at the fed, mr. bernanke was at the fed at the same time during that period of time. the responsibilities are to supervise the banks, to deal with predatory lending, to address some of the scandalous behavior of some of the brokers in the subprime market, and yet they did nothing. all of this went on under their noses. the question for me in dealing with mr. bernanke and other oth, how many times do we have to learn the same lesson? i've been here at a time when the savings and loans collapsed in this country. it wasn't surprising why they collapsed because we had a bunch of folks who used the savings and loans as a big piggy bank. the savings and loans were actually gathering deposits from around the country and they were like roman candles, just taking a small little savings and loan and turning it into a big institution with lots of deposits overnight and then guys like mr. milken were parking junk bonds ensured by the american taxpayers and things collapsed and it cost hundreds and hundreds of bi

which is what the fed normally does. and an economy that was collapsing on employment going up and bernanke came back to his colleagues at the open market committee that does these things and says we've got to keep coming down to see you go and they did. and they are still there why. why did they do that? >> guest: the way the fed deals with a slow economy is to cut interest rates so it's easier for people to borrow and the lesson they felt they learned from the past from japan and from the 30's and things are bad the fed has to do a lot, it's a on the accelerator. as you know they didn't stop there. once they got the race to zero they kept going and found other ways to put credit into the economy buying securities in the markets to put money out there. so this is a grand experiment and frankly we do not yet know how this is going to turn out. some people think this has a worked so well given the amount of credit the fed put in the economy would have expected the economy to be doing better to let other people think they'

should the fed had a bigger or smaller role. and there's also quite a bit of interesting motion of the international level about coming up with a new set of rules for banks about how they behave and where i see there is a great deal of consensus on the big picture stuff which is important but i'm wondering whether they will be able to come to consensus on the details and what the rules are because banks in germany, france, the u.k., u.s. and japan fear different and governments tend to want to tilt the playing field in their direction and that usually prolonged things. it took 12 years to get the last one so there's certainly a lot of smoke. there's a lot of talk about this and that's better than not. but i do not sense maybe you disagree much urgency to get this thing fixed. >> host: no, i'm afraid that's right. although i guess i'm a little bit more optimistic. one thing that seems to be happening in all of the major countries is control on the executive compensation. at first hour bankers were saying well, if they control as

alan greenspan in my view made the fed a little bit too much like the vatican. she was the pope and he was infallible and most people didn't know anybody else man. bernanke came to washington determined, he said at the time, to follow greenspan's policy but to be different the greens entry i call and in the book to be the un-greenspan. i think actually a was a bit naive but it did help him build consensus at the fed so when the time came for him to exert strong leadership to push people to do think they were not entirely comfortable with he had acquired their trust. i think in the beginning he seemed kind of awkward in public like nervous. his hands would shake sometimes. >> host: yes i actually was with him recently when he gave a speech and i commented to him afterwards you seem very relaxed compared to a couple of years ago and he said life in doing this a lot. >> guest: right. i think the -- so he grew into the job. i think we are kind of lucky this crisis didn't hit in august 2006 when he'd been in the top six months. he did have a year to get used to the f

as one new york fed staffer put it, any public disclosure by aig is still subject to fed approval.of transparency we have seen in the double bailout of aig leads to distrust, which leads to anger. the question that looms over all of this, how do we prevent a repeat of the financial crisis in the future? unless the congress adopt s genuine financial services reform, it will be only a matter of time before we see another aig, bear stearns, another lehman brothers and the next big bank will be too big to fail, and the taxpayers will wind up footing the bill again and again and again. i ask my republican colleagues on this committee to join with me in fixing the system. blame is about yesterday. fixing this system is about today and the future. in the aig case, we can talk all we want to about complicated business deals, but this all boils down to a simple concept. when average people are losing their homes and jobs, the same big banks that caused the problems got every dollar back courtesy of the american taxpayer. and the federal reserve tried to keep important information a secret.

the fed was responsible. ben bernanke did not do a thing to protect consumers from this gross conflict of interest that torpedoed the financial prospects of millions of american families but he had direct responsibility. in the fed, monetary policy has been in the penthouse, as it must be. that is the primary responsibility. sapiens on this on the upper floors and consumer protection in the basement. we cannot the consumer protection in the basement. i will close with this. ben bernanke was not alone in helping us that this fire. he had a lot of company but overeat years to make critical mistake after critical mistake that in the short term large financial institutions loved but it set the conditions for our economy to burn down and the consequences for families were extraordinary. loss of jobs, loss of retirement, loss of savings and with the job loss, loss of health care. that is an extraordinary amount someone rebuild our economy and ben bernanke is not that man. thank you mr. president. president obama ha

