happens, i wrote an opinion piece in the wall street journal about goldman sachs. there is a curious incident, this became curious in retrospect. in september, lehman brothers had collapsed and aig was teetering. the fed wanted to prevent an aig from collapsing. goldman sachs said that their exposure to aig was not material. that is fine. in the middle of march, it turns out that all of the initial $85 billion of the bailout -- bailout money went to goldman sachs. well how do you reconcile? this goldman receiving 7 billion had no exposure to a aig. goldman was an empty creditor. goldman bought credit to default swaps from aig from, quote, large financial constitution's so care terribly much what happens to aig and it indeed was quite aggressive in terms of calling for collateral from aig. >> but it didn't work. >> what was interesting is it did work for goldman but it illustrates this issue, social issue. >> we are still wondering where the bottom is on aig. islamic and using this to illustrate the concerns you have is as a public policy matter we should be concern

the september 16th goldman sachs said its exposure to aig was not material. that's fine. but come the middle of march, it turns out of the initial 85 billion of the federal bailout money aig received, about 7 billion went to goldman sachs. well how do you reconcile? this goldman receiving 7 billion had no exposure to a aig. goldman was an empty creditor. goldman bought credit to default swaps from aig from, quote, large financial constitution's so care terribly much what happens to aig and it indeed was quite aggressive in terms of calling for collateral from aig. >> but it didn't work. >> what was interesting is it did work for goldman but it illustrates this issue, social issue. >> we are still wondering where the bottom is on aig. islamic and using this to illustrate the concerns you have is as a public policy matter we should be concerned about these creditors who used to care about ensuring our worst stay out of bankruptcy. that they have much less incentive to do that and that in today's world -- >> we better corrected. >> we might want to consider correcting that.

to get away from goldman sachs. guest: @ thank you. i worked very closely with paul o'neill and john snow and was in a position of heading up the international division before tim adams, two people with remarkably long and strong records in the private sector. and i think it is important to have people with management experience, executive experience. washington, of course, is a lot different, and and in ministration at any time is different than a corporation. but those skills i think are important. i think we need to find ways and government to be more effective and more responsive. and it is much more difficult, in some sense, because of all the players, turf battles, debates about how to proceed. but i think it is important to get that right. i see obviously from your question the room for improvement. host: today's "the wall street journal" editorial that focuses on ben bernanke and his role. he will lead political courage we have not seen since paul volcker was chairman, to exit from all of these efforts in ti

goldman sachs -- these are global firms. a number of foreign banks do business here as well. it is global. every time the g-eight kids together, the top economic ministers get together, they will talk about these things. as part of a global regulatory landscape situation. the talk about it all the time. they want to harmonize regulation. this is something you will see other finance ministers talk about. . . host: has the government moved to limit pay on hsbc officials? guest: they believe you don't want to set two hundred thousand dollars. i think there really is a fear of any country, no one wants to really say you can only make this much. there is widespread belief that these structures were bonuses, getting a bonus when your company does horribly doesn't make sense. host: please turn down your tv. go ahead. caller: has michael read the reports that time magazine put out on the 25 worst people in this debacle? guest: no, i have not. caller: there were like seven people who work on this. it cleared up a lot of things for me. one of the things, was the -- i think it was a gla

goldman sachs will be giving out a bigger bonuses than before the crisis began. it was the compensation system because the bankers to look for audit derivatives to write, which gave rise to the kinds of prices we had. they will find new ways to subvert the system. people are not so much as honest as they are following their instincts. host: what are the brightest spots? guest: most americans remain optimistic about the economy. we are seeing that in consumer optimism. we're seeing changes in behavior households. americans are saving more as they should. i was having dinner last evening with another couple. they were my age. they do not have a lot save for retirement. i have a lot of dinners like that. baby boomers have to work into their 70's because they do not have the cash. we are going to save more, so we have to find other ways to create demand for the things we make in america. what we have been doing for the last 10 years is spending more than we burned, borrowing from abroad, an increase in the trade deficit to make up the difference. i do not see the oba

