Senator Elizabeth Warren on money in politics. We invested in medical research and Scientific Research and Engineering Research because we believed out of those innovations, there would be opportunities for kids like me and other kinds of kids. And thats what happened for 50 years in america. As our country got richer, our families got richer, as our families got richer, our country got richer. I had a fighting chance. I ran for the United States senate. I wrote this book because thats not where we are now. Rose donilon and warren next. Theres a saying around here you stand behind what you say. Around here, we dont make excuses, we make commitments. And when you cant live up to them, you own up and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it, when you know where to look. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Rose tom donilon is here. He served as president Obamas National Security adviser from 2010 to 2013. In office, he was a champion of the socalled pivot to asia. The president is in asia this week on a fourcountry swing throughs japan, south korea, malaysia, and the philippines. Vice President Joe Biden was in ukraine earlier this week. Today, the situation there appeared to worseep. Russian foreign minister Sergey Lavrov warned a military response in east ukraine remains on the table. I am pleased to have tom donilon back at this table. Well talk about both asia as well as ukraine in this conversation. Welcome back. Thank you, charlie. Its good to be here. Rose tell us what the president expects to accomplish in asia on this trip. Its an important trip. Youll recall his last trip to asia was canceled last fall in the wake of the government shutdown, and that was costly, frankly because he was back dealing with the budget. He was back here dealing with the budget, and he had planned on that trip to go to malaysia and the philippines and two summits as well and that had to be canceled. Rose and the chinese had a real opportunity to make their case while he was gone. I think thats right. But the more important point is he didnt have the opportunity to work some of these issues and have a regular presence, which hes had in asia, since the outset of his administration. So this trip allows him to step out there, to be very present, to go to northeast and southeast asia. In northeast asia, of course, the theme will be allies. He will be with our two fundamental core allies, and those alliances are in quite good shape. The relationship between them is tense, and the president made some progress on moving them closer teplitzk at the haig las. We have an important trade negotiation going on, the most important trade negotiation going on in the world. The key is between the United States and japan. You believe this will govern global trade in the 21st century. I believe this i believe this is the opportunity for United States to obviously get economic benefits from it which i think arguments are compelling but more importantly is a strategic initiative. Its the u. S. Leadership in the region, most economically dynamic place in the world, putting together the rules of the road. Putting together the rules Going Forward in the 21st century for almost half of world gdp. Now, if you combine that with the work were doing with europe on negotiating a free trade and investment treat weeurope, and if we can get both those done, the picture there, charlie, is the United States strategically in the middle of the two biggest trade negotiations in the world, setting the stage, setting the rules for the economy in the 21st century, and if we dont do it somebody else will. Rose with respect to japan and the islands and the conflict there. Whose side are we on . Japan is our a, number one. The islands the subject of the dispute are the subject of the treaty and alliance obligation we have requestw japan. And what the United States wants there, obviously, is to have reduced tensions between china and japan over these. The United States rejects intimidation and coercion upon. It rejects a unilateral attempts to change the facts on ground, and thats really the role we play. We dont have a claim here. But we do have obligations to our ally, japan. Rose which means if in fact they are attacked in any way that we will come to their defense . Well, they would be subject to the treaty, and we hope, obviously thats what the treaty says. We would meet our obligations charlie, to the japanese. What has to happen hoar is that is that that needs to be avoided, obviously. And its neither in the interest of china, nor japan, to have a conflict over this. I dont think either side wants a conflict, but both sides have Strong National sentiments around these issues, and the danger is a mistake or miscalculation or accident which can spin out of control. Rose heres what the Chinese Defense minister said. China will make no compromise, no concession, no treat net conflict with japan. Thats tough language. It is tough language, and its a its not a good situation, when the number two and the number three economies in the world report talking together, talking to each other teplitzky political level, and we should do what we can to move that forward. There needs to be a way to break the ice here between japan and china. What can happen here, of course, if you do have an accident, if you do have some incident, and you dont have a conversation under way, if there are no counter vailing forces its difficult to climb down. Thats the real danger here. The theme on this trip, to go back to the trip, is allies in northeast asia. Rose okay, but that brings me to this question. China is somewhat someone in5v china said we dont want the United States coming over here and qepg developing a kind of nato agreement with Asian Countries that somehow is has the mission containing us. And they fear that. Yeah. And i you know more than anybody because you spent a lot of time talking to them. I think ive