goldman sachs was established 141 years ago.we are an institutional-focused firm, providing investment- banking and investment management services to corporations, institutions, governments and high-net worth individuals. as an underwriter, we help our clients excess equity and debt capital markets to grow their businesses. as an adviser, we facilitates strategic options for mergers and acquisitions. we provide the necessary liquidity as market makers to help ensure that buyers and sellers can complete their transactions and securities markets can function efficiently. and, as an asset manager, we held public and private pension funds, corporations, nonprofit organizations and high-net worth individuals plan, manage and invest their assets for the long term. to begin on a more general point, any examination of the financial crisis should set out with an understanding of some of the global economic and economic -- global economic and financial systems of the last decade. 10 years of low, long-term interest rates and other factors

>> you are one of the top officers for goldman sachs, write? >> yes, the top officer. >> at some of the people went to work for mr. guyton are? >> i believe i know some. >> and when you left golden sachs and went to the treasure, you were there for three years and you've got $200 billion in tax benefits because you didn't have to pay capital gains on $500 million worth of stock, write? >> i would strongly disagree with that. because -- >> is okay. you can respond. i will send a question to in writing. the concern i have is the same concern that mr. stearns had. u.k. before our conference their nervous saying oh, my gosh, the sky is falling, we got to come up with this money very, very quickly. and you were visibly nervous when u.k. before our caucus. and then we have this bailout of aig. and you don't know anything about. mr. geithner had nothing to do with it. it just really boggles the mind that some of the biggest people involved in this whole thing from beginning to end had nothing to do with it. they didn't know. it make you want to think t

i had -- i assumed that goldman sachs knew that goldman sachs, and i assumed most other were counterparties. i had no knowledge what the individual claims were and that was my concern here was not about counterparty claims when we rescued aig. my concern was about what was going to happen to the american economy and the american people. and, again, you need to understand when we worked together fed and treasury, we had different authorities, different responsibilities and there was so much going on that we -- we had a lot to do and they had the authority and responsibility for dealing with the loan and -- >> the thing i have trouble with, though, is that the government gave goldman sachs, your former firm, a better deal than it had a right to respect. you heard the previous testimony here. i just -- it's mystifying how you, as treasury secretary, this could happen and you not really know anything about it and did you -- unless you recused yourself from any discussions about aig. or about goldman sachs. >> i didn't have to recuse myself because the fact was no one discussed it with me, consu

i had -- i assumed that goldman sachs knew that goldman sachs, and i assumed most other were counterparties i had no knowledge what the individual claims were and that was my concern here was not about counterparty claims when we rescued aig. my concern was about what was going to happen to the american economy and the american people. and, again, you need to understand when we worked together fed and treasury, we had different authorities, different responsibilities and there was so much going on that we -- we had a lot to do and they had the authority and responsibility for dealing with the loan and -- >> the thing i have trouble with, though, is that the government gave goldman sachs, your former firm, a better deal than it had a right to respect. you heard the previous testimony here. i just -- it's mystifying how you, as treasury secretary, this could happen and you not really know anything about it and did you -- unless you recused yourself from any discussions about aig. or about goldman sachs. >> i didn't have to recuse myself because the fact was no one discussed it with me, consul

goldman sachs was established 141 years ago.stitutional-focused firm, providing investment- banking and investment management services to corporations, institutions, governments and high-net worth individuals. as an underwriter, we help our clients excess equity and debt capital markets to grow their businesses. as an adviser, we facilitates strategic options for mergers and acquisitions. we provide the necessary liquidity as market makers to help ensure that buyers and sellers can complete their transactions and securities markets can function efficiently. and, as an asset manager, we held public and private pension funds, corporations, nonprofit organizations and high-net worth individuals plan, manage and invest their assets for the long term. to begin on a more general point, any examination of the financial crisis should set out with an understanding of some of the global economic and economic -- global economic and financial systems of the last decade. 10 years of low, long-term interest rates and other factors coalesced o