first half of the year," and now i don't mean to just peck on goldman sachs. there are a number of other financial outfits that may be engaged in excessive oil speculation, as well, but gold map sacks is the leading trader of oil and gas derivatives. so here we are, goldman sachs, among others, now paying out huge bonuses after having been bailed out by the taxpayers of this country and they're back at their same old tricks engaging in excessive speculation which is what my amendment begins to address. address. so madam president, i am amazed our republican friends would refuse to allow an amendment to come to the floor of the senate that was passed overwhelmingly in the house with very, very strong republican support in that body. and with that, madam president, i would yield the floor. the presiding officer: the senator from north dakota. mr. dorgan: madam president, as i have indicated previously, the underlying bill on which we're going to have a cloture vote is bipartisan with over 50 cosponsors here in the united states senate? the last congress. republi

everyone to be like goldman sachs than half our row e's is digga sx. dimond and a number of occasions said we are not going to go down that route purely through chasing after a quick and easy p&l which again does not mean they did not make mistakes. i don't want to paint these guys is somehow perfect angels because they made their mistakes but it is a very instructive lesson. [inaudible] >> in terms of boat was going wrong? well, for example, when all the banks started going in what was called cdo, which is basically taking chunks of mortgage debt and slicing and dicing it into cdo plessy due to the tangible lawns are increasingly towards the end to the derivatives of those loans. there was a number of occasions where internally the j.p. morgan investment bank try to work out why the competitors were making so much more money than them and there was a huge debate on a number of occasions and if they should do the same. they kept running the numbers and they could not work out how to make a pay unless he took crazy, crazy risk, so they said no. to say n

everyone wanted to be like goldman sachs three diamond on a number of occasions actually said you know, we are not going down that road trying to beat everyone else purely through chasing after, you know, the quick and easy bnl, which again, doesn't mean it didn't make mistakes and i don't want to pay these guys as somehow perfect angels because they have made mistakes but there were decisions taken which i think it very instructive lesson. >> [inaudible] >> in terms of what was going wrong? >> yes. >> well, for example, when the bank started going in what was called the cbo basically taking chunks of mortgage debt and slicing and dicing either through the actual tangible loans are increasingly towards the end through the derivatives of the loans there was a number of occasions where internally the jpmorgan investment bank tried to work out what the competitors were making more money than then and there was a huge debate on an number of occasions whether they should do the same, should they dashed on the root of the atf and copy that and the kept running of the numbers and couldn't wor

goldman sachs -- these

goldman sachs employees toasted their freedom. "this one is on may seek one called out from the table -- "this one is on me." is that unusual that the banks did not amount to make statements? guest: no, this program from the start has been hatched in the midst of a terrible financial crisis. no one likes the program or says that it has been administered well. this panel that elizabeth warren chaired has looked at the operations of the program. tarp is not popular. but the point that tim geithner and others have made is that it does seem to have some role in having save the financial system last fall. you never know what would have happened if tarp had not been put into place. many of economists say the downturn would have been worse. but this is not a popular program and banks' people are not popular in washington or across the country. but i would not expect public statements of them saying that. host: do you think that if things get into trouble again they can go back for tarp funds? guest: i believe they are. i do not think any

sachs. getting in bought in trading securities that threaten the fundamentals of the banking system. we do not need to go back to classical -- glass stiegel. with the banking sector being such an important contributor to the democratic party and political candidates requiring all of these $5,000 contributions from individuals, the only place you can harvest the contributions you need are on wall street, silicon valley, and hollywood, which gives those sectors of the economy extraordinary influence on washington. host: we have michael on the line from mobile, alabama on the independent line. --caller: certain aspects of the budget had been hidden. i understand that this particular budget that we have is much more in the open and visible. what aspects of the budget is above board that makes this budget a $1.40 trillion budget? guest: it is more like a $4 trillion budget. we have a big entitlement program. we have a huge stimulus package. we have the military. we have the state department that

rocket -- record profits and goldman sachs uno accountability.

