i'd like you to talk about the volker rule. as people have debated there seems to be a strong emphasis on the reasons it can't work rather than the essential importance of recognizing that perhaps a bank that wants to buy, for example, a mortgage backed security shouldn't do it with government guaranteed money. and then when things go wrong, look for the taxpayer to bail them out. can you talk about the essential importance of why the volker rule is a good thing and why maybe we recollected have an eye more on make it work than figuring out why it can't? >> we had a crisis caused by some institutions taking too much risk. taking advantage of the safety net where it existed. we're going to be living with the legacy of that damage for a long time to come still. it is very -- it makes a lot of sense to try to make sure we're doing things to protect against that risk. the volker rule is a broad sense of laws to do that. banks shouldn't be able to run internal hedge funds and take a huge risk relative to capital that could put us in

. >> in laymen's language what does the volker rule stop the banks from doing? >> stops them from doing speculative trading. and when i talk to your people on the street in new york or have a reading and make a speech and i say, "you know, is it appropriate to have a rule that banks that are protected by the u.s. government should engage in speculative trading? i'm -- when they're effectively subsidized? using your deposits to go speculate?" and they all cheer and say, "of course not." >> i know. >> i mean it's just kind of common sense. the point is that this kind of trading affects the culture of the whole institution. and when it becomes important in the institution, that you've got some very highly paid people for taking this kind of risk and speculating, people elsewhere in that commercial bank, traditionally conservative people, worried about credits, being careful, say, "what's going on here? i mean i want to get better paid too and i want to take some more risk. and maybe i'll make some riskier loans. and then they'll pay attention to me." and it really

the volker commission proposed the same thing. boles simpson we all sat in this room and i was thrilled when ur skin boles said what we had been talking about. we know what needs to be done. the question is whether we muster the political will to do it. in terms of benefits to the country having a precedent where we have actually done it to help create 6.3 million new jobs in two years sounds like a pretty aracketive way to proceed. with respect to medicare, mr. chairman, it is clear the challenge is to protect the medicare guarantee. this is what it's all about. is protecting the medicare guarantee since the days when i had a full head of hair and rugged good looks and was director of the senior citizens program. i've always seen this as sacred grounds. we know from the trustees that run the program in a decade we're not going to have the funds to ensure that that medicare guarantee is protected. once again, i think we have an opportunity to come together. i'm attracted to the concept of premium support. premium support is not so

volker. so let me ask you, how is the fed doing? >> oh, look, i think ben bernanke's done a good job. he came into an impossibly complex situation and took unprecedented actions which combined with t.a.r.p. and other activities have prevented us from going over an abyss. that's a little different from the question of where are we today and what do we do going forward. gdp for this year is still a slow recovery. it's very high unemployment. the consent was forecast 2.45%. clearly we have a long way to go. having said that, i think there's a lot of discussion about should there be a qe-3 in one circumstance or another, i think the qe-3 would mean absolutely nothing i'm not an economist, but i was at a group with really distinguished economists. one of them guested that qe-2, had very little effects on interest rates. given the rates are very low. but much more importantly, whatever effect it might accomplish, and i think it would be very limited. that effect on interest rates would have little effect on business and consumer behavior.

. >> volker said forget financial innovations. it didn't do any good for us. >> warren coats, retired from the international monetary fund. >> you just threw that out like it was nothing. >> still actively consulting with them, by the way. market dismin of banks relies in part on depositors carrying which bank they put their money in. deposit insurance removes that particular incentive that is normally focused on smaller deposits. the coverage limit was raised recently and was pretty high to begin with. do you think it's too high in terms of getting the right balance between protecting -- >> that was raised on your watch. >> that is a very good question. that the folks that are under those insured deposit limits are going to add a lot to market discipline. certainly the average main street family are not going to go to the fdic website or go through reports. you're not going to get a lot of market discipline from main street depositors. i do think it's important for them to have peace of mind. a safe place to keep their money that

