Transcripts For CSPAN Washington Journal 20240622

Republicans, 202 7488001. Independencts, 202 7458002. You can also find us on facebook and twitter. You can send us an email at journal cspan. Org. The dodd frank act was named after its authors, and senator chris dodd and barney frank. It was a massive bill that required federal agencies to write hundreds of new rules. Here are some of the things that the dodd frank act did. It was signed into law by president obama on july joint first, 2010. It created the Consumer Financial Protection Bureau. It attempted to an too big to fail bailouts of Financial Firms. In eliminated loopholes of financial products, providing shareholders a say on executive compensation, and enforce regulations on the books. Here are some polls that show just exactly the scope of this bill. A summary of the bill by a law firm shows that the bill was 22,290 six pages long. It has had 119 congressional hearings, and there have been 139 bills issued in congress to amend or repeal the act. The stats also give you a sense of exactly how much regulatory muscle has been used to implement this bill. It shows that the pages published over time actually total the same amount as 34 copies of moby dick. Clearly this bill is one that has resulted in many new rules that have had wideranging impacts on the financial industry. It has is not done the implemented yet. Dodd frank rulemaking progress by corner is the title of this chart. 235 regulation top and finalized related to the dodd frank bill as of march 31, two thousand 15. 30 regulations have not even been proposed. Future deadlines that have not been proposed, there are 51. There is play more to be done when it comes to the dodd frank bill implementation. Representative barney frank spoke this week about the durability of the law as we head into the future and challenges from republicans. [video clip] if Hillary Clinton is elected president thousand 16, the bill will survive, even if there are people who want to veto. By the way, it is still one of the most popular things that the government has done. By the end of the next president ial term, by 2020, these practices will be embedded. You look at the rhetoric of the late 1930s and 1940s what these and Security Exchange act it was predicted to be terrible. By the end of world war ii, they got used to it. I think by 2020, after 10 years this bill will take root. It is not going to be in their interest to introduce all of this instability. Host that was former representative already frank talking about the dodd frank act, one of the most sweeping Financial Reports in the Country Financial reforms in the country since the great depression. We want to hear from you and if the Financial System is safer than it was five years ago. You can call in, 202 7488000 on the democratic line. Republicans, 202 7488001. Independents, 202 7458002. You can send us a tweet cspanwj. You can find us on facebook, facebook. Com cspan. You can send us an email, journal cspan. Org. Our first call it is my is john from spring, texas. What are your thoughts . Caller i think dodd frank helped some. I was in real estate and the banking business for decades here in the houston area. These bankers made loans when reagan deregulated the loans, it was a collapse. These developers did not have any money in the projects. They built apartments all over the place with no money. Then, all these loans went bad. Im retired now. Republicans want to loosen these regulations and let these bankers do whatever they want. We need more regulations of the banks, not less. Host john, you are calling on the republican line, is that right . Caller yes yes. The glasssteagall act was ano major flaw. They illuminated that back in 19 99 with bill clinton. It was phil gramm who did that. Anyway, we will have another collapse. I do not trust the bankers at all. Host all right, that was john from spring, texas. Next up is james from sherman texas, calling on the republican line as well. What are your thoughts . Caller good morning. Host you are on the air, go ahead. Caller i just want to say host we will turn to some polls from wall street. The wall street journal has this view of wall street still suffering this by Economy Survey says. Lonnie from ohio on the independent line is our next caller. Go ahead. Caller good day, maam. Like one of the other caller said, glasssteagall, that shouldnt have ever been repealed. I cant wait for the bric nations to get together to create their own currencies of these weasels on wall street can be sent back home. Host all right. That was lonnie from ohio calling. Another survey shows that millennials do not trust wall street or investing in stocks. This article shows that just 14 of respondents in a recent survey who were ages 1829 say that they trust wall street to do the right thing all or most of the time, compared with 12 last year. That is a survey released by the Harvard University institute of politics. The statistic has barely changed over the past five years. Host cnbc reported on five things to know about the dodd frank act, five years later. One of the points that the article makes is that big banks have actually gotten bigger. The article says that the Banking System asked assets have swelled, and the top five institutions control the total. Here is what representative had to say earlier this week. [video clip] the dodd frank in the structure has indeed made is less stable in many ways. The small banks are fewer. Because washington can control a handful of large establishment firms much easier than small zealous competitors, this is what likely and intended consequence, not unintended consequence, of the act. Todd frank concentrates greater assets in fewer institutions. Title i dangerously allows federal government to designate too big to fail firms, also known as intern, title ii creates a taxpayerfunded bailout, known as the liquidation authority, that the Nonpartisan Office costs taxpayers 20 billion. From wall streets point of view, dodd frank may not prove so that after all. The big investment houses can shape regulations guaranteeing paybacks for themselves. This is bad policy, and worse economics. The roads market discipline, and risks further bailouts to be paid mostly by lower and middle income taxpaying families. It becomes a selffulfilling prophecy making firms bigger and riskier than they otherwise would be. Host that was a representative speaking at an event at the American Enterprise institute earlier this week about the dodd frank act. We are taking her call the want to hear your thoughts on wall street. You can call in on the democratic line, 202 7488000. Republicans can call in at 202 7488001. Independents you can call, 202 7458002. We are on twitter, cspanwj. On facebook, facebook. Com cspan. Next up from Fort Lauderdale florida, is tom. What using about wall street . Caller when you say wall street immediately people start thinking about banks. If you are talking about wall street in general, the United States can really think its lucky stars. We have executives at the home of the Major Companies of the United States. They basically saved this economy. I think it seems to be popular, the hate, how executives in the corporate area. I think it is very misplaced. Give them a break. They host top, we have seen stock markets hit record highs over the past year and a half. Our you invested in the stock markets at all . Have you benefited from that . Caller sure, yeah. I got destroyed when the market went down. I am lucky to be wary of today. Most of us have been regaining what we lost. People dont really talk about that deal either. Lets get back to the banks. Lets focus on the banks because that is really where most of the hate comes from. Im not a lover of banks. I personally wish that glasssteagall had not been revealed either, but it was, so lets get a life. The banks ok. They did wrong and it was politically inspired. I would just like to know more about the other side of the ledger, the people whoo lied about their mortgage i e application and knowingly took up second mortgages knowing they could not afford them. That is really what brought the system down. Yet, sure, criticized the bank for what they did, i would like to hear more about the other side of the transaction, the on the inside giving them a legal mortgages illegal mortgages and the responsibility of the mortgage holders themselves. Host all right. Next up is kerry from king george, virginia, also on the republican line. Good morning. Caller good morning. I would like to say that i support dodd frank. From what i know about it i am sure it is a complicated. When i hear that citibank is going to congress, writing its own legislation, that is really disturbing to me and a lot of the people that know about it. What we know is these lobbyists from the big banks have incredible access where an average person has to jump through hoops just to go visit washington. These people are just walking in the front door and going out the back writing their own legislation. It seems to me that people are really out for themselves. I really enjoyed losing to Hillary Clinton morning talking about some more reforms that she would put in place. Look at longterm growth instead of shortterm growth. Host once again, your calling all the republican line, and you