the fed failed terribly. giving us the kind of warnings we should have had as a country of where we were headed particularly in the bank holding company area. my concerns about this are based on recent history where there has been a failure performing that function and the concern that we should be looking at something different would provide us with a greater warning and the ability to respond, not spending the last two years. i admire what you have done but it should never have gotten to that. we should have gone through for the last two years. had there been cops on the street doing their job at helping us avoid the problem why should i give an institution that failed in that responsibility the exclusive authority we are talking about? >> it is true there were weaknesses in that supervision and i describe the steps we are taking to strengthen it but the federal reserve was not the systemic regulator. it had a narrowly prescribed set of supervisory responsibilities. if you look at the firms and the markets

as one new york fed staffer put it, any public disclosure by aig is still subject to fed approval. at least two things are clear here. the entire financial regulatory was broken, and there shouldn't be any more bailouts. the lack of transparency we have seen in the double bailout of aig leads to distrust, which leads to anger. the question that looms over all of this, how do we prevent a repeat of the financial crisis in the future? unless the congress adopt s genuine financial services reform, it will be only a matter of time before we see another aig, bear stearns, another lehman brothers and the next big bank will be too big to fail, and the taxpayers will wind up footing the bill again and again and again. i ask my republican colleagues on this committee to join with me in fixing the system. blame is about yesterday. fixing this system is about today and the future. in the aig case, we can talk all we want to about complicated business deals, but this all boils down to a simple concept. when average people are losing their homes and jobs, the same big banks that caused the prob

the fed has chosen not to do that. mr. president, we need transparency at the fed. i am the author of a g.a.o. audit of the fed which now has 30 co-sponsors, which i hope that we will pass. at the very least if the taxpayers of the country are putting at risk trillions of dollars being lent out to large financial institutions, we have a right to know which institutions are receiving that money and under what terms. let me conclude, mr. president, by just saying this, this country is in the midst of a horrendous economic crisis. millions of families all over this country are at their wits end. they are suffering. they're trying to figure out how they're going to keep warm this winter, how they're going to pay their bills. the time now is for a new fed -- for a new direction on wall street, for a wall street which is helping our productive economy create decent-paying jobs. not a wall street based on greed only for themselves whose goal in life is to make as much money as possible for their c.e.o.'s. so, mr. president, we need a new fed. we need a new wall street. and

the fed, of course, has an answer: don't be ridiculous.ight now, says fed chairman bernanke, we choke off the recovery, and head back down toward deflation, depression. >> however, as the recovery strengthens, the time will come when it is appropriate to begin withdrawing the unprecedented monetary stimulus that is helping to support economic activity. for that reason, we have been giving careful thought to our exit strategy. we are confident that we have all the tools necessary to withdraw monetary stimulus in a timely and effective way. >> reporter: as to what the fed will do next. >> any hints, just between us, on where interest rates might go? ( laughter) >> well, they can't go much further down! >> reporter: so is bernanke right, or john taylor? in the end, as always for the fed, it's the same old question, the same old song. >> ♪ inflation or deflation? the choice is looking grim ♪ i wonder what john maynard keynes would say ♪ if we asked him inflation or deflation ♪ tell me if you can. will we be zimbabwe, or will we be japan? >> re

what do you think about ron paul's effort to audit the fed and then more portly, abolish the fed? >> well, he sold more books than me so far. [laughter] >> i think this is an example of why, if reasonable politicians on both sides of the aisle they'll come up with reasonable solutions, people are going to gravitate towards these unreasonable solutions. we don't need to get rid of the fed. what we can't depend on monetary policy is her only regulatory tool, which is effectively what we've done for 20 years. monetary policy is wrong. it's the human condition for monetary policy to be wrong, but we need limits on borrowing so that mistakes in monetary policy don't create any asset bubbles in one particular asset class that becomes so big that it can't fix itself without destroying the rest of the economy. and of course, we need to do better with monetary policy. but focusing on the fed and what it's done right or wrong there is a distraction, in my view. thank you. >> hi. what about getting rid of some of the regulations that i would've you've sort of part of the root cause of the pr

that's what the new york fed did. the government gave goldman sachs more than goldman sachs had any right to expect, while at the same time giving no financial relief whatever to millions of americans facing a foreclosure crisis. if that doesn't illustrate what the new york fed thought it was working for, or who it was working for, i don't know what does. you may respond and then my time is expired. >> cookman that is not true. it is unfair to the public servant -- >> what's not true? >> what you just said. >> what is not true? >> it's not true that the actions we took on a.i.g. were for the benefit of anybody but the millions of americans who at that point were suffering from the worst financial crisis since the great depression. the only way to help reduce that damage, protect that damage, was to fix the system and prevent catastrophic failure that would have made that crisis worse. that is the only motive that underpinned those actions. >> i thank the gentleman. my time is expired. mr. duncan. >> mr. secretary, you

