we want to get rid of glass-steagall. let's throw aside these barriers because we want to do what we want to do. and they just caused an avalanche of effort here in congress to decide we've got to get rid of glass-steagall. it's old-fashioned. it hurts america and so on. >> that's a great term for it. how did they create an avalanche here in washington? >> first of all, they have a lot of money. and they're interested in their own financial interests. and so, when they weigh in on something like repealing glass-steagall, they have money to advertise. they have money to persuade. they have money to get grass roots support. it became, kind of, a circus in the sense that this was not thoughtful. this wasn't a bunch of people in a room with the best minds in the country thinking what might be the consequences of doing this? if we really thought through what the consequences might be, having gone through a great depression once as a result of banks fused with risky ventures? i don't think it ever became a moment in which reall

the regulations aren't as tough as glass-steagall. >> gary b? you what, the financial industry is 8% of our sector, just from pure, from a macro standpoint, if you more heavily tax 8% of the sector, and move those funds to a less effective form, which is basically the government taking the money, it's always going to be less effective than the private sector, you're going to have a drag on the economy. it's as simple as at that and it's silly and toby makes the point. financial sector is the life blood of the economy. don't shut it down now. >> bob, does it take us back into recession, do you think? >> it puts us on the verge. if you look at financial services industry, it's that one industry that touches every other industry and there's no other place like it. so it does have a greater impact than any of the other sectors out there and to be the most ironic part of it. now after the rating agencies, watch the banks destroy all of these investors net worth and now they're saying you know, we think we might downgrade them. it used to be a leading

is this the result of having no class people equivalent that's right and i mean the repeal of glass steagall is an example of the revolving door between washington ruben you know come over a strike or treasury secretary. led the charge to get glass to go removing the one over the city where he made over one hundred million dollars that it basically said there i mean as a reward. i mean glass steagall should exist i mean banks there are public policy is to hold deposits and so making loans and if they're going to do that then you could somewhat justify the bailouts of keeping banks you know intact because there's a functioning economy needs a banking system yeah but if if they're going to sit there and borrowed zero percent from the fed they're going to make loans in very limited circumstances and they're just going to act like a giant hedge fund with customers money where the customers don't share in the upside and go to london and go thirty to one leverage you know why are we propping them up before we go broke with this yes or no answer are your customers going to get their money back you

until until just recently you know we had a stable economy until phil gramm pulled apart glass steagall in one thousand nine hundred ninety this puts it half way back together and just seems to be like a rat is an honest argument to be had for separating shareholder equity investment but i don't i think we're making again we're making a problem for a solution that was not the cause of the financial crisis it wasn't there we just leave data we have an economy now that is you know twenty five percent of our economy now is fire it's the financial services but that benefits it was only ten percent you know when reagan came into office thirty years ago at that time we had twenty six percent of our economy was manufacturing it's down to ten or eleven percent now our commies flipped completely upside down right but when you send word to reveal a lot of these banks just make anything of value we use the word the rivet and i think that word gets demonized but the reality is when you're an airline company that specializes in service and airlines you don't want to deal with the price of oil that's

we basically had glass steagall which that's the wall street that existed for that period of time where banks were not allowed to do this proprietary trading and get involved in securities business so you know if we're inching back to ever so slightly in that direction we're certainly not reimposing the glass steagall by any means is that an emasculation i don't think so i mean if anything you see the growth in the proliferation of hedge funds and by the way a lot of these traders who were on prop desks at the major banks now moving over to hedge funds the same type of activity is going down and we see the explosion of high frequency trading which is making the markets crazy more like a casino than ever so i think it's really hard to argue i mean you might get it from some of the top big wigs of wall street who are good you know cry and a little bit about the loss of their propped but i mean if anything i think we're just seeing a transformation of wall street there's more speculative activity than ever i mean i don't see this as a masculine i mean they're they're they're upset about on

paul volcker essentially tried to do was put back in place the structures that came along with glass steagall which was not a perfect answer but it did keep the banking system reasonably safe or close to fifty years right sounding the banks on just openly making a joke out of any attempt to regulate them and there's no is there any fall of the washington pretty closely is there anybody in the washington right now who is in a position to do anything constructive on this i know elizabeth warren was going to be part of some consumer board he got knocked down basically is there any seed of hope or are we just going to live in this clump takar see for the foreseeable future i don't see any possibility that that we get a positive outcome here until there is a bond market revolt and the federal government is forced to stop the deficit spending because it's kind of like having a chief of police who is a heroin addict he's not going to arrest his own course or he might. bust some of the other drug dealers in town but he's not going to bust the guys given him his junk all right carl denham very much in

