Latest Breaking News On - Greg pratt - Page 1 : vimarsana.com

Transcripts For CSPAN2 Book TV 20140315

which was protected by a large stone fortress. when they approach the city of st. augustine the military commander in that city let it be known to the patriots that there are not going to allow them to take control of st. augustine. there were some periodic fighting that took place. end of significant fighting that took place. when the patriots moved on some of black towns that were located in the interior portion of the northern florida peninsula around what is today known as the prairie. the time it was known as olajuwon. the patriots were defeated in the fighting against the seminoles. they eventually moved back cam where they determined that this project was a complete failure and that they had failed to achieve their objective of taking a portion of florida. and what they ultimately wanted to do when they took over it was that as soon as they became in charge of that area it was ceded to the united states, immediately transferred to united states buried in in the republic florida would become another territory of the united states. and so they created an 95 in the time in which they were in florida and the control they created what is known as their constitution, the patriot constitution. and the document the -- is very similar to the united states constitution. it was directly influenced by that document. and it is very, very similar in form and function granting citizenship to white men over the age of 21. those of the only people could vote. it was very specific that most of the people who would make up this government which would be short-lived anyway had to have taken all role in the rebellion against the spanish. well, it was never really in forestall. because the individuals, the so-called patriots were not officially acting on the part of the united states government and since they never took control of spanish florida, constitution really never had any significant impact whatsoever on the form of government in what was at that time spanish florida. now, the territorial government started to form, the drive toward stated occurred about 15 years after florida became a territory. the document that we have here is the 1838 constitution of florida. this is the first constitution that was drafted in anticipation of floor becoming state. in 1838 a group of delegates met this is a site along the coast, a port city along the coast southwest of tallahassee. it's a very small area, but it was very important in the time and it was kind of a rival port city. so delegates came from west florida, east florida, and there were selected to serve on different committees depending upon the area of expertise. one of the major controversies surrounding the constitutional convention was the issue of banking in florida. quite a lot of articles in the constitution that attempted to regulate banking in what will become the state of florida. there was a very big interest among floridians from keeping a lot of outside of the state-controlled banks from establishing themselves in the territory. they were quite adamant about keeping land speculation to an unknown. and in effect the territorial government wanted to be the ones handling a lot of the land dealings. now, the document itself mobs, this is the first portion of it. a very long document. general looking at one of the top of it. the very top of it. and if we were to lay it out it would extend across this entire table. it's unusual because this is the only known copy of the 1838 florida constitution. it's believed to be secretaries copy, and the secretary in this case would be the secretary of the constitutional convention. there are a lot of interesting provisions. it's very similar in form and function to the united states constitution man and also to the constitutions of georgia and south carolina. there were specific laws in here and at limiting the ability for the state government to emancipate slaves. they did what they could to limit the extent of free blacks from moving into the territory. set up the terms for the governor. the governor was elected every four years. the house of representatives of the elected every year, and in the senate would have 2-year terms. so the senate and house. seven years would pass before florida or become a state. that has to do with the fact that at the time states or admitted into the inner in pairs when floor was admitted as a slave state in 1845 iowa came into the union as a free state. the next document that we have is what is known as the florida ordnance. much like the 1838 constitution, this is the only known copy of the ordinance that is in existence. now, this particular piece, as you can see, there's quite a lot of damage to the original document. for many years the son in the hall of the florida house of representatives. it's a remarkable document in so far as it's the only county known to exist. you can see some of it is peeling off. it's clear what the ordinance did in the context of florida. you can see, is dated january 10th 1861. this is the document that severed the ties between what at that time was the state of florida and the united states government. when the civil war ended in 1865 the state of florida became part of being underwritten federal control. now immediately upon the possession of florida by the federal government they drafted what is known as the 8265 constitution. and its major contribution to florida's political history was to abolish the floridian ordinance of secession. in essence this document said the secession which had been illegal and so on under the -- from the perspective of the federal government was hereby notified and in this constitution would be -- however , the most important thing now was going to change, slavery would be abolished in the state of florida. the next document is the 1868 constitution. this is significant because this is the constitution that was enacted in florida during reconstruction. so it is the reconstruction document. now, with florida being readmitted to the union this is the constitution that was the accepted by the federal government. it had to abolish slavery, the 13th amendment. it had to accept the 14th and 15th amendment in order for florida to be readmitted into the union. so this document in effect granta lot of political rights to african-americans that prior to this time they have been at rest weeks tonight by the words of the 1838 constitution. and some of the 1868 constitution from the perspective of those individuals is something they wanted to reverse almost immediately. it did take some time. the federal government occupy florida and tell -- into the 1870's and the individuals who can, not the people who have been federal agents to in essence and florida, they wanted to try to reverse the center back some of those rights that have been granted to african-americans in the wake of the civil war periods of this document in essence and did a lot of what the 1868 document did. for example, it established a poll tax. these were taxes that were placed on voting throughout the south that throughout other parts of the country as well so that poor white and african americans were prevented from voting in essence disenfranchised because they would have to be required to pay a small amount of money when it came to know. there is also another provision, a very specific one saying that it was illegal for african-american and whites to live together or to marry one another. by the time they would get to the 20th-century you are still working very much on a framework that is established during the territorial time. little tweaks here and there, how long representatives was served, different things about districting, banking, infrastructure. much of the framework established in 1838 remained in place until the 20th-century what we add this major revision there really brought florida's constitution into a modern time and reflected the massive economic and demographic changes that took place in the state in the 20th-century. >> for more information on book tv recent visit to tallahassee, florida, and the many other cities visited by our local content vehicles go to c-span.org / local content. >> here is a look at some of the best-selling nonfiction books according to the washington post the list starts with three self-help titles. that is this week's list from the "washington post" of the best-selling nonfiction books. >> you're watching book tv on c-span2. here is our prime time lineup for tonight. >> analyzing the banking systems of the united states, the united kingdom, canada, mexico, brazil going back several decades to find out what makes banking systems unstable and concluded that the deciding factor is the level of political interference. this lasts about an hour. [inaudible conversations] >> good afternoon, everyone. welcome. we're going to start our program . i am president of the museum for american finance. we are joined by our chairman of the board. and our friends from c-span2 are taking today. our guest lecturer, the henry cast and professor of financial institutions of the columbia university business school. he also teaches at the school of international and public affairs . charlie received his b.a. in economics from yale university where he graduated magna cum laude and and matriculated to stanford very get his ph.d. in economics. a member of the shadow open market committee as well as the financial economist roundtable and the federal reserve centennial advisory board. now, charlie is very well-known in the field. i will point out to of the minneapolis he has received. one is about a year ago. the university gave him an honorary doctorate for outstanding achievement in the field of banking history, banking regulation and financial fragility. and if that isn't a sign of the times of financial fragility is a field. he has been named by the economist in 2011, one of the most influential people in economics. why is this? well, a prolific thinker and writer. he has 50 of third work co offered articles in peer review journals. eighty articles arco offered in not peer review journals. sixty chapters in books and 20 book reports or pamphlets that he has authored or co-authored leading dick to make the web charlie writes books faster than we can read them. now, his latest and therefore his most important is the book that he co-authored that is going to talk about today, fragile by design, the political origins of banking crises and scarce credit. it's my pleasure to introduce talk to charles. [applause] >> thank you so much for that introduction. i feel like i'm at a second home here. bin enthusiast since the very beginnings and the members as the very beginning. i'm really pleased about the that david in the cabin demonstrating here at the museum if he had not been to the exhibits upstairs to yourself because there good. there will even let you hold a gold bar if you ask really nice. now, and won't. well, i'm here today to talk about my new book with