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tv   Book TV  CSPAN  January 29, 2011 2:00pm-3:00pm EST

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berri nice of both of thee . ronald reagan, who is the one who got me interested in politics becothese as governor would come to the l. a. rams uootball pr that itice. here is a politician who knows what is important and then he asked me to be chairman of young virginians for reagan in 1976 and that got me involved in politics. ronald reagan became governor the same ing on ar we mverned t california. >> george allen is author of "what washington can learn from the world of sports". booktv covered a previous event with george allerth go to booktv.org. you can watch the full event in its entirety. ..
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speaking. i am sure that will come across very quickly. thank you very much for coming. thank you so much to beverly for having this event and for hosting it. this just happens to be my favorite bookstore. i have bought many about year. i love coming year. of course it turns out that beverly has a connection to this industry because in chicago who doesn't. i start talking to her. oh, yes. my uncle grew up. i went out to breakfast the other morning with a trader from the board of trade to says that he used to work for beverly's
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father. i thought, of course. again, it is chicago and everybody seems to have a connection. so, i just thought that i would say a few things about writing this book and then i'm going to interview because that seems much more fun than listening to me talk. i first of all why i wrote this book. i moved to chicago in 2004 for ford's. it just seemed that i seemed to meet a lot of traders everywhere i went. we rented an apartment to start in lincoln park and took up tennis which we played very badly. trade -- played tennis on the next court regularly. another time we went to the lakefront. i was reading a book about the dummies' guide to futures and options because it just seemed that it was a big local business
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and i should learn more. some guy came up today and tapped me on the shoulder and was like it's going to get easier. i said, oh, that is good. i was reading about some -- i think it was a butterfly trade and options. it just seems like craziness. meeting all of these traders seemed very interesting. you know, i just got curious. of course the chicago board of trade building is absolutely gorgeous. i was curious as to what went on inside. this seems to be a lot of news going on in the industry, which anybody in the industry, of course, you might find obvious that in 2004 there was a lot going on. i start covering the industry. then i wrote a couple of stories. i wrote a story about the merger of the two exchanges. i got a call from a book publisher who said, do you think that there is more to say about these traders?
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i thought, well, of course. there are such interesting people. there must be something. this was 2008 when the financial crisis was happening hidden. oil prices were going crazy, food prices are going crazy. i was not really sure what i was going to right, but i thought it sounds like fun. redbook. in retrospect that was the most naive thing i could have possibly, you know, done. because the more that i learned about the industry and traders and the history of this place the more i felt like i was taking on but just a very big project and also a very personal project for people in the industry. there are people here whose families have been here for generations. i suddenly thought, who am i to
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the coming and sleeping and writing the story. but i am glad that i did because wine really at the teachers industry is all about risk and i guess in my case it was just one of those nine yves risks which i hope paid off because i really enjoyed it and i've really enjoyed meeting the people who i have met. so -- >> i just want to say how i actually had the good fortune to meet up with family. it turned out one day i was out having lunch with a good friend of mine. a lot longer than i have pretty represented the generation ahead of mine, lloyd's snyder. >> whose son is here. >> his son is here. i was telling lawrie, you know, i am third-generation by myself. ino, the older guys are fast
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disappearing. you know, i really wish that somebody out there was really collecting stories to really write the history of this very exciting industry. something that was such an important component of the chicago economic history. but she said, what are you talking about jack there is this still doing it right now. of course the first thing i did was give emily's phone-number and call her an hour later and introduce myself because i really wanted to us to what little i could to help her make this a very successful book that she is writing. >> which i appreciate and which also i should add that this feels like -- first of all, it is more than chicago economic history. it is chicago economic history, but futures have transformed the financial system in ways that i think people don't fully may be appreciate. maybe they don't realize. that does for traders as well as for people now who are wrestling
