[laughter] paul volcker is known today for the volcker rule, but he earned the trust that easy anonymous with his name and defeating an inflation that almost destroyed the american financial system. why is he obsessed with the financial system? he is fond of blaming his mother just like the rest of us for all of our obsessions. and i say he has to stand in line for -- [inaudible] because she refused to give him an increase in his allowance at the end of world war ii in 1945 when he was leaving to go to princeton to. >> ultimately controlled inflation. the process began. by 1982 inflation was 4%. but the final victory certainly before interest rates came only after congress passed a balanced budget amendment in 1985. it was called the graham-rudman-hollings bill that imposed draconian cuts in government spending unless the government, unless congress passed a balanced budget. does that sound familiar? it's almost like what we have now. senator warren rudman, one of the sponsors of the bill, said it was a bad idea whose time had come. and yet only after graham-rudman-hollings was passed di

if you by this one or paul volcker, you will make enough money.t zuckerman is a guest all the time. for anybody who wants to become a star in the real estate world, boston properties, breakfast, power breakfast with mortgage. mort. >> meet president clinton and obviously everyone wants to hear from former president clinton especially he solved the fiscal cliff if we recall. many years ago. liz: we had a nice surplus back then. >> yes, we did. liz: behind the scenes at facebook is another one. is this newer item? >> never had this one before and this with the top executives there and that's going to be a great time. liz: mark zuckerberg, will be there? >> we're not promising that but you will have to go and find out. >> lunch last year was the second highest bid outside of a meeting with the pope at the vatican. so we have 24 hours to get this up. okay? substantially. liz: 24 hours, everybody. before we go, you, bob have been known as the president's ear right for banking. >> i'm very close to him. liz: what is happening with the fiscal cliff, him

just before past the late senator john heinz uncovered hidden agenda in the paul volcker plan. this so important i am going to reenact the conversation. ready? >> mr. chairman we have agreed the deficit is bad. but in my experience with congress is anything to go by, there will have to be a crisis to fix it. my question is, a you prepared to bring about the necessary crisis the year continued restrictive monetary policy? he could hardly believe his years. to avoid a political suicide, i will just say as a matter of general philosophical approach and feel very strongly it is not our job to artificially provoke a crisis. then they say mr. chairman i never intimated that was part of your thinking and he said iowa's cent absolutely sure about that. then hines says but maybe the inevitable consequence. paul volcker cannot law old ally -- tala lie and then in fact, it confirms the hidden agenda to maintain painfully high interest rates so monetary policy could go up. of final confirmation this after the bell was passed senator phil gramm called paul volcker to say now we have the bud

in 1971, paul volcker was an unknown working for another american. henry kissinger, who you may have heard of. before he became secretary of state. he was still national security advisor. volcker's paper, which are when i read a few years ago, i thought it was the most remarkable document ever to emerge from washington in the last 50 years, 60 years. asked a simple question. now that america is losing its surplus, looking at the emerging economies of the world -- primarily germany and japan at the time -- how will we retain our hegemony? he said we could not recycle our own surpluses. we must recycle other people's surpluses. and this is what happened between the mid-1970's and 2008. the u.s. utilizing its trade deficit with the rest of the world has been operating like a huge vacuum cleaner. sucking into the united states the net exports of europe, japan, and lately china. thus providing exporters -- germany, japan, or china -- with the requisite demand necessary. so, the ever expanding trade deficit was not an accident. it was a very clever way of r

beginning at 7:00 eastern, william silver and former federal reserve chair paul volcker discuss paul volcker's life and career. police chaplain describes circumnavigation. her book is round about the earth. at 10:00 eastern we conclude the prime time programming with our weekly afterwards program. this week dr. marty makary discusses health care reform with richard davis of memorial hospital. this is booktv.org for more on this weekend's television schedule. >> with a month left in 2012 many publications are putting together good bear your end list of notable books. booktv will feature several of these lists focusing on nonfiction selection. these nonfiction titles were included in foreign policy magazine's must read books. in breakout nations, in pursuit of the next economic miracles, the head of emerging-market in morgan stanley reports on growing economy and a shift in global economic power. senator rand paul of kentucky argues against what he deems far reaching government regulations in government bullies, how everyday americans are being harassed, abused and imprisoned by the fed

in 1971, paul volcker was an unknown working for another american. henry kissinger, who you may have heard of. before he became secretary of state. he was still national security advisor. volcker's paper, which are when i read a few years ago, i thought it was the most remarkable document ever to emerge from washington in the last 50 years, 60 years. asked a simple question. now that america is losing its surplus, looking at the emerging economies of the world -- primarily germany and japan at the time -- how will we retain our hegemony? he said we could not recycle our own surpluses. we must recycle other people's surpluses. and this is what happened between the mid-1970's and 2008. the u.s. utilizing its trade deficit with the rest of the world has been operating like a huge vacuum cleaner. sucking into the united states the net exports of europe, japan, and lately china. thus providing exporters -- germany, japan, or china -- with the requisite demand necessary. to keep the factories going. so, the ever expanding trade deficit was not an accident.

