idea the deregulation has not always been good, and especially when you're dealing with what alan greenspan called his flawed philosophy. up.se, sir, and i will hang guest: thank you for asking. areo-author and i neither pro-regulation or anti-revelation. we are looking for smarter, more accountable regulation. there are obviously regulations we need that are integral to the safety and well-being of the economy. there are other relations that may have been well minded, but did not work out. is significant problem congress the private sector in reality moves faster than government. the financial crisis, there were financial devices and instruments being created that were complex. the government is perpetually trying to play catch-up that. that feeds into our proposition that government has to be smarter. the way it does so is by having more expertise in-house. host: we talking about his article in national affairs, the case for the congressional regulation office. most directfer the congress toow compete in the regulatory arena, as it has not done in many years. this would not make legislato

after the near collapse of global markets, former federal reserve chairman alan greenspan said, "no twonything in common except human nature." and that is where we pick up with pulitzer prize-winning journalist thomas friedman. what part did we as individuals play in what went wrong? what can we do better? thomas: when someone comes to you, selling you a home mortgage, and telling you the only thing they need to do is check if you can fog up a knife, and not show your income statement, that is a pretty good sign that it sounds too good to be true. it usually is. also, should we really have to pass a law that tells bankers, "you cannot give a loan to someone who cannot pay it back?" i mean, do we need to pass a law to do that? so people were doing such manifestly obviously unsustainable things because they always thought, what i call ibg or ybg, i will be gone or you will gone. i will do this mortgage, because i will be gone. i will package this into 1000 bonds, i will sell it to somebody, and i will be gone. they pawn it off to another investment bank in france and they will be gone. yo

john b taylor, stanford university, alan greenspan on the other side, talking about discretion.es andyou on discretion and the efficacy of that strategy for any given central bank? >> the word i think most critical here is fed independence. tohink that to look ahead 2017, 1 of the big political footballs may prove to be the independence of the fed which i be in thisbe -- must country. so when we talt thk aboutaylor rule and so on, i think it is a good starting point. the fed obviously uses many different mathematics. also, models to determine where they want to be, where they think interest rates will be. view, the logical back. >> are the checks and balances within the washington system to give us the miracle of 1951, usurped for a very independent fed. 25 years on. we want to drive that. everyone agrees with you. we want an independent that. other checks and balances to push back the mood of so many that support the president? >> i think it is important that it not just be the president but also to congress that a knowledge is that the fed should be independent. when the feder

john b taylor, stanford university, alan greenspan on the other side talking about discretion. are you on rules and discretion and the efficacy of that strategy for any given central bank? abby: the word i think that is tom, isitical, fed independence. i think that, to look ahead to 2017, one of the big political footballs may prove to be the independence of the fed, which i think must be sacrosanct in this country. now when we talk about something like the taylor rule and so on, i think it is a good starting point. the fed obviously uses many different mathematical models to try to determine where they want to be, where they think interest rates will be, but the taylor rule by itself is just one tool, in my view, in the larger tool bag. tom: are the checks and balances within the washington system to give us william mcchesney martin's miracle of 1951. you served with a very independent, relatively independent fed 25 years on. we want to drive that forward, everyone agrees with you, are the checks and balances to push back the mood of so much support of the president? abby: i t

bush, we were heading towards surpluses, alan greenspan was worried we might be paying down the federal deficit too fast, and they undertook major tax cuts under bush. the broader issue is, if a democratic president was politicizing individual investment decisions of companies and attacking them each time they made a decision to invest somewhere else in the u.s., you would have republican leaders in congress and for that matter the u.s. chamber of commerce exploding. but right now they're willing to accept this as the price of getting so much else of what they want, which are the tax cuts and the rollback of federal regulations. it's unclear whether they will accept that forever. one other point, not only could these tariffs mean higher prices for consumers, but we now have, as christine knows, a global supply chain. we have products that move back and forth across borders all of the time. if you impose a 35% tariff on every part of a car that is coming in from mexico or somewhere else, it is not clear whether the final assembly of that car will still be economically feasible in the u.s

he was in a jazz trio with alan greenspan. that is another lecture. [applause] [laughter] appointed. in fairness, they did not like him. garment says that nixon was a champion hater. he hated people who opposed him. if you are in his way, he pushed through. that this is a kid who grew up in the 1930's. if you show me a christian or a jew who does not have some trace of anti-semitism in his or her soul will show you a human being who has a body that contains no germs. he says that i live in is complicated world, i understand that sometimes when he was angry he used these ugly words. i understand that he appointed me and henry kissinger. he supported the state of israel. i will play this for you with billy graham. has a little secret for that. he says that the best jews are the israeli jews. mind issee in nixon's that american jews and israel he jews.- israeli -- i'm not supporting anti-semitism, i'm not justifying it. but this guy who saves the state of israel also ended up saying these ugly things. as historians, it is not our job to sit and judge. we

it's almost like he's a presidential version of alan greenspan. >> i wouldn't go there. thank you very, very much. i think we can agree it won't be business as usual. we will keep updating you on these developments. the house was going to get the same briefing that a lot of these candidates have had, russia's role in the last election. donald trump has acknowledge it. he's not acknowledging that it affected the outcome. even some of the ridiculous charges that buzz feed makes, he wouldn't accept. >> i'm eric bolling with kimberly guilfoyle, juan williams, dana perino, this is "the five" ." a very big news day. a jampacked hour ahead. president-elect donald trump held his first news conference in nearly six months today. he answered 17 questions in total on a variety of topics, including russia, obamacare, the wall, the handover of his businesses, taxes, the supreme court and more. he kicked it all off with the bombshell unsubstantiated new reports that russia has compromising personal and financial information about mr. trump.

