ben bernanke has done everything he can. i only wish that -- i think if the american people realize that every pension fund in the world, in the world was tied up in all of these derivatives and this whole mess. i have followed this for the last 2 1/2 years and lost a fortune in this mess. they would come to understand what is going on. but the people that got us in this with their policy, since 1994, which are the republicans, are the ones that made the biggest fools of themselves, especially darrell issa of california. and the other one is the other buffoon, dan burton of indiana. these are people who are all about capitalism, yet they know nothing. they are absolutely ignorant when it comes to monetary policy. the person that should have been in that seat was alan greenspan, who got us in this mess. and these republicans sat there and green light and all of those policies because they were in charge and they did no oversight. as a result, business people and the very people that they claim they are ousoul in favor of, are

does the president we approved ben bernanke? if you look at the set of economists that he is likely to pick from, and the kinds of people he picks, they are the kind of people who will let the president run the printing presses. they believe in lots of government. that is their point of view. my feeling is the person that is most likely to take the punch bowl away from barack obama is ben bernanke. he would not be a person that barack obama would choose if he was not there already. he is more likely to exercise some monetary discipline than anyone else the president appoints. i would suggest that at some point there will be some kind of showdown between the fed and the administration over money. at that point, all of those conservatives out there that like to put jefferson about central banks will be very happy to have what is left of an independent and a boric economists over there holding the crank. host: north carolina on the democrats' line. caller: have you read a book called fool's gold? guest: know i have not. can you giv

>> i am not going to make news about ben bernanke. i think he has done a fine job under a very difficult circumstance. i would say that all financial regulators did not do everything they needed to do to prevent the crisis from happening. that is why we have put forward a bold as a set of reforms in financial regulation in 75 years. there were too many gaps. there were laws on the books that would have brought about a prevention of the crisis. the enforcement was not there. there was not sufficient law in some cases. i think the fed probably performed better than most other regulators prior to the crisis taking place. they would be the first to a knowledge that in dealing with systemic risk and anticipating its, they did not do everything that needs to be done. since the crisis occurred, ben bernanke has performed very well. one of the central concept behind our financial regulatory reform is that there has got to be somebody who is responsible not just for monitoring the health of the individual institutions but someone who is monito

on capitol today, fed chairman ben bernanke before a house committee, taking questions on that merger between bank of america and merrill lynch. one headline in "the new york times," the gop expected to paint ben bernanke as an ally of big government. the senate health committee continues its market appearance today on the issue of health care reform. nancy pelosi holding her weekly news conference. president obama meeting with some members of congress. today the issue is immigration. there's also a white house picnic on the south lawn for lawmakers. governor mark sanford admitting his affair yesterday on the front page of "the washington times." social conservatives fall from the moral high ground. that is our focus for the next half-hour. our phone lines, as always, 202- 737-0001, of our line for republicans. 202-737-0002 for democrats. if you are an independent, the number to call is 202-628-0205. beginning with the "los angeles times," another gop bombshell. the "atlanta journal constitution," where the governor flew back cut from his trip to argentina, a costly confession for the

>> i'm not going to make news about ben bernanke. although i think he has done a fine job under a very difficult circumstance -- under very difficult circumstances. i would say that all financial regulators didn't do everything that needed to be done to prevent the crisis from happening. and that's why we've put forward the boldest set of reforms in financial regulation in 75 years. because there were too many gaps where there were laws on the books that would have brought about a prevention of the crisis, the enforcement wasn't there. in some wayses -- cases there just weren't sufficient laws on the books, for example, with the nonbanking sector. i think that the fed probably performed better than most other regulators prior to the crisis taking place. but i think they'd be the first to acknowledge that in dealing with systemic risk and anticipating systemic risk they didn't do everything that kneed to be done. i think -- needed to be done. i think since the crisis has occurred, ben bernanke has performed very well and one of the ce