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with these big concepts like derivatives and understanding where they came from and what happened here is the story that really has not been told very much. i am not so foolish to think that it is completely told in this book. i am hoping that eye scratched the surface of what i think is interesting history, and it deserves a lot more attention. i know i have more stories in my notes that did not make it in. i hope that i can add to this record after this another time because it's just really is so much. so i asked bill to talk because but i was hoping that he might be able to of explain to people who aren't in the industry who are here what i am even talking about a olbers because his family very much mirrors the
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futures industry here in chicago. so maybe you could just start if you don't mind. what is the futures contract? >> i know a lot of people think it is a very mysterious and arcane type of business. a futures contract is essentially insurance products. that was the reason that the industry first developed. it was futures contracts as a way to about but offset risk-based on the part of both people who need to use commodities and people who produce commodities. very simply a futures contract is a contract between a buyer and seller for a specific commodity at a specific price for a specific future delivery date. i guess the easiest way to explain it in terms of how it is used by people to offset risk. i think one of the simplest examples is you take an airline
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company, someone who needs to use a lot of fuel on a regular basis. of course if fuel prices go up it can have a severe adverse impact on their profitability. so an airline company realizing that crude-oil is at $80 a barrel and they are concerned that it may get to $100 a barrel, they have the ability to purchase all that they need at a given price of $80 knowing that will be their final cost for the product. >> they used features because they have too much risk. they want to shove it off on to other people. i think what makes this such a fun business is that chicago has of these people willing to take that risk. >> that is the other side. the real economic reason for having futures contracts is for those who want to avoid risk. it certainly also provides a great opportunity for those who want to listen risk in search of profits.
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that is the speculator. >> the speculator. the hedger and the speculator. for people who are traders there is boring stuff because you know it. for people who aren't in the business it might be really interesting. there are two exchanges, very different places. the chicago merc. so can you -- who came first? >> the board of trade came first. >> let me read ask that. you in your family came first? >> my grandfather was the first member of the family pet trade. and he went in the early 40's. he started trading there. back when there were still trading onions, but i think he primarily traded in the egg market. but. >> and to your knowledge what was it like then? >> it was much, much smaller building. i actually went to work for the
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first time that the old mark in 1969 when i was almost 16 years old. i had a summer job working there. at that time i think there were a total of 500 members, most of them were not even there on any given day. it was, you know, probably three, maybe four, 300 or so actual live traders on the floor. it was much, much smaller. i remember there were only three products that were traded, hogs, cattle, and there was the real most important contract which was frozen pork bellies. >> and tell me about the pork bellies. how did people trade? they traded. the talk about that. then you had your uncle. >> my uncle. >> your article, as far as i know, was the meanest person to ever walk through. >> he had that reputation. i don't know if it was deserved. certainly i think, you know, it was essentially the game face,
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his persona. he was one of the old school guys who felt that you had to have really put on a tough front. you know, he was not and freight -- afraid to use intimidation to further his business interests. it was very funny because my uncle, you know, after getting that reputation it was very common among the order desk on the floor. whenever there was a new clerk who was just starting off at the exchange a kind of right of passage was to give this sport did a bad water and send them to michael. essentially they would give him a live cattle order and send it to my uncle it would watch the ensuing fire works. my uncle would browbeat the sport it and tell him he is a complete moron and did not deserve to be at this place. of course the order desk would have a great bit of amusement around that.
