mr. thomas? >> thank you very much, mr. chairman.i would ask unanimous consent that my written statement he made a part of the record. i just want to thank all of the commissioners. we have been doing a lot of that 7/8 of the iceberg under water. and people are not going to see the 1/8 that you usually see above water. i think all of us are conscious of the fact that these hearings, notwithstanding the trauma of the hearings, is not the fundamental work that is before us. it is asking the questions the american people would like answered into doing it in a way in which we increase the understanding, the comprehension of what happened. for the purpose of not having it happen again. thank you, chairman. >> thank you, mr. vice chairman. now we would go to the witnesses on our first panel. let me say that it will be the common and customary practice of this commission in public hearing to swear witnesses in terms of their testimony. so this is not unusual. with that, i would like to ask each witness to be sworn. and i would like to ask t

mr. thomas said, met me reemphasize something.we are here not just to examine what went wrong in the private sector. we have unnoble combination to as thoroughly and as vigorously examine what happened in the public sector, what happened in regulatory agencies, what happened in enforcement agencies and helping us understand the full record of what did or did not happen. actions, inactions is important to our inquiry. thank you, mr. attorney general. >> and the attorney general is probably at the current time. >> well, but please, don't misunderstand. there is a desire on the part of the department to cooperate. this is an important inquiry, that you all are about. it is important for our nation going forward, it is important for historical purposes, for us to understand why we are in the present situation that we have to confront. the only concern i have, are the rules and regulations that govern the dissemination of information that the department of justice accumulates, and to the extent that we can work our way through those, w

mr. thomas? >> thank you very much, mr. chairman.unanimous consent that my written statement he made a part of the record. i just want to thank all of the commissioners. we have been doing a lot of that 7/8 of the iceberg under water. and people are not going to see the 1/8 that you usually see above water. i think all of us are conscious of the fact that these hearings, notwithstanding the trauma of the hearings, is not the fundamental work that is before us. it is asking the questions the american people would like answered into doing it in a way in which we increase the understanding, the comprehension of what happened. for the purpose of not having it happen again. thank you, chairman. >> thank you, mr. vice chairman. now we would go to the witnesses on our first panel. let me say that it will be the common and customary practice of this commission in public hearing to swear witnesses in terms of their testimony. so this is not unusual. with that, i would like to ask each witness to be sworn. and i would like to ask that you stan

mr. thomas? >> thank you very much, mr. chairman. i'd ask unanimous consent that my written statement be made a part of the record. and i just want to thank all of the commissioners, we've been doing a lot of that 7/8th of the iceberg under water, and people are not going to see the 1/8 that you usually see above water. i think all of us are conscious of the fact that these hearings, not withstanding the drama of the hearings, is not the fundamental work that is before us. it is, as you've indicated, asking the questions, the american people would like answered. and doing it in a way in which we increase the understanding, the comprehension, of what happened. obviously, for the purpose of not having it happen again. thank you, chairman. >> thank you, mr. vice chairman. and now, we will go to the witnesses on our first panel. let me safe, it will be the common and customary practice of this commission in public hearing to swear witnesses in terms of their testimony, so this is not unusual, and with that, though, i would like to ask ea

mr. thomas said let me reemphasize something.we are here not just to examine what went wrong in the private sector. we have an obligation to as the early and vigorously examine what happened in the public sector, what happened in the regulatory agencies, what happened in the enforcement agency and helping us understand the full record of what did and did not happen, actions come inactions is important to our inquirer. >> and the attorney general is a probably at the current time. >> please don't misunderstand. there is a desire on the part of the department to cooperate. this is an important inquiry that you all are back. is "important for nation going forward. it is important for historical purposes to understand why we are in the present situation would have to confront. the only concern i have are the rules and regulations that govern the dissemination of information the department of justice accumulates into the extent we can work our way through this we will get the information to you. it is our strong desire to cooperate

mr. thomas? >> can i ask a quick follow-up question?he complexity, more and more drive with the documents that the public deals with in terms of trying to put them, in relation -- so that you can understand them. i know that sometimes, it is difficult to bring it in simple terms. but do not all of them focus on who gets what, when, and how? and you can permeate that in any way you want to, but there are some fundamentals that do not have to be there. sometimes, complexity is impressive. i mean, if i said "i hate you," you would get it. i am extremely strong feelings of animosity, some folks may not. the fundamentals are the same -- i had extremely strong feelings of animosity. talking about simplification, so that people can understand, or a kind of agreement that you're going to have a fraternity, which gets paid highly and has the jargon. i used to run a lot in government in which jÜrgeargon s used in which to reduce the number of people they had to interact with. is that the case in terms of some of the complexity that you find mnow?