i think it is interesting to see ben bernanke talking about fiscal discipline. that is appropriate within the context of what we were talking about. i watched the testimony to congress. it was not the fiscal stimulus of the great depression that was a problem but it was that it was not big enough. that is what he said. the fiscal stimulus along with monetary -- is causing people to think longer-term. how much more doesn't put the fed in a position of being more outspoken? you are the ones that have to pick up the pieces that the other end of it. >> we have to understand the ramifications of fiscal policy and government spending and how it will affect the workings of the u.s. economy. we have to understand where we are on that trajectory. it is standard fare for us to be paying attention to the confectionary effects of fiscal programs as well as other programs in the international environment. we have to understand it more or less accommodation should be put in place to keep inflation in the range this is supposed to be in. you are talking about over and above th

host: do you see ben bernanke best being different? caller: he was with green-scam during those years. guest: there is an interesting debate that has not yet been resolved about the role that the fed plays in creating this financial crisis. after the 2001 recession there was a fear we would go into japan-style deflationary. the fed cut interest rates to only 1%. then they said there would keep it there for a long time and did. there is an idea that the cap parades too long and created this excess in the housing market. but there is-a isview of this that the fed -- there is a counter-view that the fed was responding to powers beyond its own. interest rates were facing downward pressure because there was so much money flooding into the economy and of the u.s. system from places like china, russia, saudi arabia which had these large surpluses and excesses' of dollars that were flowing into the united states. even as the fed started to raise interest rates in 2004, loan rates which are tied to mortgages continued to stay long. it was a con

. >> and knelt federal reserve chairman ben bernanke discusses last year's bank of america merger with merrill lynch, a deal that included billions in taxpayer dollars and over $100 billion in government guarantees. this lets about three hours, 16 minutes. -- it lasts about three hours, 16 minutes. >> the meeting will come to order. order. today we are continuing our investigation of the bank of america acquisition with merrill lynch. this was a most unusual transaction. on september 15th, 2008 bank of america announced that it was purchasing merrill lynch, creating one of the nation's largest financial institutions. at the time, it was a merger negotiated between two private parties. design for the exclusive benefits of private shareholders and paid for exclusively with private money. for months later on january the 16th, 2009, the world discovered that merrill lynch had experienced a $15,000,000,000.4 quarter loss. most importantly, we discovered that the merger had taken place only after the federal government had committed to give bankamerica $20 billion in taxpayer money. in short

did he did it -- did ben bernanke say that you should not disclose the information, did this come to you from any way from bernanke? >> henneberg said that we should not disclose anything that was already disclosed. i never heard from him on this issue of not disclosing something. >> it looks like you are trying to go somewhere. ing. >> anything else -- look like you')gg@@ @ @ @ @ m" z >> when did he do this? >> he expressed this on more than one occasion. >> last but not least, you are experienced, and you have used the trade judgment -- great judgment. this was based on your own experience. this was of the clearest -- clear blue sky. >> the were out of line with other institutions and the institutions that we have. >> this was not this kind of situation? there was not a mac situation? >> i can't say that there wasn't a mac because we never called it so we just don't know. >> very well. >> if the gentleman would yield for a moment. >> my time is up. >> the gentleman's time is expired. i now yield to congressman flake from arizona for five minutes. >> thank you, mr. chairman. i just

. >> but next, federal reserve chairman, ben bernanke, updates members of congress on the upper air -- on the economy. next, the labor secretary talks about the employment situation. after that, senator john ensign on the future of the republican party. >> tonight on "q &a" governments daniels. he was director of the office of management and budget under president george w. bush and a senior adviser to president ronald reagan. that's at 8:00 eastern tonight on c-span. >> federal reserve chairman, ben bernanke, testified before congress on the state of the economy. some of the topics addressed are the gm bankruptcy, interest rates, and health of the nation's banks. this is just over two hours. >> the committee will come to order. we meet today to hear the distinguished chairman of the federal reserve, benjamin bernanke, testify on the recession that is plaguing our economy and on the prospects of recovery. chairman bernanke testified before our committee on october 20 of last year, as we searched for ways to mitigate, if not avoid a long recession. the chairman acknowledged then that m

