Hague, a few moments ago, told you that it is in the attitude and behavior that you make this judgment about what is being done. I am not going to start laying out the whole series of definitions, except to say to you that it is clear what proxies mean. If russia or its proxies disrupt the elections, stand in the way of the ukrainian people being able to have a decisive vote, that is when or if there will be additional sanctions. Our hope is that russia will join into encouraging the vote. That russia will encourage prorussian separatist to say that they should work through the process that has now been opened up. That russia has helped insist on, and that that process be given a chance to work through the osce and otherwise. That is our preference. That is what we want to have happen here. Between is, eight days now and election, there can be a concerted effort to try to put the confrontation behind us and put the effort to build ukraine in front of us and to try to do it together. That makes a lot more sense and that would be our hope for direction. Thank you all. I appreciate it. [captions Copyright National cable satellite corp. 2014] [captioning performed by national captioning institute] tomorrow, the indiana governor speaks at an event hosted by the American Enterprise institute about alternatives to medicaid. You can watch it live at 11 00 a. M. Eastern on cspan 2. Quick you can now take cspan with you wherever you go. With our free cspan radio app on your smartphone or tablet. Tvten to all three cspan channels or cspan radio anytime. And there is a schedule for each of our networks so you can tune in when you want. Podcasts of recent shows on our networks. Take cspan with you wherever you go. Onlined your free app for iphone, android, or blackberry. Next, a discussion about the career and legacy of former treasury said secretary timothy geithner. This is from washington journal. It is about 30 minutes. We welcome ian katz, he covers Economic Issues for bloomberg news. Inc. You for being with us. Test,ok is titled stress elections on financial crisis. What is your brought take away as we drill down some of the specifics . It is pretty readable for a book that a 600 pages long and it goes over some pretty dense topics. This is a lot of washington inside stuff in there. I think they did a good job putting it together and making it readable. There are some interesting behindthescenes stuff from the financial crisis. Not full of huge surprises for those of us that followed geithner are closely over the last few years. Interestinglot of things about him, his background growing up, and some of the things that happened at crucial moments that will certainly add to the store of knowledge on the financial crisis. And did he want the job when he faced that fears criticism over his own taxes, why did he decide to stay in the nomination . Guest he was a reluctant person to take the job. His wife was downright imposed downright opposed. Feeling thatng when the president asks you to do something you do it. I think they always felt like that when they went through the tough nomination fight it was going to be tough. I dont think i ever really felt like maybe there were some moments of doubt. I think at the end he felt like he was going to make it through. Then a couple of years later, when he was trying to get out of the job and pretty much had enough and wanted to leave, the president asks them to stay on and said he needed them to stay on for a little longer. When the president asks you to do something you do it. Host whether the debate over thes dimmest Spending Program that over the stimulus Spending Program, one view of time geithner of tim geithner is guest i think he expressed an felt particular discussed with the whole debt limit process, especially in 2011. It felt like there was a lot of grandstanding going on from his perspective. The United States of america is not going to default on its debt. With all the angst and all the trauma all the drama, the markets the treasury refers to it as selfinflicted wounds. I think that particularly great at him. He felt like this is for show, this isnt real, they need to get on with it. For a way to set the stage the geithner are nomination, lets go back to november 2 thousand eight. The president winning his working with the transition office. Heres tim geithner as the new treasury secretary. [video clip] fed, timf and new york geithner not only offers extensive experience shaping policy and managing financial markets, he also has an unparalleled understanding of our current economic crisis in all of its depth, complexity, and urgency. Tim will waste no time getting up to speed. He will start his first day on the job with a unique insight into the failures of todays markets and a clear vision of the steps we must take to revive them. The reality is the economic crisis we face is no longer an american crisis, it is a global crisis. We will need to reach out to countries around the world for a global response. Tims Extensive International experience makes him suited to do that work. Growing up in africa and having lived in asia, having served under secretary of the treasury for international affairs, one of the many roles in the international arena, and having studied chinese and japanese, tim understands the language of todays International Markets in more ways than one. Tim served with the distinction of being under both the democrats and republicans. 