tv In Depth Nomi Prins CSPAN April 8, 2019 12:01am-2:03am EDT
it was prevalent to the different presidencies throughout our history. in the history i cover specifically since teddy roosevelt through today. >> is there a reason you pick that starting point? >> yes. so time that imuchtt had to do a couple of centuries versus one. but really what happened was, as we know there was a crisis, crash, black tuesday 1929, is that when i started the book but i realized that i researched that crash that a couple of the bankers that were most connected to the crash and most concerned including pickers from the morgan bank which is j.p. morgan chase now you could trace them back too jp morgan and he was oe of the lead bankers from 1890. there wasas this line of individual families and banks the past back to that time. but also that was a time under
teddy roosevelt administration where there is recession going on. there are times when the country is doing well for a couple years and then received for couple yearsei economically. to the point in the mid- 1890s the government talked about dependency had to call upon j.p. morgan to help them finance the budget. so that is what happened and that was a gift that j.p. morgan gave and in return he required influence over his years and that is how it started. in the 1907 was a huge impact and it required a lot of links to close as ultimately happened for 2008, almost a hundred years later. at the time teddy roosevelt administration turned to j.p. morgan again as they had in the 1890s and what can i do to help me. and what happened, the treasury department fashioned $25 million it was the first bailout of thanks that the government pay for and said to j.p. morgan here's $25 million figure it
out. and they gathered in the library with major bakers at the time haand he decided to pursue the money to the friends and they all got together and a lot of the other banks failed at the time but that was a situation where he became known because he let his bank survive and he saved this panic as the king of baking. the new york times called him that as well. the history goes back to that. between the 1890s and 1920s. they were very influential for money and will have a politically and have the treasury department ultimately survive the panic at the time. >> tr was known for being the trust buster for not liking big business or railing against thet
least. >> what he busted was nonbanks. at the time standard oil which was a major oil company, he actually did bus stop some of the more powerful elements to try to make them more competitivevi environment. but he stayed away from banks. if you look at the history why he did that i think it dates back to the 1907.p panic. he needed j.p. morgan to help them basically to not have a larger punic throughout the united states an entire country. to keep money flowing throughout the entire country. i think that element of saving was something he required and therefore as a gentleman agreement made by busted up the
larger institution which as a result is why we have j.p.ou morgan chase today. the fact that he did not bust up the banks back then is one of the reason the larger banks in the country today have been able to accumulate to that size in the way they have. >> too big to fail is not a new concept? >> no it isn't. the difference is in the recent past too big to fail were banks the became vague over this major period of the past century and required help for the government and the government help country provided the help from the federal reserve and the time back then they were helping themselves getting money fromm the government to help themselves a bit more limited. >> before we leave this . . .n there is a character in your book that we probably have not heard of today. james stillman, he seemed to have an influential role. >> he was one of the leaders which is called national city bank. we now know as citigroup.
going back in time he was one of the major directors and his family was an upscale family in new york city and culture and ao forth. but he was also one of the bankers but after the period of time that she was friends with the morgans is over, he was one of the main people that decided it would be necessary for there to be a central bank in the united states like we have now, there federal reserve that would say thanks in a situation where the government could not step in and help those banks. so when it was an unsinkable. like the pnf, rather than j.p. morgan counting on the treasury department which he had furnished money to in decades before that there would be another central entity to do that. in behind-the-scenes he started to work with congress to create what became the federal reserve bank. but his name is not noted for that and history.
>> so jekyll island 1913, was that a noble effort? >> jekyllan island started in 10 and it was basically cash it was like the country club for all the rich people in the united states at the time. they effectively -- i spent a lot of time doing research down there and now it's a resort hotel off the coast of georgia. but at the time all the major families, the morgans, hides, rockefellers had t condos or but they were not city condos they were just really nice and had service come down and you could only access jekyll island to the waterways and the rest of the people had to stay away during times they were there. go around around thanksgiving and christmas. a particular thanksgiving around 1910 a small number of them went before the families came in forn the holidays cash it became the
documents that ultimately turned into the federal reserve act in 1913 which created the federales reserve. i talk about it because it's one of my favorite stories. the senator and the head of the finance committee at the time. >> republican rhode island. >> yes that's right. he had a bit of perceived himself and he was on the finance committee, the banking committee. he had a son who is living in new york as a banker. he was going to visit him and talk to j.p. morgan and others about essential think and decide where to have this meeting. he was going to be in new york and what happened he got hit by a trolley car and so he got laid off and during the period he had people know what was going on it was decided by j.p. morgan that
basically aldridge and a bunch of people go to jekyll island and convene and decide what to do. it's ultimately what happened. they meet at jekyll island in the plan ideas for central bank based on travels, what was required, based on what they thought would go through with the american public. win ultimately avenging thinkes including james stillman who took the documents back to congress and basically brought them into the senate and it was not passed in 1910. under what was a republican presidency and it passedd underwood wilson after the facility to take over. it was an idea to the fifth federal reserve, central bank to help them when they needed it but provide credit for the
country. the idea if there was ever to be a panic again liken the farmers wouldn't find the banks can get money from new york and would not be able to provide them to s the season or hardship. that was how it was sold as a people think. but in reality it was created together with aldridge and senators and bankers to provide them if there would be an emergency. >> based on the european model? european extent of the model which was a more -- our country's bigger, the bank of england or bank of france aten e time -- the idea that we would have 12 different entities which are part of the federal reserve system. and that r goes back to farmers and back to 12 separate entiti entities. they will be able to cover the local banks in the area in terms
of making sure their credit when they needed it, regulating them when they had to in making sure other banks that use the prefix to help workers and farmers and other businesses throughout the country would have access to credit and money. our system has more banks to spread out to the country politically and geographically were bigger and have different cities that have more banks for more purposes locally. and now more national. but at the time that was the idea. >> with their protest against it in 1930? today there is an undercurrent of protest against the fed. >> there more protest in 1911 and 1912. they were more protest under the president before wilson then there were during him. with him it was much more concerned instead of a creature controlled by wall street banks but what he did, is decide to
use -- he was worried about having a federal reserve even more after the fact, he decided to t use wording and to work wih politicians throughout the country particularly in the middle the country to provide the narratives to the rest ofhe the country that this money will be good for everyone. and the idea not to just focus on the wall street banks and families around the banks of the time but the idea was it would be old idea to bring money for the country. with that respect he got around any protests which were limited by the time he was in office and also got around criticism because he got by and from a number of senators and representatives throughout the country that ultimately the system will work for everybody. >> nomi prins will return to central banks when we get into pollution, your most recent book. i want to read two things, one
thing from all the presidents bankers, the political and financial alliances between bankers and presidents and their confidence continue to define the policies and laws that drive the economy and from one of your previous books other people's money, you write, the amount of financial sectors wheeled in washington cannot be underestimated. >> that is true. those are both true statements. other people's money i wrote in the wake of thehe enron scandal which were effectively in the energy in the telecommunications sectors they happened because those in banks of the country on all derivative structures and hiding money off of folks in the scandal situation happened, this recession happened and everybody knew about it, but the banks got off relatively free fromfr that.