professor steve hager which is called frazzled by design. the political origins of banking crises of scarce credit. i appreciate the you're all year , and i'm going to tell you i will not be able to give you the full gist of the book which is about 600 pages. what my plan is to give you just a sketch of some of the important ideas in the book over the course of about 30 minutes of lecture and then reserve the remainder of the time for you to be able to ask questions and make comments and have a little bit of the back-and-forth. let me start with a question, really a fact. we are currently living through an unprecedented era of systemic banking crises, and although we are all familiar with the one that we experienced in the u.s. recently it's important to note that this is a worldwide phenomenon. we have had more than 100 major banking crisis in the world over the past about 35 years. and you can see that only about 29 percent of countries have avoided having at least one major banking crisis. about half of the countries in the world have had one, and the remainder have had more than one. by the way, the united states is in that category of more than one. we admit -- we have had two major ones in the boss 35 years. the first thing to know about this is economists tend to think about this phenomenon in a way that is not entirely helpful. what is the cause of these banking crises? i think it's fair to say that if you're reading the economics literature about banking crises where you would read is banking crises happen for two reasons. there has to be a big shock. it could be a collapse of some prices in the country. if you're in chile let's say maybe copper prices collapse. a big shock. but it also has to do with the view that banks are inherently fragile. why? because they have assets that are opaque, hard to value. they have liabilities that are typically short-term debts. and so with a big shock happens and you can't tell whether your banks, because of their opaque assets, are having trouble based on a shocker not and if the banks are relying on your willingness to roll over the debt and the very high-frequency, well, you can see how that would lead to a banking crisis. a lot of withdrawal pressure, a lot of concern that might lead to a contraction of bank credit. and that is, i think my reasonable story that economics gives us about banking crises. you need a big shock. banks tend to be inherently more fragile than let's say nonbank operations. the problem here is that the story must be only part of the story. the reason is because in some places and sometimes even though we witness really big shocks and a lot of banking law we don't see a banking crisis. so if banking crises don't always happen when there's a lot of banking going on in the really big shock then were missing something with the story that i would call this sort of standard economic story. and in fact the variation over time and across countries is quite dramatic. for example, the first era of what is called financial globalization happened from roughly the 1870's through the world war one was a time of massive capital flows, lots of banking going on. yet during that time despite the abundance of bank credit and lots of trade and growth and a lot of volatility in terms of the relative prices of exports and imports, lots of shocks going on during this time suffice it to say. and yet during that time the total number of banking crises by the measure i'm going to use which is i would call the conventional measure, also the valencia imf measure which is that thing down the standard measure for looking at current data, and that measure is either a lot of banks are failing with large losses relative to gdp or even if there are lots of banks failing with large losses relative to gdp is a very destructive event where banks are under a lot of withdrawal pressure, maybe even forced to suspend convertibility are some other kind of measure. by that definition as i said from about 1980 to the presence we have had over 100 such crises as you go back to the first era of financial globalization the number of crises was about 12. six of which were insolvency crises, and six of which were not, were just liquidity crises. all six of those happened in the united states, by the way. the liquidity crisis. the insolvency crisis, by the wake of that happened was not nearly as severe on average. there were about one-third as a beer on average as the ones during the current year were living in. suspending a little time on this because i think it's important to emphasize. were living in a time of banking crises that we have never seen before. but it's not just that there is a change over time despite the fact that banks in many ways a very similar based on that first economic story and was selling. there are also differences that persist across countries. for example, some countries have been a crisis for. canada, in spite of being a volatile commodity export economy, in spite of having the incident with the u.s. and lots of problems during major global chocolate the great depression, in spite of that canada has never had a banking crisis. the u.s. has had 17. that's very interesting. it can't be the absence of shocks in canada because actually it said more volatile gdp in very big shocks. a lot of banking going on in canada. it must be something else. is it regulation? in that think the answer is yes. as a lot of evidence that it is regulation. and in particular the combination of generous protection of banks which is really a phenomenon of the last 3540 years worldwide. combine that with inadequate regulation of banks ways to what economists sometimes call moral hazard an adverse selection problems, basically what it means is if banks can take risks on the public time the going to take more risks in your going to get people in banking it may be even should not be in banking because they're tolerated because of this protection that comes from government safety nets. so i think that the story of the increased protection and an adequate provincial regulation is a pretty good story for understanding why things to happen differently across time and across space. think there is a good story to tell that the canadian banking system has been regulated better there's a good story to tell about the increase since the 1970's and the protection of banks without adequate parental supervision. i think the story as a lot going for it. as a large literature -- in fact would say is probably the least controversial literature that i know of and financial economics. pretty much documents that this is a wry wit think about this. there's a further problem. that just begs the question. why is it that in some countries regulation has been successful in other countries as an? we look at the history, particularly the comparison of the u.s. and canada is particularly striking because the u.s. is been unstable over and over and over again. people have actually been looking at this topic. we did not just art the day before yesterday thinking about this. and they pretty well understood the nature of the problem for a long time. so then you wonder why is it that we don't fix it. so i think the answer is pretty obvious and a sense. that is regulation is a political outcome. and so we have to go beyond just pure economic financial theories of banking instability to try and understand why some political systems and up with very fragile banking systems and others don't. so that's the first fact that i want to talk about that we deal with in the book. and our way of dealing with this is to think about the political process that gives rise to regulation as a game. because of the game of bank -- replan is basically that there is a process that takes place in every political system, every country in which some groups and societies working with officials in the government's basically form a coalition that determines the outcome of this can its inherent in the way this coalition works that it's going to try use the banking system as a way to create favors, typical of subsidized credit favors. if you're creating subsidized credit that means creating subsidized risk which is usually associate with some kind of fragility. banking systems are especially useful as ways to create these kinds of transfers precisely because they're not on budget. so you can do a lot and the banking system that might be more difficult to do politically with legislation because a lot of these deals don't require legislation. so these are the kinds of basic political insights. i'm not going to describe them in great detail, but i think you get the idea. these are the basic science that are driving the outcomes. there's a second fact, a second problem that i also want to raise because there's another major dysfunction and banking systems. it's not just fragility. it's also credit scarcity, the inability of some banking systems to deliver. here's the puzzle. we have about five different literatures looking at this question for many different perspectives and countries. of the question of does credit supply help for economic growth, doesn't help for promoting into poverty? does it help for reducing inequality? all of these good things. the answer is whether you're using cross country studies, crosstie studies, cross industry studies, of these various literatures arrive at the same conclusion. it's good to have credit. not surprising i just saw my friend not his head because of course he is one of the authors of some of those studies i was just talking about. it's demonstrating how important the financial revolution that provided adequate credit to the creation of success, grow. but is not just growth. as i mention it's also economic up originally for people who are not already rich. you would think that this would be the biggest no-brainer in the history of the world. everybody should be developing economies that are abundant in credit supply. and to further add to the puzzle, the basic tools of commercial banking, things like deposit accounts, lines of credit, branch banking, the clearing of transactions recorded banking system, all that was developed by the middle of the 18th-century and scotland and in some other places even earlier. but the full swing commercial banking model that we can recognize today has been out there for more than two centuries. and yet many countries are dramatically credit constrained. that is many countries have a persistent inability to generate banking credit. so what is this happen? again, it brings us back to politics and to the game of bank one simple explanation, much of the world still is rule by autocrats. in autocracies there's a big problem with setting of the bank . the big problems the government is so powerful that it may just decide to take all the money away from the people who invest in the bank. so the expropriation risk which is inherent to a lack of checks and balances that exists in autocracies just has an inherent negative sort of incentive consequence for the creation of bank credit. to