and they had goldman envy and be as good as goldman sachs. diamond on a number of occasions said no, we ain't going to go down that route and beat everyone purely through chasing after the quick and easy p & l. but again, it doesn't mean they didn't make mistakes. i don't want to paint these guys as perfect angels because they have made mistakes but there were decisions that were taken which was a very instructive lesson. [inaudible] >> in terms of what was going wrong? >> yes. well, for example, when the bank started down cbo abs business which is taking chunks of mortgage debt either through the actual tangible loans or increasingly toward the end through the derivatives of those loans there was a number of occasions where internally the jp morgan investment bank tried to work out why the competitives were making more money than him. and there was a huge debate on a number of occasions about whether they should do the same. should they dash down that route with a bshcbo and they kept wor number unless you take crazy risk. and they said no.

and become everyone wanted to be like goldman sachs. diamond on a number of occasions actually said it no we aren't going to go down that route and beat everyone a purely to chasing after the quick and easy pm el. but again it doesn't mean they made mistakes and i do want to paint these guys as somehow provide angels because they have made mistakes but there were decisions taken which i think was a very instructive lesson. >> [inaudible] >> in terms of what was going wrong? >> yes. >> well, for example, when the bank started going hell for leather and what was called business which was taking chunks of mortgage debt and slicing and dicing into ceos, the tangible loans or increasingly torn it in the end of the derivatives. there was a number of occasions where internally the jpmorgan investment bank tried to work out why they were competitive in making more money than them and as a huge debate on a number of occasions about whether they can do the same and -- down at that and copy that and they kept running the numbers and cannot work ou

sachs before coming to washington. but ben bernanke was a respectable academic who earned a modest salary teaching at princeton. largely speaking, that people who work at the fed have perfect reputations. they don't seem to be feathering their nests and operating with any malevolent intentions. i don't always agree with everything they do, but everything they do is justifiable. i think it is unfair to start to pull out these kinds of rhetorical arguments. we do not have a private central bank. we need a central bank. the rate structure of the fed is a very sound one. as for those cottage industries, everybody thought that the internet will shine all kinds of light, which it does. at the end of the day, it is so difficult to penetrate shattering thing which is washington. it seems that those with very focus agendas and a lot of money to spend on political campaigns to the best. witness what has happened this week and with gm and liability claims. it is normal that liability claims are jettisoned in bankruptcy court. we

we can rely on goldman sachs who is touring the financial times two months ago, states it very strongly, compensation arrangements, in need to inform them. and across the board, they were wrong. they don't like government intervention but at this point, there is widely shared consensus that executive compensation arrangements, only room for disagreement. in bringing about the change, everybody agrees. >> professor bebchuk, i will open this up to anyone. one of the things i keep hearing is we have to let american corporations get all the money they want under whatever compensation system that they want because if we don't, then these really smart, talented people are going to go elsewhere. you have heard this line of argument. could you comment on this issue? if we reform the entire american system -- >> i agree with you. it is a bogus argument. the first point is where would they go? shareholders can invest in private equity. that is fine. these guys did not do that good job so let them go. let them go abroad. >> to european firms compensate the way we do? in line with that, is there an

sachs, works at the federal reserve, new york, and the book was still being edited and finished up and the conversation was, how do we pull ourselves out of this collapse or get out of this are terrific morass? what really struck me that i heard over and over was people did not understand how this came to pass through it was very much an example, there is an old story of the six blind men describing the all of the one has the tale, one has the year, a task and they and a leg and the truck but no one describes the whole so the road goal of the book was to give a big overview ensure everything that is happening in a way that makes some sense. the first false statement the first major misunderstanding is this was an accident, the perfect storm, a completely random, one and a million shot wi

sachs, if they're managed properly -- if they make a risky loan, they calculate the potential cost to themselves if the loan goes bad but they simply don't calculate the impact on the whole financial system. and we now see how severe that can be. not that it's anything new. in fact, this inherent deficiency of markets, this inefficiency of markets is perfectly well-known ten years ago at the height of the euphoria about efficient markets. two prominent economists, john etwell and lance taylor, they wrote an important book in which they spelled out the consequences of these market inefficiencies, which we now see. and they outline means to deal with them. these proposals were exactly contrary to the deregulatory rage that was then being carried forward by the clinton administration under the leadership of those who obama has now called upon to put band-aids on the disaster that they helped create. in substantial measure, the food crisis plaguing much of the south and the financial crisis of the north have common roots, name namely, the shift toward neoliberalism since the 1970s. that b