the fed already has that information. >> by whom are the terms set?> the terms are set by the fed. >> is not something they you learn from a person? >> the rate and eligibility requirements are set by the fed. that is not what this case is about. i want to the identity of the bar or, how much they said -- >> let me just -- you're saying that the media wants to know how much they asked for? my understanding is that the media wants to know how much you gave them? >> is exactly the same thing. >> in any circumstance, and any government agency, if the government agency grants some permission, some exemption, a loan, whatever it may be that is the action of the government agency when it grants something to a corporation or whatever it may be, that is shielded from disclosure because by revealing that the government agency granted something, there would be a revelation that the person who received the grant had asked for it? >> it does not apply to the situation. >> what is the difference? correct me if i am wrong. you are saying that here is the broadcaste

so first to the fed. the fed has nothing to do with the free-market. the free market is the idea of social cooperation bounded by private property rights that we all engage in voluntary transactions with each other and we can not trespass upon other people's rights to life and property. for all the definitions you have been getting of the free-market, there is no room in that set up for a monopoly paper money producer. that violates the tenets of the free market which opposes -- the free-market would never produce a paper money system where the money is paper and renewable. the system was never created voluntarily through the free market. never. no such thing. it has always made me laugh your governments and the use of police to suppress alternatives. it has never spontaneously emerged. the fed is going to be the target of my remarks. i am of the opinion the free-market more or less works. the free market works but when it comes to money and interest rates we need a soviet czar engaging in a central plan. seems like an inconsistency. we don't need to c

as one new york fed staffer put it any public disclosure by aig is still subject to fed approval. at least two things are clear here. the entire financial regulatory was broken and there shouldn't be any more bailouts. the lack of transparency we have seen in the double bailout of aig leads to distrust which leads to anger. the question that looms over all of this how do we prevent a repeat of the financial crisis in the future? unless the congress adopts ss genuine financial services reform, it will be only a matter of time before we see another aig, bear stearns, another lehman brothers and the next big bank will be too big to fail and the taxpayers will wind up footing the bill again and again and again. i ask my republican colleagues on this committee to join with me in fixing the system. blame is about yesterday. fixing this system is about today and the future. in the aig case we can talk all we want to about complicated business deals, but this all boils down to a simple concept. when average people are losing their homes and jobs the same big banks that caused the problems

the fed was responsible. ben bernanke did not do a thing to protect consumers from this gross conflict of interest that torpedoed the financial prospects of millions of americans' families but he had direct responsibility. in the fed, monetary policy has been in the penthouse, as it must. that is a primary responsibility. safety and soundness in the upper floors and consumer protection in the basement. we cannot leave consumer protection in the basement. so i'll close with this: ben bernanke was not alone in helping to set this fire. he had a lot of company. but over eight years he made critical mistake after critical mistake that in the short term large financial institutions loved but it set the tone for our economy to burn down and it results in a loss of retirement, loss of savings and with the job loss, loss of health care. that's an extraordinary mament t of damage. we need somebody to build our economy. ben ber >> senator, a moment ago you mentioned health care. the president obviously made health care

but it did help him build a consensus at the fed.so when the time came for him to exert a strong leadership, to push people to do things that they were not entirely comfortable with, he had acquired their trust. i think that in the beginning he seemed kind of awkward in public. >> host: i was with him recently when he gave a speech and i commented to him afterwards, you seem very relaxed compared to a couple of years ago. and he said i've been doing this a lot. >> guest: i think, so he grew into the job. i think we're kind of lucky that this crisis didn't hit in august 2006 when he had been in the job six months. he did have a year to get used to the fact that -- i don't think anybody could ever appreciate just how much, how much are you now, but more frighteningly, how much every word you utter can move markets around the world. i don't think people appreciate when they come fed chairman just how loud the megaphone is. >> host: is partly the press that makes about. >> guest: we are very good amplifiers, absolutely. i also think that

so, first to the fed. the fed has nothing, in my opinion, whatsoever to do with free market to get the free market is the idea of social cooperation bounded by private property rights that we all engage in voluntary transactions with each other, and we cannot trespass upon other people's rights to life and property. that always is for all the boogeyman definitions you've been given about the wickedness of the free market, that's all it is. there is no room in that set up for a monopoly paper money producer. that violates the temmins of the free market, which opposes monopolies and the free market would never produce a paper money system like we have now where the money is paper, not redeemable. the system we have now has never been created for one chiarelli three the free-market, never. no such thing. it has always been introduced through government and threats of of violence and use of the police to suppress alternatives. it has never spontaneously emerged. so the fed therefore is going to be the target o