markets nonexistent markets and phil gramm also proposed the grammys bliley bill which blew up glass steagall in this was these were in ninety nine and two thousand my recollection is correct to what extent does a lot of the responsibility for those lay right of phil gramm as feet are at you know coming out of the enron model and phil gramm perhaps even being influenced by his wife being on the board of it. you know i haven't done enough reporting on phil gramm to say definitively clearly. folks like phil gramm and other people in washington played a significant role in and pushing this because the reason that that folks at the big banks were emboldened to do this is they knew that that the shackles have been taken off that there was little chance that there was going to be any kind of enforcement any kind of rule making and often you know as they say you know what was what the crime was was what was legal it was sort of an anything goes. and vironment right which brings us to the philosophy of the phil gramm was pursuing or pushing and not just him i mean in this whole thing as you point out

remember this is the rule that supposed to write some of the wrongs associated with the repeal of glass steagall which of course separated commercial banking from investment banking and the volcker rule was part of dodd frank legislation now the spirit of the law is meant to prevent proprietary trading by banks which hold as the icy insured deposits basically stop banks from making risky bets with your money now wall street has been lobbying against it ok we've covered that before it's pretty obvious why they would want to do that and there are some unusual critics though to reportedly like red lobster and macy's but old lot of people have an opinion on this the wall street journal cites logic's data which tracks regulatory disclosures and they say the request for public comment on the volcker rule has drawn close to seventeen thousand letters everybody from banks to asset managers v.c. firms local governments foreign governments exchanges and one three hundred twenty five page letter comes from a financial activist group occupy the f.c.c. which details how and why the volcker rule doesn't go ne

phil gramm the guy who pushed the commodities futures modernization act and bliley which blue glass steagall which is a whole nother hysteria both of which tremendously held one company enron his wife wendi in his work in the industry she was on the board of directors of enron so this is there's a long history to the bizarre corruption here phil gramm who was john mccain's economic adviser and and good buddies with ronald reagan free marketeers say hey anybody should be able to gamble on anything you know. but we historically haven't done that we've had markets that are transparent and that are regulated particular commodities markets how do we get back to that. well you know free marketeers also love to quote adam smith who thought this sort of thing was despicable so this isn't a market in any conceivable sense of the word in a market when the demand for a commodity goes down the price reacts accordingly this is something else altogether this is gambling it's gambling in secret it's gambling in private in the way you get rid of it is by regulating what needs to be regulated in some cases t

you should be able to write off being ripped off by the repeal of the glass-steagall act on your taxes. people got robbed. there should be it allows -- there should be and allowing of writing off. host: from "the new york times" this morning. filmmaker arrested on capitol hill. and then a follow-up from "politico" this morning. here is an coulter's column this morning for published in "human events." so, if you want to read more from ann colter's column you can go to humanevents.com. maryland. john on the republican line. what do you think of the most recent proposal? caller: here we go again what the democrats social engineering sticking their noses in it. the last thing they want you to remember is the community reinvestment act. if all of these democrats calling in and running interference for him and thinking he is the next best thing since sliced bread, it is just going to be more spending, more taxing, until finally the middle-class is nonexistent. that is where he is headed for votes. no amount of democrats calling up on the democrat or republican line -- not swinging all of the

glass-steagall that is what you do. that was never mentioned. i have got to shut up. >> don't shut up. [laughter] what makes be incredibly angry to ask the question is what has happened to the four people of this country? have the democrats lost their voice? i would take no because in the obama's speech it is pointed out he never mentions the word poverty and i will make the accusation again. in your book there is no mention of the bird poverty? to make is that right? that is because it is not a proper noun. [laughter] >> really. i feel there is a silent ideas of the country and they have no voice whatsoever. >> come on. this is the land of the dollar. you have a voice when you have money. otherwise the democrats have dollars why don't they use it to give voice? >> you are asking me to get real cynical. [laughter] i will decline that invitation but the movement and power have to come from the working-class people who do have jobs and you will earn a living up of the poverty level but should be on the democratic side but increasingly moving to th

we enacted the glass-steagall act was separated the investment banks from the commercial banks.phil gramm took that firewall down, that's when we began to have our problems with the banking system. if we enacted glass-steagall again, that would at least help solve some of the banking problems. it is not all just corruption. these are deliberate attempts by certain individuals to make the rich richer and the poor poorer. that is not class warfare. that's an actual fact. host: go ahead, gideon rose. guest: there's a certain amount of truth to that. i'm not the world's greatest expert on financial reforms and which should be done and how much glass-steagall's loss contributed to the policies. i am not entirely sure. it is certainly true that we need policies directed towards the overall economy. let's just say that the democrats bear their share of the blame, as well. there are very kind -- there are various entitlements that are very costly. long-term debt is an issue for economic competitiveness, as well to and what we really need is to make sure or finding a way of making sure t

