that's not enough to sink the country, that's not enough to cause a crisis, it doesn't turn us into greeceand goodness, but is completely unnecessary, unwarranted and the bigger picture and we haven't fixed the problem. we have not fixed the financialp company in september 2008 as a way to save it from collapse. it has access to the fed discount window. in his private equity investments to well, i can assure you they will make out like bandits. to use a technical term. [laughter] if it goes badly, whose problem is that perhaps it is a bank. it is a bank with access to the fed discount window, we do not let them fail, we cannot let them fail. and goldman says if that's your attitude, simon, we will stop being a bank -- wait a minute, you became a bank in order to save you. your investment bank before, rather lose not entirely accurate term, but not regulated by the federal reserve. and it took a lot of risk and they were on the verge of failing. they say through no fault of their own. again in the book we beg to differ. if you let them out at this size with these characteristics with this r

it doesn't turn us into greece, and thank goodness. but it's completely unnecessary. unwarranted, and we haven't fixed the problem. we have not fixed the financial system. and its ability to take on reckless risk and do well when things go when they're lucky and, and to show that risks onto us, onto society when things go badly. goldman sachs is a big backer of automotive in china, that just bought volvo from fort. i am a professor of economics at mit. i like the. there's a big driver of growth in the united states around the world. think about goldman sachs and the goldman sachs says. goldman sachs is event. became a bank holding company in september 2008 as a way to save it from collapse. it has access to the fed discount window. if it's private equity investments do well, i can or should you they will make out like bandits. to use a technical term. [laughter] >> if it goes badly, whose problem is that? is a bank. it's a bank with access to the fed discount window. we do not let these banks fail. we cannot let them fail. and goldmans is okay, if that's your attitude

it doesn't turn us into greece, thank goodness but it is completely unnecessary, unwarranted and the bigger picture and we haven't fixed the problem. we have not fixed the financial system and its ability to take on reckless risks and do well when things are lucky and to show that risk on to us on to society when things go badly. goldman sachs is a big banker of the chinese car company that just bought balto from four ford. that is a risky investment. i am not opposed to risk and people taking a risk if they want to take risk. i like it. it is a big driver of growth in the united states and around the world think about goldman sachs and what goldman sachs did. goldman sachs is a bank holding company. they became a bank holding company in september, 2008 as a way to save it from collapse. it has access to the said's discount window. if the private equity investments do well i can assure you they would make all like bandits to use the technical term. [laughter] if it goes badly, whose problem is that? it is the bank. it is a bank with access to the discount window. we do not let them f

it is almost as if they are intentionally trying to turn us into greece. summer loverss "grease." the bad grace that isn't that right now. -- greece. i am going to end of this because there has to be a governor back there waiting for me to end. i went to harvard last night and the night before. i was to speak to a group at the harvard school of government on propaganda in politics. you should have seen me. i was writing on the desk in front of these people propaganda? i will show you propaganda. congressmen was the person who invited me. he is a fellow there. he is teaching. he said, i want to take you to a speech that is being given over at the school of government. you have seen it on c-span when the habit brith very official c- span cameras all over the place. rows and rows of people. i walked in. i swear i had no idea that the new president of the -- new president would be there. that he would be introduced by former head john sweeney. he takes me into a green room and we are just standing there. this is true. a photographer by the name of martha stewa

whether or not this recovery is robust, and whether global trends, what's happening in greece, could still pull us into a second dip, we talk to the man who oversees the financial global system, the head of the imf. we have a lively debate about what appears to be a bold new approach from the obama administration. apparently trying to force movement on the israeli/palestinian peace process. >> a strike on iran is a very risky and unfortunate option, if it has to happen. there are options that the united states -- >> what does it mean to be safe? >> i think the word we're looking for is catastrophic, disastrous. >> but first, we have an exclusive conversation with the foreign minister of poland, one of the few leaders who was not on that plane. he'll talking about how poland goes on after a staggering tragedy. stay with us. >>> i want you, for a moment, to imagine the unimaginable. imagine if air force one went down while carrying the president, the first lady, the chairman of the federal reserve, the national security adviser, the deputy secretary of state, the deputy secretary of treasury, the army ch