discussed this issue with the chinese as much as as anybody in the United States government and i say two or three things about that. Number one, the u. S. Presence in the asia for last 60, 70 years has actually been the platform on which asian social and Economic Development have taken place and the chinese have been big beneficiaries of that, maybe the bifght beneficiary. Our presence there has caused the situation to move in the direction of prosperity and not rivalry. And thats obviously an important thing. Number two, we do have obligations toaur of our allies, and we intend to meet those obligations, but another part of our asian strategy is intensive interaction. Our allies and partners in the region certainly expect to us meet our obligations. They expect to us have help balance. They expect us to be there when they need us. But they also expect us to run a constructive and productive relationship with china at the same time. Rose are they fearful of china . Well, yes, i think they are. Rose they feel china is aggressive . They are concerned which is why theres a huge demand for u. S. Leadership in the region because we have a history of 60 or 70 years. And today, given this mix of chinas rise, of history, of nationalism, territorial disputes that are unresolveed, is all the more reason for the United States to be there. We really are the key force. On the containment thing let me go back to that for one more important. In terms of containment, we know what containment looks like. We ran a successful containment policy with respect to the soviet union for half a century. It doesnt look like a 500 billion a year relationship with china. Thats ths a much more complicated relationship with that. And, by the way, this is a ps, by the way, of integrating china into the world economy, into the world police plil system, that has been the aim of every president since richard nixon. Rose what do you think they want . I think mainly what they want is to continue their social and Economic Development. I think the chinese leadership knows that thats that has to be their first, second, and third priority, reet, to continue their economic and social development. Rose beyond, that for example, i talked recently to a friend of mine who saw the president and he told him three things our economic prosperity, our dealing with corruption, and doing something about the awful pollution problem we have. Those are the three priorities. Yes and those are all about the survival of that regime, and its about their continued economic and social development. Those are the Top Priorities of the chinese leadership right now. And they have really immense challenges ahead of them. Theyre trying to pursue a very aggressive and important reform agenda right now. And the conflict with the United States is the thing that would take that most off course for them. So, yes, there are tensions with japan over the islands issues, and historical issues, generally. Yes, there are tensions with the philippines over territorial disputes in the south china sea. Whats important is the United States be present there because thats the conflict china knows it needs to avoid. Rose i want to come to japan in a moment but staying with china, when you look at how they see themselves playing a role in the world, do they want to do they want to be a Global Player in terms of influence, influence in the middle east, influence with respect to the kinds of conflict we have in ukraine now with russia . Or do they want a handsoff, let america be preoccupied with that, and well just do with our own mandate here . They typically have not been involved in issues that are far away from them. But unless they were in pursuit of national as powers rise, they seek more plns. Q. Right. China does have intn its periphery. Theres a lot of history here, and in interest. They do have an armed force that is increasingly well funded and wants to engage in missions, and they do have a real interest, obviously, in providing the resources and getting the resources from around the world. They need to continue their Economic Development. Charlie, its interesting theyre a dependent power, you know. To continue their social and Economic Development, theyre dependent on bringing commodities and resources in from around the world. And the point i made to them directly, which is why with respect to the maritime disputes, as they look at their needs of the coming decades, they have a big interest in freedom of navigation and having these rules of the road developed and be and be followed. And thats a tension that theyre going to have. Rose they also are trying to shift their economy from an export economy to a domestic consumption economy. Yes. Rose and thats not something you can do overnight. No. And its a huge set of challenges. The changes the president has taken on, he laid out the agenda last fall teplitzky Party Meeting are immense, and he laid out a couple of them in the conversation you allayed. Theyre trying to shift their economy to a consumerdriven economy, as you said. They have real issues around corruption because they know that will undermine confidence in the regime, and they have issues, obviously, around quality of life issues, a place where you cant drink the water or breathe the air or eat the food safely is a place thats not going to be, over time, stable, and thane that. Rose you, obviously, have been part of conversations between the president and chinese officials about Cyber Espionage from the public and private sector. Are we making any progress on that . I think a couple of things on that. The president pushed this issue directly with the Senior Leadership in china, and the key there was this it was indicating to the chinese that this was not going to be a free shot. That in fact, that the quality of the relationship between the United States and china was going to be affected by their conduct in the cyber realm, and in