give you a little bit of an idea of going to go through some of these facts. if you look across the world you can see that the ratio of private bank credit the gdp meaning credit from the banking system provided to the private sector relative to gdp varies enormously across countries piquancy your the u.k. is about one-and-a-half times gdp. you can see in canada by this measure is about equal to gdp in the u.s. is about two-thirds of gdp. you can see in brazil and mexico is the country's new study in detail. if you go down to the democratic republic of the condo you can't even see the ratio of private credit to gdp because it's so close to zero. many countries just can't have a banking system. that's very strange. it's a political explanation. i talked a little bit briefly about the autocracies as an example where expropriation risk makes it very difficult for anyone to create a bank because if you do your going lose that will wear the other very quickly that's just one small point of the many points that we make in the book that come down to the pointing out that its political differences better so important for understanding these two dysfunctions that up and pointing to. fragility and a lack of supply and credit. now, just to illustrate this again the main thing we do in the book is go into detailed histories over three centuries of five countries so they can really see how politics shapes banking regulations overtime. but just to get started with took the database that i referred to before, the imf database and looked at where financial crises have happened a reasonable amount of supply of credit and no banking crisis. the answer is really come up with six countries and all world that fit that over the past few decades. that's a very small number. and what was interesting to us is this actually was something we do toward the end of our book, talk about the six countries, what's interesting is there really fit in with the story that we wanna tell about the five countries in our book. the first three of these are countries that you would describe as city-state's our own states. one of the key features of the city state think roe versus urban. one of the main divides where the game of bank bargains has been played is one of the other, initially rural and later urban groups in forming important political alliances that use the banking system. in these cities day environments there really aren't these natural divides that lead to this kind of segmenting a political interest so that you have one group. the winter and it -- the winner in the game benefiting encasements of the others. the other three countries and particularly canada and new zealand are countries that have long histories of what we call anti populous constitution's. the use the banking system as a political football. so we think that very interesting facts that pop up to us as we look at this list, all of them have in common that the places where it's difficult to play the game of bank bargains in a way the segments people in the two groups, winners and losers were the winners used politics. now let's look at the other side of the coin. the countries where we tend to seek very scarce credit and a lot of instability. the answer is first of all they tend to be autocracies. with the exception of a couple of dr. seuss, most of these are among the most dysfunctional political environments in the world. so if it's not a coincidence that this group of countries is also the group of countries in which banking credit tends to be rare. so as you can see just coming out of the simple exercise which is really not the main focus of a book, it's very much part of the story of the histories that we document and a boat. what you find is the systematically less likely to be able to create stable and efficient banking systems. democracies do tend to uniformly create more bank credit. some democracies like the u.s. in particular are not successful at creating stable banking systems. >> mentioned that canada and the u.s. for different. since 1840 which in some ways is a fair comparison of the two systems. it's not because canada's ben and under bank economy. maybe canada is so successful of wedding banking crisis is the down the bank's. quite the opposite, a canadian credit to gdp has been equal for much of that history. since the 1980's canada is credited gdp has actually outstripped the u.s. significantly. this is mainly because canada does not experience was called in u.s. history the financial disintermediation. from the seven is going on a reaction the high inflation regulation and other types of problems in the u.s. canada has never had any of that every one of the interesting things about canada was the banking system's balance sheet today doesn't look that to a more it looked like a hundred years ago, especially in terms of a high reliance the banks on retail deposits. so if canada parses the u.s. a real puzzle, why is it that some democracies are more successful than others? of already into that has something to do with populism and constitutions that a difference between the u.s. and canada. for the remainder of my tenants and going to talk about just those two examples, the u.s. and canada. these other questions in the book. not going to dwell on this we have to look at strategic interaction is and why some rules of the game are promoting this kind of outcome of using the banking system to transfer resources in a way that is risk creating from one group to another. the five countries are study in detail in the united kingdom, the united states, canada, mexico and brazil, 1600 to the press. to some going to talk of the u.s. and canada why want to talk briefly. one of the things we discovered is all autocracies are not created equal. in mexico the autocratic banking system and you worked in a chaotic. political insiders who were important and industry also under control, banking resources and will part of the winning political coalition of the autocrat. they did tend to create some bank credit. although as already mentioned give high appropriation risk of a large story about how an autocrat tries to deal with the expropriation risk that comes from a limited power, thus really in a sense the plot line and runs through all of mexican banking history. it tends to result in scarce but some private credit. brazil is a very different country. unlike mexico which is really says the gas tax been able to have really highly centralized and powerful central government, brazil because of its pattern of early settlement, because as gerard murphy, because of the way the current work a month away the ocean currents or has been a very difficult country in which to establish centralized political power. that's a constant theme of brazilian history. another theme has been inequality, the importance particularly of the african slave trade the growth of these very powerful local elites. there were very resistant to the creation of any kind of national government. the combinations with those in the quality problems meant that brazil was very much a decentralized economy. the only thing that government really had effective control over was the chartering of banks. so if your federal government and you have hard time collecting taxes the you have one thing they can do, how we collect taxes? it will be something we call the inflation tax. use the banking system. sure inflation tax collection with the banking system by having the banks maintain zero interest bounces your basically financed by inflation. in an economy of this kind of inequality with this kind of elite political structure, the regressive taxes will be welcome what's interesting is you might think that all autocracies of the san. won't talk much more about the mix up to seven not. centralized power autocracies give rise to these very effective limited credit facilities to create networks. but autocracies that have less centralized power tend to give rise to almost the complete absence of bank credit because the banking system is so busy the fiscal needs of governments which requires inflation taxation at the expense of private intermediation. so you can see where we get a lot of understanding of autocracies and the particular kinds of differences in their outcomes for banking systems by looking at the history of these two very different countries, mexico and brazil. in the last couple of minutes of just want to talk about u.s. from the very beginning in the u.s. there's a lot of political discussion, not least by james madison about different kinds of goals for democracy. particular will recall in the book the goal of liberal democracy, a classic liberal democracy which is to maximize individual freedom and some of the concerns which of course people in the u.s. have which were especially visible in control pollution, the reign of terror being a great example of that. and so the u.s. constitution as every schoolchild in the u.s. knows was designed to create checks and balances through federal as and also of your separation to try to limit populist pressures. from that standpoint is a it's a little strange to point to the u.s. as a place that is such a populous democracy and created such financial fragility to this game of bank board is the mention. but the key point to recognize there is that despite these checks and balances our constitution and you might even say because of them coalitions' want to get around having to go through this very difficult legislative process. instead to be able to reach deals with did not require legislative agreement precisely because separations and powers made that so difficult. one of the ironies of u.s. federal as some and separation of powers and the various branches of government, the banking system was particularly subject to populist pressures. other parts of the u.s. government will. now there are several areas in the u.s. the we want to talk about. the important three are first an error which you might call crony capitalism. one in which one of our favorite people at the museum here and also my personal favorite, alexander hamilton was himself involved with creating monopolies within each of the states, a monopoly at the level of the nation and advocated these monopolies at least has the first phase of of an album of the banking system. many of these were chartered hundred influential federalist politicians and bankers believe in true was not allowed for a long time. this comes apart in the 1820 s. we get the development of a new agrarian populous unit banker partnership. what is amazing about that and that second phase is a last for along time. lasts from roughly 1830 until about 1980. what's going on in this partnership is a sort of mutual agreement. remember, these deals are being made of the state level because of federalism, because federalism needs to bank legislation will be determined by the individual states. these are state level decisions to structure banking systems and a unit basis meaning banks can't branch, not just across states but they can't for most purposes in