the cleveland fed is not equal to the new york fed. i'm interested to your answer for the record. number three, goldman sacks was the largest recipient of funds in this counter party arrangement. now as treasury secretary, your chief of staff is the gatekeeper for access to you. could you please provide his name? >> his name is mark patterson. >> thank you. >> for whom did he work before you selected him as your chief of staff? >> he worked for the president's transition team. >> before that. which wall street firm? >> this is a matter of public record and you know the answer to this question. he worked for goldman sacks. >> thank you very much. you answered my question. let me say this. you have answered the question. you answered the question. thank you. the aig transaction was disturbing to many observers. why did your government not require the bank creditors to take the lead and bear some of the cost in any plan to stabilize aig? you in effect nationalized the company and let the bank creditors off the hook. why did you as president of the new york fed not work out an arrange

bernanke was the head of the fed? then, of course, we had the new york federal reserve board participating in these conversations as well. so you're pretty much the group thad decided they should give $85 billion in september to aig. those are mostly the participants, am i right? >> yeah. we were -- as i said in my testimony i very much supported that rescue. >> in november it was the same group. you as president bush's secretary of the treasury, mr. bernanke and the new york fed@@@ use to get that $85 billion? >> they used their funds. >> their funds emanate from where? >> from the u.s. government. >> were they frees from other banks? did they come from your treasury? where do they come? >> they come from the -- the fed obviously can print money. >> okay. and did they take money that they had from fees charged to member banks or print money to accommodate this $85 billion? >> you'd have to ask the fed that. >> you're not aware? >> i'd like them to answer that question. >> you may not like to answer the question, sir,

and that those funds did not go into this maiden lane vehicle, where the fed -- the fed loan -- >> so you didn't have any knowledge of the counterparty payment transactions? >> i did not. >> are you telling us that? >> i did not. >> and are you telling us you are not aware of any of the discussions, leading to the counterparty payments with any of the principal's? >> that's what i'm telling you. >> you're telling us as treasury secretary you had no role whatsoever in the decision on counterparty payments that you didn't even -- you can ask anyone questions that you never expressed an opinion on the matter that you're completely unaware of the nature, of proposed transactions until it was contemplated and no answer any questions about how these emergency economics act or the recovery act funds would be used to stabilize aig, the one financial institution, the heart of the crisis, you just did no? >> congressman, we asked a lot of questions about the $40 billion t.a.r.p. equity investment. that was something that was our job and it was our authority. and as i said, the loan, that was a

and turn that one of the greatest fed chairman ever. so if you can find someone by that, by all means. [inaudible] >> possibly. i think he's a bit -- he's certainly want to consider. i have some reservations about his role as sec chairman. but anyway, if they could find somebody like that i would agree. but i should say realistically that's not going to happen i don't think. and with all the political impetus being on health care, i think we will be lucky if we get any sort of financial regulation through next year. so this stage i'm thinking, well, if obama's -- it's been like health care. if it's obama's legislation or nothing, i'm in favor of obama's legislation. >> the question of jobless recoveries, globalization off shoring of jobs here just a couple -- on manufacturing jobs and financial jobs are everything that i think the ratio used to be the other way around. >> it's an interesting case, and i've done traveling around the country to publicize this book. a lot of people have made it largely to me, what's happened to our manufac

fed. but it has never been the case that the investment banks were able to do that. during this great crisis fed chairman bernanke and the board of governors opened that window for direct lending from the federal reserve board to the investment banks. well, i wasn't critical at that moment. i didn't come to the floor of the senate and express criticism. i don't know exactly what they saw that persuaded them to do that. but some months later i sent, along with eight others of my colleagues who signed the letter that i drafted, i sent a letter july 31 to chairman bernanke and said the tpefrb board took -- be federal reserve board took tobgs allow all the major investment banks in the u.s. to directly access lending from the federal reserve board for the the first time in history. down in the letter i say "we now urge to you release the names of financial institutions that received the emergency assistance and how much each has received. the american taxpayers' funds were put at risk, and we