particular, we were we were and are quite focused on one particular kind of Cyber Security threat, and that is the statesponsored cyber theft of intellectual and other property which is a huge problem between the United States and china and one we need to continue to put teplitzky center of this. The chinese,sh, have pushed back on this, particularly in the wake of the snowe of the snowdes with respect to the n. S. A. Programs and its important for the United States not to accept equivalence here. Espionage happens between countries and also oz will. What were talking about here is something very different. What were talking about is a big economic relationship we have that is affected by something which we dont do, and which has to be off the table, which is economic stuff. Rose define the u. S. Relationship with russia today. A couple of things, i think. You know, i saw i saw president putin thed from night before he was inaugurated on behalf of the president , and it was clear then that we were stalled with respect to major issues between the United States and russia, like syria, like arms control like iran. Iran, no i think on iran, they have been a constructive participant in our p5 plus 1 effort, with respect to iran. They have been supportive of the sanctions regime. They have been important players in the negotiations, and to date, i think that still continues. As, by the way, does the activity with respect to the Syrian Chemical Weapons which as of today we have about 90 out of the country. Rose but there are new reports of using chemical weapons. Different kinds, chlorine gas. But with respect to the weapons identified by the u. N. , were about 90 done with it. Thats an important thing to get done. But how to characterize the relationship. It had stalled i think with respect to specific issues. Putin moved to a posture very different, by the way, from the posture he was in when he had my job as National Security adviser for boris yeltsin, and very different where he was under president medvedev, to a much more hostile stance, as seeing Foreign Policy as something they were going to define as opposition to the west and opposition to the United States, very much zero sum. There are a lot of elements here as to why this has happened. Most of it has to do with, i think, president putins domestic politics. Rose his popularity is rising. Yeah. And i think today, any by the way, this is about preserving his regime. And its an autocratic regime. Weve now seen the most repressive russian regime since the collapse of the soviet empire. Expressed in opposition to the media, massive propaganda campaigns being run by the state. So where is it today . I think were in for a this is nothing like a cold war because were not ideologically standing off against each other, right, but were in for a cold period here where russia is going to increasingly define itself as in opposition to the United States and the west. We have leverage here is it leaning towards a different direction in its own identification . Yes, i think it is leaning back from the west, frankly, and i think, again, trying to carve an independent stants, if you will, basically defined in negative terms of the west. The domestic picture that putin and his ideological Propaganda Team draws of the west as kind of a decadent place, russia standing tall, asserting itself now after a period of humiliation, after the fall of the soviet empire and thats the direction i think hes taking it. We are not in a cooperative mode, obviously, and its going to be i think a bit of a hostile mode for a period to come here. Although, we can continue, as i said earlier, to work on issues together where they see it in their interests. Rose like iran . And the Syrian Chemical Weapons. Some of this depends on what putin does. You know, they obviously have troops massed on the russianukraine border. They are engaged, charlie, in a debstabilization effort in ukraine right now. Basically its a multidimensional, covert operation john mccain was here last night strongly attacking the Obama Administration as he has done in the past saying basically they dont even believe in american exceptionalism, the Obama Administration, saying the president appears weak to putin and he thinks he can take chances. I dont think its all the posture of the United States. Were support, ukraine politically. Vice president pride booiden has been there the last two days. We have organized a support for ukraine economically. We did it 1 billion. 15 billion from the imf. Rose when is it going to be there . It needs to be there quickly. Rose exactly. To support them. And the United States has been behind this. Rose thats 16 right there. And plus additional money from the european reconstruction go ahead. Third is we have been engaged expressly in reassurance of our nato allies thats a treaty. Its a treaty but we need to reassure. By the way, theres a lot of second guessing here about nato expansion and tom freed map other ands is have wondered whether this was the smart thing to do. Today, if you sit in the baltics or poland youre glad you have it. Youre glad you have this. Rose and you may have been glawd had it if you were in georgia as well. Yes. Rose but its not going to happen and putin i think, the president s response here, and the response of the west is a lot more forceful now than it was with respect to in comparison with the summer of 2008. Rose somebody said to me on this program, the russians went through leningrad. Youre not going to break their back on sanctions. I think that is a that is a thats a glib way of saying it but not real. Heres the deal russia can stand stride ebtent and defiantly back politically, which is what putin is doing, but in a globalized economic world, he cant stand back from the global economy. He has large companies. Theyre involved in the commodities trade around the world, and they are vulnerable to sanctions, in my judgment. I