are a supporter of. Frank and likely Hillary Clinton . Caller no, im calling on the democratic line. Host that makes a lot more sense. Caller thats all you want to say. I support it. I dont know about wall street. They are out to make money like everyone else. I just want regulations in place they keep people that are greedy , that want to take money, instead of her the money. My, is about citibank. Host that was kerry. Hillary clinton did recently speak about her vision for what the tax system should look like under her potential presidency. [video clip] first, im proposing a reform on taxes of capital gain. The profits earned by the cells of stocks and other assets to promote and reward farsighted investments. The current definition of a longterm holding period, just one year, is woefully inadequate. That may cap as longterm for my baby granddaughter, but not for the american economy. It is no way to run attack system. As president , i would run to a sixyear sliding scale that provides real incentive for longterm investment. For taxpayers in the top bracket , any gains from selling stock in the first two years would be taxed just like ordinary income. Then, the rate would decrease each year until it returns to the current rate. This means that from the moment investors buy into a company they will be moreprofits. And, so will some executives who are paid in part by stocks or stock options. Host that was democratic president ial candidate Hillary Clinton. We are talking about the dodd frank act and getting your thoughts on wall street. We will hear next from mark from massachusetts on the independent line. Go ahead, you are on the air. Caller good morning. I agree with the dodd frank reform. Just hearing what you play there for the first time. I think there were reforms needed. As a make any sense to me how these banks could just go and write a quarter million or have a million policies to people with no income, no vacation, no money down. It seems illogical from a business standpoint. Then, the banks blamed the government saying we had to loan money. I do not know any company that the government is making do anything, making them right policies not policies, but mortgages. These are some of the Biggest Companies in the World Holding trillions and trillions of dollars in assets. I just want to know where the board of directors and a lot of these companies were. I fill confident with wall street, im invested in wall street personally, and think it is a great system, but there needs to be some oversight so there are not water to people pulling the strings of a whole trillion dollar company. Host do you feel like the Financial System is safer than it was in 2010 or 2008 . Caller sure. I deftly think it is. Host that is mark. Next up is john from attleboro massachusetts. Go ahead. Caller hello, good morning. Boy, i want to call and disagree with my fellow massachusetts person. And, the Hillary Clinton thing. If clinton getting to the point on what is going on here, clinton said some things and that speech that were disturbing to me. One of them was making the assumption that xerox created the technology bubble. I do not think that is what it is. I think the American People and their innovation did. I think they should break up the large banks and large corporations, but that is neither here nor there. Back to dodd frank. Dodd frank put a lot of regulations particularly directed to the banks, and particularly directed to the large for banksur banks, the people selling bonds for the United States, primary dealers, if you would. A lot of it overlapped with the Security Exchange commission. If you go look at elizabeth w warrens letter to mary jo white, they are not laws. If you look at eric holder going back to the people who created the housing crisis thing, and the revolving door in washington we need more competition. I dont even know what line to call in. The democrats and republicans are really not serving me. Host do you think it was the banks that are to blame or were to blame for the financial crisis, or the regulators and the lack of action . Caller i do not think it was either. I think people were sold this notion that debt for housing and things of that nature is an asset. It is an asset if house prices keep going up, but it is a liability of if house prices stay the same or go down. It is nothing but a steam for more property taxes and more government control of what is going on. I am totally totally against the regulations for one size fits all. I think they should break up the media companies. I think we need to reinforce competition. I think wall street has long since been used as a vehicle for private investment. I was involved in this kind of stuff back in the 1990s late 1990s and early 2000. At that point in time, you could go out and have people make small investments under 200,000, and things of that nature. There is always hope on the other and that they have a Big Corporation byuy out. The system is kind of broken. Dodd frank is just a boondock for people who do not care about the country. It is just regulators. Host all right, that was john. We will have to leave it there. Next up is carry from mansfield, ohio. You are on the air. Caller good morning, how are you this morning . Host i am good. Caller i would like to comment on wall street. I think wall street is about like the senators and congressmen who represent the people of the United States. I think it is a joke to the American People. I think that everything takes in the congress and the senate so long to get an answer on anything that deals with the peoples business of the United States. I think they feel like they run the show. Hopefully, with a guy now running for president , and might fortunately make it donald trump join the cspan conversation like us on facebook, follow us on twitter. He is someone who will tell what he feels, and regardless of anyones opinion he knows what he will say, does not need a teleprompter, and i think a lot of people are really excited about donald trump. Host how worried are you that another financial crisis could happen in the next few years . Caller very possible. There is no control. There is no one watching. Host all right. Next up is a need of from lancaster, ohio on the republican line. Go ahead. Caller my comment is on barney frank. I am not usually on tv. Host thats ok. Caller anyway, when this came about, i know my sister borrowed on her house. I said, how can you borrow that kind of money . Iwatch the crisis, and all this money then had to be covered. The people, the Foreign Investors, who aig, it finally came up to them and Foreign Investors who buy into america aig could not give them back their money. Everything fell. People who did not watch this and then barney frank up and leaves congress. He never got any feedback about his part in it. It started in the Clinton Administration of giving these loans to people who could not pay them back. We watched it because my family has worked all their life. I had this one sister who cap borrowing. She was one of the people who was not a person who could manage money. Now, people get upset about this, but this is a fact about the housing. The housing was the backbone of america, and they destroyed it. I do not care what anyone says i watched it. I watched the chinese say that america is broke. Anybody who did not watch it i even had a brotherinlaw in mortgage. No one speaks to it, and it makes me angry. You can tell. My voice. Im 76 years old, very old. I watched it, and i wanted to know what is happening to america. Barney frank was part of it. The clintons were part of it. I am a republican, i will speak to that, but every american needs to take, and anyone who took out a loan and to pay it back, needs to speak to it. Host all right. This comment from twitter, give banks a way, are you kidding me . There are some efforts in the senate under way to amend, or overhaul, the dodd frank overhaul. The Senate Appropriations committee announced on thursday a billiondollar bill containing legislation that would impose a sweeping overhaul of the dodd frank law. Host certain changes to current law are needed, shelby said on thursday, and Credit Unions have been subject to a one size fits all regulatory framework. Democrats, however, were staunchly opposed to any rollbacks. Our next caller is just from tennessee. Good morning to you. What are your thoughts on wall street . Caller it is amazing to me how may calls i have heard this morning about this topic. I have never heard once the Fair Housing Act bank of america and ken lewis being forced to buy art out countrywide. All of these things happen specifically because of the dodd frank supported Fair Housing Act which required banks to give minorities loans. They had a have a percentage of loans just for minorities. That caused the rates to drop to zero, that no one had to give any money down for a loan. Then, they started bundling these loans and selling them to freddie mac. No one mentions chris. Leaving the senate because he had a personal loan. All of these things happen because of dodd frank. Everyone wants to pretend like those issues never happened. Bank of america was forced to buy countrywide, and then the government came back and is penalizing bank of america because of countrywides illegal loan action. This is