to repeal the glass-steagall act which was the protection after the depression of our banking system by separating investment houses fro banks. whilthis was all part of this ugly system, it is back with a vengeance. if anyone believes there is an independent as the law requires from the candidate, that ia joke. even the supreme court justices are saying this is a farce. i think this will be overturned especially if president obama getso pickhe nominees for the supreme court. host: this is from madison, wisconsin. caller: first-time caller, long time listener. this is a great service to the country. senator, thank you for being a voice during the a conception of the patriot act to say maybe we should slow this. in regard to the candidates and their willingness to speak about foreign policy, i was wondering about what you thought aut ron paul. guest: it is great to hear from madison, wisconsin. obviously, ron paul and i agree on some issues. he w willing to challenge some of our on wise interventions. he believes that we ought to have a congressional review of interventions overseas in

and of course a company out of the this sort redrick and the fdic, glass-steagall, regulatory crackdown of banks at the same time is what you do. but i was never even mentioned today. okay, i've got to shut up. yes, sir. >> .shut up. one makes me incredibly angry and this drives me to a certain questions. what has happened to the poor people of this country. how the democrats lost their voice with regards to a poorer community? i will take note of this because an obama speech, it was pointed out that he never mentioned the word poverty. and i'm going to make this accusation again. in your book, the index is no mention of the word poverty. >> that's because it's not a proper noun. >> no really, i kind of feel that there is a silent -- they are a big fan of poor measures of this country and they have no voice whatsoever. >> that is not somehow. come on, this is the land of the dollar. this is like you have a voice city of money. >> otherwise the democrats have dollars, so why do they not use it to give voice to those people? >> you're asking me to gabriel senecal. and i am going to declin

to repeal until glass-steagall act which was the key protection after the depression of our banking system, of the protection of people's money by separating investment houses from banks. well, this was all part of this ugly system. it's back. and it's back with a vengeance. and if anybody believes that there really is sop keep -- somd of independence as the law requires of super pacs from the candidates, that's a joke that even justices of the supreme court are already saying they know is a farce. and i think this decision not only can be overturned, but will be overturned especially if president obama gets to pick the nominees for the supreme court. >> host: okay. let's get some calls, and the first is from madison, wisconsin. tony's a democrat out there. you on for russ feingold. go ahead, please. >> thank you. fist time caller, long time listener. this is a great service to the country, it's too bad it's not on free tv. senator feingold, thank you for being the only sane voice during the conception of the patriot act to say, hey, hold on, maybe we should slow this. with regard to your

we got rid of glass-steagall. we've just given them a free rein.t they did is they bought our politicians and sent everything overseas. and the bottom line molly's initiative is saying the wealthy have to pay their fair share and the only way that we're going to get the resources of taxation resources -- it's not going to be enough to do a value-added tax. you can't do it through the consumption. look at the numbers. we will post our graphs so that you can see the case yourself. you'll have to do it through income taxes. that's what president lincoln -- that's why president lincoln established the income tax. it was because all those tariffs and fees were regressive. and they weren't providing enough for the common fisk for him to be able to raise the money. he instituted the income tax because it was the only fair way to make the very rich and the plantation owners pay their fair share and the commonwealth and the common good that they made their money from. the income tax is the only way. so molly has done an initiative and when it makes it to th

to repeal the glass-steagall act which was the protection after the depression of our banking systemrating investment houses from banks. while this was all part of this ugly system, it is back with a vengeance. if anyone believes there is an independent as the law requires from the candidate, that is a joke. even the supreme court justices are saying this is a farce. i think this will be overturned especially if president obama gets to pick the nominees for the supreme court. host: this is from madison, wisconsin. caller: first-time caller, long time listener. this is a great service to the country. senator, thank you for being a voice during the a conception of the patriot act to say maybe we should slow this. in regard to the candidates and their willingness to speak about foreign policy, i was wondering about what you thought about ron paul. guest: it is great to hear from madison, wisconsin. obviously, ron paul and i agree on some issues. he was willing to challenge some of our on wise interventions. he believes that we ought to have a congressional review of interventions overse

, but does not change too big to fail, does not increase capital ratios, does not reinstalled glass-steagall, and is hosted by goldman sachs. i do not expect the president to be bought. i expected this president to bring change. i have seen none. host: tulsa, oklahoma. go ahead. you are on with governor roemer. caller: i am a former truck driver, and i have seen your state go from bad, and they have done a lot of good building in your state. i have a car loan financed through my trucking company and i just got that car. guest: by the way, i am -- go ahead. caller: ibm a conservative. i used to be a democrat. i changed to a republican, and i want to be independent. i believe in limited government, strong border control, and obama seems like a good guy, but i think he is trapped by his own party, and the politics as bad. he hired the wrong people to do the wrong job. it just seems like he can not find a way to leave the country. he is a good speaker, but not a great leader. guest: thank you. i'm a member, to, by the way. i have to go to a $650 million bank here in louisiana -- i have built a 6