i think he wanted to be a legacy is the fed chairman who cleaned up wall street a bit. he may not be able to do that but doing a good job in the last year or so, we should give him another chance. >> you said that the individual is different than the collective, that individually it made sense to keep the bubble going. is that because you quick enougt bursts it doesn't matter? >> well, the question is why does it make individual sent to participate in the bubble? is it because you can get in and out before verse? the answer on an individual answer is yes. most people think they can. ducey if everybody tries to get in and out of the same time the bubble collapses. that is what happens in the end that there is a period, there is a period in which you can get in and out. going back to the chairman of city-- cid geek, things are looking a bit shaky are you going to be pulling back from the markets and he said no, as long as the music is playing we have to keep dancing. what he was saying basically investing for wall street management is a form of musical chairs which keynes

it talks about the fed. the federal reserve is what we are talking about this morning, specifically ben bernanke and if he should be reconfirmed. you heard our guest saying that in about two weeks or so, his term will end, and facing some opposition on whether he should be reconfirmed. rockville, maryland, our republican line. jerry, good morning. caller: good morning, sir. just a quick question. dr. greenspan has said that the federal reserve has more ph.d.'s per square foot than any place in the world. my question is, if anybody knows, i would loved to have asked your reporter, why did the federal reserve approve the purchase by wachovia of golden west with all their macabre mortgage products? it almost sounds fraudulent. in all the news reports that i've read, i've heard nothing about this, and i'm just wondering if anybody, any of your lessoners have heard anything or anybody anywhere. host: do you have any thoughts on ben bernanke? caller: well, yeah, he's a good guy. i mean, he's a great guy, and i pro

we need to rein in the fed. what did ben bernanke do with all of the trillions that he made out of thin air? host: thank you. ben bernanke was speaking in atlanta last night about financial regulation and about what led to the explosion in the housing market. here is what he had to say. >> at some point lenders and borrowers became convinced that house prices would only go up. borrowers shows and were extended mortgages that they would not be able to service in the longer term. they were provided these homes based on the notion that refinancing would allow them to manage a more sustainable blown given increasing prices. this description suggests that regulatory and supervisory policies, rather than monetary policies, would have been a more effective means in addressing the run-up in house prices. host: we were treated to one of the many charts that he used last night in his speech. tom, of pittsburgh, pennsylvania. good morning. caller: thank you for taking my call. before stating my concern relative to ben bern

scapegoat at the fed. is there many ways to interpret the election results of massachusetts last week -- the editorial begins. it said is but one thing massachusetts did not represent was a mandate to make a national scapegoat out of ben bernanke, the federal reserve board chairman. yet, two democratic senators seeking reelection in november, plus another planning to retire appear to have read it that way. they took the occasion of last week's political people to announce their opposition to another four year term for mr. bernanke, whose current one expires january 31st. the senator's attempt to burnish their populace credentials by making mr. bernanke the fall guy for all of the sins real and perceived of wall street feels the right, left, and i fed and congress that has already produced troubling attempt to subject the fed to interests of counterproductive of its of its monetary policy. well, that is a partial resuscitation of the editorial. i can convince the editorial by saying the editorial board at t

bernanke's leadership, the fed even tried to keep the details of a.i.g.'nts to its counterparts secret. the emails clearly demonstrate the kind of culture that bernanke oversaw at the fed, one of secrecy to stifle important public disclosure. again, it is not his money. after the difficult financial year we've had, common sense dictates a change in leadership at the federal reserve. reconfirming mr. bernanke to a second term is like putting a stamp of approval on the health of our unstable economy while guaranteeing more of the same failed policies. more of the same is not the solution to our economic downturn and crisis in our financial markets. we need a complete departure from the failed policies of the past. mr. bernanke steered our financial system directly into the rocks. should we really put him at the helm again? no. the speaker pro tempore: the gentleman yields back the balance of his time. the speaker recognizes the gentlewoman from arizona, mrs. kirkpatrick, for five minutes. mrs. kirkpatrick: i ask unanimous consent to revise and extend my rema

we need to rein in the fed.llions that he made out of thin air? host: thank you. ben bernanke was speaking in atlanta last night about financial regulation and about what led to the explosion in the housing market. here is what he had to say. >> at some point lenders and borrowers became convinced that house prices would only go up. borrowers shows and were extended mortgages that they would not be able to service in the longer term. they were provided these homes based on the notion that refinancing would allow them to manage a more sustainable blown given increasing prices. this description suggests that regulatory and supervisory policies, rather than monetary policies, would have been a more effective means in addressing the run-up in house prices. host: we were treated to one of the many charts that he used last night in his speech. tom, of pittsburgh, pennsylvania. good morning. caller: thank you for taking my call. before stating my concern relative to ben bernanke and his predecessor, john bolten is hard