federal chairman ben bernanke thought lewis was using the marle losses as a bargaining chip to obtain federal fund. other e-mails reveal that federal analysts found it suspect that mr. lewis claimed to be surprised by the rapid growth of merrill's losses given the clear sign in the data. they noted that at a minimum it called into question the due diligence process. bank of america has been doing in preparation for the takeover cht in short, the treasury department had provided a $20 billion for a shot gun wedding. but the question may be, what was -- who was holding the shot gun? at today's hearing, we hope to better understand what happened in the four months between september 15, 2008, when the merger was announced, and january 16, 2009, when the public learned that bank of america had received $20 billion in taxpayer money. we will be looking for answers to some puzzling questions. why did a private business deal announced in september, and approved by share holders in december with no mention of government assistance end up costing taxpayers $20 billion in january? did paulson an

. >> first, on ben bernanke, he spoke on capitol hill today. many are concerned about fed policy role in the bank of america merger. -- about the fed's role in the bank of america merger. >> the president has confidence in the role that the fed will play going forward to ensure what has happened will never happen again. >> can you give us a flavor as to forwaht president -- as to wt president obama will be speaking of? >> we saw her in germany not to many weeks ago. i think they will continue conversations as we get to the g-8. it will be on continuing to get the economy back on track. they will talk about clean energy and climate change. obviously, north korea and iran would be discussed as they were in germany. i assume that issues like guantanamo bay and others will be on the docket. >> yesterday, at the health care reform, president obama expressed frustration on how the budget office scores health care. is he planning mass it -- is he planning not necessarily to listen to what the cbo says? >> obviously, they are the budgetary scorekeeper.

the face on this is alan greenspan and his successor, ben bernanke. they are inflating the money supply. we have not seen all of the consequences of that yet, but it will destroy our currency. people in america should at least try to understand that, and go to people who were warned of this before it came about. i recommend the book meltdow"men ,"m i think people need to understand that and read up on at and concentrate on the institution that causes it, the federal reserve. host: 1 of the things that the president outlined this week was overhaul of our financial regulatory system. today in the new york times, they write about how it is already being met with separatism on capitol hill. they signal an unwillingness to accept the white house is a recommendation, expect -- especially expanding the power of the fed reserve. inflation is just another word saying i have to deal with higher prices with a little money i have. nothing new. next to raleigh, north carolina. caller: my concern -- i would like to compliment the last caller on him being informed.

before the crisis to over 2 trillion now according to the remarks made by federal reserve chairman ben bernanke. in the short run government interventions have stabilized the market but i fear these repeated multibillion-dollar taxpayer bailouts are weakening the financial system and now threaten our economic future combined with a current administration to borrow and spend this policy many have come to believe including myself the vast expansion of the fed's balance sheets is in itself becoming a systemic risk to the national economy far greater than failure of any private financial institution. it all so i think fundamentally affects ability to borrow money and price at which we borrow the money. to restore the economy we should reject a philosophy that has transformed us into a bailout nation. however there are some who want to further enshrine the field government policy of rescuing too big to fail institutions by crafting a resolution authority or systemic risk regulator which would give the government and government eurocrats' priorities tax payer money to prop up certain financial instit

a few weeks ago, ben bernanke was the commencement speaker and his -- his message was simple. the flexible and open minded in dealing with the fact that life is unpredictable. he quoted john lennon, who said, life is what happens when you are busy making other plans. i would like to promote the beatles as well. it was paul mccartney who said, yesterday, all my troubles seemed so far away. we're often reminded of ringo starr as we get by with some help from our friends, and i am not aware of any hidden messages, but some of the statements made more sense if you read them backwards. now to a more serious subject. following the worst financial crisis of the last 70 years, we are experiencing a recession that will surpass those of the 1970's and 1980's. the response at the fed has been to look for programs different from the past. these programs are put in place for these exceptional circumstances. they will have to be changed as we returned -- we return to normal. this morning i would like to discuss what underlines these policies, and some issues that we must address. these are