>> he work for goldman sachs. >> he work for goldman sachs to goldman sachs as i understand it got the most and counterparty payment of any domestic institution, is that true, $14 billion bequest i actually don't know if that is to. that is a matter of public record. >> goldman sachs was number one. now, you made about 100 calls to fed chair ben bernanke, but the next higher number of calls in that period, he made 100 free -- >> the gentlewoman's time has expired. with the gentle lady yielded? >> magis asked what firm he worked for? >> as you know, he work for goldman sachs. >> thank you. i will have additional questions with regard to who you phoned and will play set in the record. thank you. >> mr. chairman, can i do say one response it's very important. congressman, you are suggesting that the people that were involved in this were not acting in the public interest. and you are suggesting that they were working for the private interest, not the public interest. and that is not true. i would never and i believe none of those individuals were ever part of any decision like that. and i

are executives, but the money comes in to the mcdonald's corporation or the enron corporation or goldman sachs, that -- wait a second. the money that comes in is not coming for political purposes. in other words, you do not go to mcdonald's to contribute to the mcdonald's corporation political office. all the more so with money for a utility, for example. but you can now take money out of the corporate treasury and put it into politics to get someone elected or kick somebody

now it's what's good for goldman sachs is good for america. not necessary goal but because they are so unpopular. but what's good for jpmorgan chase is good for america. >> no line has been drawn. there's been no edition. basically mathematics. so therefore says that as it may be, deficit. since we are tiptoeing past the cemetery nobody wants to do the math. >> there are some people, the argument here is that banks haven't dealt with a bad debt problem. they're still sitting on their balance sheet so we will end up like japan presumably. i think there is very respected people, i was on a panel with carmen, an economist in maryland that she made this argument. i think there's something in there. they allow them to and not put all these assets to market. it started a downward spiral because you mark to market an initial capital so they have to sell, prices keep going down. you can get it down to spiral with mark to market. you need somewhere in between. may be a country free suspension of mark to market. sort of common and these people, i think

>> i would have to look -- as goldman sachs i wasn't at all focused on it until it started getting intothe press. >> again, i'm going back to the newspaper reports that goldman was early in recognizing the dangers here and began at that point to the sell short no. >> -- in order to protect itself. was that not -- >> let me be clear. first of all, we had research which we'll make available that showed goldman sachs -- i mean, published research to the world that showed we were very negative on the housing markets, i believe, going back way before '07 and '06. our movement in the sub, in the, you know, mortgage market was, for us, a matter of hedging and managing our risk. because as a sindh cay to have of product, we were usually in a position of finding ourselves long much like the banks that have had big, big problems in accumulated tens of billions. our risk management protocols required us to try to sell down those positions or else stop being of service to the clients who wanted to syndicate their pools of loans. and so we were always, we were driving ourselves from a point of view

you have the utility banking system and on the other side people like goldman sachs say we don't want anything to do with that. find. they could, what people call casinos, the cassino aspect of the system. they would be allowed to carry on but there would be inexplicit loss. there are no bailout. if you get into trouble you were by yourself. it might not be credible you say? it is probably not going to happen but the question is whether it will be credible. i think it would be credible because, if people really believe they had a chance to go under they would be much more reluctant to lend money so people would have trouble expanding their balance sheets in this way. is not going to be happening obviously but it u. s. mint personally what i think should be done i think we should sort of a point paul volcker as the new treasury secretary. he is still in pretty good shape. or else, i mean going back to the previous question it is phys bernanke's somebody else come if bernanke or bring back paul bull gravel tick paul. don't think anything this would have happened if paul volcker was stil

. >> guest: if he had come from goldman sachs that would have been different. so that is true. but i also think that he's not a very pretentious person and when a juror telling people the world is about to end and you're not known as a high-priced people tend to say you must really mean it whereas if he had been one of these people who pronounced every third day as the most extraordinary day in american history that would have been different. >> host: let's come back to why so few people saw this financial crisis coming. you and i are presumably among the culprits. we were not in a responsible public positions. but i watched the economy and the markets and been at the fed and you cover the economy and especially the fed for "the wall street journal" for many years and so far as i know, neither of us were out there issuing dire warnings in 06 or 07. why did this crisis catch so many people by surprise? >> guest: that's a good question and i'm not sure i have a complete answer. some of my colleagues in the press will make a question like that and point to have a dozen stories we

we now know that at the time there was some consideration of saying to goldman sachs and deutsche bank and everybody like that we can't pay you 100 cents on the dollar. everybody has to take a hit. they decided they are not able to do that unless the banks acquiesce and surprisingly the banks decide they would like 100 cents on the dollar and geithner, paulson and bernanke decide to pay 100 cents on the dollar and that a year later is causing quite a bit of a title among the public who want to know why did the bond holders of washington mutual get hurt and preferred shareholders of fannie mae and freddie mac and all the workers at gm have to give up stuff but aig's counterparties -- >> host: not to mention all the people who lost their jobs. >> guest: somehow it was too important for goldman sachs to get less than 100 cents on the dollar and so there's a lot of resentment. >> host: yes, and added to that it turned out that aig had promised bonuses to the very people who were running the operation you described as a casino and making a lot of money on this casino and a promised these bo