we've deregulated company to use to to be a legal beagle and got rid of glass-steagall.ve just given them a free rein. you know what they did with? a broader politicians and sent everything overseas. the bottom line is most initiative is singing the wealthy have to pay their fair share and the only way we look at the resource is a taxation resources is not going to be enacted a value-added tax. you cannot do this through consumption. look at the numbers. we'll post our crafts you can see the case yourself. you have to do it through income taxes. that is why president lincoln established the income tax. it was because all of those tariffs and fees for regressive and they were providing enough for the comments ask for him to be able to raise the armies. he instituted the income tax because it is the only fair way to make the very rich and plantation owners pay their fair share for the commonwealth and the common good they make their money from. the income tax is the only way. some molly has done an initiative eminem makes to the ballot in supported and get out there and ag

we've deregulated company to use to to be a legal beagle and got rid of glass-steagall.ve just given them a free rein. you know what they did with? a broader politicians and sent everything overseas. the bottom line is most initiative is singing the wealthy have to pay their fair share and the only way we look at the resource is a taxation resources is not going to be enacted a value-added tax. you cannot do this through consumption. look at the numbers. we'll post our crafts you can see the case yourself. you have to do it through income taxes. that is why president lincoln established the income tax. it was because all of those tariffs and fees for regressive and they were providing enough for the comments ask for him to be able to raise the armies. he instituted the income tax because it is the only fair way to make the very rich and plantation owners pay their fair share for the commonwealth and the common good they make their money from. the income tax is the only way. some molly has done an initiative eminem makes to the ballot in supported and get out there and ag

glass-steagall has not been put back in place, and let me tell you, we are going to have another collapse. now, getting to missile defense, if such a threat to the country as the whole economy is not being addressed by the political leadership, why do you think they will address the missile defense? >> dean, do you want to comment? >> i will agree with what michael said. developing a constituency, vested interests, congress ultimately funds this stuff so you got to get to the hill. >> that's the way it works. it's like making sausage, i understand. other questions? [inaudible] >> you asked me to identify myself to my name is jackie, the executor of the western states legal foundation in oakland which is a 30 year old advocacy group. i have two questions and a comment. the two questions are, none of you mentioned in your radars are potential radars that maybe station in norway or scandinavia. i wonder if you have any information about that. second, you can do was to comment on what they think is the significance of the fact that anders rasmussen, secretary-general of nato has recently anno

the original glass-steagall.eing asked to answer 1200 questions to establish whether they're in compliance with the volcker rule which is costing small hedge funds $ 100,000 to go through the process of answering all the questions. so if there were less of this pernicious lobbying, business wouldn't be having this debate. we might have more better, more enforceable regulations. >> that's an argument for simplifying the tax code, too. there's news that we're examining the obama administration today to do something they lower the tax rate to 28% to 35% for the top tax rate. get rid a lot of the deductions, is that a good ideaor a bad idea. >> that's good idea, we've been arguing for that as the economist. generally the more we have one rule applying to all across the board. you know, he think you have much less loopholes, much less capacity for lobbying and actually everyone knows what the playing field is and you don't have all this complaint about regulatory uncertainty. >> it's better for small businesses, too,

, but does not change too big to fail, does not increase capital ratios, does not reinstalled glass-steagall, and is hosted by goldman sachs. i do not expect the president to be bought. i expected this president to bring change. i have seen none. host: tulsa, oklahoma. go ahead. you are on with governor roemer. caller: i am a former truck driver, and i have seen your state go from bad, and they have done a lot of good building in your state. i have a car loan financed through my trucking company and i just got that car. guest: by the way, i am -- go ahead. caller: ibm a conservative. i used to be a democrat. i changed to a republican, and i want to be independent. i believe in limited government, strong border control, and obama seems like a good guy, but i think he is trapped by his own party, and the politics as bad. he hired the wrong people to do the wrong job. it just seems like he can not find a way to leave the country. he is a good speaker, but not a great leader. guest: thank you. i'm a member, to, by the way. i have to go to a $650 million bank here in louisiana -- i have built a 6

to repeal the glass-steagall act which was the protection after the depression of our banking system by separating investment houses from banks. while this was all part of this ugly system, it is back with a vengeance. if anyone believes there is an independent as the law requires from the candidate, that is a joke. even the supreme court justices are saying this is a farce. i think this will be overturned especially if president obama gets to pick the nominees for the supreme court. host: this is from madison, wisconsin. ton y is a democrat. caller: first-time caller, long time listener. this is a great service to the country. senator, thank you for being a voice during the conception of the patriot act to say maybe we should slow this. in regard to the candidates and their willingness to speak about foreign policy, i was wondering about what you thought about ron paul. guest: it is great to hear from madison, wisconsin. obviously, ron paul and i agree on some issues. he was willing to challenge some of our on wise interventions. he believes that we ought to have a congressional rev