ben bernanke was the commencement speaker at the boston college school of law and a few weeks ago. his message to the graduating class was simple. the flexible and open minded in dealing with the fact that life is unpredictable. as part of that speech, he quoted from the beatles, john lennon, like is what happens to you why you are busy making other plans. this morning i would like to quote the beatles as well. in regards to the current economy, i think it was paul mccartney who said yesterday all my troubles seemed so far away. now it looks like they are here to stay. [laughter] at our meetings, we get by with a little help from our friends. i am not aware of any secret messages embedded in fomc statement, but i have been told that some of our statements make more sense if you read them backwards. [laughter] i do not agree with that. now to a more serious subject. following the worst financial crisis in the past seven years, we are currently experiencing a recession that will likely match or surpass those of the 1970's or 1980's in depth and severity. the circumstances depots grea

the current chairman, ben bernanke has done a fair amount to do with the risk in terms of after the fact setting regulation on the right course. he has also done a lot of credit cards, but after the fact. there is a lot of negative sentiment towards his predecessor. but it leaves the concern of whether you only read this into the hands of the fed chairman and that is why the administration has proposed creating an agency for regulating these financial products. especially with credit cards, mortgages, and for a one case -- and 401k's. host: good morning to our caller from louisiana. caller: when the federal reserve reduces the interest rate -- how long does it take for that to get to your local bank? also, i always thought if you did not have 20% down on a loan for a house that you had to pay a certain type of insurance on that. can you answer those two questions? guest: absolutely. the question of how long the fed interest rate changes takes this kind of complicated. normally the fed, it could take six months up to 18 months to have the full effect flowing through the economy. obviously

it is what allowed chairman ben bernanke under exigent circumstances to open the lending window to any institution from a bank to insurance co., to an ice cream shop. most people considered that and necessity. but you will see will add a step to that. maybe after three months the fed needs to close it down. in some way to rein in the power. host: here is tampa, fla. on that our republican line. caller: i would like to ask you a question. they regulate a lot of things. then they turn around and said that they will regulate these people at the top who get ridiculous bonuses. once the government steps in to say they are bailing them out i think all of that should come to an end, do you know what i mean? guest: it is something the administration has addressed just last week. they officially unveiled their restrictions on recipients of the tarp money. that includes appointing a compensation for czar, special master of pay to look directly at that. if you have received federal funds, the government believes it has the right to tell you what you can and cannot receive. host: that is for those

nowhere in the legislation did it suggest that hank paulson, ben bernanke or anyone else operating on behalf of the united states government was given the power to force shotgun weddings. today we're going to hear from ken lewis, ceo of bank of america. a man who spent decades understanding the value of financial institutions. we will hear about the transactions, the ratios determined for a stock trade type merger were in fact considered to be reasonable. as the chairman has said, rightfully so, the federal government played a clear part in this, but the american people should understand their dollars were not given to any party in this transaction, but, in fact, loaned at an amount substantially greater than the interest rate paid by the federal reserve. as such ken lewis had an obligation to reck fliz they were going to have to pay this money back and they had to receive value in this transaction. allegations made throughout the press and will undoubtedly be reiterated here today. that the value that was being questioned by bank of america had something to do with getting more money

how is ben bernanke doing? guest: that is a very interesting question.e is been very criticized for doing extraordinary things that would of been required by any better reserve chairman in his shoes. i have no problem with what he has done. i believe him about merrill lynch and bank of america, knowing what kind of academic administrator he was. reading is testimony. i am fairly confident that he is telling the truth. let us put that one aside. with regard to monetary policy and the banking crisis, he extended a great deal of credit. that needed to be done where the situation would have collapsed. when he did not do as regulator of the bank holding company is good will conditions on the way they run themselves. it would've been hard to oppose the kinds of reforms necessary in new york to get the job done. he did not do that. he gave them the money. rocket -- record profits and goldman sachs uno accountability. -- and no accountability. the same goes for jpmorgan. host: we have read about the latest economic plan by president obama. it would give more pow