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 talked about looking at these events with hindsight and two men who did a researcher at the london s

for example, no one at goldman sachs gets paid solely at his or her own performance. traders, not sales people, everyone gets paid on the basis of a firm as a whole, their business unit, and we take account of their performance, but the opted for us is to keep going with that spirit of partnership and cooperation and teamwork, and also by the way, an incentive for everyone to surveil everyone else around them, because everyone is responsible for everyone. that would be a distinctive element of our structure. in terms of looking at it and scrutiny, we try to keep it. the big change is not becoming a partnership of becoming a much bigger global company, still called partners of goldman sachs and staff in beijing and far- flung places, whereas 20 years ago we were clustered around some american societies -- cities and maybe london and tokyo. >> has the percentage of your total revenue distributed in compensation to your partners changed as the legal status of goldman sachs has changed? >> in the old regime, everything that was left over along to the partners. they were e

it's clear you by the goldman sachs tour that china's gdp is going to overtake that of the united states in 2027 at 4:00 in the afternoon on the 25th of december. but i wonder what you're telling us about china employs anything more than that. in other words, it's not clear that your civilization state with its tradition of tributary relations with its neighbors and yes, maybe some african countries today, have an aspiration to rule the world. could you tell us if there is, in fact, some prospect of that? that doesn't seem to be in the tradition you're describing. and therefore, why worry? >> well, i think you put your finger on a very important distinction between the chinese tradition and the western tradition. they do share, they both are civilizations which have a strong sense of university. unlike japan for example, which it never did have a. but the way that's expressed is very different. whereas the century the european tradition sought to project it at the time across the world, and i suppose the colonial tradition was the most dramatic illustration of this, the chinese tradition

goldman sachs was established 141 years ago.re an institution focused firm providing investment banking, market making, an investment management services to corporations, institutions, governments, and high net worth individuals. as an underwriter, we help our clients access equity and debt capital markets in order to grow their businesses. as an adviser, we facilitate strategic mergers and acquisitions. we provide necessary liquidity as market makers to make sure that buyers and sellers can and click their transactions and security march and -- security markets can function efficiently. we help public and private pension funds, non-profit organizations, and high net worth individuals plan, manage, and invest their financial assets for the long term. to begin on a more general point, any examination of the financial crisis should set out with an understanding of some of the global economic and financial dynamics of the last two decades. the growth in the amount of foreign capital, 10 years of low long-term interest rates, and ot

with corporations, blackwater, and ron, goldman sachs, bank of america?ss has to do is say that if you get federal bailout money, federal contract money for corporations, you are not permitted to engage in expenditures. essentially what that is doing is taking the money from taxpayers, giving it to corporations, and letting them turn around and tell us how to vote. >> so you have moved to a ban on federal contractors. of course there is a right of the press to engage on the first amendment. in politics, in speech of any kind. but the press is an activity. it is not a class of individuals or actors or participants in society. it is an activity. if the first amendment was written today, it would have freedom of the internet. but there are no people saying that. the press is an activity, and it applies to all people. these days, it applies to persons under our laws. let me get to person's virtue as individuals. i know you like to talk about that. but the press is, as i mentioned -- here is -- actually, i hope for problem the point i want to make because you

what i would start with would be for the chief of goldman sachs.if this free market that they are operating under and bundling securities, passing them off to unsuspected folks, if they were so wonderful how is it that they bet against the success of those as this moved down the tracks? they knew that this would fail. goldman sachs was the biggest culprit according to the article from "the new york times." that would be my question. host: thanks a lot. colorado, your questions for the bankers? what would they be? caller, turned down the sound, if you can. cathy, are you there? caller: yes. host: turn down the sound before you speak. caller: absolutely. host: what would you ask? caller: how can they sleep at night, having done what they did? host: we need you to turn down the sound. caller: yes, i am. host: that will make a difference. caller: anyway, i called in once last year when this was all coming down. i was speechless, it was beyond belief to me. i thought that the american public would jump up, something would be done. i was glad that presid