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>> and these are the kinds of stories that it took me awhile to understand what that meant. there were different pits where different things were traded. so if you have an order for live cattle and had to go to the live cattle pit. if someone took in order to the wrong pat then and -- >> right. generally speaking. you need to take it over there, a man. but my uncle reacted a little more interestingly than that. but, you know, in his defense when he was not trading he was a very generous man. he helped lots of people in the industry. you know, i think he wound up with four wonderful children that are of very good people as well. >> and i spoke to a woman who was a clerk for your uncle who said that she loved being a clerk for your uncle because everyone had to pay her respect because they did not want to
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have her go get bill. >> nobody wanted to enter his wrath. >> right. so you were there also when futures kind of left the world of agriculture and move into the world of finance. this is a big -- this is a big step to read what was essentially the world of commodities and get into the world. >> it was always assumed that futures markets had to be about agricultural products. in fact, there was a very novel idea to introduce the idea of having financial futures. interestingly enough that happened during a time when i was not involved in the industry. i worked their in 1969. i went away to college the year after that. i did not return to chicago to get back into the business until
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1978. the merc had changed dramatically in that ten year. , actually nine years. it had moved from of very small facility at 110 north franklin to a much, much larger building at 444 west jackson. when i came back there not only was agricultural markets, but there was a gold futures contract that was doing enormous volume. there were five currency contracts that reads doing very well. within the first year that i came back they introduced it treasury bill futures contract which was kind of the precursor for the eurodollar contract. came along in 1982. >> who were some of the big, big traders and personalities on the floor. >> when i came back their work, i think, some certainly big traders. you know, the cattle market was certainly being dominated
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dwight. i remember the rumors would go across the floor, he is buying cattle. people would run to the cattle pit to try to cut tell him. i remember in the hogs and bellies joel greenberg was a real big player. i remember joel greenberg actually moved into the treasury bill pit and became a very large trader there for a while as well. >> what did you trade? >> i came back to chicago. i worked as a clerk for a few months. and at least a seat. i started trading gold futures. at the time gold futures were actually the second largest volume product at the mercantile exchange. part of it was due to the fact that in those days people were utilizing what they called build
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spreads. buying one contracts, selling another as a vehicle to actually differ taxes. >> and by defer you mean not pay. >> yes. able to use gold contracts to essentially take a tax liability from one year and move it into the next year. some people did that year after year after year. the problem was essentially the government says the regulations and people could no longer rule their taxes. so all of a sudden some people want out with multimillion-dollar tax bills that were immediately do. >> update. >> and i think that was the end of the ability to roll texas boy. it was sort of the beginning of the end of the gold contract. business actually wound up moving to new york. >> so now keep going forward. the 80's. the 80's were the heyday of
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trading. so what was that like? and i want to ask you about the board. >> the two most important new developments in the 80's or the introduction of the eurodollar futures contract and in the introduction of the s&p 500. >> can you describe what the eurodollar pit looks like? >> the eurodollar pit was incredibly packed with people. it was a place where there was absolutely no extra real estate available. in fact, at 1.1 of the big brokers there decided he was going to leave the business. he was able to sell his spot in the pit. thyssen a front for one person to stand for a million dollars. >> side, what made that spa so fantastic? >> row, they were doing so much dollar that a good broker was
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making more in the month but a good broker in the cattle would make in the year. it was so busy that clerics who were there to just process order flow to get the orders from the desks and tell the broker what he needed to do. we are being paid six figures one time. >> and you, you told me once about the lots that you went to. >> yeah. back in the days when we were doing quite well we used to take turns buying lines for the other two people in the group. the running joke was to see how high they could run the build. expensive champagne, the things like that along with a fancy meal. >> and so how long did you make it? >> sometimes in excess of a thousand dollars for lunch. times were good back then. the markets were very
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inefficient, and being on the trading floor was just an incredible advantage. if you were willing to be disciplined and careful you could make a lot of money without taking be very much risk. some people manage to do it without any risk. >> so now and things changed. the floor is not what it was. suddenly the markets are a lot more electronic. the board of trade's which we have not talked about, maybe we can, at least in questions, one big company. a very different situation. the of been there for three generations now. is there going to be a fourth? >> i think it is unlikely. you never know. i don't have any children that are particularly interested in trading. you know, i think definitely electronics is completely changing the industry. it is changing the way that
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ultimately is allowing the volume to go to the numbers that we could not have imagined 20 years ago. ultimately it has provided a much fairer and even playing field for most of the participants. chino, the professionals no longer have the ability to the react faster to get better prices and to have any real advantage of the normal retail trader. >> and so what did the merc people think of the board and then perhaps we did have some contingent here address that. >> chino, i am not sure why there was essentially sets an ongoing culture clash. the board and the merc never could seem to really get together. i mean there was talk of merging the two exchanges back when i started in the business. from one reason or another they could never get together.
