What Went Wrong?

" You are about as a partisan animals I've ever met them you love the partisan -- you have. Then instrumentalists to straight state treasurer in California you were head of the Democratic Party in California I mean you wore a political animal. But I see your co chair is Bill Thomas who was the former Republican chairman of the house Ways and Means Committee and then. You go to on the list and a result of a bunch of powerful dams and Republicans on the Alessio. How -- you write about this -- from from. Where you get into a partisan fight with each other."

" So first of all that the nice thing is silence I had been working very closely with vice chairman Bill Thomas who has a twenty year member of congress from California probably they'll come. Bill was head of the Ways and Means Committee one of the most powerful committees in congress and."

" I guess like me and I had a."

" Who reputation for fighting hard for what he believed in being quote uncle partisan."

" But here's --"

" A couple things first call me the people on this commission like -- Meehan had a lifetime of public service but we're not political combatants today we're not running for office."

" This time next time -- you know in the foreseeable future so -- step away from the daily political comeback that has engulfed Washington."

" That's number one."

" Number two is. This is a crisis which knows no political -- either in its creation or it's -- fact I mean let me just say that right from the start."

" No one should think that what we're gonna find yours that the so this was a Republican problem or -- democratic problem is an American problem and."

" Today we get 25 million Americans."

" Who are either unemployed underemployed. Or given -- looking for work and we've got two million people lost their homes to foreclosure and in the central valley from which you came and."

" A California and bill Thomas and --"

" a 100000 people families of Gloucester home so this knows no partisan --"

" Here's the third thing."

" I do find -- you know I've been engaged in the same way you've been engaged in the media for years and civic life. I find that when people are asked to do something important for their country. The day right that occasion I think -- good model for us is the 9/11 commission. The 9/11 commission was composed of five Democrats five Republicans different walks of life different political parties. And they were charged with looking how this country became or was made vulnerable to terrorist attacks -- could become axed it could appendix. Ordinarily political trying to. Point fingers from the Clinton administration the Bush Administration vice Versa."

" But they decided they would take it back shall."

" looking at what happened and I here here's my view if the commission myself included and mr. Thomas included. If we stick to the facts the facts are what they are people says Ronald Reagan once said those facts are stubborn things. So for example. We will look at what happened in the mortgage market we will look at how much sub prime lending was -- we will see by -- it was done when it was -- We will take a look at compensation practices and what happened to compensation -- financial industry -- other industries. We will try to do a hard target actual -- and every one on this commission. Comes with opinions. But the facts are the facts."

" The the one thing that is different then or talking to fill Antilles is the chairman of the financial crisis inquiry commission. That thing that's different from the 9/11 commission which I think we is genius. Is that your report. Is do -- me. What December. On December 2010 actor and -- the election thank you. Because that was the one the one little billion old gray mark over the 9/11 commission was well we're -- into the election period in. So this this this avoids that you're gonna come out with whatever -- in December."

" Yes title what we're gonna do interim ports want to weight in public hearings on the way and we want this to -- process that's understandable accessible to people you know sometimes the masters of Wall Street -- things seem very complicated. When in fact they're not and part of our job is to explain to people in simple terms not dumb down terms what happened. And when they talk about a credit default swap what is it. Wanted to about the role the credit treaties and these two are -- in what they do. So they that we will have information throughout the year but again I want to stress something I don't know a person who thinks. That this was a partisan creation I mean I -- just tell you that what happened spanned all Puerto."

" All parties and there -- the usual accusations though come from the finger pointers in Washington pointing out when in fact I think they're part of the problem too."

" Well look here's I think we need to do and that's why I think that is very valuable -- these independent commissions. And that is we will look at the major. Policies a major forces. The major events -- that practices that led there's -- obviously can't look at that and not look at policy."

" The Federal Reserve how far back and also congress -- again this whole business about Fannie and Freddie -- There are there community and -- and."

" Local scrubbing so well for example the fact you know congress is the one that pass the bill. To ban the regulation of credit default swaps of things that you know and and bringing down AIG. So yeah we you'll get the facts I mean -- and you know."

" It was it was the congress and turns -- a democratic president Tom who passed. The repeal of the glass Steagall act."

" That got rid of the separation between investment banks and commercial banks so."

" You know -- lay it out there."

" And I do you think at the end this'll be a little bit like a rorschach tests will lay out the facts will lay amount of -- to coach Wayne people may come to the wrong conclusions about. What in -- cause -- it's our job to lay out the major markers."

" How far back -- gonna go -- little because some people some people stay regular I would thinking -- approach to crisis there you go vote -- not start there well."

" Any of that is you know as as senator Bob Graham one of my colleagues says it's important to figure out when -- start the camera. And I would say it's too -- we're still talking about that internally -- but. I don't think we go all the way back to the new deal deal I think we have to traits it's."

" Some level maybe make up policy decisions made in seventies and eighties but really start this narrative probably in the early nine yeah -- debt."

" By. My experience with the community were reinvestment -- I was involved in the in the S and all business on on the board of the biggest and now in the area. And and we were dealing with the regulators on that -- petered out and increase and everything else and somewhere along maligned. The rules changed dom that in a lot of people say well you know you've -- racist no I'm not the rules changed and there were a lot of people -- and all kinds of different things weather and how it all snowball and I'm glad that you folks are gonna be doing this."

" It says this is again this is a good example there are some who will say how Fannie and Freddie help drive this there are others -- say the facts don't support that."

" That they were obviously I mean there's no question Fannie and Freddie made big mistakes -- they didn't they wouldn't need to 200 billion dollars bailout but others today."