it was supported strongly by the chairman of the federal reserve, ben bernanke and bipartisan leadership. the rank and file never liked the program much. to the caller's other point, with the federal reserve -- one of the interesting questions is just how powerful the fed is. it has been very aggressively getting the financial system stabilized. most people think they have done a good job, but will have a difficult time removing programs to return to more normal operations. there are a lot of questions on the separation between the fed and treasury. mr. bernanke is asked that a lot when he testifies. he responds that it must be independent but during a serious financial crisis id must work with the treasury and government in power to keep the economy stabilized. host: our guest is with market news international ,john shaw has joined us to give us insights and answer your questions. florida, scott on our independent line. caller: good morning to you both. the big picture seems the reason why we needed this tarp which, yes, republicans and democrats -- whoever would have been president wou

federal chairman ben bernanke fought louis was using the merrill losses as a bargaining chip to obtain federal funds. other e-mail's revealed that federal analysts found a suspect that mr. lewis claimed to be surprised by the rapid growth of merrill lynch posted losses giving the clear signs in the dead. they noted that at a minimum, it calls into question the due diligence process. bankamerica has been doing it in preparation for the takeover. in short, the treasury department has provided $20 billion for a shotgun wedding. the question may be, who was holding the shotgun? @ today's hearing, we hope to better understand what happened when the merger was announced, and when the public found out that the company had received $20 billion in taxpayer money. we will be looking for answers to some puzzling questions. why did a puzzling bit -- why did a public business deal approved in december with no mention of government assist

i think it is interesting to finally see ben bernanke finally talking about fiscal discipline, which seems appropriate within the context of what we are talking about. i watched the testimony in congress, and he said it was not a fiscal stimulus and the great depression was the problem. he said it was not big enough. the fed supported, as you noted, the fiscal stimulus, along with monetary stimulus in the beginning of the crisis, but is now calling on congress to think longer-term. thhow much more does it put the fed in a position to be more outspoken in perhaps the economic functions of washington at this stage of the game when you are the ones who have to deal with picking up pieces at the other end? >> the part of that that is central to the federal reserve is to understand the ramifications of fiscal policy and government spending and how it affects the workings of the u.s. economy and how that position as well or not so well the path of sustainable growth and where we are on that trajectory. it is standard fare for us to be paying attention to the stimulative or contraction rate

just had a long talk with ben, ben bernanke, i presume, says they think the mac threat is irrelevant because it's not credible and tends to make it more clear that if they, meaning bank of america, play their card and then need assistance, management is gone, period. and then says forgot to tell them that kl, i believe that's you, ken lewis is near retirement, close. the there's a different dynamic going on here. there is -- remember the context of all of this is the sky is falling, as mr. cummings said. and tremendous pressure on everyone. they think you're playing a game. they think you're throwing this thing out as a red herring in that they think what you're really trying to do and what some people suggest you might have been doing was to leverage taxpayer support by falsely putting this mac out there. the fact that you're going to let this deal crash, walk away, even asserting -- you don't have to win the mac, as you said before, you don't have to win it. this deal needs to stop and then i think the weight of all of the forces that play there with lehman and everything else, wer

host: let me go back to the editorial that focuses on ben bernanke and his role as the fed share. it says mr. bernanke will need political courage we have not seen since paul volcker was chairman. to prevent another bottle. they are talking about the housing and credit card bubble. -- to prevent another bubble. host: he did had amazing courage and strength -- guest: he did have strength to counteract the problem in the country, the loss of confidence in the dollar. he took action and was criticized for it, but stuck with it and passed a better situation with his successor, alan greenspan, who did a very good job. host: but some point to his policies as one of the reasons we are facing this situation today. guest: i am one of those critics come out because towards the end of his very effective term, the fed get too easy. -- i am one of those critics, because towards the end of his affective term of the fed got too easy. we can look back at that and learn lessons. the most important lesson is don't do that again. i call it get back on track. get on what was working in much of the 198