mr. thomas and i have spoken. with the ground we have covered we will allocate three more minutes to each. >> thank you, chair sheila bair, do agree that the reagan tort reforms that the other chair recommended? >> yes, it should be a high priority for congress. the chicks you agree that the regulatory reforms that the other chair recommended should be agreed to? >> yes. >> i also like to ask about a program that the sec adopted in 2004 called the consolidated supervised entity program. i think it was intended to bring some prudential supervision to the large investment bank- holding companies. i think it covered a bear stearns, lehman brothers, merrill lynch, goldman sachs, and morgan stanley. one of which failed, some of which had to be acquired, and the others became bank holding companies. that was during the financial crisis. did the program fail in providing sufficient credentials supervision? >> we have to conclude that the program was not successful. as i understand the program was developed in regard to c

mr. thomas has had literally a prior commitment that goes back one year, and he had already altered everything to be able to be with us yesterday and today, but he has had to depart for the west coast. so mr. holtz-eakin will be sitting in the vicegerent seed and working with me any allegations or time for commissioners. so let me start this by reminding witnesses first of all thank you for your written testimony. it was very well done and we appreciate the effort you made. we will ask each of you to give us a statement of up to 10 minutes, and then we will go to commissioner questions. and we will start today with the attorney general of illinois, ms. madigan. so if you would please begin your testimony, that would be terrific. >> thank you, mr. chairman and members of the commission for inviting me to testify before you today. my testimony is going to focus on my office efforts to combat the predatory practices that grew rampant in the mortgage lending industry over the last decade and are at the root of our country's financial crisis. the state attorneys general who served as first responde

mr. upton and chairman boucher for advancing this and i look forward to fulfilling the thomas of our billing constituents. >> thank you very much, mr. inslee. mr. kerry is recognized for two minutes. >> thank you for holding this legislative hearing him a look for to hearing our witnesses. we have to make sure that we do this right and in balance with the spectrum that's used in military. i had the pleasure of representing the 55th wing which is an electronic warfare and information operations out of air force base right outside of omaha in bellevue. i relate her from the association of old pros that set out some of the issues that we may be discussing here with the spectrum and i'd like to offer that letter into the record. >> without objection. >> last in our committee memorandum it starts off with the introduction criticizing universal service fund and calling it in effect tears. in the second paragraph also starts off with the universal service. so somehow universal service fund is important in this discussion and i look forward to your comments on how universal service fund affects the

mr. thomas, do you want to make any opening comments this morning? >> no thank you, mr.chairman, other than to say, thank you very much for appearing before us, and we look forward to continued cooperation. thank you. >> on the first panel, and we have before us, the attorney general of the united states, mr. holder. we have before us, mr. lannie brewer, in charge of the criminal division of the department of justice. we have sheila bar, chair of the fdic and mary shapiro, chair of the s.e.c. we're going to start as we are with all witnesses, as will be -- as has been and will be our custom at this commission, we will swear all witnesses, so i'd like to ask all the witnesses to please stand and be sworn before us. do you solemnly swear or affirm under the penalty of perjury, that the testimony you're about to provide the commission will be the truth, the whole truth and nothing but the truth to the best of your knowledge. >> yes. >> thank you very very much. we will now commence, i will ask that each witness provide an opening statement. we do have written testimony from

mr. thomas. >> thank you very much, mr. chairman.uld ask unanimous consent that my witness statement be made a part of the record and i want to thank all of the commissioners. we have been doing a lot of bad 7/8 of the iceberg under water. you all not easily see that. i think all of us are conscious of the fact that these hearings, notwithstanding the drama of the hearings, is not the fundamental work that is before us. it is as you have indicated asking the question the american people would like answered and doing it in the way in which we increase the understanding, but comprehension of what happened. obviously for the purpose of not having it happen again. i think the chairman. >> thank you, mr. vice chairman. and now we will go to the witnesses on our first panel. let me say that it will be the common and customary practice of this commission in public harassing -- hearing to swear witnesses. this is not unusual. i would like ask each of the witnesses to be sworn. and out like that aspect use was banned that i swear you win, the