most states even branch within states. why would that be something anyone want? bachmann you can see why individual bankers might want that because they give local monopolies. the overhead costs of establishing a second with the bank is so great that it did the only bank in a town you might do very well. in fact there is evidence that that was the case. why would the rest of the population be in favor? the quick answer to this, of course we know the many people were in favor of it were the so-called agrarian populace. the william jennings bryan. why were they in favor? one argument which i argued elsewhere and we argue in the book is that if you're a corn farmer in an area that primarily produces corn and if the price goes down that means the price of the land goes to hell with me your creditworthiness also goes down. it might be beneficial to have the banker and an impending for credit have no other option than lending against . great way to do that is make the bank to be local. of course that might be when corn prices collapse you go down in the baker goes down. absent that went on prices of just declining a bit is going have a sort of captive supply of credit. that fits very much will people were saying about why they like unit banking. this was an important platform of the room of. of course things change. of talk about than a minute. after 1980 that old coalition fell apart. we get the transformation turn the 1990's from the unit banking system to a nationwide bank branch banking system. along with that we had a new partnership was formed. instead of the rural or agrarian populism partnership with unit banks will we see is an urban popular sport-of forming with the mega bank. and as the partnership that we were still living with since roughly the early 1990's. give you a little bit of an idea of what the old system look like as of 1920 you can see have about 28,000 banks. not even 1,000 are so branches. and that itself is accounted for by about three states. some for most of the country it's very much a fragmented unit banking story. the transformation of the banking system, the dramatic decline and the dramatic increase. why does this happen despite the fact of this early rural union bank coalition the bank reform movement and in particular the national monetary coalition of 1910 commission studies of all the world banking systems. they understood very well that three different books about canada, the u.k., germany. they understood well that the u.s. was a peculiar country, the only country with a unit banking system dominated and they understood that that was explaining the history of fragility in the u.s. you might say given that they understood that why did they recommend that we adopt branch banking. they did what it thought it could do, recommend something called the federal reserve system to try this move seasonal fluctuations in the supply of credit. that was the best we could do. was it because we didn't understand a problem. it was because they concluded that they could not fix the problem. and this coalition also survive the great depression which was again a unit banking catastrophe we did change unit banking after the great depression despite the fact that it was so obviously because of the problems that we were experiencing. so what finally a wound? that's a long story. a big part of it was technological. of a big part of was demographic. people move from rural to urban areas and urban areas became the winning parts in the game of bank organs. there was also some of people, the big shock being banking crisis in the 1980's which created lots of interests to allow printing. if all the banks around you were collapsing it made sense to allow banks outside the state to come in and take over the collapse in branches. made sense for the fdic would save some money by having the acquisition to replace. you can see the political stars were finally aligned in the 1980's along with reflecting demographic trends and technological trends to get rid of this horrible system that had plagued the u.s. for 150 years. the politics didn't disappear. what happened instead was a new coalition was formed, a coalition of urban activist groups because they saw this merger wave is an opportunity. it was a great upper jenny. they were allowed under to express opinions about whether the banks that want to merge to become the major banks to express their opinion about whether those banks were good citizens. and what better way for them to determine whether there were good citizens than how much money those banks were willing to give them. and so was born in a political coalition. how much money we talking about? and show you on the graph. they got to become a bank's huge economic benefits. if they're willing to share those with people who will testify that this was a good thing to do. and therefore take a lot of the window on the sales potential detractors from this big merger them were having. by the way, i was in favor of the merger. was also a detractor. i can tell you that a couple of the cases, it was very clear that these transactions should not a bailout of the time that they took place. they happened over the objections of some people. very much as a result of political power. it wasn't just the power of the big banks. a lesson from our boat is the big banks can never do it alone. they always need bankers to get what they want and legislation. the big allies during this time where the urban activist groups. and as we point out the book, that also did not just mean relying on the bank merger process but also going to the government to ask for a change in all roles of the gst, fannie mae and freddie mac to help us assess that same process creating transfer from the bank to the community groups. in other words, giving the gst is mandates to have to purchase from the banks much of the risky lending that the banks themselves were agreeing to do. how big word these agreements? from 1992 to 2007 the explicit agreements made to get people to testify at these merger hearings totaled $867 million of credit being agreed that would be transferred to these community groups to basically allocate to the constituents. that is a whole lot of money. and you can see here the mandates that a telling the gst is what fraction of their portfolios, the purchase portfolio has to be devoted to serving particular constituencies in major urban areas. so this was a pretty clear deal. of course it contributed very greatly to the debasement of underwriting standards of the mortgage market. you can see here that the percentage of mortgages in the u.s. was effectively zero downpayment, 3% for west. in the 1950's zero, in the 1980's and still zero. by the 1990's it's still about 10%. but by 2007 its 40%. this is a huge transformation and underwriting standards. that wasn't the only thing that happened. also underwriting standards changed where the gst is not only with the ever pound gorilla in the mortgage market deciding what the standards will be, now we decided to allows your down payment mortgages but also in 2004 it took all the limits of the undocumented mortgages. they did that very much explicitly as you can read in the mills within those organizations between the risk managers in the sea as much about public, they did it very much because of the only way they could meet demand its. i want to emphasize another point. once the standards were based there were debased for everyone. it wasn't just the urban poor reports dissipating in this. in fact if you look at the comparison you would find that the total amount of bad mortgage making it was done was just as prevalent for all income groups. the key was that the political push, especially to empower the urban poor ended up creating changes in standards that apply to everyone. why did canada who run into any of these problems a been talking about? of the that neither of the early times of the agrarian word this more recent what we point out is that it's not that the canadians did not have the same political pressures within the economy. they did. you can see in canadian history that there is an agrarian populist movement. what happens is every time the movement tries to pull together a coalition to get a certain banking regulatory out, it fails one being the centralization of power so that the whole country had to decide, not the individual states. the other important factor was that the canadian cent was and still is appointed. used to be for life. by the queen of england. although known fact. and most of these populist measures run afoul in the senate, the canadian senate. that's where they don't get. and of course there was no merger wave to happen in canada in the 1990's because they started off as a nationwide branch banking system from the 18 teens. .. where the dominant group within the economy in fact the entire group in the battle of québec and 59 but people who hate them, the french canadians who are very resentful of the british that had taken over the country. they are at absolutely crucial juncture from an economic standpoint the routes to the atlantic in the entire development of the interior of canada depends on being able to get past that point. of course the french recognize that and they want to use it to get independence for themselves. and the recalcitrance to any economic projects that would benefit the interior and ultimately a french-canadian up rising in 1837 that led the british to decide they had to create a new political system of high centralization that democracy but also with checks and balances. they couldn't get british citizens to migrate to canada to help develop the interior if it was and to a talk or see but they met needed to be limited because the french were inherently not in agreement with the aspirations of the british government and needed to be effectively diluted in terms of their impact on economic policy politically. the canadian constitution is basically a mechanism for diluting french resources. first of all let's talk about democracies. democracies tend to have very low at expropriation so they have a lot more credit typically. some democracies however tend to be stable with abundant credit and some tend to be unstable and that depends on how much the banking system and so ding used as a populist tool. the last point i want to make is if that there is no getting around the inherent political process of banking regulation. there's no way to get politics out of the process of thinking regulation. and you might say that's even a depressing message because ultimately there is no way for us to side with canada and i'm not saying we'd necessarily would want to but if we did it would be very hard. i gave this to a libertarian group, this same talk and somebody said to me why can't we choose to be canada? i said how many of you would like to have the u.s. senate led by the queen of england and no hands went up. [laughter] the u.s. was from the very beginning a place that had revolutionary ideas about individualism which translated into a particular kind