led the sanctions effort as you know for four and a half years with respect to iran and can tell you there can be a high cost that can be imposed on russia with respect to continuing bad conduct and ukraine. Rose tell me how in terms of the same kinds of vairchg sas we have against iran . I think he will probably continue to try to destabilize ukraine. They have leverage. They have historic geography. Geography and economic relationships. So there is leverage that russia has and we need to acknowledge the facts here but i do think there is a price to be paid. For example ucan increase the list of people on the sanctions list and go to whole segments of the economy its financial and Energy Sectors why dont you do that now . I think, frankly, my recommendation would be if in fact russia does nothing to comply with the commitments made in geneva last week that lavrov made with secretary kerry, my recommendation would be to go to the next wave of sanctions and to date, i havent seen anything that the russians have done in order to implement that agreement, and, indeed, ive seen a lot of things youre saying you should go to the next wave of sanctions. I think he will do an assessment with respect to russian conduct and go to the next level. Rose but the question is now, if you look at if the sanctions are ratcheted up, and you believe it will work, but what if it doesnt work . What if they begin a deeper destabilizing of east ukraine . Well, i think you increase the cost. You increase how far are we prepared to go is the question . Well were not going to engage in a military operation. Rose so again ukraine is not worth a military operation by the United States. Were not going to engage in a military operation. We can, i think, support shem militarily. I think we continue to support them economically. And you can increase the price here for russia. Russia at that point, by the way, a continued effort to destabilize ukraine will result in their continued political isolation and result in a high cost. The russian economy, charlie, is quite vulnerable. Rose and energy dependent. Yeah, theyre energy dependent, but their stock market, their currency, the financing of their various companies they are a a high cost can be imposed. Then the question comes back, well, onethird of Russian Energy is dependent on European Energy is dependent on russian exports. Well, thats a twoedged srd. If you tonight sell, you tonight get paid. Rose if theres no sale, theres no revenue. Exactly. The last thing i would say in terms of u. S. Strategy what, this also has done, i think it really has caused europe and the United States to think hard about steps we can take to increase the diversity of supply to europe of energy and to increase their independence. And we cant let this go. We need to noax on this and get ourselves in an increasingly better position in europe with respect to energy and we can do that. Rose are they allies today prepared to be led by the United States and be supportive of the United States . I think so. Rose you think so. I do. Rose is there a question whether you might be too optimistic . Lets look teplitzky evidence. When we came into office, i think if you had said we were going to be able to put 60 a six or sevenyear effort in afghanistan people would have had doubts about that in 2009. Weve been able to do that and able to work with our allies in the libya operation. Were engagemented in an important negotiation on trade. Rose interesting historical note. There are some people who say, you know, that putin and his present thinking is influenced by a couple of things. One is kosovo, he is influenced by that. He was opposed to that though hes doing the same thing in crimea. Second, that the lib first of all, i dont think that this i think its a its a bad analysis. Rose which one . To think this has to do with syria. I think thats wrong. Rose hes too savvy to read that into it . This is a lot more fundamental. This is about an important aspect of what he regards as the russian sphere of influence. He has tried in mis mind to reconstruct or construct, this urasian union. Its a bis bit fanciful, but without ukraine its impossible. On libya and kosovo, a question you asked earlier thats a historical note. Well, i think its important. I dont think its historical, actually. I think hes principally driven by this ideological posture and his political need at home. Thats first. But on the Foreign Policy side, i think its important to understand, and i have actually sat with him and had this conversation where he will say well take you in a conversation from kosovo to iraq to afghanistan to lib ra, and you get to syria, and this is where the Russian Federation was going to stand up and not allow the west to use the international in other words, when you went through those countries before you got to sirria, ending with sirria, he basically said i dont want that to happen again. And he said with respect to syria im going to show you its not going to happen again. And he publicly criticized medvedev on the extension of the u. N. Resolution, which is a legal basis on which our operation went forward. So this is, again, part of this whole piece of him standing back and defining russia as separate from the west, not integrating with the west, and rejecting to western conduct. So i think that the point there is i think hes wrong about this, obviously. But you identify a strain in his thinking which is not historical. Its current in its thinking. Rose let me make two point. One, when i said historical, i mean that i meant these are the things that have happened, and they add to our knowledge of understanding of why people are motivated to do things. Thats what i meant by our own history. There are people who wonder if he is so driven by these ideas of restoring russian floar because of his famous quote about the soviet union, you know, that there may be a degree of irrationality and