mr. thomas literally had a prior commitment that goes back when year and he had already altered to be with us yesterday and today they he had to depart for the west coast so mr. holtz eakin will be 60 in the vice chair seat and working with me on the allocation time for commissioners. let me start this by reminding witnesses coming thank you for your written testimony. it was very well done and i appreciate the effort you have made. we will ask each of you to give a statement up too 10 minutes and we will go to commissioner questions. we will start today with the attorney general of illinois. lisa madigan so please begin your testimony. that would be terrific. >> thank you, mr. chairman chairman and members of the commission for inviting me to testify today. my testimony will focus on my office have pressed to combat predatory practices that granted in the mortgage lending industry over the last decade and at the root of the country's financial crisis. the state attorneys general to serve as first responders when problems emerged for consumers are routinely aware of the wide scale of 38 --

mr. thomas had a commitment that goes back one year. and he had already altered everything to be with us yesterday and today. he has to depart for the west coast. mr. holtz-eakin will be sitting in the vice chair seat. and he'll be working with me on the allocation of time for commissioners. so let me start this by reminding witnesses, first of all, thank you for your written testimony. it was very well done and we appreciate the effort that you made. we will ask each of you to give us a statement of up to 10 minutes. then we'll go to commissioner questions. and we will start today with the attorney general of illinois, ms. matagan. >> thank you. my testimony is going to focus on my office's effort to combat the practices that grew in the mortgage industry over the last financial crisis. the state attorney's general who serve as first responders when problems emerge were keenly aware of the wide scale abuses in the mortgage lending market. we were taking aggressive effort. my testimony will see the failure of federal regulatory oversight

mr. thomas p. danapoli. [applause] >> in addition, i would like to thank you for joining us today.[applause] >> it is my pleasure to recognize the following members of our congressional delegation who are joining us today in the chamber. congressman jerry nadler. [applause] >> congressman gregory meets. [applause] >> congressman steve israel. [applause] >> congressman mike acuri. [applause] >> congressman paul tonkow. [applause] >> congressman eric masep. [applause] >> and congressman michael mcmahon. [applause] >> now i'd like to introduce the majority leader of the -- or the conference leader of the new york state senate, new york state senator john sampson. [applause] >> thanks. pursuant to a resolution duly adopted in each of the houses of the legislature, the senate and the assembly of the state of new york are met in joint session for the purpose of receiving the annual message to the legislature from the governor of the state of new york. i am proud and honored to present our governor, david a. paterson. [applause] [applause] >> thank you. thank you. before we begin, i would

mr. speaker, thomas jefferson once wrote, to preserve the independence of the people, we must not let our rulers load us with perpetual debt. we must make our election between economy and liberty or profusion and servitude. unfortunately, it increasingly appears congress has chosen the latter path of profusive spending and the servitude to big government that results therefrom. for the next 60 minutes, i and my colleagues are going to talk about the problems our country faces from a very different perspective than you have heard during the last 60 minutes. i want to start by pointing out the nature of this problem in terms of government spending. this chart shows the deficit each year starting in 2000 and in 2000-2001, first a democratic president and a republican president, we had a balanced budget we had a surpluses, in fact the two years before that we generated a total of $500 billion in surpluses paid down against the national debt. then came the recession and september 11, 2001, and spending increases, many have, i think, fairly criticized the previous president and congress for spe

thomas is mr. principal since the desire for the game knows no bounds. adam smith expected on the contrary the market with a disciplined society and precisely set the balance, or appetite. but as it turns out, our capitalist age is not an age of discipline. far from it. our society is a study in on down the appetite. our chief public health problem is obesity. our foremost social pathologies result from absence of sexual restraint and personal responsibility. our popular culture much of the time is a diabolical mix of babylonian decadence and vulgarity and our public life is unrestrained gluttonous feast upon the flesh of the future. we borrow more than we can pay. we spend more than we have and use more than we need for all of our immense wealth we manage to live beyond our means. in fact it's almost fair to say we lack for nothing except discipline. but as adam smith can tell discipline above all is what we require to be freed. this is no small problem for the case for capitalism. so what happened? in part as a smith surely understated the challenges o