so, the fed changed the direction because the fed became a provider of credit and really stepped in toreplace the dysfunctional private credit markets. that's not my subject for today, but i think it's important to see the ineffectiveness of traditional monetary policy in being able to generate a recovery as the rationale for the fiscal policy. i reluctantly came to that conclusion in the summer of 2008 that we needed a significant fiscal stimulus. usually fiscal policy is a bad choice. it's a bad choice because the lives ourselves on. but this time in contrast to the traditional ten-month peak to trough history this time the lag was clearly going to be a lot longer and on top of that monetary policy was ineffective. so i supported the idea that we needed to have a fiscal stimulus summer to the dismay of some of my conservative friends. i advocated in any article in october of 2008 in the "washington post" that whoever was going to win the election the next month was still going to be a senator whether it was mccain or obama and that they should move immediately to develop a fiscal pol

and when you have that situation, the fed is unable by itself to stimulate the economy. host: so keeping rates real low doesn't do it, as low as they are now, just not going to stimulate the economy? guest: no, it doesn't. you have to have some engine pull the economy along, and that engine that be fiscal policy, that is, government spending. and a lot of people think that, well, if you're going to do something on fiscal policy, we should just cut taxes. but the problem is that tax cuts i don't think are going to have any impact under the particular circumstances we have right now. and i think it's a mistake to have a one-size-fits-all policy that worked under completely different circumstances and to say, well, let's just do it again under completely different circumstances. it seems to me that the keysneian model fits current economic circumstances better than any other one that we know of. host: so some fiscal stimulus was necessary in passing -- in congress passing it earlier this year? >> yeah, i did support the idea of fiscal stimulus, but i warned at the time that

they criticized the fed's handling of the financial bailouts. that left the white house to issue a statement, saying the president still has "a great deal of confidence" in bernanke, and believes he'll be confirmed. but wall street sold off again today, amid the uncertainty both about bernanke and the president's tough talk on banks. the dow jones industrial average fell nearly 217 points to close below 10,173, the lowest since last november. the nasdaq index was down 60 to finish at 2,205. >> woodruff: and for more about the bernanke story and how it connects to the economic and political fallout from this week, we're joined by david wessel, economics editor for "the wall street journal." david, good to see you again, let's start with the market drop. do you have a sense, an understanding of how much of that is due to the kemp that bernanke might not be reconfirm ed? or how much is due to the president's bank proposal? >> well, you know, it's very hard to figure out what the market does and why it does it. but i do think that there is realizati

"scapegoat at the fed. is there many ways to interpret the election results in massachusetts last week," the editorial begins. it says, "but one thing massachusetts did not represent was a mandate to make a national scapegoat out of ben bernanke, the the federal reserve board chairman. yet two senators seeking reelection in november plus another planning to retire appear to have read it that way. they took the occasion of last week's political ufp haoefl to announce -- up thaoefl announce their -- upheaval to announce their opposition to mr. ben bernanke. *f by making mr. bernanke the fall guy for all the sins real and perceived of. that has already produced troubling attempts to conduct audits of its monetary policy. that is a partial recitation of the editorial. i can condense the editorial by saying the editorial board at the "washington post," as is always the case, has taken the position that if anybody wants to know anything about what the federal reserve board is doing, it's none of their business. i

this humiliated the feds.rsey's 86-year-old senior senator laudenberg demand the guy kissing his gal be hunted down and prosecuted because of the chaos he caused. he caused? let's see. the government has cameras that watch us every time we scratch our noses. and when the cameras don't work, the government blames the person whose picture it was supposed to be taking? c'mon! all this, of course, brings out the false argument of liberty versus security. we hear it from the progressives that the government must take our freedoms to keep us safe. that's hogwash. freedom is our birthright. it doesn't come from the government. it's part of our humanity. america is the only country in the history of the world dedicated to the truism we're endowed by our creator, as jefferson wrote, with certain inalienable rights and among these are life, liberty and the pursuit of happiness. the government has forgotten basic civics. endowed from our creator means the rights come from god, not the feds. inalienable means we and the f