2008, asm november president was elected in tim geithner, was their relationship over the past four years . Geithner her and obama built up Close Relationships to wear geiger was not the most senior Economic Advisor but was he really had a report. In similar ways. They are both pragmatic. Think and what can be done in the context of the reality they face. Often eithner are dayton are also often had the often hadithner the president s ear. There andtill go out push forward. He was a good soldier, very disciplined on message. The president , i think, always appreciated that. Host we heard a little bit of tim geithner are in the introduction by the president elect. He writes about his own background in washington dc, meeting his wife at dartmouth college. What else did you learn about him as a person . Than i learned a lot more what most people knew about his time going up in africa and asia. Lot. Aw that they moved a they did a few years in thailand and then came back to the u. S. He was in india. He has some real exposure to other cultures, more so than most government officials you will see. The other thing that is crucial read e book is if you i believe it is the second chapter. It goes over his early days in treasury. I think those are the times that really shaped his thinking, especially his thinking later on during the financial crisis in 2008 and 2009. Shaped by the mexico crisis, he was shaped by the Asian Financial crisis in the late1890s in the 1980s. He was also shaped by larry you couldnt kill off a crisis with half measures. Had to use massive decisive force and not leave any doubt to anyone, either the markets or the public, that you were serious about fighting this. Theextensive that would be moral hazard argument, that you would encourage people to miss behave in the future. He always thought that was secondary to making sure that a crisis did not spread. Host what was his relationship like with former chairman ben bernanke . Similar views, especially during the crisis. From the best we could tell they had nothing but praise for each other. I think he has a lot of respect for the way bernanke was very calm and calculated during the crisis. Fact thatated the bernanke had a real historians view from the Great Depression and felt like he knew what needed to be done to avoid a repeat of that. Apparently they have a good and close working relationship during the whole time bernanke was fed chairman. Host our guest is ian katz from bloomberg news. The book is titled stress test, out this week by tim geithner. Thank you for being with us. We are going to get your calls and comments. Our phone lines are open. The lines are chris is on the phone from the walkie, our line for independents. Good morning to you. , our line forkee independents. Good morning to you. Caller the government and administrators were sent to jail for their role in it. We could have paid off all the mortgages for these poor people who lost their homes who have and weate mortgages would have been further ahead. They lost their homes because they lost their jobs because of the economic downturn. These werent people who could afford a home at a time. Guest one of the things that lingers on for the crisis that is a major point of criticism about the handling of the crisis and the bailouts is that there are people in jail, there arent big shots or pigheadedness big shots or big heads contributed in a big way to what was called the great recession. In jail. It is a complicated issue. The Treasury Department does not prosecute criminals, that is the justice department. It gets complicated. Ve wrongdoing. O it think most people sitting here six years after the crisis rope are very surprised that there are not some big shots in jail at this time. On the second point that the caller made on mortgages, it is an interesting point. Geithner goes over this in the book for my and it is one of the things he gives a little more detail on that he did when he was in office. His really all along was that if you improve the economy, if you put a Solid Foundation under the economy and you consider a blaze things and then get the economy growing again, that that was the best way to all homeowners. One frustration that they did not knew more, that they could not, but any better ideas to help homeowners. , the toolsof the day they had available was to bolster the economy. Is like another tweet we have had your thoughts . Guest that has been the common accusation and frequent knock on him. The bailout. It really grates on him, and he spells it out in the book. Bales are seen bailouts are seen as for the bankers. The way that gartner sees that is that you cannot save the economy without cvb Financial System, and he cannot save the Financial System without saving the largest banks. Unfortunately, some of the characters who contributed to these problems and updating their hides saved with bailouts. The criticism that this was aimed at helping wall street over main street. That is one of the things that he really points up frequently in the book. He says the following guest right. That sums it up. His view of it. Odds withput him at the popular view, that you should be doing more for main street, the that you should not be bailing out the bankers. Is a really interesting argument as he gets into moral hazard, the holding that if you do this again, that the bankers theeverybody will just get feeling like you can always miss behave any will be bailed out by the government. To benly there is a lot said for that view, and there is a certain amount of common sense to it. Guys thursday was that he felt it was secondary to saving the system. If you got a little bit too moralistic or tried to make too much of a principal or a point of punishing people, that you might hurt the broader economy and the main priority, the main point was to save the system. That is what he was saying. This point is making ande the treasury secretary president were in tandem on many of these issues, we did learn that the president was pushing for war to mastic items, and eisner said he cannot do any of that until there were more monetary solutions. Guest when you still president , and you getrk fed the dodd frank financial we form reform, he spearheaded that. He was very pragmatic and he took a look at what could be done, rather than looking very , were being very ambitious. And then he had the European Crisis on his hands, and trying to convince europeans to take his approach of taking massive forced to kill the crisis. He expressed rotation that they were using cap measures frustration that they were using half measures. It has been pretty hard for the administration to get ideas through. Some critics would say they have not had a lot