he describes in the book, a conversation between paul volcker and ted kaufman, senator, in which paul volcker said anything you propose to do at all, anything at all always say lending will suffer, growth will suffer. and then he tossed and he says, i'm quoting, it's all bull shit. that's what you said. i go do something to some event where i speak, the sausage being made. i see the interaction between the lawyers of the regular's and the lawyers of, a lot of lawyers involved by the way. not economist by the way. a lot of legal stuff. it's this power-play that's complicated and they have this interesting relationship to its like the tax code. they want to buy that complicated to generate more jobs for consultants and other people so they write a very complicated legislation, lots of loopholes. the volcker rule, the weight came off the shelf, completely impossible to implement because it's 1000 pages of legalese roasted by the time it's done you might as well forget. or let me give you another example with words that you know. living will. so under the monstrous dodd-frank act that is

what i see with paul volcker is why is he here besides we are friends?rate needed to go up, he put it up even though he knew that would force a recession and the fed chairman has to do that again one of these days. hope coolidge or paul volcker decides to do. >> host: you are working away backwards as we talked about a little earlier. depression, fdr, willkie, coolidge. what is the next project? >> making a trilogy or protect. i would like to make it visual as well so it goes forgotten presidents, calvin coolidge, forgotten man 1930s and silent majority is the book for which i am under contract and this book is a history of postwar america and the silent majority you can just say is america that was a little suspicious of skeptical of the progressive project and marched forward and did well, and if the private sector would prevail. the emphasis in this book is a new emphasis for me about one dear to my heart and my passion which is urban planning. i like the great philosopher jane jacobs who didn't like big planners to build things for government purpose

as rich knows, i have shared offices the last 15 years with paul volcker who became, who i met originally may 2, 1975, when he had just been appointed president of the federal reserve bank of new york. and paul has created an alliance foundation that's studying a lot of important issues, and one of them is states and cities that we now are are amassing a very talented group of people and putting together a lot of statistics. but there are people at the urban institute, there are people, there are individuals in the treasury department and the council of economic advisers and a lot of the foundations that are really thinking about these things. and ultimately, it has an effect. the only question in my mind is how much suffering are people going to have to go through before, ultimately, people recognize that the price is worth paying to avoid it. >> one last question. >> the federal government's role of the city, what do you recommend in terms of financial support in some ways? there used to be revenue sharing was a recognized principle that the federal government would aid the the cities.

list of greaters influences. >> guest: well, paul volcker is a man of character, and he does what he thinks is right no matter what party it is, and i like that very much. and he's been a great friend to my work even though he doesn't agree with it because i'm not a monitarist, and he still has a lot of that in his philosophy. this is the former fed chairman. and, you know, he has been extremely respectful of my work as has, fortunately for me, chairman greenspan. so i, there's something about monetary authorities that i like, and they like me. what i see with volcker is why is he here though besides that we're friends is that when the interest rate needed to go up, he put it up even though he knew that would force the recession. and the fed chairman is going to have to do that again one of these days. hopefully it's a coolidge or a volcker who dares to do it. >> host: amity shlaes, you're working your way backwards as we talked about earlier. depression, fdr, willkie then coolidge. what's the next project? >> guest: well, the next project is actually forward, so we're making a trilo

paul. >> good to see you, sue. >> let's start with this note. you spent a lot of time talking about well anchored inflation expectations. tell me about it. >> i think the grand war against inflation that volcker started in 1979 was won at the turn of the century and for the last 15 years, inflation has been incredibly absent. we've had our cyclical ups and downs but when you look at it on a chart, i think we achieved the promised land, price stability over many cycles and right now we're a little bit below where we'd like to be, but this whole notion that the fed has to always be fighting an inflation war is what i'm attacking because we won that war. >> does that mean that rates will stay low longer than, perhaps, the market expects? or a lot of investment advisers expect? i mean, the whole theme going into this year was race rates going to rise. that hasn't played out. >> i think rates are going to be lower than what historically is the case, but i think equally important issue is that the fed's cyclical, how they engage to try to cyclicly fine tune the economy will be changed because the old doctrine of opportunistic disinflation which had its companion strategy, preemptive tightening, is