and none of the ceos went to jail, this was 2001 and 2002. but the influence was very highl inin washington because they wee basically saying, this is not enron, they did things wrong. we might've did paperwork and help them with banking but the reality is those kind of institutions, enron couldn't become the major derivative that it became instead of the energy company is that it was and willc cannot account the massive organization and so much stuff hidden offshore and from their books from the public if banks hadn't helped create the facilities, credit line, merge companies together and do all that. with respect to the influence in washington all of that comes to bear. all of the bankers at the time and throughout the history and committees, major advisors, they
been able to look and say, it wasn't as it was then. and summarizing. so in terms of all the presidents bankers, is released at the same take. all the presidents bankers a row, ten years after i wrote other people's money but in the book i go throughgh r specificay the kinds of relationships and influence the bankers had in washington. today we think mostly of the donations. in the lobbying which is compared to other sectors and right now the text sector is giving banks a run for their money. but historically, the influence, the sitting down with president obama and president trump or whoever or a major baker or jamie diamond. it also has cloud on the other side so they can influence washington and influence business media and the narrative of what banks do and why they
are needed even if they do criminal things. and why they need to be maintained in the current form. >> nomi prins you come from outside of the equation as well don't you? >> yeah, when enron was happening at the time i was managing director of goldman sachs and i had a teamir that created what were called creditd derivatives which were bets on whether companies or other sorts of loans whether they were attached to mortgages or anything else with default. basically that is what a credit derivative is. it's like i'd let you you be able to pay off your loan or not be able to pay for long. if your company you'll be able to pay off the debt that you borrowed from banks or you won't. and that i do on that. i offset that with somebody who's willing to take theidns or side or with insurance companies that ensure dispatch or insurance and taking it to the other side to make this fact. but they were much more convoluted than that.
ultimately as we found out in the crisis in the aftermath of the financial crisis. i created at goldman -- i also ran in analytics department in the '90s. in the creations that could enable these credit derivatives to be used for investors, for companies, and large quantities mix-and-match together, all the analytics for that i was involved in throughout my career on wall street. when i left and wrote this, toward the end of the book i said -- aristocratic derivative and ceos -- it got real technical on a sunday. debt obligations means a bunch of stuff together and that coagainst also. they were something that we could watch because they'll be
at the crops of the next financial crisis. that is partly because i saw where they were going, i sawdi e junk that was being put inside of them and still is. then they were very small and a small part of the market and they were in fashion because they can make so much money like goldman sachs and ultimately they became the crux of the financial later. >> where you get your job? >> yes. i was a quantitative analyst throughout my career. i started as a programmer at the bank in the 80s from having a gotten a degree in math and or try to get a job to work in your city and the banks were hiring into fromni the beginning of derivatives of looking at aggregating different types of financial securities, looking at the map, programming i didat tht stuff from a sort of very
initial level in the 80s to when i ultimately left in 2002. but what i also did in the one of the reasons i left wall street it was very important when i was crating analytics or directing my team, as i was building them in different places i worked to analyze the downside. to make sure the salesperson was selling a product for which we're doing analytics they were also explaining what the risks were in the product. and what began happening was as things got more voracious and competitive and more money in the products the idea of talking to clients about risk or funding risk analytics within the company, just like the budget in washington, this money goes for this this money goes for that, that happens in vegas as well.on
it wasn't considered a priority. it was downn considered. i had more and more of a problem morally on that. it is one thing to create something with risk attached and if someone understands the risk to be involved but if the risk divider and the public but they cannot be explained properly then that is a bigger problem. that is where i started to divide out fromid wall street ad ultimately become a journalist. >> you write about 9/11 and the impact that had on you. >> yeah that was the breaking point for a lot of us in new york. i was working at goldman sachs at the time, very close to where the towers had been an impact on morning i had a corner office on a high floor at goldman sachs in
the actual plane went by my office. when the first plane went nobody really noticed and nobody on the news noticed it just happened. but we were in the flight path. but then when it all the debris and spoken community quickly and asserted to be covered on the news and the second plane came by that plane we noticed and we knew it came very close. at the time the moment of impact new it was a terrorist attack but everything got very chaotic very quickly internally. we were supposed to go to an off-site to talk about credit derivatives and all the teams have flown in from around the world the night before and we are supposed to go off tot jekyl island and obviously we cannot. my clearly moment was when one of the people from the major
group in the department and they said maybe we leave now will be the traffic out of manhattan. more like no, there's something bobobig happening. it's not about that right now. ultimately the next few days i spent a lot of time just thinking about where i was at, where life is not, i was volunteering instead of going into work a few days after to try to match items with people as they were coming in and help volunteer to do that. we were supposed to be at work in the resulting settlements of priorities. in terms of what was happening in history and life in general. that was a pivot point for me and i wanted up resigning of humans after that. >> from it takes a village, nomi prins writes in the ship and embraced into the bosom of goldman sachs even for agreed entry brief time is hard to
grasp its culture of excellence. like carver, new york times, the senate and the new york yankees all rolled into one. once you drink the kool-aid and managed not to spit tai it out u really began to think you areer better than everyone else. >> i wrote that. yeah, first of all when i was interviewed for goldman as people were, it is a very long process. i was working in london at the time and i was sought out by goldman to come to new york and do credit related products with them into the nine-month interviewing process there was partners, i met in london, and new york, it's a rigorous getting through of the total pool up to the senior levels of the company. all along the way, there is an
know not that we did not the goldman sachs had an aura of being the man wall street in the manner of thinking because how it presented itself. so the idea and the interview process manifested that. if you get toou this hurdle in this hurdle and this hurdle it almost dashes we like you more and this makes you better, it's a weird cultural indoctrination from the beginning. once you get to that i remember i was standing and one of the training force for the interviews and eyes beingng interviewed by lloyd who became the ceo of goldman sachs and he walks me out after rear chatting and he does one of these. he says, this is not like bear stearns, in other words this is so much better than where he was. it was that aura and that moment