you heard me right. 1% goldman sachs when most small businesses and corporations in this country are paying at a 35% tax rate. wall street elites still don't carry their fair share. imagine secretaries, nurses, firefighters, cleaning crews, the middle class of this country pay at a higher rate than goldman sachs. and the chief executive officer of goldman sachs harvested over $140 million in salaries while head of that firm. he said business is a bit too much. his answer is he's doing god's work. i'd call that blasphemy. this is fundamental economic injustice in america and the american people know it. they're voting their frustrations. they expect congress to listen to them, not continue to reward wall street over privileges at their expense. i yield back. the speaker pro tempore: for what purpose does the gentleman from texas rise? mr. poe: i ask permission to address the house for one minute. the speaker pro tempore: without objection, the gentleman is recognized. mr. poe: mr. speaker, most of the american people oppose the government plan to take over health care. it costs too mu

the public is angry at goldman sachs, not because people don't like rich people. they don't want people to do well. it's just because they can see this is unfair and the public is right. that goldman is operating with an implicit government guarantee. and it does not end the problem for these banks to pay back their t.a.r.p. money. in fact, in some ways it makes it worse because at least with t.a.r.p., people know there's government money there. now we have again an unseen government presence distorting this economy. however, this is not something that the public can do by itself. we do need political leadership here. for washington to realize that reasonable regulation with the into being fair, consistent financial market discipline that this is not a barrier to free market capitalism. that this is in the and necessary prerequisite to free market capitalism. so with that, i am very happy to take questions. thank you very much. [applause] >> i am howard, and my job here today is to point out questioners for nicole. if i might start, nicole, on your point about exte

the heads of jpmorgan chase, bank of america and goldman sachs are among those who will testify.he hearings begin on wednesday and could cub into thursday. >>> the football crisis may have caused problems for home sales but they rose in the baltimore area in 2009. the baltimore sun says sales increased by 3%. the downsize is the average sale price fell 9% compared to 2008. many economists say sales picked up due to the $8,000 first-time home buyer credit. >>> baltimore is halfway through the traditional flu season that typically ends in april. as gee gentlemen barnett explains, doctors are hosting h1n1 flu clinics anticipating a boost in patients. >> reporter: the h1n1 flur clinic in southwest baltimore works on a first come. >> we had people here about an hour before we were supposed to start. >> reporter: first served basis. >> it's a different bug. >> reporter: doctors say it's unpredictable. that's why many hospitals are keeping strict visitation restrictions to protect patients and workers. >> at this point, we still have visitor limitations in place. we're still asking visi

how does one figure actually how one big company-- let's say a goldman sachs or bank of america-- howuch would it really hit them? >> in a broad sense it's not a lot of money. in its best years the financial industry makes $200 billion. this is $10 billion a year. it's a fairly small hit. but for some companies it will actually be pretty significant and the reason is the way the tax is structured. this is a tax on borrowing. banks get money for their activities from two sources: the deposits that we put into them or money they borrow from investors. this is a tax on money they borrow from investors. so retail banks like, say, wells fargo which rely primarily on deposits won't be hit as hard. they might pay tens of millions of dollars a year, but companies like goldman sachs, morgan stanley, j.p. morgan chase, companies that rely heavily on borrowed money to fund their wall street activities could face a bill of several hundred million dollars a year. >> warner: so when the president said this would promote reform in the banking industry, are they hoping this tax or fee actually provid

they mht pay tens of millions of dollars aear, but companies like goldman sachs, morgan stanley, j.p.organ chase compans that rely heavily on rrowed money to fund their wall street tivities could face a bill of several hundr million dolls a year. >> warner: so when t president sa this would promote reform in the baing industry, arthey hoping this tax or feectually provides a sent set of incentives. >> they dot view this as a major force for change but they're hoping increntally, on the rgin this is will push banks to borrow a little bitless, make borring a little bit more expensi, maybe think about whether you want to paa little tax by reducingonuses. it's iended to compliment some ofhe other things they're doing. >> warner: and not rely so much on leverage. >> yesand reduce the risks they're taking >> warner: now, wh are the prpects in congress? in congress th seem outraged over the bones and the profit >> right now it's hard to pa anything throughhe united states senat so very murky . >> warr: why? explain more, though. in the senate you've hea even republicans excoriating the g ban