paul vote e volker writes the p about it. >>. >> paul volker is a giant.resting page. kristin wig who we absolutely love is on your list. as well as if we go up, you will see anthony kennedy on the list. perhaps the single most powerful man right now. >> that's the first sentence and he is the person who will decide so many issues for us in the coming years as a swing voter on the supreme court. and somebody who is a swing vote who's not actually a predictable one, we don't know which way he will go on certain thing. >> we're surprised that harvey winestein made this list, and his pal johnny depp wrote about him. >> he picks the films and develops the films that we talk about. >> he's an old fashion cynic. >> olt affidavit pairings are ---a lot of the pairings are made on the "morning joe" set. >> go ahead, willie. >> on the list of icons, you've got our friends matt lauer, but what i'm more interested in is the choice of man who wrote this piece and why a threesome comes up? >> what? i don't understand. >> i think what you need is a dramatic reading of th

. >> senator obama has been talking to paulson, has been talking to warren buffett and paul volker andlarry summers, and you know, and a host of other economic advisors. >> obama is prepared, and he talks about what needs to happen, and we'll pull together, and he's been... he doesn't want to take over in a country which is in depression, so he's extremely supportive of this whole emergency bailout thing. >> senator obama said, "well, i'd really like to hear from senator mccain, because he's the person who called for this meeting." >> mccain is fumbling with his cue cards. he doesn't even barely get started. obama kind of patronizes him, saying, "i think senator mccain has something to say." mccain just melts on the spot. >> obama took charge, had authority. john mccain had no plan, no strategy. i don't think he understood what was happening, or didn't have a plan for what he wanted to accomplish. >> president bush whispered to nancy pelosi, who was sitting next to him, when mccain was talking, he said, "you guys are going to miss me." and she kind of laughed. >> t meeting ends up brea

we have complicated issues to do with governance and anticorruption and paul volker and others hope. second, before too long, we pursued until crisis hit us in late seven. so i am particularly pleased that a combination of the international experience and reading what is happening in the market we moved quite quickly and if you talk to people the food security community, they felt the bank was more agile than it might've been in the past. and in addition, we start to see this as an opportunity to invest in agriculture going into the future. as i've mentioned in the financial crisis, doing a quarter trillion dollars of support is not only important financially, but it was important to how we designed a lot of it. so the fat twin trade finance and the team leveraged financing to keep banks in the market i mentioned the vienna initiative. an entity should we organize for pedestrians and japanese attacks that proposal. so part of my point here is not just financing. we need to be out to leverage an innovative and innovative ways. and i think were able to do that, including things i hope

president obama brought the veterans of the civil rights movement to washington to see the leland volkerion in the oval office. it's right in the beginning. no, in the front of that section. television in action. oh, well. host: continue. guest: so is there time for one more? the day that lincoln signed the proclamation, ever the alert editor, he found a typographical error in the proclamation and had it reinscribed by a clerk. so by the time he got hold of it on january 1st, african-americans had been in churches, in camp gatherings waiting for this news for hours and they were seriously wondering what on earth is happening? is this going to happen? and lincoln finally got up to his office, took out his pen and put his pen down in front of witnesses and picked up the pen and then put it down. and people wondered is he changing his mind? there was some -- i've been shaking hands at my new year's reception for hours and my hand has no feeling in it. if i sign and the signature looks tremulous, people will think i hesitated and i don't want that to happen so he massaged his hand back into

in the old days, under volker, they used to have preemptive strikes against inflation.rowing or if a nominal gdp got up to about 5% or 6% or so, they would raise interest rates to ward off inflation. that is skirchlly not going to happen right now. can you imagine -- >> you really believe bernanke is focused on the fact that our budget, our inability to with stand higher interest costs for that debt is one reason why they have to keep interest rates down? >> i'm certain that he's aware of that. he's a smart guy. he can do basic arithmetic. you can't imagine raising the cost of the debt, busting the budget by another few hundred billion dollars. and get this, think about it, an intentional attempt to suppress national income. bus that's what a preemptism strike against inflation is. it is an attempt to stop nominal gdp from growth too much. >> and we keep having a slow growth economy for all these years in order to with stand what might be precious -- >> all i'm saying is that you are not going to get interest rate hikes by the fed unless inflag, i think, goes up to 4% o