all amazing to me that people just dont seem to remember for two minutes the actual cause of the problem was the Fair Housing Act, passed by the democrats, which regulators force the banks to give minorities loans at 0 interest or zero money down, and that caused Property Values to increase because everybody could buy. It is so easy. It is just so easy, and it is amazing to me that no one remembers that barney frank and chris dodd, and how complicit they were in passing one, the fair housing as, but then getting personal loans from countrywide. Host do you think it has been progress made in reducing the amount of the subprime mortgages that are available . Caller what is happening now is things are going back to that zero rate. You are starting to get another bubble forming in the Property Values. Then the governor comes along and they want to increase your property taxes because the value increases artificially. It is all a big boom. At some point, people have to see that the government is the cause of the problems with all of their overregulation. If they would just get out of the way now they are killing the coal industry, for gods sake. The overregulation and the meddling by politicians is what starts most of these problems. Then, they come along and say, look, it is be banks. Pork and lewis, he had to resign from bank of america because they forced him to sell countrywide. Host we will have to leave it there. Our next caller is carrie from arlington, virginia. Good morning to you. Caller good morning. I am what you would call a d. C. Insider. There is always an asset that people do not talk about. What i was able to point out clearly was a bill what i documented to legislators was regulators behave is that when someone does that, congresses rules say that we will give you a sanction, we will discipline you. People did not go to jail. The example i gave was easy eric garner, the i cant breathe man. I brought to legislators papers that show that Bernard Madoff was not selling products since 1963. Congress wrote those rules for every person in the investments community with stolen money. They did not go to jail. They may be got barred for some amount of time from the securities industry or a sanction. And, the area gardeners who are in the face of the officers who are always being fingerprinted and mug shot. What i showed to illustrate the impact i did a sidebyside comparison of a person that went to jail for a little bit of drugs and a person in the same month and year in the financial industry who stole 20,000 100,000, and they did not go to jail. In all of these conversations, whether it is real estate or the other issues that people around the country are raising, at the root of it are the rules that congress wrote that put some people in jail and does not put others. I love to be a guest on your show and show examples of this. This is the conversation we need to look at. Do not blame dodd or frank, i know chris and barney. We need to blame every legislator who will a lot, not understanding down the road the impacts. A person on another cspan shows that we do not always know what we are doing until it is too late. Host next up is roy from East Hartford connecticut, also on the independent line. Go ahead. What are your thoughts on wall street. Caller a look of it like this. Their failures in 2008 with a big things played a major part in our demise and past failures. We recovered somewhat, but in the long term, i see that a lot of people are going to get host again, that is bigtime money back and wall street. Before we know it, we will be in serious trouble. Like everybody says with donald trump, were sending all of our Job Opportunities to mexico, china, and so forth. I say, we had corporate cronies major monopolies pyramid processes, and ponzi schemes etc. Wall street and big banks have played a big role in our demise since the 1930s, if you think about it, with the market crashed back then. To make a long story short, what we need is a peoples Investment Network where the people own, operate, and controlled her own destiny and for seeable future. I have been working on that. I submitted various proposals to independent, republican, d and Democratic Candidates with the hopes that they review my work and consider it. Protect your job opportunity but invest wisely in the foreseeable future. The very careful of things, Insurance Financial institutions who are only in it for bigtime profits. Host all right. A few comments from twitter wall street is like blackjack, if you know how to play it, it is good, if not, it is bad. The wall street journal reports that a key part of the dodd frank act, the socalled local rule, went into affect this week. Host we are take your calls on the dodd frank act. We want to know what you think about was wall street. We will hear now from robert in arizona. Go ahead, you are on the air. Caller yes. I would like to clarify that im an eisenhower style republican. I remember how our nation was actually constructed with a 1956 Republican Party platform. If someone wants to get this country back into a growing dynamic economy where everyone benefits that is the platform. I would like to correct several of the previous callers, it was not the fault of the ordinary people who wear suckered into buying zero downloads made promissory notes. The light is where the brokers. They are the ones who told these people tell me this, do you have any other income, make up something. They are the ones guilty of that. The biggest and most m virilent ones were doing construction, mall developments. Im in arizona, and we have about 180 stripmalls that are completely 100 min istripmalls that are completely empty. Iceland completely collapsed followed by britain, followed by germany, followed by france. Host as you mentioned, arizona is one of the places that was hardest hit by the financial crisis. What have you seen in terms of levels of unemployment. You mentioned the malls. Caller unemployment here is probably closer to 16 percent17 . Submarkets have been coming to bat, but most of it is under individual contract labor. Instead of a 35 job, they tried to sucker the in for 23 with a contract that may be renewable it may not. Host our next caller is brian from irvine, california. Go ahead, you are on the air. Caller hello and thank you. I would like to read just a few excerpts from an essay i wrote while i was in school. It is called financial hedonism, pleasure and pain. It sums up how i feel about wall street and so on. It starts out with hedonism is a philosophy. Where the hedonist seeks maximum pleasure with minimum pain financial hedonism seeks to the financial elites have sold their souls and pursue of pleasure, involving privatized profits without enduring the pain of socialized losses. They gratify their senses through their debauched financial activities. Financial hedonism is the spot of the economic debauchery and its reach extends into every endeavor. At the financial elites and their coconspirators and government is evident by the fact that the u. S. Congressman and senators on average perform a percent10 higher on their investments. If anyone was to utilize the information, it would constitute a legal insider trading. The refusal to pass the audit of the said indicates that they know who their daddy is. They insist on host all right, we will have to leave it there to get in a few more callers. Next up is call from minnesota. Go ahead. Caller yeah i would like to tell you that for example, a working man that has an average job, you know, and an average house, and average trip mall stripmalls a lot of us are not so lucky to the traders and make money and get your check the next day. It is a wonderful thing what i consider to be legalized gambling. Primarily it is an illusion money, and that is what our government is doing. We are giving away money so it can keep feeding it sell make itself feel better, because of everyone is fed, everyone is happy. Host if you want callers on the segment. Next up is larry from ohio on the democratic line. Good morning to you. Caller first, i would like to thank you for saying democratic line. I get tired of people saying democrats, like it is something bad. As for wall street, if people can afford to electronically transfer a million shares are 100,000 shares, i think it would be appropriate to put a tax on each individual share, maybe a dime. That would help pay for all that. The people who got us in this problem should be in prison charging them 1 billion or 2 billion as a fine is not doing anything good for the public. Host next up is richard from massachusetts on the independent line. You are our last caller for this segment. What are your thoughts . Can you make it quick . Caller my thought is that they should have never deregulated the bank. We had a guy from a bank in boston 2004. He went to the board and said we are to go broke for selling all these loans. They fired him. Then, he went to the congressman and they did not want to hear it. Public tv is what we need. Public news that is supported by the people. We do not hear any of the truth from these corporations that have news channels. Host all right, that was richard from passage to since. That concludes our first segment on wall street reform. We will be continuing the this gush and next segment. We