persia joining the treasury he worked it 18 years of goldman sachs most recently as the co-head of finance. our third witness is ms. patricia wide, secede director of the federal reserve, a division of research and statistics. ms. white is oversight responsibilities for sections that analyze risks in process microeconomic data and she is participated in domestic and international working groups on central counterparties, securities settlement in financial regulation. we very much appreciate all of you joining us here this afternoon and chairman schapiro would you give your testimony? >> thank you very much. mr. chairman, ranking member bunning and members of the subcommittee i am pleased to have this opportunity to testify to the house and securities exchange commission concerning the regulation of over-the-counter derivatives. the severe financial crisis that has unfolded over the last two years has revealed serious weaknesses and the structure of u.s. financial regulation. one of these gaps is the gap in regulation of otc derivatives, which under current law are largely excluded or exemp

has hired goldman sachs to manage the possible sale of open code the boston globe." the report says they have begun accepting bids. >> "washington journal" continues. host: gov. howard dean joins us, the author of "howard dean's prescriptions for real healthcare reform." guest: i do not think we are blind to get much agreement between dr. dean and dr. coburn on this one. the idea that we were better off with insurance companies is a crazy idea. there are more bureaucrats telling doctors what to do than there ever were in the united states government. host: as far as prescriptions that the obama administration one for health care, how did they fall in line with what you are prescribing? guest: that is the plan in prescribing. there needs to be a public option. the most effective, efficient plant in america -- taking care of people with medicare. yes, there are serious problems. compared to what the private insurance companies have done to doctors and patients over the last 15 years, we are better off with medicare. i fully agree with the president. people should be do

we have meanwhile learned that the bailout was also a bailout of goldman sachs and some of the world's largest foreign banks, all of whom were not asked to accept a penny of losses. i have four question areas for you that are all closely related. i will try to ask you to just respond at the end. the first one is just directly, when will you have a thorough and complete response to every query asked in april by the oversight panel? bill that's -- if that same panel concludes that one-third of the money given away and of the tarp was raised did, you have not disclosed significant details to provide an analysis of what the fed has been doing to determine what value they are getting. what meaningful assurances can you provide the american people that were not being -- that we are not being squeezed again. have you done a full review of the deal from the taxpayers? if so, will you provide complete documentation for the basis of that documentation? the situation is far different with your newly discovered emergency powers. there is little difference between those that you waited in secret an

he eloquently describes why analysts from goldman sachs to mckinsey are so optimistic about india's future. he states that all the working age population of other major economies will be falling, india will have an additional 47 million workers in 2020. almost equal to the world shortfall at that time. he further estimates that india's quote, demographic dividend, will peak at 2035 by which time india will have added an additional to have your 70 million persons to is working age population paragon. these legions of young indians and transfers work -- workforce for the first time represent an immense economic opportunity for india and his partners. but only if they receive the education and training they will need to compete in india's globalizing economy. right now the united states is educating over 90,000 indian students in u.s. universities. but america's educational institutions would like to do more, work in india to reach the vast majority who cannot go to the united states for an education. we plan to build on the goals of the government -- indian government to boost literacy, expa

people were getting merrill lynch and goldman sachs statements saying they had stock they never really had. that's just the tip. no one knows how big the rest of it is. it's probably a multiple between -- beltways or 15 times the size. what the f.c.c.'s response was they -- they stonewalled, they slammed the door. i -- i have a website called deppcapture.com which explores my fight with wall street. it's basically investigative journalism directed at wall street. and because we became convinced the f.c.c. was something called a capture regulator. convinced they were a captured regulator when a regulator forgets to protect mainstream from industry and they think about the million dollars a year jobs waiting for them to be a good boy. people used to think i was crazy talking about that but with the last year it's an obvious truth that, the fcc forgot to do its job. i'm a fan of the new people that have come in and the internet taxation point, you made an interesting point. the truth is, that if somebody orders from us in madison, wisconsin. what's supposed to have happen is they have a d