. -- ben bernanke or henry paulson. i realize that you do not want to characterize -- to characterize it as a threat or any one word. but did you feel that you were being pressured to go through with the deal at least as strongly as that salesman trying to sell you the car and get you to close or the insurance salesman. you know the pressure i'm talking about. were they advocating strongly and using both positive and negative forces to do so in those conversations? >> yes, sir, but i think it was in the context of them thinking was in the best interest of bank of america and the financial system. >> you said the best interest to bank of america and the financial system. i'm not going to quible over their motives on the financial system. but why do you say bank of america? did you believe that they really believed this was a good deal for bank of america, even know you were seeing a change which would have affected your arm's length negotiation of a price? >> well, their concern obviously was from the top and that is for

he is not anti regulation like some folks with that label would assume, but he is a real fan of ben bernanke and not of alan greenspan is also been explain when he doesn't like about greenspan end what he does like about bernanke. >> what i like about bernanke it is the man has been a very courageous i think, he has been doing things that would have been unimaginable a few years ago but given the fact as an academic his main focus was the great depression and he knew that he couldn't wait too long to do some pretty drastic things given what we saw in the financial and the banking sector. he said the -- he studied bearcat carefully what happened in the 30's and you can say that the great depression became her the great depression because the monetary authority is, the federal reserve didn't do anything or at least certainly not enough to stop at the banking crisis did firmly degenerating and i think the big thing he did and who was probably one of the first world wide realizations that he had to step in and do whatever was necessary to stop a banking crisis. personal he used interest a policy

first event of the day features author johan van overtveldt and his new book bernanke's test: ben bernanke, alan greenspan, and the drama of the central banker. >> bosin and in the end class l. class . .

the chairman of the federal reserve, ben bernanke, considerably more decorous then the chinese students in testimony before congress wednesday. but only slightly less skeptical. "maintaining the confidence of the financial markets requires that we as a nation begin planning now for the restoration of fiscal balance. the editorial says it is serious to time -- is a serious time to get serious about deficit. caller: good morning. i do not understand it. i thought that we had a debt approaching 12 trillion dollars right now, and if i understand the gross domestic product of our nation, it is in the 14-15 trillion dollar range. so i do not understand where they get the 40%, the 80%, the round numbers. host: the numbers can become blurry, but it is the year-to- year deficit, the overall debt. you are right, the last i saw, the overall debt was $11.9 trillion. caller: i still do not understand what you just said. we go $12 trillion. our gdp is $14 trillion or $15 trillion. so how do we get 40% or 50% out of that? host: are you talking about gdp per year? caller: yes, gdp per year. host: yes,

institute] [captions copyright national cable satellite corp. 2009] >> later federal reserve chair ben bernanke up bathes updates members of congress on the state of the economy. >> today on newsmakers, hilda felice talks about the latest trends in the job market. >> this past wednesday, two days after general motors' bankruptcy, democrat and republican senators voiced their dispproval of the closing of dealerships and john rockefeller of west virginia is the chair of the commerce and transportation subcommittee. this is three hours, 15 minutes. >> uh, this hearing will come to order. three weeks ago chrysler announced it was going to terminate franchises on a nationwide basis. i spoke with pete lopez, who is here with us. he is not a dealer from -- he is an autodealer from west virginia, it's not the largest city in the world but it's one of the finest and right in rural west virginia and just sort of sets up the whole tone of this. and he learn that had his contract had been terminated. you know, with chrysler. so obviously he was very concerned about that. we talked on the telephone, and he

in two hours, fed chairman ben bernanke faces questions from a house committee investigating whether he and other government officials pressured bank of america with a merger with merrill lynch that cost taxpayers $20 billion. live coverage of the house oversight committee hearing at 10:00 a.m. eastern time on c- span radio. also on the hill, former vice president al gore meets with the democratic caucus at lunchtime in support of a scheduled vote this week on energy and climate change. and those are some of the headlines on c-span radio. >> as this year's supreme court term comes to an end, here it chief justice robert stock about the court's work. then a panel of experienced court watchers including linda greenhouse, jan crawford greenberg, and ted olson review the decisions. saturday morning at 9:00 a.m. eastern. >> july 4 weekend, discover an unfamiliar side of our nation's first president as we are live from george washington's mount vernon estate with historian and author john ferling. sunday, july 5, lion on "in depth." >> "washington journal" continues. host: we want to welco