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i don't know if it was eagles of the people who were running the exchange's. in know, always kind of an interesting thing. the board of trade people always had an attitude that they were first. maybe their exchange was the more legitimate entity. i think there was always that attitude that the merc was sort of the second rate exchange down the street. >> we were just talking to somebody before the suit said that the merc was the juvenile exchange. that was the nickname. how did you have a nickname for the board? >> not that i recall. i was fortunate that -- you know, actually my father had memberships of both exchanges. he actually had his office and the board of trade building. even though he predominantly traded mercantile exchange products he, i think, always liked the board of trade better. in fact, he originally
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encouraged me to go to work at the board instead of the mark. he said it was a more civilized place. >> and why did you end up at the merc? >> part of it was your pavilion. and that is honesty why i think when i started in the business i did not want to trade agricultural products. i was really excited about the new financial futures market. i felt that ultimately they would be with the big volume was going to occur. that is why i started off in gold and in san move into foreign currencies. i realize the foreign-currency market was potentially the biggest trade of all. >> and see you think -- what do you think -- did you think that people today understand what features are? >> i said the industry? >> outside the industry. i think there is still the same confusion in the mind of most people. that is why they have some much
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fun with it in various movies. futures industry has always been this arcane subset of the financial industry. very few people understand it. even though it is really not that difficult of a concept once you sit down and take a look at it. >> thank you. does anyone have any questions? if not i might target people. >> actually, i wanted to say one more thing. when i was working as a runner before the financial futures the biggest trade in mercantile exchange was pork bellies. it actually, 90% of the volume in the 60's. the pork belly contract actually this year 2011 is the 50th anniversary, the introduction of that contract. just last month there was an article in the "wall street journal" talking about pork
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bellies. pork bellies were -- actually, the mercantile this change was often referred to as the house the bellies built. as of last november 6 contracts traded in pork bellies at the chicago mercantile exchange. so, it is one of those things is not -- certainly appears to be on its way out. i noticed that and i also realize that last year was, i think, the first year in 70 years that there was not somebody with a last name penetrating at the chicago mercantile exchange. it is kind of sad to see things change, but certainly the exchange itself, the volume is healthier than it has ever been. >> it is a story of market evolution. >> absolutely. >> your family was there during an amazing type of innovation. now it is almost a new era of innovation.
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>> yes, it is. questions. >> any questions? >> yes. >> emily, you mentioned you are not from around here. someone from the family, broker family. i want ask you. you do a good job in the book talking about how the exchanges are crash. and obviously there are family secrets and stories and things, but not always ones that they want the general public to know. added to get people to talk to you? open up, it's a mini get stories and obviously so many of them you will be able to tell us later. >> well, over drinks. no. no, i did not. is my has been here? first of all, i covered the industry for a couple of years before the wrote the book, and i think that was really helpful because then people knew who i
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was and within able to vouch for me because you are right, this industry is incredibly crash. you have to have people that the essentially make an introduction to other people. it was for example -- and everybody knows someone, but it is all about introductions. the way i found bill was through the snyders, will way i found the status was by calling people at the new york mercantile exchange. it really is attain a telephone. everybody knows someone. and then i think this was a unique time rare because things are going electronic, because the clubs are no longer actual clubs and they are publicly traded companies, because there is a time of transition people are at a point but they are more willing to look back and talk and they were before. so i think that helped.
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>> said don't want to think about it. to know it was going to be a fun piece. >> people come in and want to hyperbole with a derek. some very good, well organized questions. it took me five or six minutes with her before i actually told her the truth. >> this is true. >> and just have to see which angles she was coming from. a lot of people tried to come right a book. they look for the negatives. the same as the "wall street journal" reporter. negative because it was on the front page. so to a her part of that she did her research and her homework. >> i do want to say that it is easy to find the negatives in this business, and that and not trying to hide the miner. i think it is part of the history of the place, but i feel like a lot of people focus a lot on the negatives and remiss what
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actually works about the industry. at think that especially now when we look get what has happened with the derivatives business and things it is important to go back inside for history about what worked in history. larry snyder. can i ask you a question? you started -- when you started it was also the 60's. >> i started working as a runner in 1967. 110 north franklin. how little did people know about the industry at that time? >> nobody knew anything about the industry. nobody knew anything about the mercantile exchange. as bill said, the only 500 members, and many were new yorkers. the board of trade, he had maybe 1300 members. there would only be a handful for each brokerage firm. it was not as large as it was
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today. the story you are leading up to, it is 1968 and i am in the elevator. two women comment. one says to the other, isn't there some kind of stock exchange in this building? the other says, yes, but it is a small one. and i wanted to stop the elevator and say, excuse me, ladies, it is a futures exchanges and it's the world's second-largest, but nobody knew this. go up a couple of years. i am a senior in college. people say what you going to do when you get out of school? i've going to be working at the mercantile exchange. that's great? can you give me an? i have to buy a sofa. they have to say, no, it's not the merchandise mart. what is the difference? and imagine trying to explain to your future father-in-law of what you're going to do for a living and have your going to support his daughter. for sally in 1972 there was some activity in cattle.
