. >> brown: and paul solman talks to economist simon johnson about past presidents who took on big banks and won. >> f.d.r. really changed fundamentally the infrastructure of this country. both the physical infrastructure and the financial infrastructure and did a really good job. nothing lasts forever. we have to go out and do it again. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> woodruff: the fbi staged a series of raids across the northeast united states today connected to the investigation into the times square bomb plot. attorney general eric holder said the three people now in custody are tied to the main suspect in the case. in one of the raids, police cordoned off a small house in watertown, massachusetts, a suburb of boston. law enforcement officials said the suspects were from pakistan and

this concept of 13 bankers, simon johnson johnson and james crock has written a book called "13 bankers" and the title comes from that conversation with larry summers but the real meeting where this played out is the april 21st, 1998 meeting in the conference room of the secretary of the treasury where rubin, somers, greenspan and levitt, in front of all the government regulators and white house officials, one by one took warren to task and asked her not to do this. she did it anyway and then congress stopped her in her tracks. most people believed that had we had transparency in 1998, 1999, 2000, we would have a thriving economy right now. the only reason our economy is in trouble right now is that we blew a multi-trillion dollar hole in it because the casinos didn't have the capital to pay off their bets, and now the american taxpayers had to do it. we paid. we have gone into huge deficit. one in six americans is unemployed or underemployed and much feels a sense of high economic insecurity and as we sit here today, greece, portugal, spain and italy are on the threshholds of default.

simon johnson, professor of entrepreneur shrng the sloan school.there is simply no evidence -- and i mean absolutely none -- that society gains from having a balance sheeft larger than $100 billion." his point is that too big to fail means too bismght arnold king,cato. i seldom quote cato on the floor of the senate. quig big banks are bad for free markets. there is a free manufacture market case for break up large financial institutions: that our big banks are the product, not of economics, but of the politics." and finally -- let me use another one. the president of the federal reserve bank of kansas stirks the third fed press. "i think stheshed be broken up, and in doing so, i think you'll make the financial system itself more stable, more competitive and i think you'll have long-run benefits over our current s" we broke up standard oil into 23 different piece and it turned out that 23 pieces were more valuable than standard oil wassments i'm not saying break up things just for the purpose of breaking things up. if there is a standard by which yo

the book by simon johnson and james clark. breaking up the banks is not a populist idea in the pejorative sense of the word. it is supported by smart and foreign people outside the washington wall street corridor who understand what is happening, including three presidents of the federal reserve bank and a host of economists and academics. even alan greenspan in his recent speech to the brookings institution, looking back on the crisis, stated clearly, and i quote --" for years, the federal reserve had been concerned about ever larger size for financial institutions. federal reserve research had been unable to find economies to scale in banking beyond a modest sized institution. a decade ago, citing such evidence, i noted that megabanks being formed by growth and consolidation are increasingly complex entities that create the potential for unusually large systemic risks in the national and international community should they fail. regrettably, "alan greenspan said again in his quote," we did little to address the problem." any

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