and presentation of who we are. the idea of the culture of excellence and there is a book about -- it was written not toor long after i was there. it's something that is discussed internally. they consider it that it's the word they use. it's considered a culture of excellence. if you are liked them and moving up the ladder you are called the culture carrier. it is just the thing. at least when i was there. so this idea of being one of us and then doing your job but the new job is about being one of us is very self enforcing. that is what i mean by that. there is a very strong sense of where really great, if you're here you're great, but only if you behave like this and if youe
don't you don't belong here. >> what do they do? >> like any other banks do they do a few major things. they put things together, public companies together, their investment banking advisors. they find the requires of companies and then find companies that want to be acquired and work out the details. if we are working out the details a couple of things follow. one thing thatls falls out is a lot of fees. another thing that falls under that deal are the ability to potentially issue bonds on behalf of the new company or on half of one of the companies involved to raise money to go on with the next part of the process. they can issue shares, issue new
shares of stocks to do that. ultimately once the company are already merged together or already exist without having been merged theyte can work on stocks, trade the stocks, issuing bonds, trade the bonds, and they can effectively create a financial power for their clients that they take cuts of all along the way. they can trade in the secondary market along the way. they can kinda be on both sides of the initial entry of something new to trading something that is already in the system. >> in your newest book, collusion, you write that much of the 20th century belong to wall street, the 21st century now belongs to the central bank. >> right, along the way of the 20th century as we talked about the influence through
wars, crises, economic policies, trade agreements, there also to things was a semiotic conversation and relationship that occurred between administration, presidencies in the major banks of the country. j.p. morgan chase, citibank, goldman sachs, morgan stanley and as we went into s this cen century, not so much the beginning but the last decade and moving forward, central bank stepped in to act as a finances for everything the banks were doing. . .he . in 2008, the fed did this major pivot, the federal reserve, the main central bank of the u.s. did a major pivot and said well, thanks don't trust each other right now. it just, number one. a number two, they don't trust each other let alone you compelled to give money to like a small businesses or to individuals at the rates we are only going to give them, which
is zero. but into the crisis we will come in and help them and we will create or fabricate money electronically in order to provide them with credit because we can, but what happened was they didn't just do it a little bit. they took the situation the federal reserve in conjunction with the treasury department and the bankers at the time and they took something that was considered a to b. an emergency by what was going on in the fall of 20081 there was basically a complete crisis of confidence in the banking system inside it and externally related to it and they said we are going to dump tons of money into the system to make it right. here could give banks loans and low rates so they can basically get money from uss at nothing ad ul are going to buy ultimately bonds from them that no one else wants in order to give them more cash something called quantitative easing in order for them to operate.
so this entire shift from the banks having a lot of thisis mar influence financially relative to washington was because the fed had the money. all of a sudden it wasn't just the banks that have the ability to raise money in private kerkets historically or public markets and so much of peoples deposits on which they could do more financial activities with all of a sudden there's this extra body. it had been there all the time and created ultimately over 100 years or so before that to provide help when they needed nt went into overdrive. it was the federal reserve, 'scause the european central bank of japan. they decided to find ways to electronically fabricate money their systems so
this thing that was an emergency and considered to be an emergency back in 2008 has become policy there's a cap in terms of how much conversation they might hav have with how the created for the public opinion to any of the a central banks can create electronically in the guide of helping the financial system or helping the general economy.
it's by the virtual puffer of pf being able to create so much money when they want to they had a shakyd monetary system that will collapse without their s manipulation. they had no plan b. to alter course without causing massive damage and financial pain. our federal raises reserve have an about-face iny, its policy.
they have to pay to receive that money's on the fed put to put te rate down to 0% at the end of 2008 and kept them there for december 2151 of the tools to be able to make sure the cost of money over three-month period is negligiblehr to banks. then they waited a full year because the markets didn't like that after the fed just raised their rates after seven years of being at zero to financial
systems themselves would be okay with that and that means not having like massive downturns in the market. the markets opened up really upset and being really upset and as it turned out there were meetings with senior bankers and the fedio at the end of december as well going into what became anor about-face. there were different bank leaders from the parts of the central reserve system.
maybe we shouldn't tie pin too much end up in a couple weeks came out.licy the reality is during this ten-year period thtenyear periog worse than it's been doing recently and they still kept the rates low. the difference now is the markets have gotten upset again so january 3 was a negativ negae debt. since then we've seen a massive rally in the stock orchide' because of the about-face because it wasn't just the fed it was all the central banks around the world that were worried they would have to type in money and make money more expensive and stop buying assets to keep the level the finance up
and cost of money down. he definitely won't have to worry about it and that is why some of the markets have rallied as well so there is a dislocation between economies and markets if the fed were truly getting back to what i said, all right we are going to normalize rates and reduced the size of the books. there could be an absolute financial crisis through the banking system and the staff market and that's not some crazy statement that doesn't come from the data that is just looking upon what happens when money gets to type too quickly and the immediate reaction of the stock
market which iss a place where many moves quickly in and ou alo the reactions are very in tot, t it but the reactions happening throughout corporations and thing is throughout the world as well. >> host: the nice thing about your books as you put in glossaries and casts of characters which is very important. good afternoon this is the monthly in-depth program our guest this month is author and financial journalist her first book came out 2004. it's how the conservatives are picking your pocket whether you voted for them or not the trial came out in 2008 was written by somebody named the thalia.
>> guest: that is my alter eg ego. they write about the industry from the standpoint of something that is palatable. i've kind of done that to begin with just in case it was too close to home and one of the things about the book now that you've mentioned just for calling. it's kind of based on the treasury secretary of the united states later.
it is an untold trillions black tuesday another novel came outt in 2011. her two most recent books the hidden alliances that drives american power 2014 and her most recent is collusion of central bankers rigged the world. this is your chance to talk. here are the numbers (202)748-8200 if you live in the eastern central time zones (202)748-8201 for those of you in the mountain and western time zone. all available to you we monitor those.
now that we have this 100 plus year history that you've written about. >> guest: he was someone that was on the new york board class aa director. he was ahead of j.p. morgan chase, so he happened to haveim been in the height of the financial crisis when it first the directoralso of the wall street located fed of the 12 member reserve system that he was one of the people along with hank paulson who at the time was treasury secretary.