of populist government outcome which we are living with right now. i'm not saying that it's impossiblimpossibl e to change it but i'm saying it takes a lot of sense historically and a final depressing thought i would say there's really no reason to believe that a history of financial fragility is in contrast with the u.s. and in contrast canada is going to change. yankee for your attention and lets let's have some questions. [applause] i think there is a mic. i'm not sure. >> you haven't said anything about ownership or structure. the snl industry used to be controlled -- i'm sure they have significant dynamics and incentives on all those kinds of issues beyond just the political. >> i think it's a reasonable point that you would want to look at all of those issues that are point is that those are also regulatory outcomes. those are political outcome so i think when you do look at of course with greater competition which finally came about in the 1980s and 1990s mutual institutions have large lake disappeared. not entirely in the u.s. but much more compared to what they were the savings and loan being an example the banking mutual kind of arrangement so i think that i haven't thought a lot about the particular political preferences that gave rise to mutual but i would say that there again we see that outcome changed a lot as a result of increased competition so maybe the mutual form as an ownership structure wasn't ideal but in a system of unit banking you could tolerate those less efficient kinds of ownership structures whereas once that system became more competitive they weren't able to be tolerated so i think there's an element to what you are saying but again i see that as the outcome of a political process allowing that competition to take place or not yes. >> you talked about the history and more recently the urban. this is such a big financial crisis we have had. is it shifting us into a -- do you see things being in an era for the next 20 years? >> it's hard to say. at the end of the book we talk a little about this. on the one hand that mergers have already happened. you have already seen the largest banks going from the very highest cra ratings to the now more satisfactory cra ratings. they don't have to engage in any more of these contracts and so you could say the alliance is going to change. on the other hand if you have noticed some of the proposals having to do with the mortgage market, talking about disparate impact as primitive face the evidence of discrimination meaning that if you set the market standard that tends to mean that poor people can't get mortgages as well any underwriting standard would say that. what that means is you now have committed discrimination. that is not become the rule of law in the united states yet it is a serious proposal. it's hard to say how the coalition will emerge going forward forward. there's some evidence that branches have been reduced in inner cities and community investment rates are declining to satisfactory so you might say gee it looks like things are changing. on the other hand we are seeing these coalitions tend to reinsert themselves in other areas so i would say we have further articles. if you go to your web site fragile by design.com we write further articles after the book talking about some of the changes in the political coalitions the political coalitions and how they are evolving. it's hard to say and it's a great question. i don't have the answer except to say i wouldn't think just because the merger is over but it's the end of the second coalition. it's a very powerful coalition. >> three of the countries or six of the countries you mentioned that did not have a banking crisis all have a british imperial charge. what was the relationship to that and how come you didn't put england and that what policies did they follow that the six did not follow? >> i agree with you and we do mention it in the book that all six of those success stories are former british colonies. of course there are lots of warmer british colonies that aren't on that list too. but i don't think it's just a coincidence. i think you are right that there is something about the british legal tradition and political tradition that is favorable toward the possibility of political democracy and i told you the canadian story explicitly. in new zealand it's very similar where the minority are playing the role of the french in terms of the development of the new constitutional path we think. we didn't do a chapter on that but we have a few paragraphs in the book about it. yes i think it's not just a coincidence. there's definitely some favorable features of reduce legal tradition that you can point to but i think again the key is not whether you are british colony or not but whether through that evolution hugh ended up being a country in which this kind of political use of the banking system was relatively unlikely to succeed. but i agree, it's a good point. >> the german banking system has the tradition, over hundreds of city-owned banks which seem to be quite stable in the last 100 years and likewise the state-owned bank of north dakota seems stable over the last 100 years. can these publicly owned banks also provide abundant credit without crises? >> i think actually the german example answers your question very definitively. the markets are complete mess in germany so state involvement in structuring those banks has been a catastrophe. the spanish a similar story so i think we wouldn't want to certainly -- what we know about state-owned banks is they are enterprises that allocate on a political basis and i think they are catastrophic. but i would point to the german system of the major banks as being i would agree with you that those banks were traditionally relatively stable also. we could talk about the development of that because in particular you might say well germany wasn't that -- wasn't he an autocrat after all and how does that fit our story of democracy? we did talk about that a bit in the book and the quick answer is it wasn't autocracy but with lots of checks and balances with which we think serve the same role of ex-appropriation risk that democracies often fulfill rather than autocracies that don't do that so we do have some interesting things to say. >> one more. actually two. >> the repeal of glass-steagall in 1999 would have firewalls put in place that would protect the commercial and companies from holding up in a firewall to keep it from being unduly exposed but then in 08 that seems to have disappeared. did those firewalls never materialize or are they still identified in the commercial banks? >> it's a big question that you are asking. we do talk about this a bit in the book but let me answer it in a quick way. just to point out we have got the vocal -- volcker rule. it is limited by bank holding companies but guess what the big exemption for it is? for the volcker rule? you can still set up fund says the bank to, like the funds that were set up that got us into trouble. as long as it's a mortgage finance you can do it and i think that's very telling. this wasn't a crisis that had to do with relaxation of glass-steagall. this wasn't a crisis about proprietary trading. the crisis had to do with the subsidization of risk and mortgage credit and it's very instructive despite all of the regulatory changes in 2010 there always are specific carveouts from risky mortgage credit which tends to also get an official treatment terms of very low capital requirements. that political deal of course is exactly what got us into this mess which is low capital requirements and carveouts to encourage risky mortgage lending. cause it's politically popular and before any of us blames the big banks we should all take a close look in a mirror to see if we weren't part of the political constituencies that leiter may be individually liked getting all that cheap mortgage credit. thank you very much. [applause] >> thank you charlie. the book is on sale now and charlie will be happy to autograph it for you. [inaudible conversations] [inaudible conversations] now on booktv amie parnes and jonathan allen speak about their biography of hillary clinton. in the book the co-authorco-author s look at clinton's political career since her primary defeat in 2008. after this hour-long politics and prose event we will bring you would a book party for the authors. >> we are going to read a little bit from the book. i first wanted to say thank you to everyone who showed up. i see a lot of familiar faces. i'm from silver spring originally so it's a big kick to be here because i've been sitting in the audience telling folks earlier, i saw ted kennedy deliver that midnight ride of paul revere here many years ago which was kind of cool. it's hard to -- i'm really nervous and kind of nervous now so thank you all for showing up. really appreciate it. i guess we are just going to start with the reading so we can get to questions as soon as possible. this is actually from the beginning of part two. chapter is titled -- in the spring of 2009 obama's vetting team gathered as it often did in white house counsel woodpaneled corner office on the second floor of the west wing. in lunchtime sessions a small set of senior aides typically shuffled through paperwork of as many as 15 job candidates. on this day one named conjures such searing memories from the campaign trail that stood out from the others. capricia marshall. the west wing crew considered marshall a staunch hillary loyalist to be an enemy combatant be like any of the women who surround hillary marshall's graceful discipline and down-home grassroots. a brunette with a short haircut have croatian and half mexican marshall who favored rigorous workouts went way back with the clintons clintons. marshall have been one of hillary's closest confidant in washington becoming the youngest white house social secretary and memory following bills 1992 campaign paid when hillary suspended her own quest for the presidency in june 2008 she at a time when some democrats felt hillary might make a the final play for the nomination. the animosity to the candidates it runs deep that hillary's face was bulletin board material and obama's scheduling office. they had all this unflattering pictures of her on display. kind of the sports locker room mindset. even after the primary was decided marshall had been in charge of sensitive projects like recruiting staff to count delegates from the texas party convention to make sure hillary won her fair share but no single marshall since stood out in the minds of obama's ate so much as the general view that she embodied. the president's team acquiesced when hillary chose cheryl mills as her chief of staff and with greater hesitancy fully brine is as her senior adviser. there were members of hillary's staff entirely within your domain but hillary pics martialed to be the nation's chief protocol officer a position he carried with it the coveted prestige of an ambassador's ranking and a reserved seat on air force one anytime the president