." >> in fed we trust, the role he played after the economic collapse of 2008. he'll discuss his book with the former vice chair and first director of the congressional budget office. part of booktv on c-span 2. now remarks by jeffrey lacker, president of the federal reserve bank of richmond. he spoke to a gathering of the maryland bankers association in baltimore. this is about 45 minutes. >> in 2009, he served as a voletting member of the federal open market committee. as a member of this committee, dr. lacker was involved in decision making process that determined not only the fed funds rate, but decisions that affected interest rates in general, foreign exchange rates, employment, and the general level of prices of goods and services. many of you were at this event last year and heard dr. lacker as he started in this role. we are certainly looking forward to hearing what he has to say about 2010. and he has agreed to take questions, so questions come to mind during his presentation, write them down and he will try to answer them for you. dr. lacker. [cheers

the fed already has that information. >> by whom are the terms set?>> the terms are set by the fed. >> is not something they you learn from a person? >> the rate and eligibility requirements are set by the fed. that is not what this case is about. i want to the identity of the bar or, how much they said -- >> let me just -- you're saying that the media wants to know how much they asked for? my understanding is that the media wants to know how much you gave them? >> is exactly the same thing. >> in any circumstance, and any government agency, if the government agency grants some permission, some exemption, a loan, whatever it may be that is the action of the government agency when it grants something to a corporation or whatever it may be, that is shielded from disclosure because by revealing that the government agency granted something, there would be a revelation that the person who received the grant had asked for it? >> it does not apply to the situation. >> what is the difference? correct me if i am wrong. you are saying that here is the broadcast

and got a disaster for it and if we had stable money -- >> don't blame the tax rate cuts, blame the fed. >> david i'm in the reality based community and i don't base on ideology, i base on experience, debt as a percentage of gdp fell from truman through jimmy carter and rose under ronald reagan and the first george bush and the second george bush it kroez agarose ag government -- >> you got it, he grew government, hold on, hold on -- >> it different pay -- >> increased when tax rates were cut under reagan and revenues, amount of money that came in, increased -- >> but david. >> hold on, victoria. go ahead, vickie. >> go ahead, vickie. >> increases in capital gains tax typically lead to lower revenues of capital gains. so you don't see the increase that you want because that -- those investment dollars go elsewhere. so these tax hikes -- >> but vick it increases at the level george bush was okay with, in 2001. >> quentin you complain about other people overtalk and you do it all the time. >> there we go, quiet. go ahead. >> and we take -- back to the '90s level and that was the decade of

you see this fed backlash over the months. host: our guest was educated at dartmouth college and at the london school for economics. the next call comes from easton, pa., on the independent line. caller: my question -- i only took one course in economics. the question a professor raised was will produce what for how many? the question never seems to be addressed. the previous caller said that ben bernanke was a mistake. it was not. it was deliberate. obama is a total sell-off. both parties should be history if we had a public who could know the time of day. host: any thoughts? guest: there's a lot of concern over this particular nomination, which think is notable. -- which i think is notable. even ben bernanke when he was first nominated passed with only one vote against him. he got out of committee with a unanimous voice vote. host: one one picture of the fed share from "the wall street journal." the headline says at that bernanke gains backing from the senate. caller: i have three comments. i think then bernanke should stay.

critics argue that the fed kept rates too low after the 2001 recession fueling reckless lending by banks> this week on wall street could set the tone for the rest of the year. investors will be watching for what is known as the january effect. a phenomenon where stocks often rise to start a new year. if the first five trading days of january are up the year often finishes the same way. that was the case last year. >>> the world's tallest tower opens in dubai today. it's part of the city state's effort to become a worldwide hub for business despite its shaky financial footing. the tower height is a closely kept secret but there are more than 160 floors. it's part of a $20 billion complex though analysts say the tower is unlikely to be profitable on its own. >>> "avatar" has gone where few films have gone before. it took in $68 million in ticket sales in the u.s. this weekend pushing its worldwide total past $1 billion. it's only the fifth movie ever to reach that milestone. the director james cameron is responsible for one other "titanic." >>> 2009 was a record-setting year at the box off

there's no doubt by favoring the wall street crowd that he fed into that whole thing. then talking about global warming, it all leads to this perception. i think the perception is a problem for him. chris: tipping to the atlantic and not too homegrown. >> those two things i think are real problems for him in 2010. chris: do they sense that they have to be a little more heartland? >> i think they do. they got very upset about the storyline that they themselves help to create after his asia trip. he said i'm america's first pacific president. he struck a lot of conciliatory notes when he was china. japan and the united states don't want that story line. they push back a lot on that. they are a little bit skidish about that storyline. that's not one that they want to see out there. chris: that's funny. they wanted to be the country that's part or the world again. >> right? >> absolutely. and there is a difference between the obama policy and the bush policy. they don't want to lose that america should lead the world. we set the agenda. if obama loses that and we saw it la

i don't expect t fed to be draing credit or raising interest rates unt the end of theear at theoonest. becae the economy is, as jim said, still prty fragile. >> it would have to surprisingly strong, strong than anticipated before the fed srted to turn the spigot and drn some of the money out. >> srez: cathy, doou worry out the exposure of not only the feral reserve but the fedel government to a this stimulus and intervtion ? yeah, i think th's our next b worry. the cause the last recession was thathe consumerector got overinbted and could not actuly pay on all the bills that they habuilt up over time. and you know, weave worked through the pastear of people getting in a tter spot. but nothe govement is borrowing at an unsustnable rate and unlessomething happens like we raise taxes or we inflate, it's going to b very difficult forll that debt to be paid back and think that is a true danger. if you rai taxes, you can't raise taxes justn wealthy people bause there aren't eugh of them. and you need lot of extra moy. you inplace -- inflate, the pain is felt by absolutely every human being.