. >> and how about this, fly fishing with paul volcker.you can do that, you can buy the other auction items. >> charitybuzz.com. i've got to beat anderson cooper. finally, let's come to the car accident you had. >> yes. >> a strange case, where you had taken an ambien sleeping pill in the morning. >> i reached for my thyroid medication and took the wrong pill. i did it at 7:30 in the morning. i did what tom brokaw did. i took the wrong pills. i was on my way to the gym. got into the car. got into a car accident. but there was no alcohol in my blood. that's what happened. >> the case in general. >> yes. >> good luck with that. >> thank you. >> let's talk about taylor swift before you go. she's the hot woman at the moment. she's dating a british rock star. she was honored at the rfk centers gala. >> and incidentally, you can get one direction tickets, too, on the -- >> well, there you go. is she nice, taylor swift? >> so fantastic. such an amazing woman. she spoke. she gave about a 20-minute speech, sang 4 songs the other night. very deep, v

i think paul volcker mentioned it and in response, 96 senators passed a sense of the senate resolution that this was an evil idea. >> here's the way i think about it. we're not going to get a consumption tax in this discussion this year or next spring either. the reason it's inevitable, on the republican side, it is the way to slowly do tax reform. peter's right, reforming the income tax is very, very hard. it is also the only way to pay for a larger government, if that's what the american people want. >> what really matters now, that republicans have moved on taxes somewhat, is that we have some movement on entitlements. not because it is necessary for next year or even five years' time, if you look out over two decades, that's where the u.s. needs to do something. that's where the president has a huge opportunity. he's got movement from the republicans. i suspect there will be movement, not just on deductions but on rates. that argument is over and now show leadership on entitlements and take on some sense the left of your own party and put out something bold there. >> peter, do you

falconing with my brother bobby or go fly fishing with paul volcker. and there is lots of set visits and going to see anderson cooper on one side or bill o'reilly on another. and lots of access to hollywood, to broadway. it's a really fun auction. >> for a great cause. i also just want to give a plug because i enjoyed it so much. your sister has done a documentary, people can see it on hbo, about your mom. so if people want to get an idea of where the center came from, sort of how it all developed, although that's not the focus of it, your mom is the focus of it, i think that's one place to go. i know you're proud of her. >> which has been short listed for an oscar. so all of you -- all of you voters out there in the documentary category, vote for rory. vote for ethel. >> spoken like a good sister. thank you, carrie kennedy, for coming on. logon to rfkcenter.org. >>> a stomach virus keeping secretary clinton from her planned trip to morocco in the middle east today. she was to join foreign ministers from all over the world to talk about the crisis in s

fly fishing for two with paul volcker in the catskills something benjamin wallace wells has always wanted speech by bill clinton and a photo with him, which is actually priceless. lunch with obama body man reggie love which i think has set hearts aflame across the united states. >> you'red bying on that. >> i might be. >> and a character named after you and john irving's upcoming novel which i believe josh greene -- i feel like you've figured prominently john irving novels. >> will you be the villain or hero? >> probably depends on the size of your bid. >> informant. it's ongoing right now. >> yes. >> we're trying to dream up exciting item that maybe coming on set to visit with the "now" with alex wagner team should be up there. >> we're going to fix that. that will be up there by dinner time. >> look at that. bid high, america. we have to leave it there. thank you to my panel, benjamin, kerry, karen, josh and melinda. that is all. i'll see you tomorrow noon eastern, 9:00 pacific when joined by richard wolf, michael eric dyson, brian anderson and rana fa roo har. find us at facebook.com/n

in 1971, paul volcker was an unknown working for another american. henry kissinger, who you may have heard of. before he became secretary of state. volcker's paper, which are when i read a few years ago, i thought it was the most remarkable document ever to emerge from washington in the last few years. looking at the emerging economies of the world -- primarily germany and japan at the time -- how will be paid back germany? he said we could not recycle our own surpluses. we must recycle other people's surpluses. and this is what happened and 1978.e mid-1970's the u.s. utilizing its trade deficit with the rest of the world has been operating like a huge vacuum cleaner. thus providing exporters -- germany, japan, or china -- with the requisite demand necessary. so, the ever expanding trade deficit was not an accident. it was a very clever way of replacing one that surplus recycling system with another. it was one where america had a surplus and america decided instead of doing what germany is doing at the moment -- which is cutting its nose to spite its

credit card pervvijze and predatory lending arguably it was making even though war and stifel and paul volcker said it wasn't a single financial innovation that has led to the increase in productivity for the atm machine and what is wrong with the atm is a british innovation and so the fees from the dollar to $3. so, that is another example. the ceos have been taking advantage of the governments to increase the share of that corporate income. more revenues have become that much more productive or not much more productive than the ceos and other parts of the world. but what they have become is better at getting a larger share of the pie. you have to admit there is a certain amount of cleverness but it hasn't led the economy to be more efficient to the investment or r&d spend on their salary. >> i like to do the division to take the u.s. economy since the early postwar years and roughly divides about in half. the first era was the legacy of the new deal of the corporations that viewed themselves as a coalition of stakeholders rather than just roofless capitalism strong labor unions of course tax