citigroup is still trying to get out of its own way, but jpmorgan and morgan stanley and goldman sachs are all up significantly just in the past month, 5% to 10% for all of those names. >> the overall market did quite nicely in the first five trading sessions and at the same time we've seen volatility being sucked out of the market. 19 month lows intraday friday session. what do we make out of this? >> i think that there were a lot of players, a lot of option players that left last year very early. they went home, they said we've made some money, we're afraid of big losses, so there were players who were not participating that might have. now, big name players, institutional players, tend to be sellers of volatility. now they're back to the game and that's what's going on. >> and another big point. next friday is expiration. so if you own january options coming in to the year, there were very few events in this option cycle in january as we really only have five big names reporting before expiration. >> do we make anything out of the fact that it's been slightly elevated to the vix? >>

we ought to look at the transaction that warren buffett had with goldman sachs.that was an arm's length transaction. that would have been fair for the tax player to reflect those terms. we would have gotten back a lot more. >> all i want to understand how the success of lending contributed to the financial crisis. if this relies -- this relates to consumers that maxed out credit cards. is there anything that the government can and should do in the future to prevent a mind set from taking hold and exposing our financial system from another crisis? professor bebchuk? >> we need to regulate those to a lower level. something short of that is imposing levies. that is a useful approach. it could be useful going forward regardless of the issue of making up for the past actions of the taxpayers in terms of charging financial firms for the risk of larger liabilities. >> thank you. ms. minow? >> i agree. >> mr. stiglitz? >> it is important to affect the incentives. if you have the incentive for excessive risk-taking, you will do it. those are also at the organizational lev

the market, after tomorrow or during the appraisal process to find, you know, buyers, they hired goldman sachs, they're not there for a transition. you hire them, one of the best investment banks if not the ghost go out and find buyers and get the price up. that will -- that's a good question. it has not come to that yet but the team is going out into the market. but i'm not sure when gets handles, that's a big part of it. and it is out there and figure out how to deal with and it is probably a liability, he has not played in two years he play #-d 15 games in two years. >> and. >> 30 million a knee that's questionable. you have to wonder going into following as well. >> and stay tuned after the break and the finishing touches on washington post live weekend. come back. ! me! ut. i toit. i tothe efor outh. co ale refot call yoa beng mx! theionsme! tahim,. i d, ieir foulwhen boun te'thrne, e. ce galex coac gol. ♪[music] ♪ >> differences that you decide to dress up and wear a tie in my honor. it's in thy contract you have to wear them on thursdays and mike weiss has to be here on time. >> not you

>>oodruff: i ask because there wathe cfo of goldman sachs who said thiis not practical for to separate, for example,rivate equity from the other work we . we hear other baers say we're going toave to lay people off. it's going to hurt o business. >> y're going to hear a lot of ncerns from bankers about th and we're involvedn a very important cause ich is try to work with congss to put in place rerms that will prevent this from happening again,nd that's going to reire a lot of chans. but our principal obctive is to me the system safer and more stable so tt the economy, the avere american family, is not vulnerable aga to this. and, again, that's goingo requirchanges in behavior. the president said today-- a you've heard him say it-- en thgh we're two years, three years into this ep financial crise, our financial syste today is still opeting under the same rules that helped create this isis, and we need to move congress to change tt system. >> woodruff:et me ask you about one particular aect, and that is banks that would separate some of their investmentperations. does it mean, for exame,

. >> guest: if you come from goldman sachs, so that's true.i also think that he's not a very pretentious person, and when you're telling people the world is about to end and you're not known as a hype artist, people tend to say, you must really mean it. where as if he had been one of these people who pronounce every third day as the most extraordinary day in american history, well, that would have been different. >> host: let's come back to the question of why so few people saw the financial crisis coming. you and i are presumably among the culprits. we work and of course public positions, but i watched the economy and the market, and i've been at the fed, and you covered the economy, and especially the fed for "the wall street journal." as far as i know, neither of us were out there issuing dire warnings in 2006 or 2007. why did this crisis can so many people by surprise? >> guest: i think that's a very good question and i'm not sure i have a complete answer. some of my colleagues in the press will take a question like that and point to have