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there was a lot of protest. forgot whether that was the year prices were too high or too low. suddenly all of the channels in chicago, the news teams had stock footage of the trading floor. then people would say, are you one of those people that goes down and shouts of laser and? yes. they would walk away. they had the sense of what you did. i think that plus the currency trading really helped change things. i think today if you call up channel nine they would have a massive collection of stock footage of the trading floors. that really started to chains things. up until the 70's the only schools that taught anything about futures trading with a land grant colleges, university of illinois, iowa, and that would be in the agricultural economics department. there was one book on the futures business. if you walk into a bookstore up
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until really the early 1970's, maybe even the mid-70s there was nothing in all on futures trading. you would have to look very hard. answer that became part of my mission to help educate and become a cheerleader for the industry. >> and in the 80's utah classis. a much bigger interest in futures when the people thought become to chicago and make a niche. >> definitely. i was on the education committee for the chicago mercantile exchange in the mid-70s. we noticed that there was a huge number of summer employees. granted, many of them were children and nieces and nephews of members, but people want to know what they're redoing. they just didn't want to go down there. run this order, answer the phone. i was part of a committee that created one class an introduction to futures.
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it was so well received that the exchange said maybe we should do this on a regular basis. they eventually build a catalog of about two dozen glasses that were offered on a quarterly basis. i kind of took over introduction of futures and a few other course options for beginners. we would have so many people taking this course in the summer that we would have to rent out the little auditorium and the civic opera house. people are moving to chicago to learn about this business. there was no electronic trading. he if he wanted to know if you choose you have to be on the floor. at the time, we are moving into the early 1980's, mid-1980s. i was running the retail futures department. i would have m.b.a. graduates come to me saying beckham i will move to chicago. i will work for minimum wage dirty hours a week, part-time
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work as a runner just to learn the business. their intention was to leave after a few months. that was fine by me, but they needed to get down and make their connections, meet people, i understand how it works but. he wound up with so many situations where you were no longer there because you were somebody's son or daughter or niece and nephew, but because you had an advanced degree and you saw the potential for all of this. >> thank you. at the risk of being tumor caveat want to target one other person. nancy. you were arguably, i no there is some debate, the first woman to walk on the floor. >> oh, yes. i was the first woman who was allowed on the floor at the mercantile exchange. that was in 1962 to be in fact, the chicago mercantile was the first exchange in the country to
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allow women members. my husband wanted to open his own business. so he chose me as his partner and brought a for me. of course at that time they were anxious to sell memberships to whoever caliber. the first day after i went before the board and it was approved by has been said to me, well, now you have to go out on the floor. at that time they did not allow women in please. so we take the elevator and went down. i kept saying, women aren't allowed. women aren't allowed. when we get to the gate big guard who used to be there said to know. nancy can't allow a floor. he ran for the president.