it isn't a question whether you want to audit the fed or not. the majority of members of congress agree on that. let's start off this new year with a bill that strips that provision out before the senate acts. let's see what the senate is going to do. that's why i didn't want to see this bill brought to the floor at a time when the senate has enacted on the fed. and if we -- language. and if we go ahead and take that language out of our bill, some could read it in the senate as a green light to strip out the paul provision, which is a much stronger provision than the one i brought forward in my amendment. that's the concerns i wanted to bring forward and air them publicly. just ask members a cautionary note here about what's happening with respect to the fed. since a majority of members of congress already want to audit the fed, why should we go and weaken our position by passing a bill that strips out audit provisions before the senate has acted on the bill that contains the paul amendment. with that, i reserve the balance of my time. the speak

he will discuss how and why the fed was created. "washington journal" is next. ♪ host: two democratic senators are opting not to run for 2010. christopher dodd of connecticut, and the senator from north dakota. bill ritter from colorado also will not run. good morning, everyone on this wednesday, january 6. we begin with the healthcare debate and caecilians request to have access to the negotiations. c-span ceo brian lamb wrote a letter on december 30 to the house leader saying that now it moves to the critical stage we respectfully request that you allow the public full access through television. this has sparked some headlines this morning in newspapers. i want to show you the headlines from roll-call this morning. that is in newspapers this morning as well. we heard a response yesterday from house speaker nancy pelosi's and senate majority leader harry reid also putting out a statement. politico this morning, the live pulse section, has this to say about the request for tv access. "and c-span standing as a trusted non-partisan pl

critics argue the fed kept rates too low after the 2001 recession. this week on wall street could t the tone for the rest of the year. investors will be watching for what is known as the january effect, where stocks often rise to start a new year. if the first five days are up, the year often finishes at the same way. the world's tallest tower opened in dubai today. it is part of the effort to become a world wide hub for business. the tower's height is a closely kept secret. there are more than 160 flores creek is part of a $20 billion complex. analysts say the tower is unlikely to be profitable on its own. two" -- ""avatar" took in more and $1 billion. james cameron is responsible for one other, "titanic." 2009 was a record-setting year at the box office. dvd sales slumped. it was the first year since 2002 that was spent more at the box office than buying movies to watch at home. coming up on "good morning america," tips to get your finances in order. five simple ways to cut costs and save thousands of dollars. i'm jeremy hubbard. >>> 6:19, 23 degre

the role of the fed in financial markets. go ahead. good morning. caller: i wanted to make a couple of comments. regulation in the financial sector and in the united states is well known. typically the problem is some kind of oversight, even the attempted bomber on christmas and the national security problems we have had for the last few years. regulation that is required or needed to be overlooked -- needed could be overlooked. thank you. host: the vice chairman of the fed spoke at the conference in atlanta. in "the financial times" they reported, "the fed has been working internally for months on how, when the time comes, they would put an end to the exceptionally loose monetary policy adopted since 2008. that exit strategy is delicate for economic reasons, not least the $100 billion in excess reserves formed by the fed's massive increase to the size of its balance sheet. the fed has taken pains to emphasize that the proof -- preparation does not indicate an imminent change in strategy, as recover -- recovery remains anemic." md., -- excuse me, ca

the only plan that needs to happen is they're playing games with the fed. they got to start placing the val knew america again. you look at the from illegal immigration, devaluing construction workers. we got to start being americans again and putting val knew america again. you guys can do what you want, but the democrats are selling us out into socialism, and the republicans are robbing for the rich. >> host: what been the impact of jobs going overseas. >> guest: there hasn't been a lot of that. there's lot of evidence that a lot of illegal illens would come though country previously are now in fact leaving and going back home. i guess on the theory if you're unemployed you might as well be unemployed in mexico as guatemala as be unemployed in california. but i don't think that that perspective is very useful in terms of trying to get the economy moving again because it's clear that our basic problems are macroeconomic. they're things we have to deal with in terms of what goes on at the capital, in terms terms of stimulus spending, and mostly in terms of