traveled abroad. not only would hillary's gal pal have a lot of face time with obama she would be taking up a high-profile spot in the frustration that could've gone to her friend the president. there was another red flag on the nomination. generally issues ran the gamut from dui charges and occasionally embarrassing associations. one nominee had been photographed with lisa and go the corn film actress who played the character in a -- called who is nailing palin. [laughter] marshall's problem was less lascivious than that but troubling all the same. she hadn't filed a tax return in 2005 or 2006. she rectify the omission in the fall of 2008 around the time it became clear hillary might take a job with the administration. as it turned out marshall is entitled to refunds still tax issues have to set several upon the nominees including treasury secretary tim geithner and tom daschle and the white house had little appetite for another tax cheat. >> as a leading attorney for my justice department i read a three-page article white house deputy of staff jim messina and director dan pfeifer grew visibly agitated in their posted wing backed chairs. as did other obama campaign veterans around the room. by all rights this job was -- should've gone to an obama loyalist not to marshall and not if it meant defending the dominicans questions about improper tax filings. pfeifer in particular thought it would be oppressed problematic time when there had in, when we been through a lot of confirmation issues with daschle and geithner. she was complete during the campaign and worse. marshall's campaign combination of experience with white house level social planning and her closeness to hillary made her a national selection for the job but obama's aides didn't see it that way. none of room spoke up to defend her not legislative affairs specialist john kennedy who would have to get marshall confirmed by the senate if she was nominated, not for smell director nancy hogan not ethics czar norm isakson not greg pratt who along with richard blumenthal had been a study buddy with bill and hillary rotten in the days when bill cooked up this mama's fried chicken in a future first couple's apartment near yale law school. her alignment with obama had been a major portrayal. it's close to obama's it was less if they were guests of marshall and more they wanted one of their trusted on in the high-profile role. it was we should have our person in. we need our person said one white house aide familiar with the discussion on marshall. it would have been the equivalent of the roles been reversed if hillary was president and thus cutting a deal that desiree rogers or valerie jarrett would be protocol. when you think of it that way it's like why would they ever want any of us traveling with them? >> vetting process worked in such away that by the time a job candidate reached the team in craig's office here she was the only hopeful under immediate consideration. if obama rejected her another candidate would be lined up in the same way. a process that could take weeks or months. publicly the obama and clinton campaigns claimed they had put it behind them but fear huddled in craig's office with the bookcases still empty. and the only personal effect was the robert f. kennedy poster on the wall. the two sides didn't understand each other. they didn't like each other and they didn't trust each other. the president's aides didn't have another candidate in mind when messina asked his colleagues to cast their votes that they were certain they didn't want marshall. one by one the each extended a fist with the thumb pointing down. but then messina is stronger montana whose soft voice takes the edge off of his often profane vocabulary delivered bad news to the team. i agree he said that this is very clearly in hrc pick and needs to be raised with the president. typically skirmishes over lower-level aides were resolved and back down rather than kicking the decision up the command chain. obama is too proud to draw a line in the sand. it was one of the rare occasions when a personal fight ended up at obama store. this was a watershed moment in the brutal months between the fight of the white house and steak over -- marshall had a secret weapon in the valerie jarrett who worked as in a special assistant in the clinton white house. hillary went to bat for marshall. the white house team didn't fully appreciate the role of the chief protocol officer and what went into it. it wasn't just some klehr fight advance staffer or donor with little experience in washington. it was nobody better to do this job hillary told obama. she has experience from the social office she has a great touch and feel for helping organize people. she will be fabulous. hillary had gone rounds with the president's aides and i'm telling you this is the best person she said. you will know that i'm right after you have worked with her for a month. hillary knew she held the trump card. the president told the people in the state department this is my pic she said so let's move or were it. if you want to know how that turned out you can either read the book -- [laughter] or search the state department archives. who turned out to be the chief protocol officer. i think what we would like to do is talk for a couple of minutes about what we were aiming to do with this book and what we think you will find in this book and then take your questions as much as possible. amie maybe you want to start off with what were you were aiming for. >> i was they wanted to call this book the phoenix because in our age and bridget is here and she can attest to that as i felt hillary clinton have this phoenix like quality. she always plunges and rises higher than ever in so we thought of the story sort of as a comeback story. i always say if i lost this campaign i would still be -- so how do you come back? that was basically one narrative that we thought to do. the other thing was how would she govern if she were president? who do she surround yourself with? these were questions that really intrigued us. >> we anticipated when we started this project which was the summer of 2012 hour on the political conventions that we would probably still be talking about hillary clinton at this point for a long time in the future. we thought it was important to give folks as amie was saying a sense of how she makes decisione internal dynamics are like around her at a moments and it's a hard thing to do. she is one of the most reported on people certainly in my lifetime. finding information and getting inside the clinton operations and i say operations because as a hillary clinton and bill clinton operation if they agree on the overall goal that they are aiming for sometimes there are tacked ticks or sets of people doing one thing and sets of people doing another. so this is really another sort of interesting dynamics. i felt that we achieved that in terms of form policy. we talked a fair amount about form policy but is always through the lens of what it says about her decision-making and is says about how government in washington works and what it says about how the united states perceives itself and attempts to perceive the rest of the world. you know this is not a treatise on foreign-policy by any stretch of the imagination. it is a political book and if you are into politics i think you will like it whether you like her or you don't like her. or if you are one of the 30 americans who haven't made your mind up. with that i think we would just like to open it up to questions. there is somebody at the mic. >> my name is karol. my late husband and i went to yale law school with the clintons. my question is we saw hillary change her campaign in new hampshire. unfortunately not quite in time. how do you think being secretary of state her fists -- first big administrative job changed her or maybe didn't change her, maybe it just reinforced the traits she already had. >> so, i think that it's a good question. how did it change her? you know one of the things we heard from people who were around her said especially after couple of years she seemed to be a little liberated. for so many years you are on a public stage and everything you say is constrained. during the first couple of years of the evisceration there's actually some tug-of-war between the two camps so there's a lot of tension and everything you say could he interpret it in a way other than what you would want. i think what we are from people toward the end when we started doing the book toward the end they felt she had been a little bit comfortable just kind of going with your gut and in public we saw a little bit of a mix of her having fun and dancing in south africa. there was maybe a little bit on a personal level from an intellectual level work government level this is somebody who obviously knew how the government works. certainly intellectual and abstractly had worked in the white house and worked in legal services corp. in the 70s and obviously was a united states senator. this was the first time she managed a bureaucracy and i think she learned to let in some people who are outside the circle. it's still a pretty assorted group but i think this was something she wanted from the campaign and to go out to the state department with her and there was a trend in this direction. we used as a metaphor the way she treated to knowledge it you may have remembered barack obama was good with technology and campaign using social media for fund-raising and organizing and basic communication. her campaign was left in the dust. it was 21st century versus 20 century. one of the things she did when she got into the state department has hired people that came from the sort of tacked understanding that we are now part of the inner circle so alan ross was somebody who had organized obama's tech team in the campaign. she brought him in at a high level. she raised, elevated jared cowen who was a condi rice protége who had been the state department did a lot of innovative things with text messaging and other forms of technology that affect foreign policy. he is now the head of google ideas. he ended up very crucial to what she was doing. i think what you saw over time was a willingness to try to address deficiencies in her operation by bringing in new people and i think that was something that was part of her campaign and previous to that. i would argue that's one of the things you could see overtime was opening in up to new ideas and people. >> you brought up the new hampshire moment and i think you guys will all remember the moment where she cried a little bit. i think that was really hard for her to understand that people really wanted to see that emotional side of her. they wanted her to embrace the fact that she was a woman candidate and you know even at the end there was some discussion like how much do i embrace? how much do i say and address this issue about me being the first woman candidate and barack obama did that in a very successful way. i think she runs in 2016 you will see her