you ve had paul volker manyimes for whom have enormous respect. he thinks the chans are 75% --. >> rose: that in fact ey will stop lendg money. that there will be a llar crisis in five years. 75% chce. and at does that mean? >> rose: the dollar falls suddenlyinterest rates go way up inflation, recessi, housingproblems all over again and so for. and that's the vulnerability. and this country has just t to learn to save mor which means the government not dissaving, and more rsonal savings. we just can't continue. >> rose: b in the mean tim we need a stimulus toet theconomy moving. >>hat's right. but think we nee to send a signal to the foreign lenders at we also are aware we ve a longer-term problem thatwe've got to move on. >> rose: okay,et me just talk about tt for a moment. because of your ow experien. for a number oyears you were on the boarof the sony corporatio, the japanese. ina hashe most arican debt. japan, i think, is second. >>econd. >> rose: wt do they tell you, becse there was a time, the last moh in which one of the chine officials sai

i am going to bring paul volker in. volker told him i am going to choke this economy and race interest rates. that is the only way to drain this inflation out. we said this is going to lose the election for you. i said i am going to take those risks. so he was very courageous in doing so. but this is a question of an external circumstance that perhaps might have been better anticipated. but even if it were, i would suggest that with that second oil shock, because of the revolution, it would have been very, very difficult to avoid the consequences. it was also the end of an economic era. it was the end of cainsian economics. it was the rise of the freedman monday tore supply. i would suggest that one of the things as i look back, our fiscal policy was not sometime latiff. we had a very low budget deficit, but we had a very expansion area monetary 0 policy. the change in cainsian economics was basically the end of this era and a focus on tight monetary policy. it ended up benefiting president reagan and helping lose our e

now, the group of 30 led by paul volker found and reported, there are numerous examples of misaligned incentives of incentives that contribute to instability and cyclicality in financial markets. the crisis has driven home the importance of aligning compensation practices with the incentives and controls in a firm's risk management program. aligning pay with long-term shareholder interest rather than short-term returns that cannot be sustained and which entail greater risk. this is a provision not designed, not intended, to limit the overall level of compensation at financial institutions. not designed to prevent enormous bonuses, but the bonuses must not by themselves be designed to undermine the economy or the company. this is a small step that we can take to make sure we don't have another financial meltdown. let me respond to mr. hensarling and others who came to this floor and basically said, all we have to do is make sure there are no further bailouts. well, i opposed the wall street bailout. but i'm not going to join with those who say the only problem we had in september of 20