mr. stiglitz, go ahead. host: i think the banks were great at propagateing the fact that they were the innocent victim, but let's look at one key issue, the derivatives, the gamble that is they made with each other that blew up. that had nothing to do with the housing risk and it was these driven tives that were the critical piece that brought down the financial system. we spent almost $200 billion in aig. that had nothing to do with the housing but tip phi it is irresponsible risk-taking of the banks. and let me emphasize it had nothing to do with the housing problem, and to try to shift the blame to fannie mae and freddie mac is just wrong. now phan fan and freddie mac did make some big mistakes, but they didn't get into the bad home lending until well after the banks and mortgage companies were already into it. the problem is that we privatized fannie mae and freddie mac back in 1968. and as private existence, they've looked at all the money the banks were going and said we ought to imitate that. and as t

mr. stiglitz? guest: i think you're absolutely right. but where we've gone now is one step further. we've been acting like what's good for citigroup and goldman sachs and "g.m.a.." and we been tchining for quite a while. we pushed countrys to liberalize their capital markets and open up their market for drifftives. those were things that were not actually good for those countries and not good for but they may be going in opposite directions. the problem is that -- goes back to our political structure. our political structure provides too much room for campaign contributions and the influence of lobbyists. if you look at the lobbyists, for example, for instance, from the financial industries, there's about fife for each congressman. huge amount of money being spent for the financial industry to get bills through that are in their interest. they may not have been able to invest their money in real investments, make good judgments, but they have made good political investments, and now they've been getting a return. so in the end it's the political system that -- in the united states t