" Well in fact all the sub -- stuff was initially driven by the nine agency hopes the big investment banks in New York who weren't even subject to the community reinvestment act. And they were much more aggressive and out they're peddling sub prime and Fannie and Freddie tried to catch up -- my view is. The actual show they will who made the loans when they made him in what volume. What does that look like the chart the --"

" Do you think they -- a big story do you think you're gonna be able to have find. Like a fire investigator there's -- the cigarette that started the fire."

" Well that's -- he's an analogy which is yeah if you think about it about two weeks ago. A year ago two weeks ago there was a big implosion on Wall Street -- on an -- or explosion. And the fires continue to burn since then right because the millions of people lost their jobs. The economy's wobbled."

" Our job is to try to find excuses."

" Is that what that explosion and there we may find there five or six fuses or perhaps along that -- some gasoline was poured on it. To accelerate. But that's really our job and you know that's our that's our -- I think in the course of doing this we will -- Lional lot of work done today."

" Poll also. Leave no stone unturned we're gonna find new problems."

" Knew that -- evidence of corruption I will say Tom I don't think our job. Is just to find thirty perhaps line them up against the wall. Because this was bigger than that -- much of the behavior that sent the economy off that -- Was not only permitted but exalted time."

" Soul for people listening they're -- off there there there trying to dig out the -- of the problems and who did what when and so forth. There's there's the public get to be involved in any way I presume you're going to have hearings."

" Yes we're gonna have public hearing people also soon. Have. A web site I can't tell you what it is today can just moving into the opposite you're just getting all this -- but our goal we have a web site people can follow our findings. -- wanna make sure this is one of those 4000 page government imports and no one can --"

" In the end of the day."

" And the end of the day I wanna make sure that we make information available and very usable terms to the public and also we doctors some whistle blower protections so that if people -- information and evidence they wanna come forward with."

" They can be protected in doing that. So the answer is yes."

" Talking until -- is used as chairman of the financial crisis inquiry commission and Bretton Woods was so you know for those -- the audience 5940. For the -- still raging. And the world economy's got together to figure out how to. Fix the financial system. And up came an agreement from Bretton Woods about all kinds of things some of which still -- today some which don't are you gonna -- To do -- Bretton Woods true."

" I well I I think that what we're gonna do is who were we've been sent known as -- is a diagnostic team we've been asked to do it has not yet been candidate -- so much of the effort right now has just been on trying to slap a band -- on and."

" You know and put the tourniquet on the bleeding."

" We're gonna do a hard target and -- the major forces major. -- major policies. Major practices. That. Occurred. In this dissent so in the -- we're gonna do this store local and pulled out of that."

" Well yes now but it's not all about naming names but yes I think get to make his real intangible but I think we're gonna find wasn't twenty people who. Collaborated do you this I think the better way to."

" Say this is that we will use real life examples to talk about what we're talking about. You look for example in the mortgage world I think -- will take a look at what some institutions did from the ground level you know mortgage broker with a buyer all the way up to the boardroom. So you've done and we do a subpoena power to -- get the information we need and we do of that. Ability to -- for criminal prosecution and but again I do want -- say -- we don't start out here whether gold mean that. String people opera to embarrass people we our goal is to get a -- on the table and under cover the truth and to pursue. The trail wherever it leads as if in fact in the course of doing that there are facts that are embarrassing to people that's what they are."

" Today and then again like -- that -- like the idea the fact that your report will come out after the mid term election next year but the same time Washington is moving. Somewhat rapidly -- Barney Frank financial services committee as someone who's pushing for. The financial regulatory reform that Hank Paulson originally had talked about the courts it's morphed. Quite a bit since -- power are you gonna try to keep them. At bay until you folks -- they sure work now."

" So here's my view on that my view is that number one is members of the house members of the Senate -- United States were all elected office. And -- do what they're gonna do and they're gonna do in the timeframe they think is some relevant and I can't predict their schedule but here's what I do now. I do know that even and I mean to minimize and even -- reform bill passed this year. -- and that would be kind of a challenge of reforming our financial system doesn't just happen with one piece of legislation it's cultural its deep if we're gonna. In overtime -- practices in the marketplace does take years it takes. You know a full of valuation where we've been."

" Yes thing I would say is even if legislation is passed it -- create new entity is it may."

" You know provide new powers that would as important is to have regulators who have a real sense a history. There also be much work to be done after this first wave of legislation for example the future Fannie Mae and Freddie Mac the future of the mortgage servicing industry. So our work will be of value. And you know it's the old adage -- those who do not know history are doomed to repeat it so I don't care what regulatory frame -- you put in place. If there's not a good understanding what happens. The same mistakes will be repeated."

" All right. Got one question in I need let them run out of time when you are sure why 641 -- five to five like the --"

" Like I said the house and senate and the president were all elected by the people the country but here's what I would say. There there are some real bipartisan features this legislation for example -- staff."

" Is chosen by -- as chairman along with the vice chairman."

" There -- some question about -- that apply to all the staff or just the executive director I decided working with Bill Thomas says I -- applied to every once a week but every commission member Republican or Democrat felt like they had eight. How to share staff that was -- to commissions -- subpoena power cannot be issued on a partisan vote."

" And as Bill Thomas said the vice chair."

" That's only a limitation the partisanship -- we make it I mean the end of the day -- all Americans and everyone got hurt badly by this the problems are caused."

" I think across the political spectrum -- the ramifications have been felt so it's the guilty and probably will do our job."

" Keep in touch with you Phil and Julius thanks for dornin -- today appreciate very much you about -- mentally distant German financial crisis. Inquiry commission."