we've been acting like what's good for citigroup and goldman sachs and "g.m.a.." and we been tchining for quite a while. we pushed countrys to liberalize their capital markets and open up their market for drifftives. those were things that were not actually good for those countries and not good for but they may be going in opposite directions. the problem is that -- goes back to our political structure. our political structure provides too much room for campaign contributions and the influence of lobbyists. if you look at the lobbyists, for example, for instance, from the financial industries, there's about fife for each congressman. huge amount of money being spent for the financial industry to get bills through that are in their interest. they may not have been able to invest their money in real investments, make good judgments, but they have made good political investments, and now they've been getting a return. so in the end it's the political system that -- in the united states that we're going to have to have reform if we're not going to have a reoccurrence

sachs. he is the author of seven books on economics and politics including "the coming crash in the housing market" published in 2003. for arab more affirmation on "the 86 biggest lies on wall street" visit seven stories books.com. >> i have to books i am working on write now this summer the first is from a constitutional scholar called liberty and tyranny on the new york times' best-seller list nine out of the last 10 weeks and has sold over 1 million copies and essentially is a trade is why conservatives believe unable it is a fabulous book i have dog-eared the pages and have written notes and have quoted the book everywhere i go and i urge people to read the book. it is passable -- bad as i am now taking more notes the second time through. also another book that i have heard several times it is called the forgotten man and is so timely because she is writing the history of the hoover years of fdr and the great depression and the forgot man is the american taxpayer who is paying for all of

sachs alumni that ran the world and kept popping up everywhere. but suddenly it was the jpmorgan of light that seemed to be all over the place. so i asked by neighbor what is going on, why they all work at jpmorgan or why they all used to work at jpmorgan and he said sentence that later in sap if you like changing my life for shaping the last year, you've got to understand there's one thing about eckert of the world that is up simply key, it is the morgan mafia. they are everywhere and they created it. now, like many quick cliches that wasn't entirely strip and i would stress they were not the only ones who created the modern structure credit buy any means but it turns out to have a lot of veracity as i later discovered. so i left that conference and feedback to the ft determined on the one hand to try to on a pick this strange new credit jungle and on the other hand, to try to keep an eye on why and how the alumni had come to play such a key role in building this credit world, and the next two or three years we labored away in the capitol markets

sachs alumni who ran the world and kept popping up everywhere. but suddenly there were the jpmorgan alumni all over the place. so i asked my neighbor, why did they all used to work at jpmorgan, and he said a sentence which later ended up changing my life or at least shaping that last year, oh, you've got to understand. there's one thing about the credit world that's absolutely key, they're everywhere, and they created it. now, like many quick cliches, that was not entirely true, and i would stress the morgan guys were not o the only ones who created the modern world of structure, but it turned out to have a lot lot of veracity as i later discovered. i flew back to the fp determined, on the one hand, to unpick this jungle, and on the other hand keep an eye on why and how the morgan alumni had come to play such a key role in building this world. and for the next two years we labored away, and i would stress we because it was a group of us, not just myself, trying to make sense of this vast, shadowy debt and derivatives world that was growing apace.

meanwhile, we've learned that the aig bailout was also a bailout of goldman sachs and some of the worlds largest foreign banks, all of whom were not asked to accept a penny of losses. i have four questions or question areas for you that are all closely related, and i'll try to state them and then just ask you to respond at the end. the first one is just directly -- when will you have a thorough and complete response to every query that the oversight panel ask you in april? the second is, that that same congress oversight panel concluded that a third of the taxpayer moneys that the fed gave away under t.a.r.p. were wasted. you have not provided details of a similar analysis to determine what the fed has been doing to determine what value the fed is getting for its investment of our public money. what meaningful assurances can you provide the american people that we're not being fleeced again? have you done a full review of what kind of deal the taxpayers are getting? and, if so, will you provide the complete documentation for the basis of that assessment? third, while the fed's secrecy re