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he said pau, yes. of course in the meantime he just let me out on the floor new. i was the first person to go out on the stage floor during trading hours while. there was some long faces looking at me. followed by its friends congratulated me. that was the end of that. and did then i think it was probably a few months. i did go down and answer the phones. i have four very young children at home. you know, it didn't work out. at think in a few more months, maybe six months after that how they did allow -- someone did start working, a woman did start working down on the floor. from that point on it was history. but. >> bills cousin was a woman in e eurodollar pit. perhaps the most successful
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female trader. >> arguably the most successful woman floor trader in history. she did very well. she had a great mind for mathematics and she could do numbers. she traded the back months spread in the eurodollar contract. >> one of those things that when i started this book when people said things. >> right. essentially that just means eurodollars future contracts are basically trading the very short-term interest rates. >> i'm going to stop you there because people who understand you understand you and people who don't are not going to get it. any other questions to mack if not why i hope you get a chance to mingle and talk to people. there are some pretty fascinating people here. the whole start of the book, the whole end of the book is about
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charlie. he came in from kansas which has so appreciate. a really interesting guy. board of trade people who may have gotten the shaft in this conversation, i'm sure, have interesting things. i really appreciate you all coming. it is really sweet. charlie. >> to great stories. when the cattle market rally started to boom of the cowboys wanted to come to town to see what was going on. there was a fellow by the name of frank booth who ran the biggest truckline cattle bull hauler in the united states. frank had this much-me and 100 pounds. and he came to buy a seat. they told them why don't we give you a yellow jacket. let you get the feel of this before you buy a seat.
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and so here was this giant old man among all these young runners running around the floor. everybody who was with, who is the. to his seat. is uncle bill call them over to the tent. he said, sunny i see you are older and most of these runners. to get you on the same plane lands is going to buy you a boy scout. his dad had the greatest $0.6 of the market of anybody. murphy will back me up. they were out on a new yacht. the yacht sank. they were all on this craft. on the second day of his dad came close to is life. the worst part of this is i'm sure that soy beans not down
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today. great, great humor. among all of the things, but what we built is a gigantic market of the world. it is going to get bigger and bigger and bigger. i am really pushing emily to come up with the next book because we have to have counterparty risk. it cannot go off into derivatives. we must have the contract designed or redesigned to fit the marketplace today. this place will grow like nobody can ever imagine. today they traded at almost 100,000 cattle. the base de we ever had was 35. there will trade 400-500000
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contracts a day. we could not get over 50,000 in the bed because physically we could not handle it. electronics are putting us into the future. the big thing to reverbs, 408 million people in north america. maybe maximum 200 million people in south america. outside of our boundaries there are 6 billion people. you get to sides of the hemisphere. the food producers of the world and they are the producers of industrial products. we develop this market which is what i learned how to do swaps there. the most valuable thing that i could have ever learned in life. and we will propel -- we will build jobs around the food industry just like china with their 17 vital trace elements.
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we will build steel and all of these things, but it has got to be a world of swaps or it is world war three and we knew each other out. >> and i have to say when i started writing this i would have no idea what you just said. so hopefully if you read the book he will go back and say, now i know what charlie is talking about. started in very simple markets. they grew into something that sounds much more complex and scary, but charlie knows all of this because he traded cattle. there really is a progression. okay. thanks again, everyone, for coming. we are open for several more hours. i hope people stay and have wine and food. emily has graciously agreed to sign books, and so we are going to start at right now. thank you both. that was really fascinating.