will talk with Norbert Michel from the Heritage Foundation along with julia gordon of the center for american progress. Later, with major energy bills moving through the house and senate this week, we will speak with john siciliano. Our newsmakers interview this week is with harold rogers. [video clip] do you sometimes wish that you had earmarks back . Rep. Rogers [laughter] yes. Ever since it has been a lot harder to pass the appropriations bill. Rep. Rogers more importantly the constitution controls the Purse Strings of the government, supposedly. That presumes that you can pass Appropriations Bills in order to exercise that power. We have not been able to do that. The bureaucracies in the executive branch and the executive branch have had free will to spend. The bureaucracies decide what they spend and dont spend. That is not the way it is supposed to be. The congress is supposed to be the watchdog over the executive branch to see fraud or abuse, whatever. That is my concept of what we should be doing. Part of that is with earmarks, nobody knows better than me and my part of the country because i spent time there and live there, and my stuff is there. I know what needs to be done there better than any your busy bureaucracy downtown. I think earmarks, and very good moderation sensible, are good thing to have. Considered underrated by many first lady historians, caroline was an accomplished artist who took up china painting and took it to the white house. She was interested in womens issues and helped raise funds for Johns Hopkins university, on the condition that they admitted women. Caroline henderson, the sunday night at 8 00 eastern on cspans original series, first ladies influence and image examining the public and private lives of first ladies and their influence on the presidencies. Sundays at 8 00 eastern on American History tv on cspan 3. Washington journal continues. Host we are continuing our discussion about wall street reform at the dodd frank act. We are joined by Norbert Michel. He is a financial regulations Research Fellow at the Heritage Foundation. Also by julia gordon of the center for american progress. Thank you so much for being here. I would like to start with a question, very broad, for both of you which is how effective has dodd frank bad at making a Financial System stronger . Norbert michel, we will start with you. Guest what i would argue is that we have the same structure as we had prior to the crisis with more detailed regulation. In addition to that, many of the mechanisms in place to socialize the cost of excessive risk are still there. As you have a hard time to make the case that dodd frank has made us safer. You have just as much leverage as you had before. You do have some higher bank capital standards in terms of numbers, some higher ratios, but in terms of the actual mechanism that is there, you have essentially the same system that you had prior to the crisis. The only thing you are hankin your hat on is now is if that extra 2 3 capital will do something. Guest i think. Frank has made the system a lot safer particularly on the consumer side, the creation of the Consumer Protection bureau is one of the best things to happen to consumers and this country. It has already returned more than 10 billion to consumers. On the side of the system over all, regulation, too big to fail, dodd frank helped, we still have a ways to go. Host we have been hearing from a number of colors debating what the root cause of the crisis was. Some people talk about homeowners who took out the loans. Some people talk about the banks. Some people talk about the regulators who may be did not catch what the banks were doing. What do you see as the catalyst for the crisis . Guest i think there are two things you need to talk about. One is misaligned incentives both on the consumer side, in terms of the loans, but also up and wall street, and what the Financial Firms were doing. The other issue of course was regulators asleep at the wheel. We do have better regulations now. Regulations tend to be only as good as those doing the regulating which can vary. Isaac it is very important that dodd frank has fixed some of those misaligned incentives at the ground level. Guest i do not think we are actually that far off. And some of the details we would disagree, but i think you do have to look at the regulatory failures as a key component here. I would argue that they were not asleep at the wheel, they were complicit. If you go back and look we are not that far off. [laughter] guest credit default and swabs are a big thing. Host can you explain what a swab is . Guest it is basically an agreement to Exchange Cash flows. You have one cash flow for a party and a different kind of cash flow for a another party. One might be fixed and what might be one might be variable. You would change what you get. That is the short version. Our different kinds of swabs. What were talking about is more like a protection, like insurance. I do not think we can call it insurance, but it is more like insurance. A credit default swap says we will give you something, and that something is basically for you to give me some money if something really bad is to happen over there. That is not exactly the same thing as a generic swap, but it is a type of swab. When we talk about the crisis and swabs being part of the crisis, when we look at these things, you can go back to 1993 a paper a 2006 guidance. These are regulators. Not only are they saying, look we know where all these swabs are in the banks, they are saying it is ok, it is safe, and we have the right people to be regulating these things. Host you are saying the regulation of swabs their investigation of swabs shows the way in which regulators were complicit . Guest absolutely. And, the idea that this happened in some shadowy corner of the financial world is blatantly false and demonstrably false. The fed has admitted it. It is all public information. If you look at what dodd frank did to the swap market, the one type of swap that caused a major problem is almost not addressed in dodd frank. Some people have called it a clearing mandate to fix the problem. The type of salt the aig had for example, would not be cleared. Guest i think it is important to explain this in a little less technical terms because it is very, give it stuff. We want to think about what caused the crisis there really in essence to lwo layers to the problem. There is a layer that hits the consumer and what is going on on wall street, what people do not see most of the time. On the ground level, you had, in particular, a lot of mortgages being sold to people, precisely because the Financial System appear wanted more of them. They felt they had figured out a way to completely eliminate risks through financial engineering, but they were still paying lenders to give them the riskiest loans possible. They would pay lenders more for a riskier loan so lenders went out to deliberately make a riskier loan. You can talk about homeowners who purchased something maybe they shouldnt have, but we have to understand is the marketplace was specifically out there selling these lemons because they got paid more for them than selling a 30 year typically advertising typical m mortgage. That was happening because of the second layer and what norbert is talking about going on in the Financial System where these mortgages were being bundled into poools that were being sliced and diced themselves, and then they would do this fancy thing where they would take the lousiest layers and package those, and then slice those up too. The Credit Ratings agencies were complicit in this because they kept giving the socalled least riskiest splices very high ratings for being safe, when they were not safe at all. On top of that, you have these credit default swabs the hedging. For those of us who work on the consumer side, we know what new what were going on with the mortgages. We were not so educated with what was going on in the Financial System. When the mortgages collapsed which we knew what was coming, little did we know it would bring down the whole superstructure with it. In terms of what dodd frank has changed, regulating derivatives and the way that they have is very important. It probably does not fix the entire problem, but there is still a lot of regulation that is required by dodd frank that has not been completed in that area. That is really important to complete so we can figure out what work needs to be done. Host we want to bring in our viewers now. You can start dialing in and join the conversation as well. You can call on the democratic line, 202 7488000. Republicans, 202 7488001. Independents, the line is 202 7458002. You can send us a tweet we are on twitter, the handle is cspanwj. You can find us on facebook, facebook. Com cspan. Or, you can send us an email, journal cspan. Org. Our first caller for the segment will be john from michigan on the independent line. What are your thoughts this morning . Caller yes. I would like the panel to respond to what my view of the whole crisis origin would be. That is that if there was not money, all of these problems would not have occurred. Meaning, if there was not a pump that was turned on, we would not have had all of these other issues relating to who got what mortgages, and who should not have