What Went Wrong?

" You are about as a partisan animals I've ever met them you love the partisanship 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 built Thomas who was the former Republican chairman of the house Ways and Means Committee and then. You go to on the list and result of a bunch of powerful dams and Republicans on Melissa -- How -- you write about this though from from. Where you didn't into a partisan fight with each other."

" So first of all that the nice thing is silence 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 -- 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 light Bill Thomas Meehan had a lifetime of public service but we're not political combatants today we're not run for office."

" This time next time more. Hey 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 a 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 problems 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 Californian built Thomas and --"

" 200000 people families of Gloucester home so this knows no partisan boundaries."

" Here's the third thing."

" I do fine tonight you know I've been engaged in the same way you've been engaged in the media for years and civic life. I find it when people are asked to do something important for their country. They write that occasion I think good 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 and the Bush Administration vice Versa."

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

" Evidentiary looked at what happened and I here here's my view if the commission myself included and mr. Thomas included. If we stick to that facts the facts are what they are people says Ronald Reagan once said the 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 home that was done when it was time. We will take a look at compensation practices and what happened to compensation -- financial industry verses other industries. We will try to do hard target factual 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's the thing that's different from the 9/11 commission which I think we is genius. Is that your report. Is -- on me. What December. On December 2010 actor an election 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 running into the election period in. So this this this avoids that you're gonna come up with whatever goes in December."

" Look at it. Yes title what we're gonna do interim ports want to weight in public hearings on the way and we want this to be up process that's understandable accessible to people you know sometimes the masters of Wall Street want 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. When they don't about the role of credit treaties and these two aren't 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'll just tell you that what happened spanned all Puerto."

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

" Well look here's I think we need to do and that's why I think that is very valuable that these independent commissions. And that is we will look at the major. Policies -- major forces. The major events and that practices. That led the -- are 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 and there are there -- and."

" Local scrubbing so well for example the fact you know congress is the one that passed 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 it."

" Did 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 test will lay out the facts will lay amount no way to coach Wayne people may come to the wrong conclusions about. What impact positive aspect it's our job to lay out the major markers."

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

" that is you know as as senator Bob Graham one of my colleagues says it's important to figure out windows start the camera. And I would say it's too early were still talking about that internally that they. I don't think we go all the way back to the new deal deal I think we have to Trace. It's."

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

" By. My experience with the community were reinvestment resist. -- 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 we're dealing with the regulators on that -- petered out and increase and everything else and somewhere along the line. The rules changed dom that in a lot of people say well you know you're being racist norm not the rules changed and there were a lot of people -- and all kinds of different things weather and how -- all snowballed and I'm glad that you folks are going to be doing is."

" 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 who say the facts don't support that."

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

" Well in fact all the sub -- was initially driven by the nine agency hopes for 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 it. The actual show they will who made the loans when they made him in what volume. What does that look like that chart that's fat."

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

" Well that's pitcher's knees 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 and you know 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 it uses."

" Is that what that explosion and there we may find -- 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 we're Lional lot of work done today."

" Cool so. Leave no stone unturned we're gonna find new problems."

" New. Evidence of corruption I will say Tom I don't think our job. He's just to find thirty -- line them up against the wall. Because this was bigger than that and that much of the behavior that sent the economy off that derailed. Was not only permitted but exalted him."

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

" Yes we're gonna have public hearing people also as 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 setup but our goal we have a web site people can follow our findings. A wanna make sure this is one of those 4000 page government imports -- concede."

" 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 had information and evidence they wanna come forward with."

" They can be protected in doing now. Said 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 leave the audience 5940. For the war still raging. And the world economies 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 state today some which don't are you gonna cry. To do -- Bretton Woods who."

" I well I I think that what we're gonna do is we're 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 aids on and."

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

" We're gonna do a hard target and -- the major forces major event major policies. Major practices. That. Occurred in this dissent so essentially we're gonna do this store -- 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 120 people. Collaborated do 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 we'll we'll 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 have subpoena power to we get the information we need and we do of that. Ability to -- for criminal prosecution and but again I do wanna say -- we don't start out here whether gold mean. String people opera to embarrass people we our goal is to get the facts 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 this that I liked 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 the Barney Frank financial services committee -- 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 and 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 dale do what they're gonna do and they're gonna do -- a time -- 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 of Thursday reform bill passed this year. That 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. Overtime -- practices in the marketplace does take years it takes. You know a full of valuation where we'd been."

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

" You know provide new powers that would as important he is to have regulators who have a real sense of 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 64155. To five like the --"

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

" He's chosen by year's chairman along with the vice chairman."

" There was some question about -- that apply to all the staff or just the executive director I decided working with Bill Thomas says I want to apply to every once a week but every commission member Republican or Democrat felt like they had eight. How to -- staff that was -- to commissions a whole 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 we're all Americans and everyone got hurt badly by this the problems are caused."

" I think across the political spectrum of the ramifications have been felt so it's -- guilty and hopefully we'll do our job we'll."

" Keep in touch with you Phil and Julius thanks for joining us today appreciate very much you -- to have the mentally distant German financial crisis. Inquiry commission."