that reason on these issues may not prevail with him as it might otherwise. David brooks in the New York Times the tiger of the qawsy religious nationalism which putin has been riding may now take control. That will make it very hard for putin to stopping this conflict where a rational calculus will tell him to stop. You can certainly get yourselves in these kinds of corners is that a possibility thats his mindset right now . Hes a rational guy. There were people early on in this conflict, in this crisis, called him delusional. Rose people . It was the chancellor of germany. Hes not delusional. He knows where his interests lie. But having said, that he has built up this ideological, propagandadriven approach that is nationalist, as david brooks pointed out. There are some quasireligious aspects to this. Its almost civilizational but its mainly about preservation of him and his regime. The one thing i want to add to davids point. This is putinism. By the way, it was not ordained. We worked with the Russian Federation under medvedev constructively, and in their interest, too. It was in their interest to get into thewt o. It wasnt preordained here but he made a choice here with respect to what he thought he need to do to preserve his leadership. And the reason i say putinism and it goes to davids point this is driven by him. You say to yourself, when i analyze china and you analyze a decision there, or a position, you can be pretty sure its been thoroughly vetted and considered by a lot of stakeholders in china and it had to go to the politburo standing committee. Theres a system theres no system in russia. Rose theres no process or system. Theres a constituency of one. Rose let me talk quickly about those three things. John kerry has been involved in syria. It doesnt seem to be going anywhere. The syrian conflict is obviously a tragedy. And a solution doesnt appear to be in front of us right now. Rose two, israelpalestinian negotiation doesnt seem to be happening. Well see what happens as we get up to the deadline. You know, i dont think that the i dont think the announcements that president abbas made in the last couple of days the fact that theres reconciliation between hamas and fatah. That was one of them . That was one of them. The first i was going to mention was the threat to disband the Palestinian Authority and basically give the keys back to israel. Thats not constructive in the last weeks of negotiation. And then the announcement today of reconciliation talks between fatah and hamas. Rose i dont understand why that is not good . For a number of reasons. Weve seen this before they speak with one voice. You can make a deal with one voice. Weve seen these announcements before and there are fundamental, ideolog and between fatah i know number two, hamas, in order for us to be able to deal with the combined entity, hamas is going to have to come on board with the Core Principles of recognizing israel and not engaging in violence, and meeting the obligations of the palestinian authorities taken on and to date they have not done that. Rose great to have you. Tom donilon, former National Security adviser and official from a number of democratic administrations. Back in a moment. Stay with us. Elizabeth warren is here. She is the massachusetts senator. She has become a leading populist for the democratic party. Less than two years after being elected. She left harvard for washington in 2008 to help oversee the federal bank bailout package. As part of that work she helped create the Consumer Protection bureau. Her new memoir, the New York Times originally reported that america no longer has the worlds richest middle class. Well talk about that and much more about the middle dlass and the u. S. Economy and about income inequality. Im pleased to have Elizabeth Warren back at this table. Welcome. Its good to be back. Rose how do you like this senate thing . I like it. I really do. Rose even though its about legislating. In part but remember there are a lot of tools in the toolbox when youre in the United States senate. We about legislation, how many laws you can get through. But one of the things i learned early, early on, there are a lot of banking regulators out there and a lot of banking laws. But if the regulators wont pick up the laws and use them, then the banks can just kind of go off and do what they want. If the regulators will actually use those laws, then we actually have a safer system. So the United States senate has oversight responsibilities over those Bank Regulators through the Senate Banking committee which is where i sit. Rose which is where you wanted to sit . Thats exactly right. And one of the things i get to do, along with my colleagues, is remind our banking regulators that they dont work for the industry they regulate. They work for the American People. Rose you believe they think that . You know, i believe they have to be reminded of that. We have to remember that the way it works in washington is that for a long time now, those who have money and those who have power make their voices heard too the highest volume. And everybody else just kind of gets left behind. And thats true whether were talking about the banks blocking legislation they dont want to see. Its true when were talking about other Big Corporations. And its also true when were talking about these regulatory agencies. Rose but, as you know, money talks in politics. Boy, no kidding. Loud. Loud. Rose yet, at the same time, doddfrank was tougher than the banks wanted it to be so it didnt go as star they tried to block portions of it. And so their money didnt achieve all of the objectives they wanted to achieve. This is actually is that true or not true . It is. But lets talk about this for a second because this is actually one of the major chapters in the book. You know that in a fighting chance i talk a lot about my own life story early, but i talk about the fights. And one of the