us that public debt exceeding 90% of g.t.p. is often a tipping point into a wrenching crisis, a point we are on pace to reach too soon. we only have to look at greece to see where the path we're on leads. we're here because we are committed to changing that course. getting america out of debt isn't the work of one president or one kong or one bill, or perhaps in this case, one decade. but i believe our work in kong must be about breaking a long pattern of fiscal irresponsibility and easy decisions. and putting america make on a more sustainable course. we just passed a health reform bill, which some believe to be antithetical to the goal i have just expressed. however, the nonbipartisan congressional budget office tells us that the reform bill reduces the deficit over the first decade. it is projected to save us $143 billion and some $1 trillion in the decade after that. those savings, however, as david walker correctly points out, in part are contingent on kong keeping its pledge and taking hard votes to control health care costs in the years ahead. kong does not have a good track record on that objective. doing so will take courage, the willingne

into regarding credit defaults swaps on sovereign debt. can you tell us what you found? >> we looked at the goldman sachs arrangement with greece. that is where we put most of our focus. we found in the 2000-2001, there was a contract between the greek government and goldman sachs which bike using exchange rates that were different from the market rates have the effect of modestly changing the reported debt ratios that priest reported to the -- the grease reported to the the european union. goldman sachs sold assets to a greek bank. they had the effect of distorting the numbers but there were relatively modest, about one percentage point. the debt to gdp ratio did not change greatly. this was well before the federal reserve was supervising goldman sachs. it was also before the end run episode where the -- enron episode where we strengthen our rules against the arrangements which are intended to have accounting impacts. they are designed to affect the accounting evaluations. we have discussed this issue with goldman sachs they have a much more elaborate procedure now to evaluate such possible deals to make sure they are not being

greece. testified the fed will look into credit default swaps on sovereign debt. can you tell us what you found? >> we looked at the goldman sex arrangement with greece. -- goldman sackks arrangement wh greece. there was an agreement between them which by using exchange rates that were different from the market rates had the effect of modestly changing the reported that been ratios that the country report -- that the country reported to their statistical agency. goldman sold this position into a great bank in thousand five. i mentioned the effects of distorting the numbers but those were relatively modest, about one percentage point. the debt to gdp ratio changed to 100%. it was not a large effect but there was in effect. before that happened, this was before the federal reserve was supervising goldman sacks and before the enron episode, following which the fed and other supervisors strengthened our rules against the arrangements which are basically and tended to have accounting and tax to affect. we have discussed the issue and they have a much more elaborate procedure to evalua

question is can we identify it early enough before it metastasizes, i use that work, into the rest of the economy or globally. for instance, greece, today it's the downgrading of their debt that all of a sudden caused the euro to decline and europe finds itself once again on the precipice of economic disaster spilling potentially over to the rest of the world. so that's the second point of the bill. but the third point is equally important and that is to make sure that in our -- in our determination to satisfy point one and point two, we don't end up scrapping gling a financial system -- strangling a financial system so that the creativity, the innovation, the flow of credit and capital that are critical for job creation, wealth creation and economic growth are going to be there. now, that's a very difficult sense of balance to maintain. no one's ever gotten it absolutely right. it's always one side or the other seems to be dominating the other. but those are my three goals, in a sense, here to make sure that we satisfy those first two while simultaneously not making -- making sure we don't end up making it more difficult for tha

greece. testified the fed will look into credit default swaps on sovereign debt. can you tell usdest, about one percentage point. the debt to gdp ratio changed to 100%. it was not a large effect but there was in effect. before that happened, this was before the federal reserve was supervising goldman sacks and before the enron episode, following which the fed and other supervisors strengthened our rules against the arrangements which are basically and tended to have accounting and tax to affect. we have discussed the issue and they have a much more elaborate procedure to evaluate such deals to make sure that there are not being motivated by accounting and other appearance issues. we believe in that situation that they divested that position in 2005. on the credit default swaps, we have not found large positions in u.s. banks but we have not addressed the question specifically of using cds to manipulate pricing which would be evil and inappropriate. that would be more and sec issue. exposures of u.s. banks through direct holdings to european governments is relatively limited. >> a

us for the last hour. before we let you go, what are some of the key themes you're watching for going forward? >> i think the slowdown of the global economy. i think that -- >> does greece weigh into the outlook at all? >> in asia, yes, in asia it matters a lot because people realize how weak all the euro construction is. because euro works very well in monetary sense, the euro is perceived very well, and so people just assume that everything else is fine. but, then this problem of greece really put the spotlight on the weaknesses of the european architecture that have been there since the start. so it matters. >> does it raise the question of debt here in asia? >> no, it does not. it's very different issue. asian economies spent a lot for the fiscal packages, but they have rate of growth and economic dynamics that are very compatible with their deficit spending. so they're not going to be any problems related to those ones that are very, very far geographically and in nature. >> are we grappling with a problem 6 inflation in asia? i know you fear china is not suffering from inflation? is that going to be a key problem? >> i think there are two emergencies in inflation, one is asi