he then became the treasury secretary at the turn ofe the year so you have all these individuals who effectively have the ability to direct policy and money coming out of washington to their own institutions. it's monitor supposedly by the federal reserve because one of their jobs is to be theeer regulatory sort of answer of the oversight body to the same us. they are monitored and yet they'rtheirindividuals have suct relationship with the central political powers of the country that they are able to get money effectively to themselves and the need is in far greater figures and individuals are able to galvanize to do that as a result money goes from taxpayers
to benefit them and not when there is a crisis but even from the standpoint of the glass-steagall act that was in 1999 replaced since 1933 to protect from any products or speculations the banks can do whatat they could choose to betn all sorts of stuf stuff that's n them and on their shareholders andt' private partners to repa it. people's cash, peoples mortgages and institutions that could do all sorts of stuff with that and then come to the government to help. the fact they have all these deposits people aren't going to get their money back so why don't you ge give all these othr
things had a different way of taking from depositors or taxpayers they allow them to have all these deposits on multiple levels they are extracting greater influence and when things go wrong >> host: jim walsh says can you explain how someone so brilliant and economically astute supports an economic system that always fails at tremendous economic cost or devolves into a dictatorship is that true or you a socialist? >> i separate the socialist
policies. they help societies and how they are used to appropriate the funds. i think about things like how expensive health care is for people in this country. it means they cannot ultimately be the kind of person that participates in the economy that they could haveec been without o much that. when i went to school, i started out in public schools and i went to a community college and then i ultimately went to a state college and then i went to private or all of my education, but i paid for all of it along the way. what i was earning my working was enough to allow me to afford
courses and work and talbott is often a possibility. when i look at the economy as a whole do we think it is better for an economy to be more level for people in order for them to contribute foundation only throughout most parts of the economy in an easier way and i think about how we also have firefighters and post offices and police officers and a whole host of element of our society that are meant to help more than just their shareholders or banking institutions so i look at it i from the standpoint of a healthy society that's healthyhy economically and educationally and physically protected. defense is another level of our society which has a lot of monei that goes in to it and supposedly to protect everyone, to protectro the country. all of those things to me are
socially good, and what i support from the economic standpoint and financial bas actors within that box to risk the country's financial health and be bailed out to the extent that they were were held to the extent that they've been by the federal reserve. i look at an economy as being holistic in that respect. >> host: in today's current political environment is capitalism at a tipping point? >> i think in general we are a capitalist nation. we do strive as a nation to do business activities that create profits and those profits go in different waysr either to the people involved in creating them 't a society where people's future. i don't think that's going away, but i do think that using wall
street as an example in the financial crisis as an example even the fact that our federal reserve has $4 trillion of assets on our books after what isn't an emergency situation we should think anymore that happened in 2008 and it's still subsidizing wall street and larger banks to our tremendous sums of money, so i think that healthy populism has to recognize putting too much money in one place where that's one place has been a cost for the general financial system or to general economy is not necessarily a good decision and so it needs to be more regulated. we have more places that were ignored into the collapse that t are reeling from in terms of these policies, and i think those need to be reinvigorated and we need to protect everyone.
>> host: before we go to calls, finally, the fed in your view is a federal type bank necessary if question number one and then i will follow up with questiony? number two. >> i think what the fed does in terms of providing so much subsidy isn't necessary. i think the fact that the fed can raise orr lower interest rates and terms o in terms of my policy element is the end that could equallthat couldequally ba treasury department. i think thatn the fact that the fed is structured in such a wayy that allows the private members of the bank which is how it ultimately does provide credit and takes meetings with the heads of wall street firms because they are the primary shareholders and the historic shareholders and the fed they created so whatever it is today there is a major flaw in how it
was created and it exists ultimately to benefit its membercould benefit itsmembers s to help the greater economy and the greater public but the reality is if you look at the action, they are very visceral when there isal a situation at e large institutions were a necessity to help for an institution that is part of the history into the fabric of how the fed was created and has benefited from how the fed is created and continues to benefit implicit sort of subsidy that not just the fact that all of the central banks provide to the largest banks and i think that is a flaw. >> host: are the central bank in your view coding?
>> guest: this is an interesting question because the major collusion i talk about in the book had to do with predominantly thely g7 countries and what is interestin was inter the financial crisis is that the method that they were using, the timing of the quantitative ngeasing and reducing the rate d putting money between them to help make sure the current these were moving back and forth between the central bank and respective countries because they work with each other across the borders, all of that happened with phone calls have documents and things between the major countries. where china comes in they are quite critical of the process from the beginning and it's fascinating i because one of the major ways i believe china became such a tremendous iaonomic superpower in the decades since the financial crisis is that initially they were very public about being critical of the fed policy if you create much money too quickly and to subsidize the system ultimately that system
can't sustain itself. however, in recent years the peoples bank of china has also been creating their own quantitative easing and the difference between what happens in china and with the fed are not so much colluding with your acting in opposition to a world where it is in one place and we have sort of an international capital globalized system that will be achieved somewhere elseb the bank is coming in with their own methods with what they do is inject them sorted directly into more growth strategies throughout the country so they would actually direct the money they created the infrastructure buildinbuilding into companies t creatcreate higher-speed railros were companies thatg, finance tm and so forth, which we don't say they have d a different twist so it's not so much collusion but it's more the antithesis but the result is still creating money it's just directed in different ways in the u.s. and china right now.
>> host: cc is in portland oregon. go ahead. >> caller: hello. i have a comment and a question. the comment is within the context of the person that makes $50,000 a year and has a four o. one k.. thisis whole what you've been describing to me sounds like there's no free hanthere is no m smith's theory was a fair but it's really gambling that the stock market and wall street is the bookmaker like in vegas and they are playing around with our money gambling. i just see it ass gambling. i know there's no way for us it seems to make money or advance as just a $50,000 a year person without having been there but
essentially the rules are regular working public, but all the money in the stock market and defend the people that are managing the stock market, the wealthy people, they don't leave their money in the stock market they move it in and out constantly with all these reports and told the person just leave it in there because that's the money in my mind that they are playing around with. >> host: we are going to get a responsese to that. are you interested in these markets with a retirement account or any other method? s, caller: iem so what i want to know, tell me why this isn't gambling and how it is the person making $50,000 a year is supposed to trust the system and finally is there such a thing as the freehand of the marketing world. >> host: thank you.