fights was the fight to get the Consumer Financial protection bureau. Just a reminder. What had happened by the early 2000s, the biggest Financial Institutions had figured out that they could build a profit model around tricking people on mortgages, on credit cards. And basically, there was nobody who would call them out. So they kept handing out who should have called them out. Their regulators. Rose what regulators, the federal reserve. The o. C. C. , the feds office of the controller of the currency, the fed, the f. D. I. C. , the regulators should have been out there and qawl called them , but here was the problem this went from administration to administration to administration it did. This did not just happen on one watch. This happened really starting in the 1980s. Think of it this way, we come out of the great depression, we put tough new banking regulations in place. It works for about 50 years. We build a strong middle class. Starting in the 80s, starting with the reagan administration, deregulations the watchword of the day, and theres less and less oversight glut but it continues through the clt administration. It continues through the clinton years. Rose bush and then obama. And then what happens is they have now sold enough banks enough toxic mortgages to bring down literally millions of families, and they particularred them and sold them out into the economy and to Pension Funds and all kinds of other places to bring it all down. Rose you make an interesting point because we thought of the crisis as about shaking the Financial System to the core. It was shaking lives to its core. Thats the reminder. You know, all the way through this book, i talk about the big banks. I talk about after the crisis how it was that they fought back against the regulation. Do you know at one point they were spending more than 1 million a day in order to lobby against financial regulation. And this was after the American People had already bailed them out. But what was teplitzky core of this, and what i talk about in here, were the families who just got slammed. You know. Rose easy credit and then couldnt afford it. It was worse than easy credit. Theres a woman here remember, i was doing studies all the way through this, serious, empirical studies, had good coauthors at other universities around the country. And theres one person in particular i talk about in this. An older woman who was in one of our studies in 2007. And she had called the office she had been in the office and been picked up because she had filed for bankruptcy. And she explained her story about how she and her husband had moved to this little town in the south. He had passed on now burkts she was getting along okay. She could manage on her Social Security. Then the nice man from the bank called and told her he could lower her payments. And at least the way she understood it, she said to him, but what if the Interest Rates go up later on . And he said, im a banker. I will know these things, and well put you back in your old mortgage. And then she said he never called. And so the payments shot up. They were bigger than her Social Security check. She tried borrowing, holding it together. But he was the part, charlie. She called because everyone who participated in the study who did a long questionnaire, we offered them 50. They would get a check, and the check had to be mailed after it was processed some time down the line. She called us to say she was going to be moved out of her home in a few more days, and she would be living in her car. And she wanted ton how she was going to get her check. Thats what the economic crisis of 2008 meant. It was it was people like this this retired woman who lost hear house and at least for a while ended up in her car because some banker made quota by calling her and selling her an exploding mortgage. Rose i totally agree. And not only that, i know people who ran Small Businesses i talk about this in the book, and i talk about Small Business lending. Because you know what really gets me about that story. That was happening when the United States taxpayers were shoveling money into these huge Financial Institutions to stabilize them and here was the big mistake doing it on a nostringsattached base. So the money came in from the taxpayers, and the big Financial Institutions, we were told, would turn around and lend it to the Small Businesses, would turn around and help people like the homeowners who were in trouble. Instead, they held on to it. You know what some of them did with the money . They bought other bankses. They expanded their reach rather than using that money to help heal the american economy. Today, those big Financial Institutions that we were told in 2008 were too big to fail, today, theyre 38 bigger than they were back then. Rose clearly thats what happened because of all the things that we talked about during those years, and especially in 2008 and what had happened with derivatives and all the other kinds of things happened. But then you had first under the Bush Administration administration, paulson, bernanke, geithner. Then later you had under the Obama Administration, a different treasury secretary, geithner, same fed chairman, bernanke, and i forgot who was teplitzky new york fed at the time. They get a lot of credit for saving the Economic System. Do you agree with that . That what they did in the emergency situation, they made hard choices that had to be made. My question, do you agree with that assessment of what those people did in those two mrpgzs . As i make clear, when there was only so much time and so much money to go around, they saved the largest Financial Institutions. They did not they did not focus on American Families and Small Businesses. Rose so were now talking about not the banks who made the loans. Were now talking about what happened when we had a financial disaster that affected everything. Yup. Rose what should they have done . They