most economists predict fed chairman ben bernanke will not raise interest rates. those are some of the latest headlines on c-span radio. >> as this year's supreme court term comes to an end, here chief justice roberts talk about the court tossed work. as well as some court watchers, including linda greenhouse, gen crawford greenberg, and ted olson. live coverage at 9:00 eastern on c-span, saturday. >> join our 3 our conversation sunday, july 5, live on in depth on c-span-2's book tv. >> how is c-span funded? >> through donations crac? >> my guess is government funding. >> the viewers? >> how with c-span funded? 30 years ago america pause cable companies greeted c-span as a public service, a private business initiative. no government mandate, no government money. >> "washington journal" continues. host: our guest is representative todd akin. good morning. >guest: good morning, a pleasure to join you. host: tell us what is happening on your committee. guest: the armed services committee looks over all the military needs of the entire country. i iman see, power, ther

question the president got about the financial situation was about the federal reserve and about ben bernanke saying that the president did support the fed chair bernanke saying also that the federal reserve could have done a better job in anticipating systemic risk in the markets. next up is virginia, frank on our independents line. hi. >> caller: hi, sir. this is really the first news conference where i thought the president just seemed at ease and handled himself quite well. i really was impressed with his, the way he dealt with the reporters. and then the other side is the reporters, i guess, are all part of the white house press corps, i think. >> host: well, most of them are, yes. >> caller: and i do think that -- this is what i thought. i said to myself, gee, it's like the white house press corps is like they act as if they're in a cocoon. i think we'll probably know more when, when this gets analyzed. >> host: well, tell me what you mean specifically by cocoon. one caller mentioned they hadn't asked about north korea, another said they didn't ask about treasury bonds, explain what you

and federal reserve chairman ben bernanke discusses the economy at a house hearing.

the federal reserve chairman, ben bernanke, recently told congress it's time for the obama administration to develop a strategy to address record deficits or risk long-term damage to our economy. he said, quote, unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth. unquote. a good bill is a balanced bill. but providing the disproportionate level of of funding to one agency creates an imbalance that undermines the legitimate needs of other deserving agencies. that is why i question a $10.6 billion budget for the e.p.a. a 38% increase from last year. this on top of a 7.2 billion the agency received in the stimulus package and 7.6 billion it received in the enacted 2009 interior bill. taken together e.p.a. will receive over $25 billion this calendar year alone. that's about the size of this subcommittee's entire budget just two years ago. while the e.p.a. will recve an extraordinary historic funding increase, it's worth noting that the u.s. forest service has -- was recently rated as one of

host: today's "the wall street journal" editorial that focuses on ben bernanke and his role. he will lead political courage we have not seen since paul volcker was chairman, to exit from all of these efforts in time to prevent another bubble. talking, of course, about the housing and credit card bubble. guest: again, i think it is a very good point. first of all, paul volcker did have amazing coverage and strength to counteract a very serious problem in the country. i inflation, loss of confidence in the dollar. he took action plan and was criticized tremendously but stuck through it and then passed a much better situation to his successor, pete successor, alan greenspan, who also did a good job for many years. host: but many point to alan greenspan's policies for one -- as one of the reasons we are in this edition today. guest: i would say i was one of his critics. because of the very end of his term, the fed that too easy for too long, and that 1% interest rate i think is at the heart of the housing boom, the housing bauble, and the bust. we can look back of that period and

just over two weeks ago fed chairman ben bernanke was the commence map speaker at the boston collegel of last his message to the graduating class that day was simple: be flexible and open-minded in dealing with the fact that life is unpredictable." as part of that speech he quoted from the beetles john lennon who said, "life is what happens to you while you are busy making other plans." this morning i'd like to begin by quoting the beatles as well. in regards to the current economy i believe it was paul mccart any who famously said, "yesterday all my troubles seemed so far away. now it looks as if they're here to stay." [laughter] >> at our f.o.c. meetings we're often reminded of ringo starr as we "get by with a little help from our friends." finally i'm not aware of any secret messages embedded in statements like "i buried the phillips curve" but i have been told that some of our fmoc statements make more sense if you lead them backwards. i don't agree with that. but all right. now to a more serious subject. following the worst financial crisis of the past 70 years, we are currently