>> guest: those are excellent questions for a number of reasons. one, i think your question rreally gets to the core of so many millions of people in this country because the reality is only about 10% of the country known to be co- owns 90% of the stock in the u.s. stock market so even someone like you who has an investment through your plan in the stock market, the reality isn that it is the people that are wealthier that have accumulated more stock and ultimately that the benefits of the stock market going up in significantly more ways than you would see. the reason it is gamblingg is because it is raided in a way because these institutions you know, whether they are hedge funds or brokers and you should check this on your plan, a everyone should, within your
plan, some are actively managed and that means brokers are moving them around and they get fees for trading and not necessarily performance and that comes out of your retirement and the lumps on -- -- lump sum at the end of the day. the institutions that manage money and that there is this relationship between wall street institutions into this access to cheaper rates and federal reserve policies means they are also kind of influencing the stockfl market so from their perspective if they are betting on the stock market and i am using the term as you've used the term galang they also have% for whether it's going to go up or down more so. one is they have the volume so they can see how much volume is going in or out. they also have the ability when things go down too much to go to the federal reserveve and say there's problems going on here or look at our books or we could
have credit issues going forward and ease money a little bit and then it goes back into the stock market. the reason it rises so quickly in that manner is because it's easier to accumulate money into it and it also makes it a good haven for betting that's not to say there are not companies that have real value and that are not hiring people in the country ann are not providing input into the economy and buying shares in the stock isn't necessarily a gambll that's actually investing in a growth of the company but for the gambling comes in is how c they are all ultimately the stalks are related to money coming in from an outside source so getting to the adam smith's idea of the freehand, the reality is right now and in the last year since the financial crisis there's this sort of external artificial money into the financial system that then get leveraged into moving stock and real estate up for those
that have that money at the t tp received a bold path while the backend and reposition into the market and move it up even further. that has a sort of lack of transparency and through the free-market element with a does this shows that there's this artificial stimulus to the market which has continued to drive it if you look at the relationship between the quantitative easing buying assets in their countries you will see that those were days in which the stock markets tend tos go up and more money coming in artificially to the system. >> host: scott in new york city. >> caller: i wanted to talk about an idea that i've been developing recently and that is if you were to construct a global wealth tax where the 0.1% of the wealthy, the large
corporations and the large foundations had to pay 7% a year if they do not pay with bank loans but they only have to pay 3% a year if they do pay with bank loan then obviously they save 400 basis points on their wealth and all these guys with a whizbang loans and the banks would get to set the fees first they would be able to charge to the wealthy for providing the loans had been a second set of fees that the banks with package the loans into collateralized loan obligation bonds and the wires with pay a fee for the packaging. so if you construct i at it that way, the bank could make 200 to $600 billion a year for the $10 trillion a year plus in wealth tax money and since you
were talking earlier about how powerful the bank blog is absent this would be the most profitable event in the history of the banking industry, the bank lobby would be the most ferocious proponent for the global wealth tax. >> host: do you work in the financial industry? >> caller: yes, i am a retired j.p. morgan banker and ice is a hedge fund banker, and i'm an alumnus from columbia university in mathematics. >> host: what made you come up with this formula what was the t this? >> guest: >> caller: i've been thinking about this a long time. a friend graduated second in her class at columbia and works of a big law firm. she and her clients when here's in years without paying taxes and she arranged a
100 million-dollar loan for him to pay his taxes and of course i look at twitter all the time and i see these right-wing guys saying you can't have a wealth tax because all these rich guys will have to liquidate all their assets so you know, i would always respond if you think a guy worth $2 billion can't get a bank loan at low interest to pay is blown tax than you have no concept of reality. >> host: we are going to have to leave it there. what did youep hear? >> guest: that's interesting because the last thing you said i will start with that, it is true that someone that has such an extreme amount of wealth should be able to just figure out honot justfigure out how toy in order to pay tax but also that just in general if there were a taxpayer or more related to their actual wealth as opposed to sort of leveraging the 12th, then they could easily figure out how to make extra money to sort of cover their tax
anyway, whether they are borrowing to do it or whether it is siphoning a portion of what they have. i agree with you someone in that position, and this almost relates to cc comments before, the more wealth you have the witlets you will feel attacked o the wealth tax were created in such a way that it was connected to banks being able to manufacture or to securitize as you mentioned to aggregate loans that go to institutions or individuals from which they can pay their wealth tax, yes that would be something that would be an attractive way for them to buy into the wealth tax and make money. i agree with that on the other hand i think if we are going to have a wealth tax, we should look at it as more a sort of speculation tax that should be related to the accumulated wealth and guess tha yes that io find a way to get tw to from a
forensics accounting perspective but the idea would be if we are taxing safear transactions are buying a piece or selling a piece a of a certain higher levl than the capital gains tax that would be a way to take some of that money back into the system and then use it for other things that might be more beneficial. >> host: jason in south carolina good afternoon. >> caller: good afternoon and thank you for taking my call. i have a question for your guests about it's a relatively simple question about theseci rating agencies. prior to win the bottom fell out of the tub in 2008 all these wall street mouth breeders were taking these so-called mortgage-backed securities to
places like movies who stamped every single one of them aaa. any fool knows that there is only so much commercial paper that's going to qualify as that. did any of these people at the rating agencies that stamped all this toilet paper aaa, were any of them ever jailed orm prosecuted? >> guest: >> host: before we get an answer, were you affected by the crisis? >> guest: no, not at all. i was lucky. >> guest: thanks for the question and it's a good thing you weren't. first of all, the way the rating agencies work as you mentioned is that they get paid based on r at they are rating and the information they get that goes
into the securities they are rating tends to come from the institutions that want these securities rated. they should also have independent sources and in some cases they do but the payment relationship has been that a bank whour wants a security ratd goes to movies and snp and so forth and they get paid for that relationship and stamping and it goes into the markets. that was definitely one of the main problems that the crux of the financial crisis because not only did thanks have bad loans coming in already and because you were talking about this i just want to say from someone who programmed the smallest details of things throughout my career, banks have information calling in all the time and they know immediately if a loan is going to pay worth its and a the link with your default, they know exactly what t to take and what happened was and what still happenin"-end-quotesis still han
creating these collateralized where the collateral is the loans at the time it was mortgage loans is that banks are just picking up bad loans to add to the good ones t loans to gete good rating on the entire package, but to give them enough money because the bad loans generally are paying a higher interestan rate before they go d than the good ones we are paying that's why they are subprime and the rates are higher. they are getting out of the entire beginning process of creatingge the loan and security and they are showing it to the agency and they are rating it high and then it happened is institutions who only are supposed to buy aaa rated securities are like cool we are going to buy a security that will give us more returned than another kind of treasury bond that's also aaa rated weevil by e much as we can and what else happened during the financial crisis that made it worse is as they were borrowing from the same banks creating these
securities in order to provide cincinnati'simpson of these inss that couldy only provide aaa he something that really isn'tns ad they are also borrowing money because they have a aaa against the same thing they just bought which they also have to pay back.th they multiply that a number of times it's like going down to vegas and to pretend you lose $100 somebodyti lindsey $100 you think i have more to play but in fact you ultimately have to go back to repay everyone. that is still the situation today except for the fact the rating agencies now tend to be ratingve securities that have corporate loans and then as opposed to more of the mortgage loans so what's now happened in the years since the financial crisis because the cost of money was so low and companies are able to borrow or leverage them so much, so cheaply if any of those go bust, it will create a default. if the loans are packaged somewhere else integrated high
and then the default, then that package is going to decrease in value very quickly again. we are kind of in that situation again but to your other point, no nobody in the agencies went to jail and despite the billions of dollars they paid and the department of justice and you have to go back to my first book people like ken who ran enron went to jail but not any of the people running the banking institutions involved in the s process. >> host: steve is in anchorage alaska. >> caller: hello. thank you for taking my call. i very much appreciate having the opportunity to hear you today. my call is to part i would like to first of all q-quebec to the point yout made about the relationship between the social