a.i.g., turn paid more than $60 billion to ban and compans such as goldman sachs. man ld contracts with the inrance giant to protect againslosses worth billions. as the financial crisis worsened, tal government aid to a.i.g. swled to $180 billion dollars. at the time of the initi loan, geiter was president of the new york federal resve. >> more than year removed from that terrible week of seember 2008, i believthat the govement strategy, and it was the government stregy, was the best of available tions. >> reporter: t oversight committealso criticized the government'secision to allow a.i.g.'s creditorso be paid in full-- even though a.i.g. wa insolvent. and members fromoth parties expressed anger th the public initially was notold about those payments >> were you invoed in any diussions with a.i.g. or was your staff involved ere you diussed what a.i.g. should or should not disclosto the public >> i had no ro in making those decisis but as the record shows and the record beforthe committee shows, a lar number of people at t federal reserve bankf new york and the fede

we ought to look at the transaction that warren buffett had with goldman sachs.that was an arm's length transaction. that would have been fair for the tax player to reflect those terms. we would have gotten back a lot more. >> all i want to understand how the success of lending contributed to the financial crisis. if this relies -- this relates to consumers that maxed out credit cards. is there anything that the government can and should do in the future to prevent a mind set from taking hold and exposing our financial system from another crisis? professor bebchuk? >> we need to regulate those to a lower level. something short of that is imposing levies. that is a useful approach. it could be useful going forward regardless of the issue of making up for the past actions of the taxpayers in terms of charging financial firms for the risk of larger liabilities. >> thank you. ms. minow? >> i agree. >> mr. stiglitz? >> it is important to affect the incentives. if you have the incentive for excessive risk-taking, you will do it. those are also at the organizational lev

this year goldman sachs will give $16 billion of bonus payments, about $500,000 per employee.tions. can you address that, please? >> i'm not sure if you were here for that part of the conversation -- >> i was here for the entire time. >> but, again, the actions we took were necessary in the public interest, better than the alternatives, to help prevent catastrophic damage and if you are outraged as i think you should be about how the economy and our system was in this mess, i hope you will join with us in trying to work to make sure it doesn't happen in the future. this is not something that should be republican or democrat. there is a deep, i think, moral obligation we have to try to make sure we put in place reforms that will prevent this from happening again. . if the government had done that sooner, this would have been less damaging and a critical part of the failure was we ran a country, largest economy in the world, largest financial system in the world, without having the kind of bankruptcy type powers we had for banks for decades. >> let's try to do that on a bipartis

morgan chaise, and goldman sachs. and witnesses include representatives from the department of defense and state and the head of the u.s. pacific command. that is live at 10:00 a.m. eastern. >> the deadline is approaching to enter the 2010 student cam contest. top prize $5,000. just create a five minutes to 8 minute video on one of our country's greatest strengths or of challenge the country faces. enter before midnight, january 20. winning entries will be shown on c-span. do not wait another minute. >> republican representative mike hansen -- mike pence opposes health care bill. he recently hosted a town hall meeting to discuss the issue. this is little less than an hour and a half. >> welcome. this is the building we're pretty proud of, and a lot of the events have been here. we have quite a few elected officials. i am glad you are here. and here to do the honors for us. >> all lardner able and willing will send and prayed together. >> our father, is such a privilege to come before you in prayer. per is a gift, and

commissioner heather murren, a retired merrill lynch director, pressed goldman sachs chief executive lloyd blankfein on the issue. goldman is expected to award billions of dollars in bonuses next week. >> how can you reconcile these things, given what's going on in the country economically? and do you feel that your compensation adequately reflects your firm's behaviors, what the standards of the times are? >> if you look at the history of our compensation, the compensation always correlated with the results of the firm, as it did last year. >> holman: blankfein noted that he and other top executives at goldman did not receive bonuses last year. commission chairman phil angelides, a former democratic treasurer of california, sharply questioned him about goldman's practice of packaging risky mortgages and selling them to investors at the same time the firm took financial positions betting against those troubled assets. >> what we do is risk management. because we had this risk, because we were accumulating positions-- which, by the way, we acquired from clients who wanted to sell them

they won't have to wonder anymore because they will be the senator from goldman sachs and the gentle woman from pfizer. make no mistake about it. while the legislation congressman larsen has introduced with us is not necessarily a direct response to the supreme court decision, it will do one thing, and that is that it will be a signal to those voters of the people who are not reliant on corporate money or special interest money, they will know that the people who are accepting the voluntary funding public funding under this bill are people who truly stand for them. and i think that's going to be an important element of our democracy as we move forward under this new structure, which unfortunately is going to be thrust upon us as of today. one of the things that we've talked about, shelly talked about it. the enormous amount of time candidates have to spend to raise money, realize that that is time that the people are actually paying for. i mean, we work 24-7 and we aren't really on the clock. but the number of people on this congress who spend 20-30 hours a week raising money, do it