federal reserve chairman ben bernanke discusses the economy at a house hearing. and at a meeting of the campaign for america's future, progressives discuss their role in an obama white house. >> a hearing on federal health care spending. the secretary of health and human services, kathleen sebelius, testified about her department's annual budget at this hearing of the house appropriations committee. the white house has proposed an $879 billion h.h.s. budget for fiscal year 2010. that's a $63 billion increase over this year's budget. this hearing is two hours 15 minutes. this hearing is two hours and 15 minutes. >> -- before this subcommittee. i noted the presence of the kansas call. [laughter] and we welcome that, too, today. madam secretary, when i was in the legislature i served with a fellow by the name of harvey do helm who was a retired dairy farmer, on lee as a basset hound on a bad day. [laughter] and he was probably the best human being i ever served with anywhere. and one of the things he always said he said you know one of the problems with this country

chairman ben bernanke talk about restoring fiscal balance. could you comment on that and where you see as going over the next few years, assuming that the economy gets turned around? >> it is true in critically important for this country that we put into place a framework that gives confidence that we will have the ability to bring our deficit down to a sustainable position over the medium-term. the president and his initial budget laid the path for dramatic reductions to bring the deficit down to a level at which a our overall burden is not growing. >> i heard that the debt will triple in 10 years now more than one half hour ago. >> we came into the administration where we had the chance to late a strong foundation for strong dollar. i am a deep believer and have deep conviction in the central importance of fiscal responsibility. we began this year in the worst financial crisis in decades and because of that we had to do, with the congress, extraordinary things. by necessity it produced a short-term temporary increase in our deficits. there

and ben bernanke recently made a statement to congress about fiscal discipline. and the role that deficits could play in the future in terms of spurring inflation, a little warning shot to congress and the administration to think beyond the current recession. and there's many questions about how badly the current deficit problems could later influence inflationary pressures, how much will they complicate your job at the federal reserve to not have more fiscal discipline, and what is going to be the interaction. so what's your sort of sense about inflation and the issue of monetary versus fiscal stimulus which i think both you agreed on at the time were certainly needed at the time. but with the exit strategy discussing with the g-7 right now, is that just your exit strategy but it's how do we get out of of fiscal deficits as well. >> so this is an unbelievably difficult time for everybody. and personally i looked at the last election as no matter who won the election, this would be the administration that had to deal with the fiscal issues facing the country and

at the same time federal reserve chairman ben bernanke was here on capitol hill calling for fiscal restraint. every dollar spent by the government is taken from the people in taxes or borrowed against future generations. our nation's fiscal responsibility is so lacking that a developing nation snickers at the mention of sound investment in our debt. traveling the world begs creditor nations allowing us to continue our spending binge is not the kind of international engagement we should make. it will turn around because of our people, not because of out-of-control government spending and borrowing. i yield back. the speaker pro tempore: for what purpose does the gentleman from oregon rise? mr. defazio: to address the house for one minute. the speaker pro tempore: the gentleman is recognized for one minute. mr. defazio: republicans gave us a medicare prescription drug benefit -- complete with doughnut hole based in subsidizing the health insurance industry and the prescription drug industry. now they're at it again. they're absolutely opposed to a public plan option for health insurance becaus

per quote, just had a long talk with ben, the parentheses, bernanke, says they think the mac threat isirrelevant because it's not credible. also intends to make it even more clear that if they play that card they need assistance, management is gone. now, is he misunderstanding with the conversation he has with you in those quotations? >> i don't recollect everything said in the conversation. i would like to make again, two points if i may. >> do you believe that he is incorrect according to your recollection? because he's saying in a nutshell you planned to make a threat. now you may not have done it but he's saying he planned. is he lying? >> i don't recollect the details of the conversation. i would like to say to things. first, as you point out, i never did make a threat. i never did raise this issue with ken lewis or bank of america -- >> did you think pulling the trigger on the map was a bargaining chip? >> may i make my second point? >> briefly -- >> i would like to point out what he referred to was not -- he didn't say that if lewis were to invoke the mac he would be fired, he s