i think i certainly don't envy the governments and regulatories they find themselves in now. if you think over the last few years and the dodd-frank thing and never again there's no more loss or crisis of that magnitude, and let's pull the regulators together and say okay no one understood who was in charge before, and now it's you guys. it's similar to being at homeland security and the best you hope for is that nothing happens. i

we were being told that if aig and some of the others had collapsed they would have pulled down so much the rest of the economy with them we would have had a major meltdown. megyn: here is what i want to know. i watched this interview with matt lauer last night, and it was very interesting, i don't know if you caught it, but president bush was the first one to sort of blame himself, and to criticize himself on a lot of issues. he refused to place any blame or criticize our current president, president obama, he didn't think it was right an hasn't done that in the past two years he's been out of the office. the tone president bush struck, i'll start with you lars. i know they hate it, they are thinking, they are bailing out wall street and why should we do that. for lack of a better term feeling people's pain and explaining why he had to do it seemed to be sort of a similar message from what we've heard from president obama and delivered in a different way. was the former president more effective at communicating that, i feel your pain message than we've seen from president obama? >> won

gregg: sentence that what arizona was aig sayisaying, it appearance but can be any time, anywhere forother reason. >> yes. and the judge was saying because she is experienced in the world it will become appearance because cops will go on a hunch and that is not covered by the constitution. gregg: i heard that somewhere, probably from you. judge andrew napolitano, good to see you. >> good to see you, gregg. martha: while you and the judge were talk being had that news crossing the wires. it appears michael steele will have a challenger to his republican party chairmanship and it will come from a michigan republican, used to be head of the michigan republican party launched a bid to lead the republican national committee a couple of years ago, which was unsuccessful and he'll take another crack at it, saying he thinks the candidates should be this ones in the limelight, which is seen as a bit of a slap at michael steele who has garnered a lot of attention in his leadership role at the r.n.c., that is the news, crossing the wires, wanted to bring it to you, as soon as we got it and we'll

most of those compensation decisions were consensual after tough negotiation with aig and bank of america and citigroup and the others and it was more a mediation and a negotiation than imposition of sanctions. but that's another one i'm asked about and then of course now as tom referenced bp. bp. now, all of ese tragedies in american history going back to agent orange in the 1980s which is my first experience at coming up with designing, implementing and administeringompensation systems. all of theseragedies have a few common denominators when it comes to my work. first they are exceedingly rare. over the past 25 years of practicing law the number of tragedies that give rise to a creative innovative alternative to the traditional legal system you can put on one hand i've witnessed efforts at trying to expand the notion of creative funds and creative alternatives statutory, judicial, private negotiation, largelyhey don't work. . they don't work. but there are a few examples that i can point to that tom points to that you know like 9/11, like bp. we are policymakers -- where policymakers d

they cordate with the fbi and i would refer you to them related to the aig investigation. thank you very much. >> 0.1%, the trajectory seems to be going up. how confident are you that that will be positive next quarter? >> these cycles tend to run in fairly predictable ways. we had the declining commercial loan balances for several consecutive quarters. wednesday the recovery came, it was pre consistent. you have seen, through the regulatory survey, that lending standards have changed. i think loan demand has lagged behind. large companies have gone straight to the market in recent years. they're starting to come back a little bit more to the banks. small businesses have lagged behind somewhat. they are seeing a lot of demand for their products. it has been a slow turnaround, but, once it does take place, then it will be sustained. >> will it be 0.1% again next quarter? >> we do not have a prediction for what it will be next quarter. but history shows that the cycles of contraction are very sustained. they run their course. and the cycles of expansion are sustained. and th

they cordate with the fbi and i would refer you to them related to the aig investigation. thank you very much. >> 0.1%, the trajectory seems to be going up. how confident are you that that will be positive next quarter? >> these cycles tend to run in fairly predictable ways. we had the declining commercial loan balances for several consecutive quarters. wednesday the recovery came, it was pre consistent. you have seen, through the regulatory survey, that lending standards have changed. i think loan demand has lagged behind. large companies have gone straight to the market in recent years. they're starting to come back a little bit more to the banks. small businesses have lagged behind somewhat. they are seeing a lot of demand for their products. it has been a slow turnaround, but, once it does take place, then it will be sustained. >> will it be 0.1% again next quarter? >> we do not have a prediction for what it will be next quarter. but history shows that the cycles of contraction are very sustained. they run their course. and the cycles of expansion are sustained. and th

it is alike and to aig selling to an insurance contract, taking your money and running away with it and leaving you with a blank sheet of paper. host: bob, we will leave it there. guest: thank you for your call. your view is a common view, and to some extent it is correct. i think, by the way, the terminology here is something we should not get hung up about. i can call these programs mandatory programs. it has become common to talk about them as entitled to programs, but either one is accurate. on your point about the trust funds, you are right in that we had surpluses in the trust fund for many years up until today. those surpluses were used to fund the operating deficits of the federal government, so that is correct. but the other thing that needs to be understood is that there was never any sort of real assets behind the trust fund iou's. it was just an accounting gimmick in the federal budget. gimmick is the wrong word, but an accounting mechanism. i disagree with you in the debate, that there weren't any sort of real assets in which to pay for these benefits. you are right, in tha

we made an incredible investment in aig. we're going to make a profit on that deal.t is a little bit of a failure of communication. but it's not all that. >> mike, what's so interesting is that washington is more divided than ever. you look at the house, the democratic caucus, more liberal than before. the republican caucus, more conservative before. democrats got the same percentage of votes in 2010 as in 2006. it's the independents, these extremes just don't get. democrats won independents by 18 percentage points in 2006 and lost them by 18 percentage points in 2010. it's these independents that both extremes seem to lose every two years. >> they're not appealing to either. >> they left the democratic side of the aisle in the past election because of their perception there's an inability to govern in washington. washington is led by the democrats, democratic senate, democratic president. there's also a sense among a lot of people that there is a political/intellectual arrogance to this administration. it might be wrong, but i think there's a sense that it prohibits