goods to provide the benefits to the society and the relationship of the economic system. it should be a fundamental position to provide those services. in that context, i am wondering about the social order in which it is by law a judicial decision the obligation, fiduciary obligation of corporations to make profits for theirrp shareholders and the need to fundamentally re- change in the remake that particular proposition and click the link that to a second related proposition which is if you are familiar with the governance you may recognize a man named jerry who was the leader of the air forcefo who carry off a coup afr watching years and years of elites and corporate a corruptin deflecting money away from the basic social goods for the society. after a swing in power, he
passed the law entitled economic sabotage and with those walls, he invited and found guilty those previous owners. why should we not have economic sabotage walls associated with the manner in which our economic institutionsnn function? >> guest: going back to what i was saying before, and i don't know all of the inns and out inf what was happening. from your question, again the institutions that were involved in the financial crisis to look recent example to which some of them admitted were settled to the tune of multi-billions of dollars and for which the fraud still continues. you look at a bank like wells fargo where after the financial crisis and after paying tens of billions of dollars worth or other types of misstatements and
fraud, they went about creating fake accounts for the customerss and then they charged them fees those accounts which were ultimately discovered to be fake but in the meantime those people might be on the edge of their paycheck for the month were like 80% of the country is living paycheck to paycheck and it means something to have fees or a credit score goes against you or whatever it might be because a bank is committing fraud and stealing from you. these are all things as none of unone of usshould be proud of ey and we shouldn't subsidize institutions doing this and we shouldd have real individuals made too be responsible and liable and if there's jail time for those crimes and theys are tried and it's discovered that they are guilty then that should be done, because the result of taking the financial system and having such a link to so many subsidies being able to pay fines so easily because of the walls that enable them to function as they are currently
functioning without having real accountability is ultimately a detriment on multiple levels of society because the thingsth thy do affect so many people in our society and economy, so i agree we need to have a better way of making them legally responsible and enforcing the law and creating walls that don't allow these things to happen or at least have regulators more attuned to what's going on and not after the damage has been done to individuals. >> host: it was in 2009 that it takes a village came out. you appeared on our "after words" program and you were interviewed by this gentleman. >> i remember i'm a member of the budget committee members. -- committee now. i remember the middle classes in a lot of trouble, people are struggling and losing their jobs
and income is going down and there's a growing gap between the rich and everybody else. what is your sense of the economy and you said it's doing really good and year after year and this is really astounding and a bit aggravating, year after year we heard from the bush administration but from their perspective the economy was doing great. explain to me how they could believe the economy was doing great fundamental class was wacollapsing and we were getting closer and closer to the edge of a major financial crisis. >> guest: because for them it was great and that's the problem. >> host: what's your relationship with senator sanders? >> guest: itsince i was on the show, which is the first time i met senator sanders was actually on here at c-span for that interview, i subsequently served on his federal reserve advisory council which was aie bipartisan council to take a look at where
pleasat or atleast talked to sae about more transparency in terms of what they were doing because now they were subsidizing the banks in a tremendous way and trying to sort of influence them to think about these matters and where they could lead going forward and in a better way. i've also contributed recently there was a bailout last year for the too big to fail pushback to derivatives which have been my expertise particularly when i was back on wall street to ensure banks that have too much of a concentration of too many derivatives on their books in other words most likely to be at the helm of steering us into the next financial crisis would have to reduce their size and footprint by a certain amount so that's a very large bank that basically we are subsidizing for
most of the derivatives activity that happens has to actually reduced the site said it was a different way of getting at that too big to fail for the actual regulation introduced it wasn't passed which isn't surprising because i think members on both sides of the aisle tend to think that when they say we are okay now we've got this but it's true and that is the sort of situation we find ourselves today. >> host: folks on the hill, please comment on the trump administration trying to influence the fed policy. how much influence does he have cyon the fed, is that they goodr bad thing and monetary policy set by the treasury department would be overtly political. >> guest: so, it's interesting because just going back to the history of the creation ofis the fed, it was effectively created
as a marriage between politics and finance. it was wall street working with the finance committee to create an institution that could help them in times of trouble. wasn't like it happened becausbecause j.p. morgan decido send a bunch of lieutenants to his club area to talk about how to help farmers in iowa. that's wasn't why it happened. was and why it happened. if you can consider the initial it's gone monetary policy and its rates for different ways to combat inflation or price activities going forward. that's one element. if we look at what's happening today there's still a relationship even though it was created by an independent body where its members are on institutions and their lives in washington. so, it is hard to think of it as an independent body. it wasn't createdpe independent.
it's supposed to be independent but from the sheer pragmatics of the business and really. that said i think when president trump talked about that there shouldn't be a rate hike at the end of last year, what he was looking at i think was less the economy and more the markets as i was talking about before she doesn't want the markets to go down on his watch any more than president obama wanted the markets to go down on his watch. he has a more public way of treating his opinion didn't happen under the obama administration where they didn't rise at all so now we have very publicly talked about there shouldn't be anyny rate hike sid then it turned out thatut the chairman and the committee of the fed decided not to raise rates for the rest of this year so there is the relationship. is it because of trump?at i don't know, but i think what it's because of his ultimately they are looking at the same thing which is ther clear lookit
data and the markets and knocked on their watch having another financial crisis, so in that respect what trump said just recently that they should be cutting rates right now and immediately as did economic adviseadvisor larry kudlow and n president trump, that's going further and in the same process saying what you did this before you should do this again, and i think again even though the economy is slowing it's not necessarily because of the economy, it's because the easier way to look at how money is impacting headline figures such as how it's impacting the stock market which i think they both look at. >> host: with your background in philosophy, what do you think when you see president trump criticize the fed chair? >> guest: the standpoint of the fact he put the fed chair in his position it's just odd, but
he's criticized other people. having looked at the past roll on interest rates in general he basically voted with the rest of the committee he voted with janet yellin and was fairly dovish and in fact, he almost had a couple of rate hikes under his time and janet yellin started under her time and he would have seen that before criticizing his actual policies but it's interesting on a personal level he played someone you then criticize because they are not getting what you want them to do and i think that she won't do what he wants them to do more quickly as with other entities in washington, but i alsogt think that he has looking
at the markets and ultimately they are coming out to the same conclusion which is there might possibly be a cut in the rate by the end of this year and it happens chairman powell will say it's because of the data. the net result is going to be the same. >> host: lexington mississippi you are on. >> caller: thank you for taking my call. i am a primary care physician who happened to come here in lexington mississippi. my issues are very complicated. i came here to get my own green card which took almost three years because my son is a us-born citizen. vthallenge anybody to come and visit and see the suffering of
the american people. as a positio physician that is y observation of 25 years. who is going to safeguard the deadly people who pick up the garbage and work in the hospital or the janitor, if they become sick there's no way they can be cared upon. become sick and need this ability it takes months. if something happened to these people they barely get something they have to make a choice so paying for their medicine or their own food. all of these agencies i am available to give them insight
-- >> host: i apologize your going toin leave their. >> guest: what you are talkingt about is again something that isn't just the underbelly of america which is great but it's also prevalent throughout the country. i remember hurricane katrina had happened andha i spent time in louisiana and mississippi and that was after a natural devastation, but it was living on the edge to begin with and then compounding that with the natural disaster creates devastation that was passe passd
he attended schools -- to the individuals i think what you are talking about for the primary healthealthcare perspective thau do is that as well. if we don't have a way for men economic perspective given the mass amounts of wealth we have as a country to support the people that support not just themselves and families that but others in need of medical care at multiple levels we are hurting ourselves and they could be the richest person. accessed at best private health insurance but if they are being cared for by people who can't afford their own i health care r have to choose between if there's a situation than that is
a massive hole in the system so i believe primarily an in many other ways we could subsidize so many activities called throughout an extended medicare for all the disability program that's going into the system and appropriated in a way that. >> host: it's become ashore to be domestic about this their job is to connect the dots. that stands between you and your medical treatment more often than not ite seems to their job is to createst red tape between you and your wallet. why do we put up with them?