gotten mortgages. The money flow would not have been there. The origin of what i understood this whole problem started with, and that is the aig was able to give insurance when Goldman Sachs packaged up all of these large bundles of capital. If they did not have an insurance policy to pay them, we would not have had the pump turned on, and all the subsequent problems. Please comment on that. Guest i think the problem is much more than aig. It is much more than just the money. We can talk up the Federal Reserve having accommodated Monetary Policy and the wrong time that that happened, by think the overall thing here is definitely federal policy that was geared towards, and is still geared towards getting these mortgages out in the system. That is exactly what it is designed to do. If we say that if we did not have the pump turned on, im not sure im not sure that is any different from what we e are saying. The whole system is geared towards that, whether we are tight about Monetary Policy or setting up the rules so wall street banks can be backed by taxpayers in case something goes wrong. The entire system is guest we are a Global Economy and theres a lot of money that comes from a lot of places. Certainly in the 1990s and early 2000s there was a lot of money sloshing around the globe seeking return. We cant blame any one company. But what we have to know is that is always going to be the case. That was the case then and the case now. Capital is always seeking the highest return it can get. That is why appropriate oversight and rules of the road are so critically important. That is the only thing that can help prevent this kind of crisis that can realign the incentives and help make sure we dont have five Million People lose their homes unnecessarily along the way. Guest a bigger issue is we should not have federal policy to do this. This is not the first time this has happened. You go back to 1918, i believe, we started a federal push toward getting more people in holes. Herbert hoover was in the better Homes Association and the federal went out in a private privatepublic partnership which is like a fannie and freddie thing and promoted the idea if you had a hotel that was a good home it was a good thing and we had a housing boom and it crashed. You dont need federal policy pushing the social ideals on people. You look at this last crisis, the Home Ownership rate was around 64 to 65 . It was like that from 1968 to the 1990. Bill clinton and republicans were just as much to blame but bill clinton and said we will get it up to 70 . That is completely arbitrary and counterproductive and a lot of people julie said a lot of people didnt realize this but a lot of people did realize how it would end. You can go back through clips and wall street journal and many places many policeman in academic many people were talking about how it wont end well and it didnt. Guest here is where we have our first legitimate real disagreement. This is not about pushing Home Ownership. There was nothing about pushing Home Ownership. The predatory loans the ones you heard about where people were underwritten the socalled no income and no assets, the ninja loans, only 10 of those were to firsttime home buyers. Most of them were refinancings. There have been many tombs in our countrys many times in our countrys history where we expand ed expanded Home Ownership same. After world war ii is a great example. It is funny norbert mentioned a rate of 64 to 65 because that was not the rate from 1918. It was well under half of the American Public until the g. I. Bill and the federal Housing Administration helped returning war veterans buy homes which created the strongest middle class this country has ever seen. Home ownership is an important way for the average family to get the benefit from the kind of Financial Investments that usually only really rich get and build wealth. It has been the single most effective way for families to build wealth and pass it down generations. The specific number of Home Ownership rate is something of a distraction because honestly if you break the population up into different categories, the white population for example has always had Home Ownership rates well in excess of 64 and still does. What brings down the rate is people of color have generally been locked out of the Home Ownership market and have far less wealth and less able to pass on wealth to children. So it is not about Home Ownership policies. This is about bad federal policies that incentivize what i call home buyership rather than Home Ownership. Selling somebody a loan you know they cant possibly sustain is the kind of thing that harms all of us. Host lets take another caller john from johnson city, tennessee, on the republican line. John, go ahead. What is your comment this morning . Caller yes. I see a lot of people buying houses here again in our area that have part tomtime jobs that happened the same way before the crash, and my comment is about we have an actual credit union here that is pretty large that actually pays dividends back to the members. Why are the banks allowed to give those loans more freely . It seems like the credit union is more stringent. And one other question with this new trading on wall street that is so fast with the computer and we just saw hacking recently. What will that do to our financial status, too . Guest Credit Unions are under a slightly different set of rules than depository institutions, traditional institutions. But i dont know that theres anything in particular that with make them be more free with the honest than other banks. I dont believe that is them the case although it may look that way. Maybe off the top of my head theres one credit union and not a lot of other banks in that community and maybe it would look that way. But i dont believe they are more freely lending. As far as the high speed trading, it is actually, the lie speed trading is not really new. It changes all the time but thats been going on for quite a while. Im not sure that theres any particularly new danger that that causes or that present. You always have that sort of Cybersecurity Issue going on. I think that is present all the time. Guest i will address the access to mortgage credit issue. One of the most important things doddfrank did is put in a new system that says for anybody making a mortgage first you have to check to make sure that the borrower can pay back the mortgage. It sound like basic common business sense but what was happening in the runup to the crisis was that lenders were lending without checking to make sure someone could pay back the mortgage over the length of the loan. A loan doesnt just end the day after you sit at the settlement table and close the loan. It goes on for the entire term of the loan and no one was paying attention to that. Not only were they not paying attention in the underwriting but what we all know now called the Mortgage Servicing system, the account management was in terrible shape and much of the foreclosure crisis could have been prevented if mortgage servicers had done a better job helping people work out situations as they do on the commercial side but were unwilling to do on the residential side. With the new doddfrank loans actually credit has been significantly tighter than it was before the crisis. Some small banks and Credit Unions have some exemptions from some doddfrank rules something they lobbied hard for and received and in fact are trying to get more exemptions. But by and large lenders all have to adhere to the new rules about making sure the borrower has the ability to repay. Host the new consumer tppbgs prebgsfinancial Protection Bureau addresses and has a purview over some of these issues you mentioned such as Mortgage Servicing et cetera. Here is what senator cruz will to say. It is a regulatory deal has restripped American Consumers and businesses of their freedom of choice and has limited their access to gallon all in a name of we know best attitude. Host michelle do you agree with senator cruzs statements . Guest im closer to ted cruz. You have consumer complaints that can be addressed by the federal trade commission, department of justice and state attorney generals. If you have fraud those institutions are designed to root out the fraud, to address the fraud. Why do we need another Government Agency and why do we need one that has essentially a blank check to do wherever it wants . That is is not really sort of a sound democracy principle, i dont believe. So, i do agree with him on that side. I want to go back and address one thing. I hear this all the time how the ability to repay nobody cared about the ability to repay. If thats the case we have to ask why. What Business Strategy what would be a good Business Strategy for a business to say i dont care if the customer can pay me. Guest they could pay at closing. Guest im getting there. Why would you do that . It is because you know there is some other institution to pick it up. You dont have to care. That is a horrible way to do this. You can look at the housing goals and people say it is not the housing goals but there is documented evidence that fannie and freddie weekend and got the lower quality loans specifically to meet the lower tier of the housing goals to do this. They specifically did. Guest you veer eded into