mr. president. >> jon: on the panel this week, writer and fox news contributor judy miller, syndicated columnist, cal thomasjim pinkerton fellow new america foundation and news day columnist, ellen. i'm jon scott, fox news watch is on right now. the year 2000, the new millennium, the beginning of a new decade of news and news coverage. the y2k bug was the big story of 2000, it quickly became a big bust. u.s. agents seize refugee elian gonzalez and after a long standoff sent him back to cuba. the u.s.s. cole attacked by terrorists in yemen, 17 american sailors were killed. figuring out the winner of the presidential election delayed due to ballot snafus in florida. the u.s. supreme court took on the issue, made a decision and 36 days after voters had gone to the polls, democratic presidential candidate al gore conceded the election to his republican challenger, texas governor george w. bush. he would become the nation 43rd president. jim, elliss, if you had to sum up that 2000 election fiasco in a few words, how would you roux describe it? >> i would say the reporters all voted for al gore in 2000, but they

thomas is mr. principal since the desire for the game knows no bounds. adam smith expected on the contrary the market with a disciplined society and precisely set the balance, or appetite. but as it turns out, our capitalist age is not an age of discipline. far from it. our society is a study in on down the appetite. our chief public health problem is obesity. our foremost social pathologies result from absence of sexual restraint and personal responsibility. our popular culture much of the time is a diabolical mix of babylonian decadence and vulgarity and our public life is unrestrained gluttonous feast upon the flesh of the future. we borrow more than we can pay. we spend more than we have and use more than we need for all of our immense wealth we manage to live beyond our means. in fact it's almost fair to say we lack for nothing except discipline. but as adam smith can tell discipline above all is what we require to be freed. this is no small problem for the case for capitalism. so what happened? in part as a smith surely understated the challenges o

[applause] now i'd like to invite thomas stanton the up to the podium. mr. stanton is the author and editor of a couple of books on government-managed entities, and he is a fellow at the center for the study of american government at johns hopkins can. thank you. >> it's a pleasure to be here and ralph has arranged a program so that everybody can hear various alternatives and really weigh for yourselves the pros and cons. i happen to be the author of a book, "a state of risk: will government-sponsored enterprises be the next financial crisis?" that book was written in 1991, so you can tell my timing was off. but, in fact, you can point out the structural vulnerabilities of an institution. what you don't know is when the stresses will hit that actually bring it down. so what i'd like to do today is, first, talk about why they failed, fannie mae and freddie mac, and then make a couple of points about the future. and then leave time for dialogue which in this kind of forum is really important. there are a number of reasons why fannie and freddie failed. i'd lik

[applause] mao i would like to invite thomas stanton up to the podium. mr.tanton is the author and editor of a couple of books on government managed entities, and he is a fellow at the center for the study of american government at johns hopkins. thank you. >> it is a pleasure to be here, and ralph has arranged a program so that everybody can hear various alternatives and really wait for yourselves the pros and cons. i happen to be the author of a book, a state of risk, will government sponsored enterprises be the next financial crisis? that book was written in 1991, so you can tell my timing was off. but, in fact, you can point out the structural and liabilities of an institution, but what you don't know is when the stresses will head that actually bring it down. so what i would like to do today is first talk about why they failed, fannie mae and freddie mac and then make a couple of points about their future. and then leave time for dialogue, which in this kind of form is really important. there are a number of reasons why fannie and freddie failed. i woul

mr. roe: there's a great book out by thomas friedman, he says if you want less of something, tax it, if you want more of it, subsidize it. if you have programs that are subsidized by the taxpayer, you create more people that use it. i'll give you a brief example before i yield to my colleague from georgia. in this country we talk about, i heard many times -- and we do have failings in our health care system, it's not perfect. but when president clinton had a heart attack, he was take ton an emergency room where he had a heart cat and schovered had blockages in his arteries and needed a bypass operation to save his heart. and in canada, what would have happened -- he got a bypass operation. he was delayed a couple or three days because of a blood thinner they gave him, i don't know that for sure but i think that's probably what happened. let's say you're in small-town johnson, tennessee, and you don't have insurance and come to the emergency room, what's going to happen is you're going to get a heart cat and a by pass operation and then we'll figure out how to pay for it. in canada, what the