have put that money into the banks with strings, strings attached. Let me put it this way whenever a Big Corporation gets into financial trouble, outside this crisis, when a big Financial Corporation get into trouble and new money comes along to be put in whether the couple ends up going through chapter 11 or not the new money always says there have to be changes here. What kind of changes . You wipe out the old shareholders. You make the old debt take a haircut pup change the management. And you make sure theyve got a new and different business plan. Why . Because it disciplines that company to run a different kind of organization, and its a signal to everybody else. It says, listen, c. E. O. S, if you run your business so youre going to need outside money, then its going to be your job thats going to be on the chopping block. That didnt happen in the bailout in 2008. Basically, henry paulsen, followed by tim geithner said, take our money, please. Rose have you never met a banker youve liked . Ive met lots of bankers i like. Rose do you think everybody on wall street is part of the problem . Look because thats one of the things theyll say to me, i hear all this time theres a lot of things that were trying to do. Yes, were trying to make a profit, but it is not as brutish as Elizabeth Warren would make us all i can say is they continue to fight the regulations. They continue to fight to create as many loopholes as they can in everything that gets written but that happens in everyone industry, doesnt it . That doesnt make it better, charlie. Rose, of course, it doesnt. The money that talks from Financial Institutions also talks for automobile companies. It talks for a whole range of other companies pharmaceuticals. Oil. Absolutely. That goes back to because its money talks in politics and in washington. Thats the heart to get elected. Thats the heart of why i wrote a fighting chance. Because we now have in washington concentrated money, concentrated power, making its voice heard day after day after day on issue after issue after issue. And youre exactly right. Its not just in banking. Thats where i experienced it up close and personal and talk about it. But it happens across a range of industries. And ordinary families, regular families, hardworking people across this country are playing on a Playing Field that is increasingly tilted against them. Rose tell me about it because it clearly influenced you. It did. I grew up im the baby. My the lateinlife baby. My three brothers by the time im 12 are off in the military. By dad was selling carpets. He had a heart attack. And it turned our family upside down financially. A long period of not working, the bills piled up. We lost the family station wagon. We were right on the edge of losing our home. My mom was 50 years old. Shes never worked outs the home. And i remember the day going into her bedroom. She had her best dress laid out. She was crying. She pulled that dress on, pulled that zipper up. It the dress was probably about 15 years old. She rubbed her eyes, put on her high heels, and went out the front door to apply for a minimumwage job at sears. Because back then, a minimu minimumwage job would at least help you make the mortgage payment. She saved our house. She did what needed to be deputy. Now, theres no 12yearold who sees that and it doesnt change your view of life forever. But heres the thing, charlie. There was no money for college in my family. There were no opportunities that were going to come like that. I ended up in the United States senate. And how did that happen . It happened because i could graduate eye got married at 19, dropped out of school. I ended up going to a commuter college that cost 50 a semester. I ended up going to a public law school. I grew up in an america that was investing in kids like me. We had a whole period in america about a half a century when the first thing that our politicians in washington worked on and thought about was how it grows the middle class. Those investments made in education, in a g. I. Bill, in loans and state universities. Those investments in infrastructures the highway system, the power gridz that we built. So a Small Business could get started and there was a good infrastructure to back it up. The fact that we believed this is what made us special to build a big pipeline of ideas. We invested in medical research and Scientific Research and Engineering Research. Because we believed out of those innovations there would be opportunities for kids like me and other kind of kids. And thats what happened for 50 years in america. As our country got richer, our families got richer, as our families will got richer, our country got richer. I had a fighting chance. I ran for the United States senate. I wrote this book because thats not where we are now, and thats what weve got to get back to. Rose im going to talk about that in just a moment. Okay. Rose tell me about you very much wanted having created as part of the financial new financial regulatory system, a Consumer Protection. That was your baby. Yup. Rose you wanted to run it. I did. Rose the president did not appoint you i assume because he did not think you would be confirmed. But you know, charlie, look how it worked out. It turned out pretty good. Rose mom would be proud. I now have the incredible honor of representing the people of the commonwealth of massachusetts, and i sit on the Banking Committee where i have a chance to help protect that agency. It kind of worked out. Rose fair is fair. Uhhuh. Rose and the man you defeated is thinking about running for the senate in new hampshire. Yeah. Rose what about that . You know, all i can say is hes gog have his hands full with jeanne shaheen. Shes good. Shes good. Rose it is also said you have become the great hero of the left in american politics. Is that accurate . You know, i think thats thats pundit talk. What i do believe is true, though regardless of where it