heritage land. I want to Say Something about the cfpb. I disagree strongly with what senator cruz says. The cfpb is the crown jewel of doddfrank and this is the first time you have had a federal financial regulate for working for you. This regulator has helped almost 20 million get their money back from people who have tried to compete them. It has recovered almost 11 billion for individual consumers consumers. When was the last time your a. G. Did that for you . This is the First Institution that has put Consumer Protection first before bank profits. The other Bank Regulatory agencies have what is called a safety and soundness mission which is a good thing. You want to keep the system safe and sound. I wish that had been what they were doing. But what was happening before the crisis was safety and soundness was basically equated with shortterm profits and as long as the banks were returning quarterly profits the regulators were complicit and nobody was really caring. The the condition that Consumer Protection is opposed when that is the basic Building Block of a sound Financial System overall. If you are making safer loans Everything Else throughout the system is likely to be safer. Just to this question of fannie and freddie and housing goals here is why lenders were able to make loans that people couldnt repay. This sis a system, the securitization system you have heard that word. That is where you bundle loans into bonds and sell off the bonds to investors. If you were a Mortgage Broker working for a lender here is the way it happens. The broker went out and sold loans. The broker got paid more to patent consumer in a higher rate loan than the consumer qualified for. That was through yield spread premiums. Then the broker got their check at the settlement take went off and they had no further investment in the loan. Their interests were no longer aligned with the homeowner. The lender took the loan but maybe the lender held it on their books for a few weeks or a couple of months before they sold it to wall street. Now the lender will cash and they had no further interest in how well the borrower was doing in paying back their loans. The person who wall street who bought the leaned securityized it never even owned the loan. They just put them in other corporate structures that they then sold to investors. Now the investors were left holding the bag and they really a, they did a pretty bad job of evaluating the credit risk. But thread the Credit Rating agency saying there bond is triple a rated. That is what our nations Pension Funds invest in, triple a is supposed to be this real seal of approval. Turns out the Credit Ratings agencies, who pays them . Oh those people bundling the loans together who never even own them. That is what is wrong with the system. Host you have a response . Guest the triple a part i dont know where to start with this. The triple a security part there is documented evidence of this, the triple a tiers of the Mortgage Backed securities basically did pretty well as they were supposed to. So you have tiers of risk. The lower tiered is the one that we have the problem with. That is where the problem started. It is a grass oversimplify gross oversimplification to say the ratings agencies did something nefarious. Nobody knows the future and to blame them is ridiculous. They are paid to do what everybody else is trying to do which is gauge what the default is going to be. You cannot possibly know for certain what that s. The only thing you can use statistically is previous information. All the previous information said it would do what it did do. Guest in the last answer you said that everybody knew this was coming and honestly a lot of people knew it was coming so why guest theres a difference between knowing it is a bad idea and wont end well and stamping something with a c rating when you have no empirical evidence to use to give something a c rating. Host the next call is william from harrisburg, pennsylvania, on the democratic line. William, would you like it join the conversation . What are your thoughts . Caller first, i hope you give me time to speak. Number one, im 62 years old. Since i have been a working consumer theres always been regulation regulation. Is the problem and the root is they deregulated just about everything in the financial institution. Plus they deregulated a whole bunch of other things. They created a need society based on greed. I have been using Consumer Protection and it worked for me all up until the 1990s when the republicans took over in congress and the final push of deregulation. And bush, he just added more deregulated stuff. So, the fact is if you have regulations to look over and watch these people that are supposed to give you money and all that to make sure you pay it back, we wouldnt have this problem. So both people on your panel are correct on both sides. The problem is the deregulators created a society that we are now a scan society. So those politicians regulators, et cetera, basically they all should go to jail. Guest thank you for your call. I have heard this and dealt with this for years now. There is and julia probably will shake her head no. There was no significant deregulation at any period since at least the 1930s in the United States. Financial markets, banks, nonbanks, are the post regulated of most regulated of any industry. It is a myth that we have significant deregulation. People talk about the monetary control act where we got rid of Interest Rate ceilings. We did because they were higher than what the banks can charge. That is not deregulation. That is removal of price control. People talk about the common refrain is Something Like we let banks buy stock. We didnt let banks buy stock. We let depository Institution Holding Companies affiliate with an Investment Banking institution. Both of those were highly regulated. People say there was no capital on the investment side. Rule 15c31 is a liquidity rule and one rule. All these guys are highly regulated. Guest the question is not regulation versus deregulation per se. What the caller is seeing and i agree with is theres been a culture of looking the other way in favor of profits. And one thing the consumer tppbgsfinancial Protection Bureau has brought back to the system is someone out in that world specifically looking out for the consumer. If you get scams now you can complain right to the cfpb and look into it for you and you just go on the website and do t. You dont have to fill out any fancy forms or get a lawyer or do any of those things. You can go directly and get help from a federal agency right here in the nations capital. It is really important to talk about something ted cruz is just wrong about in the quote you mentioned earlier, which is that this is some kind of rogue agency with different power than any other agency. The Bank Regulators by and large are independently funded. What is interesting is the regulators who regulate Jpmorgan Chase and citi and bank of america, you know how they are funded . They are furnished by the banks that they regulate. Which seems. Guest and appropriations. Guest theres no meaningful appropriations that relate overall to the o. C. C. Budget, to the budget of the fed. All of these are independent agencies and it is really important for a Bank Regulator to be independent because let me tell you those banks have lobbyists in congress from here to eternity and if you were to subject the cfpb to congressional projections every one of those banks would be in their Congress Persons office with their wish list and you can bet that wish list would go into the cfpb appropriations. Keeping the cfpbs funding independent is the most important thing we can did to help consumers. And it does not give cfpb some undue authority. In fact, in terms of authority cfpb is more constrained than any other agency there. Before they put out any regulation they have to put it through a panel a special panel that evaluates its impact on small business. And then if other regulators think the cfpb has gone too far they can actually get together and change what the cfpb has done. That is not something we can do for the feds. Host the reason we are talking about there because there is the fifth anniversary of the doddfrank act. Republicans have put forth efforts to amend or even repeal the act that are democrats who feel it didnt go far enough this. Is a clip of Hillary Clinton discussing where see feels it falls short. [video clip] we have to go beyond doddfrank to many Financial Institutions are still too complex and too risky. And the problems are not limited to the big banks that get all the headlines. Serious risks are emerging from institutions in the socalled shadow Banking System including hedge funds, High Frequency traders traders, nonbank finance companies companies, so many new kinds of entities which receive little oversight at all. Stories of misconduct by individuals and institutions in the financial industry are shocking. Hsbc allowing drug cartels to launder money. Five major banks pleading guilt to felony charges for conspiring to manipulate Currency Exchange and Interest Rates. There can be no justification or tolerance for this kind of criminal behavior. Mr. [applause] Hillary Clinton while institutions have paid large fines and in some cases admitted