"the new york times" reports goldman sachs is expected to pay employees an average of almost $600,000, saying last year was one of its most profitable. employees at jpmorgan chase will see an average of $450,000. many executives are bracing for more scrutiny of pay from washington as well as officials who demanded the banks disclose details about their bonus payments. >>> three of the seven cia workers killed by a suicide bomber in afghanistan have been laid to rest. hundreds turned out for services in massachusetts, ohio and washington state saturday. the cia workers were killed in an ambush by an al qaeda operative acting as an informant. >>> police in milwaukee this morning are looking for the person who threw a molotov cocktail at a gas station attendant. the masked man was aiming for the clerk but narrowly missed a customer. see that? no one was hurt. police say the motive wasn't robbery but retaliation for the recent arrest of a robbery suspect at that very same gas station. >>> finally, have you had enough of that christmas fruitcake? well, in one colorado town it's an annual t

the bailout has drawn fire over disclosures about bonuses, and payments made to goldman sachs and other big banks. a congressional probe is already underway. in afghanistan, two u.s. troops were killed today by a roadside bomb in the south, pushing january's total to 18 so far. and the security grip tightened in kabul, one day after a taliban attack killed five afghans in the heart of the city. the assault left a shopping center in ruins. today, people there called for action to stop the attacks. >> ( translated ): we are not scared of any explosion, suicide bombing, rockets and bullets. we support our government and we will continue to live in kabul. >> ( translated ): we want the government to stop those people entering our country, and the government should keep security tight at kabul's four main entrances and not allow the suicide attackers to come to our land to kill our innocent people. we want the government to make the country safe and eliminate the terrorists. >> sreenivasan: in response, afghan president hamid karzai ordered a review of security, but he also praised afghan tr

caller: oi have concerns that former executives of many of the investment banks, especially goldman sachs are and have been responsible for monetary policy and for regulation. guest: they have been appointed. all because they have been appointed. i'm wondering if you share that concern. and are there expert economists in the various think tanks and universities who could be appointed also and have more -- guest: elwell, they are. caller: as far as the average person. guest: well, mr. bernanke was a princeton professor. there are many economists -- i think up until 1965 there were very few economists in the federal reserve system in principal roles. now they are dominated by economists. many of them university economist who have become president of reserve banks or members of the board of governors. the white house has lawrence summers, former secretary of treasury but also former harvard professor and president of harvard university. there are lots of economist there. the problem is not the presence only the people of wall street but, of course, you know, if you appoint a secretary of tre

the ceo's of companies like goldman sachs benefited, they came from the bottom up.they know the value of about $100 and democracy. host: we will have to leave it there. thank you for your comments. silver spring, maryland, on our republican line. caller: this is my first call. i would like to echo the gentleman who called earlier. &x regarding limiting campaign funds to registered voters. in other words, labor unions or rifle association's or aarp or all of the interest lobbies and corporations would not be parties to being able to give money directly to a candidate. in any fashion and it should be a criminal penalty if anyone gives more than $2,400 that is recommended by the early or individual. i think corruption in this country is our leading concern. our government has been lost. it will get worse. instead of getting better. the idea that we should have billions of dollars going into campaigns for national office is ridiculous. they can campaign just like everybody else. that does not mean that corporations and interest groups cannot lobby. or write letters or a

tonight is why you are keeping secret, sealed it for 18 years, the money that went to aig and goldman sachs would like to get -- have c- span get an investigative reporter and discuss this. i can't understand how they can't steal something up for 18 years that the money put out -- public put out loans to aig and goldman sachs. i think it is absolutely terrible. thank you. host: front page of "the financial times" has this headline -- "liberal unease with obama" talk about yesterday freezing domestic spending. and here is "the new york times this morning, about message. it says a failure to communicate or the wrong message? it says, obama will accept responsibility but not necessarily blame. the state of the union address is mr. obama's third appearance, offers the opportunity for the president to restate the goals of his administration as it tries to turn the election your conversation to the economy. the speech will be punctuated with a handful of new ideas, come forehand -- it would largely be an opportunity for mr. obama to return to the proposal this let him into office. caller: i would