. >> well, the size of the gap, paul volcker estimated the size of the gap at $ trillion. the investable u.s. corporate bond market is only $5 trillion. so you have a tremendous demand for credit and a limited supply of it. as much debt as there is, demand is outstripping it dramatically. we're doing so more expensely in this credit boom. >> and here is one example of where demand is coming from. moody's is lowering its outlook from illinois's credit rating to negative citing continuing problems with the state anticipate ability to fund its public pensions. illinois is being crushed by a unfunded liability and lawmaker res pushing to get various reforms passed month. moody's says that attack can be canceled. illinois being one case where this need is getting more and more pressing. >> the long-term ratings are under pressure because if you take a long-term perspective, it's not likely they're going to be able to make their pension goals over the course of, say, the next 15 years. but in the interim, while they're raising the fees, that produces another two to five years of

they had alan greenspan and paul volcker.hey discussed the fiscal cliff, and both, they smiled and said, we have to create account -- a crisis to get everybody off their duffs. they said there was no problem with the debt and money. they know how much money is out there, local and federal. host: i appreciate the call, from arizona, and all the calls in this first segment. up next, we'll continue this discussion with a discussion with our sunday round table. later, david jackson, white house reporter with ""usa today"." -- "usa today." we will be right back. ♪ >> the release started to get worried in the summer and fall of 1774. the british admirals and generals and diplomats were reporting to the crown that the colonists were sending ships everywhere to try to get ammunition and muskets and cannons. this was after the british had sent more troops to boston after the boston tea party and signed the course of acts -- the coercive acts. maybe the colonists did not intend to use the ammunition. it came with an order from council

>> volcker -- >> we had paul volcker on the program a month ago. >> volcker started out to be a simplene of the more complex issues in banking since it's now -- bankers didn't figure it would affect smaller institutions but now it affects institutions all the way down to $50 million community banks. and it's got people running around with their hair on fire trying to figure out how to implement. >> would you buy -- giving everything you just talked about, would you buy bank stocks? >> i would buy bank stocks selectively. i wouldn't buy the industry. i think this shapes up to be a reasonably good year for the larger banks, because of where they're started. remember if you back out the reverse split and citibank it's a $4 stock trading for a fraction of where it once traded. same could be said about bank of america. as the economy heals and then as the housing secretarier comes back, i think they can expect to see some improvement there. there's also a ton of capital, excess capital in the banking sector, and a lot of that is getting returned in the form of stock buybacks and dividends.

. >> we won't need paul volcker in the future?, all they have to do is start taking that balance sheet down and start detracting. >> that sounds easy, david. >> it's not easy but it will happen. his hotel, california, who wrote that song? >> eagles. >> i'll give him prince. >> we're going to party like it's 1999? >> yeah, we can party like it's 1990. listen, i'm not talking about the economy, i'm talking about -- you have so much money. >> raspberry. >> red beret. >> i didn't say red beret i cedras berry beret. >> i don't have monitors. >> so then, we will get to 6.5% on track in unemployment? this will work? >> now you're asking me a different question. >> do you believe in the new normal? like the pimco idea that we're going to have subemployment, permanently. >> the question that the fed is taking a chance. this is a different way to put it. the fed is taking a chance that 6% is where you start triggering inflation, okay? that's the real trigger here. >> on unemployment. >> they're going to go to 6.5. i think the fed is that th

>> first of all, just so you know i'm in a studio here in dallas, set up by paul volcker's nephew.teresting contrast. >> you said it, not me. that is interesting. go ahead. >> no, i -- look, again, we are a team. we are a committee. there are some of us that argue against what we decide to do, i was one of them. but the committee makes a decision as a whole and proceeds. and i'll use that as a way of saying there's a very sharp difference and contrast to the way the congress operates or the way the congress works with the executive. we have very frank discussions, it's civil. i argued that basically we were at risk of what i call a hotel california, monetary policy, going back to the eagles song which is you can check out any time you want but you can never leave. that's what i worry about. theoretically we can check out any time we want from this program but we practically, because we're going to have an engorged balance sheet, we may never be able to leave this position. so i have some concerns. i was concerned about the 2.5% mention, even, of inflation one or two years out in te