guilt too often it has seemed that the human beings responsible get off with limited consequences or none at all even we they have already pocketed the gains. This is wrong. And on my watch it will change. Host that was Hillary Clinton talking about the need to go beyond dodd frank. We are speaking with julia gordon and norbert. Do you think we need to go beyond doddfrank . Guest first i want to say hillary is absolutely right about what she says. There is still lots of work remaining to be done to make the system safer. I want to focus on one particular part of that clip which is the transfersvesty of justice that nobody went to jail. We didnt go up against the executives who we know knew what they were doing. They have built a system where it can be very very hard to go after them. I know that there was certainly a lot of effort to go after them. But we have to make sure that in our system we have laws and rules of the road that are able not only to hold larger institutions accountable but that can hold individuals accountable for bad decisions. I would say one unfinished piece of business has to do with executive compensation. We just keep paying these people to rip us off. And that is something even when you cant put somebody in jail, you should at least be able to not continue to compensate highlevel financial executives at these exorbitant rates when what they are doing is specifically out there either harming the American People or harm being the financial harm being the Financial System . Guest i think we are mixing separate topics. In the first place we are talking about criminal liability and that is fine lets talk about criminal liability. If you have done something criminal then you should be prosecuted, of course. That is not that is completely separate from doddfrank. And the compensation issue is separate from that. To say these guys have specific specifically opened a business to rip people off, businesses dont run that way. If we are talking about the fact that things didnt go right it doesnt automatically follow that because somebody lost money there is a criminal liability. That is not at all the case. Guest im still stuck on businesses are not run to rip people off because i can give you a long list of businesses, pyramid schemes that are based on ripping people off. Guest a legitimate business. Guest people thought Bernie Madoff was a legitimate business. Do you believe jpmorgan is a scheme . Guest they have been involved in unsavory activity. Andre from ohio on the republican line. What are your thoughts . Caller i agree with what the panel is saying and also agree with what a lot of callers are saying but a lot of consumers dont have knowledge of what finances mean and what their currency in fact byes. In 1970s currency was backed by gold and then oil and now we see a drop in oil but a spike in the u. S. Dollar because of what going on. The strong dollar what is killing Multinational Corporation and the new Interest Rate it will raise that rate and they are not going to make the profits they want to make. So that is why they are worried about dont raise it now. But what im seek with the doddfrank act is a lot of consumers dont know how to actually do their finances. They really dont sit down and dont do their books and. Carefree and feel safe around you talk culturally how it affected minorities and others of gender and religion it has broken down and being targeted in a human insist humanistic way. Our country will sink in if we dont open the markets equally and free to everyone. Host lets get one more call before you respond. That is chris on the independent line from florida. Caller good morning. I think it is so rich when hillary stands there and lectures people about regulations. During the housing debacle numerous arms on how george soros, who is a primary benefactor to Hillary Clinton profited handsomely on the backs of the collateralized debt and homeowners that lost money and so forth. Im wondering if mrs. Gordon thinks the Regulatory Environment that allows people to short the market and make money on the misery of americans is a good thing or bad thing. Guest let me take the questions in the opposite sord order. Lots of folks made tons of money in the subprime Mortgage Market both going long and then going short. What is really important is you want to fix the system so no one is profiting from the misery of americans on either side of the trade. I agree with that and hopefully doddfrank has done a lot to advance that. To the first callers point, i want to thank you for making two important points. One is that we dont do a great job in this country with Financial Education and especially folks who dont come from money aoften are not as educated about how to safely engage in purchasing mortgages or taking out Student Loans and the like. I go back to the cfpb which is doing a tremendous job getting really clear understandable language out there to the public to help you. They have this initiative called know before you owe which is a really Important Initiative to help people who are potentially getting mortgages. But we need to go much further. When families are getting into the biggest financial commitment they are going to ever get into they do need professional help. Most people will only buy a louse for the first time house for the first time once and maybe refinance but this is not something you do every day and you become an expert in and it is important to have the appropriate kind of financial counseling and advice available to families for these big decisions. I think something that is really important right now in fact is the department of labor has proposed a rule again doing something that you would think was so sensible that with already be done but that is Financial Advisors have a duty to work in the best interests of their clients. That is something that is really important to put in place as well because i dont think we can guess every Single Person to be an expert on mortgages. This stuff is complicated and abstruse. What we need to do is when you are engaging in any kind of big commitment, whether a mortgage or student loan or even buying a car that you have the appropriate education and Information Available for the transaction. Host one area you can agree . Guest i think people need to do more to educate themselves. Im a former educator and worked in a Public Institution eight years doing that, teaching finance. I know there is a lot of misunderstanding out there. That is the first time i have heard that the cfpb was the beacon of light to fix that problem. That is interesting. Usually i think that these Government Programs end up with more detail than what we need and duplicate things that are out there. There are lots of programs that are available. Truth in lend something supposed to help people. Now when you go to buy a louse the stack of paper is this high. Nobody reads that and understands it. I dont know that that fixes anything. Guest that is somewhere where we are going to agree. The Financial Education is important but i dont think any consumer should be expected to get through that stack of papers on their own no matter how many pamphlets we have out there. That is why it is so important to have appropriate professional advice. When you buy a house you are required to get a professional inspector to come and check to see that the foundation of the house is sound. You should similarly have the ability to have a professional make sure the loan is sound. Host this comment from twitter. You wrote recently in forbes too big to fail is still unsolved. You said it will explore why doddfrank failed to accomplish one goal ending too big to fail. Taxpayers are as much at risk of getting stuck with the tab for future bailouts of megaFinancial Institutions. Can you explain what you meant . If you look at what doddfrank has done title one has essentially said these are the companies who regulators think if they fail they are going to cause a crisis. We know who they are. In addition to that we go to a title 2 of doddfrank which is orderly liquidation that says we will take the Parent Holding company and wipe them out to make sure the subsidiaries keep going and only do that if we can certify the fed and fdic there is no private financing available to fix this. What does that sound like . If you go to title 11, it reworked the tpaefrsd Emergency Lending Authority saying you can only do broad based lending praplsd people on the left will say that fixes the problem but half of the programs that the fed funded in the last crisis were broad based most directed a of at bailing out the primary dealers. That is now codified. There is no gray area. You know exactly what they are going to do. That is the same thing that happened last time. Host do you think too big to fail should be fixed . Guest absolutely. The problem when we talk about the details of this system or how we are pushing mortgages or the fed aspect of bailing out firms the whole problem is we are socializing the cost of doing business. Julia doesnt like businesses or that is the impression i get so we want to have all of these products out there and Want Companies to provide these products and if anything goes wrong we want somebody to pick up the tab and right now that is the federal taxpayer. That was the case before doddfrank and that is now the case. That hasnt changed. Guest first of all, i think that is really not fair, the comment about business. I do think that the too big to fail aspect of things is where we still have a lot more work to do. I definitely agree with that. Just to go back to our friends Jpmorgan Chase we were talking about, they have 2. 