>> guest: that book came out in 2006 so this was before our conversations about medicare, privatee companies or brokers and the process of separating people from their premiums without a love of the limit for some stateone that fon the limits really what the market can bear and that means people don't need the healthcare they need not just to sustain themselves but all of the levels in the country of individuals that rely on them. >> host: eagle river alaska. i think a lot of what she's
touching on in the free-market standpoint a lot of it has been presented previously talking about the affect of money on the economy and too much in the banking system. if you look at the financial crisis of 2008 the good case study when you have too much currency lying around. it seems like some aspects she's insi favor of the free market bt not too much currency one of my questions should we tend towards the commodity money and go back to a gold standard should we continue on with this currency that we have?
>> host: you stole my thunder i was going to close with that when we were done. i didn't associate you withh frederick hayek. >> guest: it tends to get labeled under different heights. from the standpoint of the free-market the definition would be full transparency and this sort of relates to my theories
of subsidizing the main financial actors in that environment by definition you read the market if you're subsidizing one level that is the market that has the best access and volume and control of the market the sort of get away from that free markets in general with a practicality standpoint by the virtue of how the monetary system has been constructed. with that said just because you mentioned it, my thoughts about how society should have more of the economic benefits that are produced by the society to sort of help to that allows people to be responsive in that economy liand that helps.
one of the things that happened when the united states was taken off of thes gold standard and 1 was all of a sudden banks didn't have to reserve cover was no anchor to the financial system anere was no currency anchored to the dollar and by subsequent definition to other currencies were pegged so all of a sudden you have the ability to create more money because there was nothing they are being about money and that was a situation that was pushed primarily by the banks because they knew that it
of the benchmark. >> host: can you explain where the fed gets its initial and >> guest: its cree its creed toe corporations with that the members are big banks ar were be shareholders in this corporation based on that and the reserves they put on the balance sheet is how they ultimately get the money to be able to utilize that and it's also an electronic process it used to be there were
reserves that they would basically useer them as collatel and it can be created electronically. but reports haven't been available since world war ii but for theth most part it's the larger banks that have more of the percentage of the fed and the put in more of reserves. >> host: robert please could you are on booktv. >> guest: thank you very much. i am blind so hopefully you're because an audio subscription to it. to be on the devil's advocate site here the way i look at
california they see it as the sixth largest economy in the world and that silicon valley yet we have the highest rate of welfare and poverty than any other state. they say silicon valley takes away money and we won't even invested in our bank. that really worries i have no it seemedt with that but silicon valley and the way they run out of the country with the money you seem to argue so what would you do about that?t? >> guest: first of all, the
audio. >> guest: there are audio versions to all of my books and in fact the one for the solution i think it's phenomenal. >> host: did you do them yourself? >> guest: i didn't, but i know it was done. there is a lot of names that are not america. what could be considered dry it's an entertaining topic i think so hopefully you will be able to listenry to those. when we talk about thee
influences it's been over a long period and/or evolution of the country and the political system where as a love of th the compas are new tone that aspect althouh to get what they wanted from regislative or policy president trump talked about getting taxes back on shore, president bush talked about getting taxes back on shore so this i has been a problem in general particularly technology where a lot of the work is done.
you can actually do these jobs in multiple different places and it's easier to create different hubs and not pay taxes. that is a problem if the individual is basically saying in the business data from the last census what we are paying is a combination of taxes where corporations pay as a percentage of revenue and ultimately gets appropriated in the budget processtu in motion tend is somewhere between seven to 11%en of all of the money that comese to washington so on that basis
individuals are paying a lot remore than the corporations whh is a small portion so i believe that's wrong. companies that have the benefit of the american population and even the global environment to do both not a country which on h on paper existed. >> host: as a retiree with investment how can i best protect myself. that's from george and begi dicd several comments like that. this is george from florida.
on the retiree side if you are younger looking at the fact you want to live into your retirement and finance that i think is a couple of things. one is the older you got the more secure what you have should be so it's hard now because the rates are so low you are getting like a quarter of a percent of interest on that. if you put it into something coe the american express online, then that money is getting over 2.1, 2.2% interest so on a secure basis with money that you don't want to do anything with how i don't have savings accounts in any of the large banks in this country because
they don't pay enough relative to other places i could put the savings so that is one example of what i would do. i think you should also be aware of what you have and how it's changing on a regular basis. a lot of people look at the statements when something good or bad happens i think what you might see if you ask these questions is sometimes your somr money is managed by companies that make money off of effectively trading your money and your plan has to pay for the charge of executing each transaction against your account and it may not be you individually it's important to have control of your four o. one k. and if you have an outside
manager have to be someon it bet is a fiduciary and responsible necessarily to a major company they might be working for air or a bank that has an asset management so therefore if trades with what the bank wanted to trade and that is what happens and it loses less in that regard. you make more on wall street and st a t journalist. if anyone thinks there's a major journalist you are right. it's important for me to preserve what i have and i do that by being careful and then make sure i'm not paying fees
and extra things along the way because thosewa adjustments givg getting them count to zero or nothing that was actually making money especially when you compound about and what where your money goes over time banks spend hours determining how to use theit relationship. there's no reason thanks to charge people to access their own mone money but what happensf you can't maintain a minimum balance a you pay a fee. next call, david hot springs arkansas. thete >> caller:.