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>> emily lambert is a senior writer at forbes magazine. for more information and to read her blog this it blocks tough for some. >> made for good this is the name of the book. well known author desmond tutu along with his daughter >> said the most of what this book is about is the essential quality of human beings. we are good. our is essential quality is our goodness. our behavior does not always bear out that a sense of quality, but it is my belief and my father is believed that our central quality is goodness and everything else is an aberration
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we relate stories from both our lives, both of us are clergy, both of us are priests. my father famously chaired the truth and reconciliation commission has seen in all kinds of places. he has seen all kinds of for. i have seen the same kind of grief and horror, but on a more domestic scale in my role as the pastor. so i have a very clear sense of the pain that we can inflict on one another as human beings, but i also note that is not the essence of our being and that we respond with horror to what is terrific because war is not the essence of our being. >> are you also a resident of south africa? >> i am not. i am actually a resident of
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alexandria, virginia. >> how long have you lived in the state's? >> more than 20 years. i am almost 23. >> do you mess around? >> yes, i do. imus, a lot. in my role as executive director of the future institute i get to go home at least once a year taking crews with me. >> mpho tutu is the co-author of made for goodness and "and why this makers all the difference." turco author is the rev. desmond tutu. >> book tv is on twitter. phos for regular updates on programming and news, nonfiction books and authors. >> up next nir rosen, a
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free-lance writer and filmmaker who has worked in iraq, afghanistan, and pakistan but said the growth of realism in the u.s. as the least. his talk at rice university in houston texas loss of one hour and 15 minutes. >> so my book deals with iraq, the civil war, how the civil war began, allied came to an end and what iraq looks like today. the other half deals with the iraq impact on the region, fighting in lebanon, and increasingly the unstable middle east and in no way how iraq came to afghanistan. by that i mean the u.s. began tampa meant many of the same tactics which were used in afghanistan. and we saw -- on site, iraq. we saw suicide bombings. things that we were associating with iraq coming to afghanistan.
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a forgotten subjects in the media. nobody cares about it. it's hard to get people interested. i'm grateful to see such a large crowd here. afghanistan, a little bit more the news because there are more americans there. when americans are dying a country tends to a little bit more. we can't understand what is happening in afghanistan, with the americans think they are doing in afghanistan. not understanding what is happening in iraq and what they think happened. i would like to start with a discussion about iraq and the implications for afghanistan. the narrative, which these days is impossible to challenge that iraq was going back fairly poorly because of poor planning and then in 2006 you had the bombing. al qaeda and iraq blew up. said lee all hell broke loose. war started.
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iraq was falling apart until this brilliant physically fit general called the david patraeus arrives and saved the day. the new american hero. now he will save the day in afghanistan using the same brilliant tactics. all of that is wrong. the civil war in iraq did not begin in 2006. the civil war in iraq began in 2003 when the americans won the war the basically lost the war. the iraqi army did not even fight. and leaving aside whether the occupation was wider wrong, the decision to go to war was right or wrong, and of course it was wrong, if you are going to be an occupier, if you are going to invade a country, at least do it confidently. we could not even do that. the military planners, to star generals, colonels and the like knew from experience in haiti, bosnia, kosovo, other conflicts in the world, they need a
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significant number of troops for the post war face because you're not going to have a state. they were requesting 5,000 troops -- five times as many troops as they were given. there were not granted those troops. we came in with 150,000 troops and created this immediate backing stripping away the government, security forces, electricity, everything was gone. you had this pervasive sense of lawlessness which in many ways remains to this day. this is not unique to at iraq. if we take a new york city and get rid of the mayor and the police and electricity and created this vacuum and you had looting. the strip away even the government infrastructure, you very quickly see jewish fighting porter rican, neighborhood gangs being formed, the police, former police now acting as private security guards are looting and pillaging because they had weapons. the upper east side melissa. the upper east side malices
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would not do very well. i'm from there. i know. iraq wasn't unique. we saw what happened in the u.s. in the aftermath of katrina when you remove the state all hell breaks loose. people are scared and turn to violence. they turned. but the america won the war. but they lost the war. but overnight you had neighborhood militias being formed. too often they were formed on the basis of a sectarian identities. they were from surrounding mosques, ethnic groups, tribal groups. you were not going to have a secular nonsectarian educated melissa predigested not make sense. the guys that used to be in neighboring soccer leagues, neighborhood gangs perry quickly became militiamen. the americans came in there with this notion that the party was
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of not the party. as like fundamentalism, neo-nazi or communists fell. the nazi party in the eyes of the american planners. it was a suny party. they were wrestling. so of course majority shi'ite. much more complicated than the way the americans devised. they imposed the sectarian and geographical entities. so suddenly you had this in the triangle. they were forcing them to think about themselves in ways that previously hadn't. racism and sectarianism and community of identity exists in every culture. reseeded in america more and more these days. attacks on muslims, people who look like me these days are harassed on the streets as well.