comes from, is it true . What i believe is true is that there are a set of issues we have to stand up and fight now. This goes back to this core notion of the rich and powerful are calling the shots in washington. Theyve got money. Theyve got power. All weve got on our side is our voices and our votes. And so its time to level that Playing Field. Consumer agency. Good first start. But theres a whole lot more we need to do. In fact, let me tell you a key one. Colleges. It starts with me. My 50 college. Today, most kids who are going off to college do not come from family wheres somebody can just write a check and pay for college. So the United States government comes in and says well send you the money. I think thats great. I think thats what they should do. Heres the deal. They say we want you to pay us back not just the funds of the funds and the administrative costs and the bad debt, we want to double that or in some cases nearly triple the amount of money to produce billions of dollars in extra revenues for the United States government. So in effect, what weve got right now, is a system where the United States government is making billions of dollars in profits off the backs of kids who are trying to go to college. That is obscene. That is wrong. So one of the bills thats going to come up next month weve got this thing scheduled. Were going to be out there talking about is. Is weve got to refinance the Student Loan Debt thats outstanding, bring that Interest Rate down look, people refinance their homes when their Interest Rates are low, their business what is the supplydemand equation today in terms of Housing Stock . So, weve got a problem. Young people this is how the pieces are tied together. Young people are not buying homes teplitzky rates tha at thd predict. When they hit 30 which is when they start to buy. Theyre not buying them. The studies show too many of them are weighed down with Student Loan Debt. A lot of kids have to pay an equivalent i thought a student loan was a good thing. Not when you charge too much. Not when you choke these kids on students loans. A lot of these kids have to pay off the equivalent of one full mortgage before they are deadflat broke. Rose the income ipequality issue its pope is talking about it, the president is talking about it. What is it, in its most obnoxious tone for you not the language, but the essence of income inequality . The richest 1 have just gotten richer and richer and the other 95 have not kept pace 99. Thats right, thats right. The hardest part of this for me is the people teplitzky top have all the chances in the world to build what they want to build. And nobody else even has a fighting chance. I had opportunities. I was the daughter of a Maintenance Man and i had opportunities and you had a brain, too . Yeah, and i worked hard. But i grew up in an america that was creating opportunities. It was investing in kids. Rose but you think were not longer creating opportunities . No, we are not. Rose secondly, when you look at this, do you blame capitalism . Is it the american brand of capitalism part of the problem . I think do we need to have more regulation . Do we need to have a hard look at what capitalism does and how it works, in your judgment . Oh, we always need to have a hard look at all of our policies in this country im not talking about washington now. I am talking about the essential Economic System that has brought the United States to the place of Economic Leadership that it is. But that in part are the rules in washington that make the difference, charlie. You put a cop on the beat on main street. It means nobody steals your purse. Rose right. You put a cop on the beat on wall street, it means nobody steals your pension. The decision about whether to have a cop on the beat will profoundly affect how much stealing goes on. Weve got to have fair rules. Whether or not we invest in our schools will determine whether or not kids are going to have real opportunities. If we invest in infrastructure, well determine whether or not Small Businesses have a chance to grow. Those policies are not divorced. Rose most people understand that billion investments investments in infrastructure, investments in Scientific Research, investments in Human Resources are essential to our competitive place in the world. Yes. So then the question becomes so why are we cutting back on all of those . Think about that, charlie. Youre exactly right. Everybody understands that we need to make those investments. Rose youre in the congress. Tell me. Oh, ill tell you exactly why. Because the rich and the powerful are hanging on to their privileges. If we we need the money to be able to make those investments. So we propose closing some of the tax loopholes terrible tax loophole use oil industry makes 170 billion in profits last year, the big five, and yet still sucks down billions of dollars in subsidie subsidy subt the same time we cant get refinancing for our college kids. Rose do you believe that the principles you believe in cha might be called a populist agenda is the majority opinion in the american body politic . Oh, im sure of it. Rose then why does it look like we may very well elect a republican congress, a house, again majority. And may change the power balance in this senate as well . Because money talks in washington. It talks in elections. The Supreme Court has just said it can talk even louder. Thats the heart of it, charlie. The game so money in politics. It is. Rose the book is calle calledify. Elizabeth warren, senator massachusetts. Thank you. Thank you, its good to see you. Captioning sponsored by Rose Communications captioned by Media Access Group at wgbh access. Wgbh. Org what if i told you that you could change your life in just 10 days . The 10day detox is the fast track plan that will help you not only shed pounds, but put an end to Chronic Health problems. 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