he was running goldman sachs as it was participated a lot of trusts and basically come the limitations of stock and other securities that might not be doing that while in the stories told about them to get people to buy but they basically lost all of their value in the market crashed in 1929 and basically thought he could do this is to become friends with the governor of new york, named franklin delano roosevelt who ultimately became president of the country why did roosevelt become president roosevelt a bunch of people in the business community
weinberg contributed to his campaign so the reality into the initial coming to office is sidney weinberg and his father were hoping to create money, kennedy in california and as a result of pr appointed a new council at the time so he has redeemed in a way by getting his friends that he invested with to basically support the incoming president. that kind of thing has continued throughout times in. there's a tremendous amount
between institutions and a vast percentage one stocks and companies that it doesn't take a rocket scientist to find out how they are related to policy and that the congress might be promoting so but still happens. >> host: please go ahead with your question or comment. >> caller: thank you for taking my call. i will put this out as a football question. 2020 can a president get a person to pay a fair share tax to reconstruct america's infrastructure. they laugh in america's face and try to keep as much money as
they can. can a president get 10% without creating a civil war. >> guest: that is an>> interesting question because under this administration was we kind of gone the opposite way in terms of taxes. there's no particular reason that the math would work better on that kind of proportion tax through the entire country so that the wealthier pay up to a certain amount, a higher percentage into the tax system that is a way to bring money into the treasury department which is where the money is taken into the budget process and ultimately then can get appropriated into things like infrastructure we have a tremendous deficit in this country everyone in the process
of trying to get a bike did la'r talked about paying money into the infrastructure. it's a problem that we have bridges are falling apart and ports that are old and railways versus low and hospitals in need of better equipment and rode too get to them and so forth it is a problem for the country and retrieving money from companies they use more of that benefit to utilize more of the infrastructure. when president eisenhower was president there were robots who stepped around him and talked him into that position after having been a general in world war ii he came up with a plan to rebuild the nation's highways and he raised taxes and both the highways anded presided over a number of economic booms not just at the top of the country.
an anecdote i found going through the notes and documents from the pure common history there was a banker at the time who said if you create a tax system whereby people that have less money can keep more ofle their money and people would have more to pay a little bit more into the systemtt ultimatey you have a stronger economy. she was a millionairhe was a mig with major banks and pistols in a letter he wrote and advocated thisbe tax system because he believed that it was in more
peoples pockets throughout the country it would lift all of the business owners and wealthy people at thehe top of that and that's one of the things inside the philosophy for the program it wasn't the onlthat wasn't tht eisenhower did listen to people and communicated through letters and took people's opinions so this is something that worked to the benefit of the country. >> host: this is from the preface of all of the thinkers who talk aboutal the research al of the national archives and records administration library is a housed well organized information withh consistent classifications they were a pleasure to peruse and i lost myself for the days after them.
records became less available. at the clinton library in little rock i learned some records may never be uncovered without the benefit of a freedom of information act request not merely for national security reasons but because the commitments to organize such an amount of material. the information that might be revealed by the request that i filed at the libraries is not available. >> guest: since that time i did file requests and i wound up ultimately getting some of it back to me from the clinton library.an it's interesting it took a number of years and they did
respond to some of them but they didn't respond to others. what i studied and tried too gt at is what happened into the repeal of the act of 1999 because there was an awful lot of activity going on back and forth between in particular the citibank head into the clinton administration and congress and so forth so what i was trying to do is get as much of that as i could and what i found because the classification systems in general in the presidential libraries became more difficult geto access and they had more difficulty to access them. ultimately they got me some material in th they use the usee paperback version and a lot of it still is coming in, but not
all of that is exactly what i asked. so i asked even though i did get some material back from clinton's library i haven't got gotten back from bush or clinton it's become difficult and my guess is going forwardom in time and i think i talked about this in the very end of the president's bankers when you get to the administration whatever we have going forward, it becomes harder and harder to get access to that information because now its electronic answers labels puts out for every piece of every e-mail that has to go through an analysis whether it's a security risk to even get access cost access, sos difficult inqu times have chang. >> host: i know this isn't your area of writing but did george shenton have a relationship with bing or his? >> guest: that's an
interesting question. i know john adams did have a relationship and then the adams family in general in terms of financing o their own rise he thought of banking and thomas jefferson us all. i'm not entirely sure about george washington. someone had to finance some of the wars and in a lot of cases even the initial war that was created in the country, you had to have financing to do that and often times it was years involved with the army and ultimately the government who hope to provide some ofo that. >> host: during world war ii were banks and fdr?fd >> guest: they were really important in world war ii. if we look at the memories of that inme terms of what was issd through the banks and individuals, there were situations i looked up documents where you could see ads being put out by the population in new
york city can open an account, get a war bond certificate. there's all sorts of deals being run by banks as well as providing some of their own money inton the effort and distracting and they provided a different element to. they had a role in the finances during that period there's a lot of communication going back and forth between the people that were running on these institutions like the mortgage bank at the time and the presidents as well as fdr.
>> host: before we leave coalition, what is the world of the imf and the world bank and the world money situation? >> we>> are talking about coming out of world war ii and the idea was in 1944 but new hampshire where this sort of leaders of the international community came together to talk about how to fund what needed to be done in the wake ofbe the war so the argument for the international monetary fund and the world bank to have a currency element to work throughout the world so they can basically lookth at financing what were at the time a book of devastations and they required for those around the world because of world war ii, for the war and by extension, others have suffered because of the economic downturns were caused by the war that needed something tfunding to be develod
that's changed having money based on developing countries and coping with anything bound to building a waterway to be more complex and larger funded and these monetary system components are led by every debate could different individuals so the idea that there is athere's an internatioe and development related money both world bank was run by a man named john mccoy and that relationship again had to do with chase or bank. we will go to the public and faithful try to raise money for them used for projects that they deemed appropriate or necessary and the world would find the work on distributing money out of those particular projects.
>> host: one final character before we run out of time that you spend a lot of time with. david rockefeller. the >> guest: he was at the crux of a major shift that happened throughout the relationship between banking and washington, banking into the- presidency. he came from a time there was depression an and the own basicc thickened portion. the family ise so close satisfying. you go to this family being involved elements of wall street and global policy, nelson rockefeller became president
while david was running chase. it was a major power player but david crockett suffered during his time as he was rising to become the chairman of chase was also working more and more hours with other foreign policy initiatives like we are working closely with the middle east and finding ways for middle east money or petrodollars to be used as currency collateral for what america or othenorthamerica or o rather than be fully aligned for money and therefore in the radical relationship and influence change, they now for him as they ability to access money coming in from an external place and lend it to another external place so that way they sort of take themselves into a position they can control of the
so these institutions placed upon society while they are saying everything is okay. they always will say everything is okay, particularly if they're not the ones holding the bag on the other side. i think that's one major thing that needs to be done. from that, everything aligns.>> this, we will the air right now.