of ideas or initiative. Would say they have had a very uncooperative congress. Or 2012, aside1 for the debt limit crisis, the last couple of years of his time in office was far less eventful than the first couple of years. Host when the democrats with a more geordie in the house, the House Financial Services had this to say on too big to fail. [video clip] the Federal Reserve bank of new york was aware that lehman was owes overstating his liquidity. Is that a true statement . A fair not know that is statement. I will go what the chair said, that there is nothing in that experience that did anything but confirm our adjustment that vulnerable to these gathering storm, both in my lunch leverage they had at how much they were funding themselves. We were deeply concerned about that. Were they aware that they were overstating the liquidity . The showing the tension in committee. Of the things that came out of the crisis was this weren that these big banks all basically protected by the government, that the government was not going to allow them to go under. Really Lehman Brothers that did. Bear stearns was saved, citigroup, which many folks thought was going to go under was also saved, and other banks on wall street. There is a suspicion that no matter what these guys do the government will be there to bail them out. In dodd frank the idea was to eliminate that, that notion that some institutions were too big to fail. , in his book, put a bit of reality on that and said you can never really actually thatnate the possibility you might have to bail out a large institution. He just do the best you can to prevent that from happening. It is one of those contentious , youg with arguments bail out these bags can believe creates this moral hazard, and they feel like they can never go under. Geisler has certainly with the book of and with his statements, has fed into that because he has supported the notion that you should not allow these huge institution to fail what you just want to set up a situation where you do not have to make that choice down the road. Let me ask you about his own personal tax issue. He addresses it in his book, saying they were all honest mistakes, most noticeably when he worked at the imf. What happened . Guest there were some things report, and the if,ont know he wast know if accused of deliberately try to taxes, but if the treasury secretary the artist is cannot do his taxes right, there is a certain amount of irony. It was an embarrassment for him and for the administration. Thee was the feeling that Obama Administration did not have all of its ducks in a row because they should have seen that coming and been able to prevent it or preempted before it became a miniscandal. Host a tweet last week the cover story of the New York Times focused on the. Ew book with we are joined right in we are. Oined nby ian katz interesting that the gentleman there blames the republicans for the economy collapsing. Let me tell you something. Timothy geithner, it is funny let is surrounded by me give you a website first. If you google frontline, the episode called the warning, and watch the video, then you will need to collapse the economy. Timothy geithner was one of the top 10 people. If you could pick 10 people in the United States who collapsed the World Economy in 2008, rubiny geithner, robert is number one, and barney frank. Host your response . Interesting, and this has been written a lot as well. One of the big issues that came up in the financial crisis was how did this happen . As a list look at it there is a lot of blame to go around on both sides of the aisle. Under the clinton administration, banking regulations were loosened. There was a lot more liberalization of the financial somets which allowed excessive risk taking to take place. Only happen under the republican watch, it also happened under the democratic watch as well. There is plenty of blame to go around. Host i want to ask you about what he faced from a number of leading critics of the president from his left flank. Tookis an exchange that place. I want to ask you what he faced from elizabeth warren. [video clip] you talk about leaving the homeowner. This is what about whether or not the investors in these mortgages, some who made substantial profits during the glory days should be required to the the losses when mortgages that they invest in turn out not to be worth nearly so much as they had promised. One means would be through bankruptcy, which would not bring the american taxpayer any money. And the extent to which the current programs that treasury advances sends a signal to investors and mortgages of and the signal is sent on the sidelines. Come to no reason to the table and negotiate these mortgages, you can wait for the u. S. Treasury to offer a bribe to get you to the table to do what have been and your interest to begin with. We all understand that foreclosures do not destroy value for homeowners only, they destroy value for investors themselves. And yet investors are hanging back. Theyre not engaging in rational writedowns that would keep a good stream of payments coming from these businesses, instead holding out for larger streams of payment and for help from your Treasury Department. I do not quite agree with that. As you one option, but know the president of the United States its proposal was theorted did support ability for improvement in housing markets for broader returns. The suggestion that congress considered and chose a different strategy. Not agree that the programs in place are working against this process of repair that will support. I think they are helping. Were seeing quite a lot of new interest and willingness in investors and People Holding the things to renegotiate and write down. I do not think we are deterring that. I lived through a big housing boom and bust down in the southwest during the late 1980s. The government did not step in and help in the same way. Eat theers had to losses for bad investment that they got involved in an subject to homeowners. This was not a question of taxpayer support. This crisis is nothing like