do more of that. >> you here her today saying advice for young women going into public service so that mindset still exists. clearly that's something that was her experience coming up. do you have other questions? >> i grew up in the 90s and my prime minister and your president had the same tendency. that was the common thing that i saw growing up. my question today is this. this would be an and knowledge he, okay? imagine this. this is february the month of love so i'll ask you this. we are on the -- of valentine's day and say you are single. do you search for love just because it's valentine's day and you love and you do that on valentinvalentin e's day? my question is this. does america really need a female president or does she really deserve it? >> i think she has to win it. >> she has to win it but people try to romanticize saying oh no we want a female president so you have to raise the right candidate to do that. we have seen the package that comes with her. you know bosnia. you know benghazi. anyway, do you think that she is the right candidate to run as a female in 2016? >> you thou it's my job to report on what they do and not what they should do. but i would say this. there are 155, 160 million women in america and so far she has come the closest of those to becoming the president of the united states. she clearly has a base there. obviously there are a lot of people do want her to run and at this point i can't see another woman on the democratic side who looks poised to win a democratic binary and it might be difficult to run against her. i imagined that there would be someone that would vote for another woman candidate and some men who would let so far all 20 women senators have encouraged her to run in a letter that they signed earlier this year. maybe there is a governor. i think for 2016 on the democratic side she seems to be the only one that is positioned to do that. on a republican site you can see nikki haley from south carolina potentially running and susanna martinez from new mexico. there are some chuckles there. i have a feeling it's not terribly popular idea in this crowd. >> i'm not exactly sure of chelsea such a situation but the smartest person in the whole democratic family will turn out whether hillary wants to be president or grandma. what do you think? >> some people are saying coco if she becomes a grandma she's not going to do this. i don't think one holter from the other. we have the swingset already at the white house. >> you my mother would not particularly like this answer but i do think being a mother is harder than being a grandmother in terms of time occupation and mom thank you for babysitting my children. [laughter] >> who were the other candidates for secretary of state at the time and what tipped the balance in favor of hillary? >> it's a great question. >> acting because senate -- senator obama the time it been thinking about her for a while. he always had her in the back of his mind and when he raised it with his advisers like david axelrod they all kind of went what the hell, why? and course you will remember a lot of people wanted her to be vice president and that wasn't going to happen. that was decided pretty early on that she was not going to be that. so he felt it very strongly. he saw this and he tried to figure out when exactly he wanted her or thought about her but couldn't exactly figure that out. long before he had one i think it was safe to say he thought she would make a really good secretary of state. he fought and fought to get her which is really interesting. >> in the book there was a lot on this. when he offered her a job she actually came with other names of people. i think it ought to be jim jones or tom donilon. they goes through this back-and-forth between the two of them in the point in the book where he tells her she has to make a decision because he is going to have to pick someone else if it is not her but the fact that one on for so long suggest to us that he really did want her for that job and he felt it was not just -- was someone i could do the job. >> what was the big statement he was making? >> you have had two recent secretary of state, madeleine albright and condoleezza rice. i think you talked about a team of rivals. he had half the democratic party at the democratic try mary. i'm going to get myself in trouble here but it helped him bring that set of democrats into his fold. she couldn't really abandoned when she worked to work for him. the people that supported her wanted to see her do well and him to do well so a shotgun wedding. >> if i could ask one more question. what do you think of -- as secretary of state? >> a lot of people pose that question to lessen the last couple of weeks. she has a few. i think number one she was his staunchest supporter on issues like the coalition in libya, on the afghan surge and the rate for bin laden. panetta weighed in early and wanted her by an because he saw her as this hawk who would sort of get behind him. so i think even though she doesn't have her stamp she doesn't have the smart key peace deal she has her stamp on a lot of things and one thing we talk about a lot in the book issue was involved a lot in domestic policy. health care for instance. she talked to some lawmakers. she was a huge supporter and getting it done and in one particular cabinet meeting, she saw what happened in her husbands administration and she said we have to rally around this. this is our time to get it done. there are achievements both here and abroad. >> especially if you look at when she came into office she had two wars going on. thethe foot rent of american foreign policy of and she elevated diplomacy and development as foreign-policy pillaged alongside defense in a way that allowed the united states to present a different side of itself. not just its enemies which was one thing but also to its allies that were somewhat upset with the way the united states was using its force abroad. one of the things you see in her time and obama's first term is a real elevation of america's perception in european countries for instance which matters in terms of putting together coalitions to stop genocide or to force other countries with economic sanctions succumb to the table to talk about nuclear disarmament or whatever the case is. i think the application of smart power, is a smaller thing in terms of the models that they use but if you look at irma and republican sort of skop of that is an achievement that the united states use this prospect of commerce with burma in addition to sanctions to get the burmese to change their policies generally speaking, we would see republicans want to use a big hammer and sanctions against people and sometimes democrats were more likely to want to use carrots. >> and your few sir election is a foregone conclusion and if not what could actually derail her second shot at the white house? since you raised the question what kind of a president would she be in your few and how would she deal with this sort of surge of the left-wing in different cities and states? do you think she is aware of that and could incorporated with voters? >> no she is not a forgone conclusion or farrakhan play. i think she is aware it would have to be hiding under a rock to not be aware of the populist sentiment that has grown within the democratic party over recent years. i don't think it's clear yet how that will affect her positioning the singer giving speeches right now to equity firms and high finance types of people that the folks on the left seem to hate or dislike or question their motives. so we haven't seen how that messaging is going to happen. in terms of defense issues like azimi was saying she was a hawk. there were internal -- with the national security council. unabashedly if you were to look at the 2008 primary and one reason she lost was a bomb had been against the war in iraq and she voted for the opposition of the war and make iraq. it's probably better to have been in obama's position and yet she still still took the hot disposition which suggests it's something she feels on the military issues and do you want to address the other questions? >> i think nothing is inevitable inevitable. your already hearing rumblings of deval patrick and other people and i think we learned in 2008 that nothing is inevitable. so i think further in the coming months we could learn of someone who could be a young upstart someone like barack obama. i don't see that happening this time around. >> is present one thing she would try to do and you saw that at the state department. that goes to the point of the presidency would be an effort to try to incorporate both the government set there and the public set or in the private sector into solving problems and the academic sector nonprofit that there is a belief that each of the pieces of a civil society need to come together in order to solve problems. sometimes that consensusbuilding helps the country move forward in a direction with the cylinders hitting and it's a direction that people like and it's good. sometimes you build coalition and it doesn't turn out to be the best direction that you would see a lot of consensusbuilding ricci did a lot of outreach to businesses to try to promote american foreign policy to use that as ambassadors for the united states and i guess as a result of that they had the benefit of the bargain so i think you would publicly see an effort to do that. all presidents are limited by the situations they are in and the circumstances they are under. we see that increasing with presidents unable to get congress to do anything and sometimes trying to circumvent them so who knows what happens but i do think that's the core belief that you have to bring all those pieces together to move forward. >> hi. >> childhood friend. >> can you discuss a hillary clinton presidency if that happens as it relates to diplomacy in the middle east given the involvement of the clintons in politics specific to the israeli negotiations? >> i think one thing that she will trump is the fact that she swept in there to actually help along the cease-fire and that was something she was nervous about. we have a moment in the book where she cobbled this together and then she gets on the plane with her aides and she is like as a broken yet? that gives you an idea of how fragile it was at the time. >> at the beginning of the obama evisceration she was large leaf frozen out of the middle east platte arm so she had picked george mitchell to be basically the u.s. ambassador. the middle east was run out of the white house so you know the israeli-palestinian -- the united states may play some secondary role in that. i would hesitate to guess how that all turns out. it's been a long time that they have been fighting each other. i think she has made an effort particularly as a new york senator representing a lot of jewish voters and donors to be pretty hawkish on israel. but i think she also, we talk about this in the book with the iran sanctions and the conference of iran sanctions