four years ago, and then before settingople were of over who would succeed alan greenspan and ben bernanketo nine months before their due date. i think the same thing is going to happen with janet yellen. the difference between two fed tightening's and for fed tightening's is material for a bond portfolio manager and whether or not the fed starts or stops reinvesting their mortgage backed securities next year or four years from now, it really won't matter materially to a mortgage backed securities market. lots of attention, lots of volatility generated. scarlet: no matter who is fed chair, and you have indicated you don't think janet yellen will stay on, communication is an area where the federal reserve could certainly improve. you think of the fed is intentionally trying to obfuscate when it comes out with its various signals on where it sees interest rates? nuven look at the bloomberg to see and get a sense of the projections that are kind of all tor the place when it comes wear fed officials see interest rates headed. is this the result of too many different imprecise communication too

alan greenspan said remarkably, that fraud would not be a problem because market forces would deter fraudand we saw what happened in the financial crisis when we had unrestrained, financial institutions and limited regulatory oversight. obviously the dodd-frank act was an attempt to impose new constraints on the financial sector and protect financial systems. one thing we know is donald trump and others are likely to hold back much of dodd-frank, essentially on this incredible, that deregulation -- principle, that deregulation is good for the economy. joe: thank you very much. a professor of law at the university of connecticut, james, thank you for coming on. scarlet: we are keeping an eye on the development in washington. this is the presidential motorcade going to the parade box at fourth and pennsylvania where president john and the vice president and families will emerge from their cars and watch the parade from the parade box. they finished reviewing the troops at capitol hill. from new york, this is bloomberg. ♪ ♪ this has been the privilege of my life and i know i speak we michell

sebastian joined us in the last hour with his wonderful book on alan greenspan.in london. what happens if the fed's ways to a quarter point, quarter-point, quarter-point psychology. rob: we have a different situation. one thing we have not seen, death by a thousand cuts, has been the wages side. wages are now picking up. that means it needs to move. tom: critically, do we see inflation pop in the u.s., in germany? francine, you mentioned earlier, u.k. inflation popping. is that the surprise for this year? ab: i think it is going to be theme, definitely, across the g7. the next two months, we will see some substantial changes in headline inflation. ,f we watch that very carefully and that starts to nudge up, the fed has its work cut out. tom: rob carnell of ing, the second-most important interview of the day. we will continue on bloomberg radio with him, david gura and myself. look for mr. trump's press conference. that is at 11:00 a.m. this morning new york time. this is bloomberg. ♪ ♪ jonathan: from new york city to our viewers worldwide, i'm jonathan ferro alon

the fed, famously, or infamously in 1994 raised interest rates, and alan greenspan said that was a mistake huge obstacle for bill clinton's economy in 1994. the economy took off afterwards, but he was not a beneficiary. if you recall, he lost congress in the period. he really was, you know, under siege as a president at that point, two years into it period jonathan: fantastic story with the data the matter where you are on the political spectrum. matt winkler. coming up on the program, trump's take for treasury secretary called for 2% to 4% growth in the u.s. is it feasible? we have a countdown to what could be a big 100 days for the markets. fiscal stimulus -- that is what it wants. we will discuss what is next. from new york city, this is bloomberg. ♪ jonathan: from new york city, this is bloomberg daybreak. i am jonathan ferro on this inauguration friday. futures positive, up about 15 points on the dow after a two -day losing streak. the positive tone as we count you down to the cash open. treasuries on offer throughout much of today. yields of about two basis points. 9%, the yield on t

that's what alan greenspan looked at, you have like you have a little more wiggle room. >> that's whated works on and we didn't get a wealth effect despite the market was up 170 percent under barack obama because americans still looked at their paychecks and circumstances and they had no confidence. so, you couple now, the idea that my 401(k) has come back and jobs are coming back, i'm getting a raise. that's the magic ingredient. you have all the ingredients for wealth effect that builds on itself. stuart: keith fitz, what happens if we get the growth we're taking about here and the fed puts interest rates up a couple of times. you're going to throw cold water on a market rally? >> no, it would have in the past, but here is the thing. janet yellen lost control a long time ago. she's no longer relevant and traders know it. i think even if she raises interest rates three times, and up .75, that's 60% low where normal interest rates have been normally. i don't think if it's a gradual raise it's a problem. companies are going to grow much faster than that. stuart: scott shellady, about yo

to alant -- listen greenspan, who during the height of euphoria of economy was called saint alan, theatest economist of all time. he testified to congress explaining basis of success for the economy he was running. he said it was based on growing worker insecurity. growing worker insecurity. meaning if workers are beaten , down enough and intimidated enough and ifheir organizations, their unions are sufficiently destroyed, that they can't ask for higher wages and for decent benefits, then it is good for the economy, creates healthy economy by some measure. has happened,his and the working class has suffered from it. they had a real need for hope and change. well, they didn't get hope and they didn't get change. i don't usually agree with sarah palin, but i think she nailed it when she asked at one point, where is all this hopey changey business? there wasn't any. no hope, no change. it showed very quickly in midterm in future elections. this election a con man came , along and is offering hope and change and they're voting for it. suppose people like you, people who form the sanders m