now if we are-- say i'm goldman sachs. and david is sponsoring reg islation to get back my bonuses. and david's got a safe district. i don't have to go after david. all i have to do is go after someone who is sponsoring david's legislation. supporting david's legislation and i go in and spent $3 million and beat him. i hanged that person. my lobbyist says we're going to stop this one way or the other. we'll spend whatever we have. i don't want to hurt you, david, but i'm sorry, shields just had to sacrifice his seat. that is the implications of this are absolutely unfathomable and they are terrifying. >> i think it is a bad decision. i think it will have a poisonous affect on political atmosphere. but for different reasons than most people that i have read and heard from. first i'm not convinced it will totally change landscape because i'm not convinced a lot of corporations are withing to want to have a political profile. >> lehrer: why not. >> because you are a corporation, you want-- everybody. so why stick your neck out. but i do think it will have this affect. what do corporati

because we were able eventually to track his mortgage all the way into a securitized product at goldman sachs. >> the -- almalene wade -- is that the correct -- she's a reverend? >> yes. >> yes. >> how'd you find her? >> we found her just through sort of word of mouth in baltimore. someone said there was this minister of the church who was living in her car, who'd had, you know, had a -- we were interested particularly because something i mentioned earlier which was, you know, that people say oh well, these people got into trouble because they took out loans they couldn't afford. they wanted to buy a bigger and better house. they were, you know, getting houses they didn't deserve. almalene was one of the many people who lost their homes who owned her house free and clear. she didn't -- she had inherited that house from her parents and then took out a loan on the house to -- she wanted to make some improvements because she wanted to sort of do a -- have an assisted living sort of operation in the house for people in the church. and, you know, was borrowed $28,000 and as she says in the film, s

caller: oi have concerns that former executives of many of the investment banks, especially goldman sachsare and have been responsible for monetary policy and for regulation. guest: they have been appointed. all because they have been appointed. i'm wondering if you share that concern. and are there expert economists in the various think tanks and universities who could be appointed also and have more -- guest: elwell, they are. caller: as far as the average person. guest: well, mr. bernanke was a princeton professor. there are many economists -- i think up until 1965 there were very few economists in the federal reserve system in principal roles. now they are dominated by economists. many of them university economist who have become president of reserve banks or members of the board of governors. the white house has lawrence summers, former secretary of treasury but also former harvard professor and president of harvard university. there are lots of economist there. the problem is not the presence only the people of wall street but, of course, you know, if you appoint a secretary of trea

it is goldman sachs, the jewish bankers, and they own obama. host: i just want to stop you.o wish? that is certainly not the case. caller: you have the federal reserve, all those bankers. ben bernanke. host: you do not have to respond if you do not want. baltimore is next. darren on the independent line. caller: thank you. this is my first time. i really hope that you do your best to find out what really happened. this country cannot take much more. and i am a young person. our future is at stake. i know so many people that have been affected by this. it makes me mad that regular people do not have a say. host: what would you like to ask, if you could? caller: i heard tim geithner will also be testifying. i would like to know what he knew about a.i.g. there was a story that he knew more than people thought about the a.i.g. crisis when he was the head of the new york fed. i just hope that congress will follow through with a real financial reform. guest: mr. gardner when not be testifying today. he may testify at one of our public hearings, and i will make note of one of the q

goldman sachs issued a report a couple months ago.i thought it was ridiculous report, saying that north korea is going to follow the hong kong model of absorption by china. i find that just totally implausible that we could have this long, negotiated unification. i think that is exactly what the south korean government would like to hear, but it is not even close to what is realistic. unification is unlikely to be gradual or smooth. if we are lucky, we will get the german-style unification, quick and relatively bloodless, but still very expensive. if we are unlikely -- un lucky, we will get a vietnam and possibly face war. in romania there was a somewhat messy fall, as we saw in romania and albania. i will also talk a bit about -- i only have a few slides. i will talk a bit about the challenges we face, some lessons we should take from the german experience. no question that the german experience was very, very different from what we will face in korea. looking at a cost of unification, and the consequences of a unified korea. the fir