mr. speaker, i rise today to recognize the students, faculty and staff at ruth moir elementary school in fort thomaskentucky. last fall ruth moir was named the 2009 blue ribbon school. the blue ribbon schools program honors schools that are academically superior or demonstrate dramatic gains in student achievement. these schools are models for others throughout the nation. i had the opportunity to meet students and faculty at ruth moir and speak with them about their efforts to improve their school. students and staff were unable to be here today in washington to receive our congratulations because they're working hard in the classroom to uphold their high standards. however the students in mrs. green's class sent a distinguished ambassador to represent them. mr. speaker, i ask my colleagues to join me in welcoming slad stanley to the house of representatives and extending our congratulations to the community of ruth moir for their outstanding achievement and i yield back, mr. speaker. the speaker pro tempore: are there further one-minute requests? if there's not, the chair lays before the house the

mr. poe: madam speaker, the united states constitution is a document to limit the federal government. thomasferson said, pre-government is found in jealousy and not in confidence which requires limited constitutions to bind down those who we are abliged to trust with our power. as the all-seeing government tries to take care of us and who believes that we are subjects incapable of taking care of our own health, nowhere in the constitution the federal government is given the enew mexico rated power grab and control the nation's health. the constitution sets limits on what dictates of pain the federal government is allowed to inflict on the rest of us. george washington didn't fight the red coats so people would be the subjects of a new oppressive, untruth worthy federal bureaucracy. and the colonnists didn't die in the war of independence so the health czar would have the rule over us. it's an un-constitutional abuse of power to nationalize america's health care and trust the government with our health andes that that's just the way it is. the speaker pro tempore: the gentleman's time has exp

mr. sulliva solomon to. >> thank you chairman. vice chairman angeles and vice chairman thomasnd members of the commission. thank you for asking me to appear before the commission. before i begin i want to commend the leadership of the house and senate for creating this bipartisan commission. to examine the causes of the current financial and economic crisis of the united states. when i entered wall street in the early 1960s, security firms and commercial banks have not changed much since the 1930s. stock ownership was not widespread. pension funds and endowments did not best broadly. the average white on the new york stock exchange was about the same as four years earlier. there wasn't a large public bond market. the business of commercial banks was lending. the securities firms were usually private partnerships. investment funds were separate from banks and security firms. i've been afforded the opportunity over 50 years to observe the dramatic changes in the financial world from a number of perspectives. my career at lehman brothers and 29 years. i rose to vice chairman of t

mrs. lummis: john adams died 50 years to the day that the declaration of independence was signed. and as he died, he said jefferson lives. and ironically thomas jefferson died that very same day, 50 years to the day that the declaration of independence was signed. these are people whose founding principles and founding beliefs carried them until the day they died. although during the years they were political rivals, they respected and admired each other so much that they wanted to nurture it and guide it and see that it survived. and i believe today, in fact tonight, we are seeing that same nurturing and guidance and seeing the founding principles verified in massachusetts. so it is indeed an exciting day for our country. among the things that you mentioned that the people of massachusetts chose to be concerned about in casting their ballots today is the deficit. and i would like to take a minute to show you a chart that explains how this deficit has grown over the last year and that the debt that our majority party here in congress today says they inheritted actually has grown to unprecedented levels while they are in control. and the fact

thomas. in his sea of thunder, i wish i could write that way. where he gets into the mind of the opposing commanders with this enormous research that he did, mr. ambassador, some in japan of them here. i don't know how he does all this and then does what he does at "newsweek." he's a genius. by october 1944, the united is prepared a strike. the strike would fulfill general macarthur's promise to return to the philippines. again the u.s. fleet was tasked with ensuring success of this invasion. once again, the japanese threw everything they had to be americans. the japanese divided their fleet to do three task forces. one was composed of what remained to the japanese one vaulted aircraft carriers. as the japanese no longer had enough training pilot to compete with the americans, this decoy fleet would try to wear the powerful u.s. fast attack are your fleet away. this ploy, this strategy would allow the two remaining japanese service tax forces -- it was a brilliant strategy. again burke and disagreed with the commander, bill hall's then. they were like both tied up with your ego and they could make terrible mistakes. that never happened to burk