and the cisada if anyone is familiar with that. she went ahead and push for an more nuanced treatment sanctions that allow countries to get out of sanctions if they divested from iran which a lot of people would contribute as being part of bringing the iranians to the table. who knows whether that ends up being a good thing or a bad but i do think it's hard to judge because if she wasn't in charge of the state department and we don't have as much influence abroad as we think we do. >> hi guys. >> colleague. >> i wanted to put on your reporter hat for a second. >> hold on. >> did you bring it? >> alex we should point out is a campaign reporter. tell me what you think her biggest liability is heading into 2016 e. there from her career -- there you go. that doesn't count. either throughout her career throughout her political career or hillary as a candidate. we saw a lot of issues crop up in 2008 and did you guys get a sense or what team hillary thinks her biggest liability is? >> i think obviously it's been godsey because they are already planning attacks. they have this video that romney was going to use all geared up. you are going to see it everywhere. they are already telling us you are going to see it everywhere and they think they are trying to the pin her to health care. it depends how well this all turns out for president obama but if it doesn't turn out so well i think you will see the attack ads pointing mostly to our books. saying look she had her fingerprints on this and she was really pushing him to do this and they may call it hillarycare. i can see it. those are two big things. >> i think we saw in 2008 some of her tendencies or lack of -- very things that appeal to a lot of voters which didn't want to embrace some of these things particularly. she says in her speech, her concession speech that it isn't about being a woman but she says i am a woman. this is like in echo that i i think was something that had been lacking in that campaign from the perspective of a lot of her supporters and maybe even some folks in the democratic primary who would have been drawn to her but didn't hear that message, didn't hear her wanting for her place in history the way he was running for his place in history. it's hard to walk that tightrope the way that obama did to let people feel that they are doing something historic and important to address it a little bit but to not focus on it. i think it will be a tough thing for her to do. the other thing i would wonder about being a challenge to herself as the ability to run the next campaign is that of the last campaign. a lot of people we talked to talk about applying that. that last campaign in this campaign, it will be eight years previous. things have moved in society is moved and when they talked about co-presidency there was a lot of negative reaction to the idea of co-presidency and now everyone talks about hillary and bill clinton. i think there is maybe a little bit less of a concern about that but our society has changed. if a female candidate had done that in 1985 would have been different? the last one will be an important challenge for her. >> i do think also how they use the former president, that could be a liability or could be the biggest asset to her and that is obviously an interesting thing to watch. if you can support his wife the way he has supported president obama. i have said this all along, she's got it made. she will go to the white house but if he is the guy from 2008 i don't know. >> and sort of to put bill clinton in the goldilocks story for a minute. a lot of people think that was one of the reasons he lost the presidency. in 2008 bill clinton was out there freelancing for the hillary clinton campaign. freed will was no bill and then obama in 2012 said he used it very well as a surrogate. he went out and gave speeches and rallies. he's popular with the democratic race and the moderates. his speech he gave in 2012 republicans were watching that. they were throwing their sodas down or whatever and it was a big moment for obama. but he didn't do interviews. he wasn't out there off-the-cuff and that seemed to be the right measurement. whether or not that's something he'll are content can do as effectively as the obama camp in terms of using bill clinton as a positive and not in ways that were negative. he hasn't been on the campaign trail himself for years so it's hard. i think that will be and i will use the word again a challenge for him. >> hello. i know you talked about loyalty and so the people around here are very loyal to hillary. given that the presidential campaign is almost like a given i was wondering if you encountered any kind of an opposition by getting them to talk freely even though you'll you offered or gave them anonymity? >> it's very tricky. we are dealing with the clintons and they are very insular people with insular aids. i think it was a really, it was a difficult look to report because of that but what we did was we bombarded people so they had no choice but to participate. we sent hundreds and hundreds of e-mails to people saying hey we are writing this book. can you participate and secretary clintons press secretary was getting all kinds of requests every day. should we do this or should we not do this? >> we are not encouraging you that there was a soft yellow light meaning go ahead. the clinton people arranged something pretty early when we are trying to talk to state department officials. this was another one of the challenges. it's a hard thing to have happen. you might have an opportunity with a particular event but i can't e-mail as secretary of state and expect that they are going to talk to me so for some of those particularly it was necessary to get the blessing of the clinton folks for the people to talk to us. it's a little bit of the game and a diplomatic process. they began to trust us a little bit more as we went through the process or they didn't realize it they did and would still write a book. i think that had something to do with it. they hope they decided to torch his debate because they thought we were attempting to do a worthwhile examination over it period of time and i think most of the people expect her to be running for the president of united states. >> also we should point out it's not like they approved everyone. one of my favorite stories is john and i were at the state department one day and we interviewed someone that they didn't know about. incomes philippe and a couple of aides. we were waiting to them like hey how are you. we had just come from a pretty big interview. >> you will see this in the book long interviews with darrell issa and various republicans on the hill who have been investigating her, people who are adversaries. people who don't agree with her politically on anything but like working with her personally. people who were disgruntled former campaign aides. people that thought the insularity of the state department at the top was too much. so there's a bit of everything in there i think. we did get the one thing that nobody else has gotten so far as i can tell in terms of offers. we really got access to all of the levels of the clinton operation that we wanted. >> hi. an observation and a question. between you today that if you only caught the one thing in d.c. make it here so that tweet was very -- you even got your mother to come. >> my mom came. hi mom. >> hillary clinton is one of the most noted people and both of you being reporters had your own ideas. so you enter this book and do this research. willis and most surprising take away from it, something you didn't know, didn't expect or something that was different, the most surprising take away? >> mine was in john knows the answer to this but it was that she is really funny. she is really funny and it doesn't come through i think great i think that's a problem for her in a way. we learned, people were always telling me when i covered her in 2008 she has this wicked sense of humor. you should just talk to her one time and of course we couldn't talk to her. everyone had a story about her and i think my favorite story about her was that we would talk about this in the book. the john favreau story. john john favreau is my neighbor i should say but he was groping a cardboard cutout, her in a cardboard cutout. >> was on facebook and the "washington post." it was a cardboard cut out of her and he was roping the cardboard cutout. >> with beer and with beer in everything and it turned into a d.c. scandal. one of those things that would have been all over twitter heads over twitter had twitter but nothing back then. long story short he's worried he's going to lose his job. he is a speechwriter and he has this job at the white house and he's really excited about it. this thing comes out and he's horrified by it. it was posted by a high school friend of his apparently on facebook. they are trying to figure out what to do. this is the first time the obamas in the clinton people that come together to figure out what to do so they were all these backroom sessions and conference calls. how do we handle this? long story short the secretary calls him and, she wasn't the secretary then but she says i heard that you were groping my -- she doesn't say that she said i didn't see the picture but i hear my hair looks great. [laughter] that kind of gives you an idea of the personality that should shine through doesn't always shine through but i think we might see it a little more in 2016. >> i have a follow-up for that. why do you think that is? does she feel she shouldn't show it and why not do that? >> so number one that ties into something else. if you read the book, read each of the quotes attributed to her, two or three times. .. is to show emotion in the boardroom warm the political battlefield, i mean. i think part of that is being in paula tax. part of it is taking shots ( who lier the years and being a

Divergent Series Cast & Character Guide

Jim Dey | Pritzker remains in denial as state population continues to shrink

It’s time once again to dive in to another round of quick takes on the people, places and events that were being talked about over the past week

Capitol Fax.com - Your Illinois News Radar » Need something to read? Try these Illinois-related books

Capitol Fax.com - Your Illinois News Radar » Isabel's afternoon roundup

NEXT GENERATION NEWSROOM: Planting seeds for the next generation of local journalists | News, Sports, Jobs

Thinking about my career path, I wondered, “How did I end up working in a newsroom in Saranac Lake?” To help answer that question, I made a list of the o

Planting seeds for a career in journalism | News, Sports, Jobs - Adirondack Daily Enterprise

Thinking about my career path, I wondered, “How did I end up working in a newsroom in Saranac Lake?” To help answer that question, I made a list of the op

'ER' Should've Ended After Season 8

Mekhi Phifer Says Lights Out Relates to People 'Trying to Put Food on the Table'

8 Mile Actor Remembers His Belated Co-Stars and Almost Passing on the Film