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obviously racism between blacks and whites certainly exists. blacks still remain very bitter about the prejudice they feel, but you don't see militia warfare. you don't see racism in the u.s. turning into violent activity. likewise and a rock before the war identity was very complex. you had urban and rural divides, middle-class and poor and wealthy. people in the government. people out of the government. north and south, people who were religious and people who were secular. have you felt about yourself and how you felt about others really depended on many complex factors such as their social class, the levels to which you were devout or not, the level to which they cracked down on you in your neighborhood. you might really hate the regime in the 90's because they cracked down. if you work from some more middle-class part and you were not going to feel as persecuted.
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while there was a glass ceiling, you were in a higher echelon of the government. so iraqis tend to romanticize. he would often hear them say we were in the same tribes. remarried each other. that is not exactly true, but it was not politically expressed. there was some resentment. some felt content. some both resentment as the sense of being disenfranchised. was much more complex. did not have to be a civil war. no history of any kind of mass violence. so he took this vacuum that you created and militias are forming right away. immediately every night we would hear the chatter of gunfire. was not americans killing iraqis, at least not to a large extent. it is people settling scores, criminal gangs forming, stealing what they could commit kidnapping kids from all the
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doctors. and all sober people who have real grievances. there may be people can appreciate it. maybe a professor give you a bad grade. this would be a good opportunity to kill him. or maybe it was an informer who was looking for the regime and got her brother executed. after all, he eluded security stations. they have lists of all the informers and government spies. you knew who to kill. too often the victims were sinise because she could be rehabilitated. now, you take this. the americans came in and set up this puppet government council basing it on so many. even the communist party member of the governing council was chosen, not because he was secular or atheist, but because he was chia.
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he led demonstrations. the americans are trying to create a civil war. that wasn't true. there was no conscious decision to create a civil war. in retrospect it does make it look like they have made every possible wrong decision. the institutionalized. and approaching iraq with this notion that the cities of the bad guys, the ones who were loyal to saddam, led the american military to be much more aggressive when they were in suny areas like felicia creating a self-fulfilling prophecy. if a loser is a good example. before the war it was a port lower middle-class industrial town. nobody had really heard of it. when you were going to a picnic you might stop to get some kebabs, but it wasn't any more unique than anywhere else. the first two weeks after the fall of iraq to the american forces for loser was quiet. the americans did not even go
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in. local officials to go for the administration peacefully. the americans came and took over a school in the center of town. on april 28 there was a demonstration. the americans claim they heard shots fired. they killed 17 people. they killed a bunch more. the following day another demonstration. it began to turn the people against the americans. i'm going to skip to the first year of iraq and the growing insurgency just to say that boy in the spring of 2004 you actually had a moment of optimism. you had an uprising in flew to an dacia uprising in the south. you had sienese helping.
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there were fighting together against the occupation. at the time i thought maybe this would give them some kind of, narrative or struggle against the occupation and they can get over the occupation. founding or refunding themselves, but that was not to be. groups like a sucker rally or just pounding civilians counselee. they were killing on a daily basis policeman. truckdrivers are going from baghdad to jordan or syria and they were being stopped and having their heads cut off. so beginning to resent more and more for harboring these sorts of guys. so when floozy was destroyed by the americans in late 2004 he did not see them coming to the aid. in fact, you saw many feeling
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like they deserve it because these people were harboring some unease that were slaughtering civilians. but as a result of the destruction in 2000 for hundreds of thousands coming into western baghdad, places like. they began to display. went to east baghdad. it because you had no american or iraqi security forces that could protect local communities local self-defense militias were becoming more and more important. now, if you are in the east baghdad south district and you know that some of these are harboring resistance guys, you don't know who they are. the best thing you can do is just get rid of all of them. so you had initial from the way the people coming. then you had your self-defense melissa figuring the best thing to do is to get rid of that
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minority. civil wars began by the end of 2004. you had for the first your to on the defensive. there were weeks. it did not get security forces. there were not yet organized. they had a fear. they were coming to get this. historically from saudia arabia. it was a real sense of insecurity. it began to change in 2005. he had elections. suddenly he saw. they took over the ministry of interior. there was a decision made to take the fight and be more

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