5 trillion in assets. There are moments when im not sure how many zeros are involved in that. It is hard to imagine what you do with an institution like tha that. What doddfrank has succeeded in is making those institutionless and the environment they operate in somewhat safer, better rules with respect to capital and risky assets and that sort of thing. But i will completely agree we have not moved all the way to demonstrating that we have these socalled living wills that these institutions are supposed to have. We have not yet figured out if they have plans in place that we think will actually work or really what will happen in the event theres another crisis, maybe some exogenous shock that happens and that is work that definitely remains to be done. Im less concerned about some of these too big to fail entities but i agree that they are still too big to fail. Host next from capital heights, maryland, a call on the independent line. Caller good morning. That is one thing i feel that both guests are kind of like hiding the real aspect of what is occurring. Im going to give my personal experience with purchasing a home. Before that i want to say this in case i get cut off. It is against the hraulaw for banks to loan money and for banks to loan their money or a creditors money so they cant make loans. It is against the law. Now let me talk about my personal situation. I purchased a home and i sat down with the people at closing and wells fargo was there i was under the impression wells fargo was paying for the home for the previous owner for me and that i was to repay wells fargo for the loan they gave to the previous owner to turn over the rights it me. I signed the promissory note and deed of trust. My signature was on the promissory note and deed of trust. That is what i was under the impression of what happened. There is a hidden aspect to there transaction that they try to keep secret and that is what i want to talk about. What i found really happened was when i signed that promissory note that is a security instrument. Let me tell you what happened first. Host you will have to keep it quick. Caller they sent me a letter saying that is when at the raised my eyebrows and did a freedom of information act to wells fargo to get all the information i could and that is when i got a copy of the promissory note and deed of trust. When i saw the promissory note and deed of trust the promissory note was endorsed by the Vice President of wells fargo and deed of trust was stamped on there there. What i found is the promissory note was referring it money. Host we will have to leaf it there. We will take one more caller and that is patrick from new jersey on the democratic line. Caller thank you very much for taking my call. I want to make a couple of comments related to mr. Michelles comments saying that credit default swaps were not insurance. They were to be covered the investments of the Mortgage Securities that much invested. A lot of the problems with the credit default swaps the risky mortgages were put into hundreds of different credit default swaps instead of maintaining in one. The problem with the credit default swaps is a 7 default rate in the mortgages they would all crash. Mr. Michelle stated the businesses are not in the business of ripping off the consumer. If there is a 7 default rate and it causes the entire credit default market which was capitalized at 54 trillion, the banks did not have the capital to back that up. And they did have a Business Model which was to rip off the consumer. Guest so, i said that i wouldnt characterize the credit default swaps as insurance. Im making sort of a technical point that i didnt need to make. I dont disagree with the characterization of what the caller said though. My point on businesses is that if you go into business and your idea is im going to rip everybody off you are probably going to go out of business relatively quickly. I dont think that is anything that anybody or any reasonable person with dispute. That was my point. Again, the system was designed and still is designed to back you up if you take on too much risk. So you have a system that was predicated on it is ok if you take on too much risk, dont worry about t. That is exactly what happened. There is no surprise here. Host our next call is bill from depuy, new york, on the independent line. Caller good morning. I recently read a back Robert Morris the financing of the American Revolution and Robert Morris invested in real estate in the 1790s and blew the market up because there was no regulation. And that was the first time financial crash in this country. And through the 1800s there were a number of financial crashes in this country and Everybody Knows about the crash of 1929. That is is when f. D. R. And joe kennedy decided we have to do something to end these financial crashes. And a bill kept the investment banks and commercial banks estimate. When george bush sr. And the Republican Party pushed to eliminate glass spiegel and pressured clinton to sign the bill and he had 29 democrats to push it through. So, now when you talked earlier about should wall street banks be backed by the taxpayer, that is exactly opposing glass stegall under f. D. R. And we will continue having crashes as long as you allow the wall street bankers to influence it. Guest thank you for that call. I think that it is really important to note that we did have regular financial crises until the depression happened and we had the new deal and we had a lot of things come in. Glass stegall was not the only thing. Fdic insurance was incredibly important. The federal Housing Administration was incredibly person. There was a lot of regulatory and other types of apparatus put in place it help stableilize the system and it remained quite stable until recently. I know we heard earlier that there has been no deregulation. Theres been roll backs of certain kinds of regulations. Theres a lot of rules out there and it is hard to know when you reduce the number or what. But there was a significant roll back both in some actual laws, you know glass stegall being one of them, as well as a different attitude on the part of the regulators. I should say that this is not i will not blame this on just the Republican Party. I think that everybody in government was complicit with this. There were the occasional regulators that tried to stand up to this. Brooks brooksly bourn trying to stand up to and saw what was coming on the derivative side but generally the boys club was not interested in hearing that at the time and shut that down and went on. I do think it is important to get regulations right again. Would restoring glass stegall by itself solve the problems . These problems are extremely complex and we need a lot of the Different Things that we worked on in dodd frank and need to continue working on to make sure our system is safer and less prone to crisis. No one can say there wont be another crisis. There are things that you cant anticipate that happen that may or may not originate in the Financial System. But the important thing is to make the system as safe and resilient as possible. So that we can avoid crises when possible and when there is a crisis have some kind of orderly process to help mitigate the impact of the crisis. That is not just on the too big to fail unwinding level but again on the consumer level. For example, if consumers could restructure the Mortgage Loans in bankruptcy you may not have seen a lot of foreclosures that you saw and every foreclosure had these ripple effects that brought down the value of their neighbors homes even when their neighbors were still paying their mortgages. So you really want to build these kinds of fire walls or fire breaks into the system so that no one shock or crisis can bring down the whole thing. Guest the first thing is i think that sound wonderful but what we normally do is get into a lot of trouble thinking we can design the system that it will be safer and we usually create pressure points we didnt expect and find out we screwed something up. Back to the call, excellent book that i would recommend is by George Benson please check out that book. You can go back in the 1700s and Robert Morris instance that the caller brought up, the Banking System in the 1700s was completely different than the one we have now. It was largely public banking before the nation was founded so it is wholly different. We have always had this populist hate toward banking and finance in the United States and it has created and just an incredibly bad system. You compare our system to canada. Canada has never had a banking crisis. We have had almost 20. Glass stegall didnt stop them. We had a crash in 1987 that had nothing to do with the s. And l crisis. We had this one. The reason i recommend the book the glass stegall idea is largely a myth. There is some empirical evidence that the banking firms that will securities affiliates and that is all we are talking about here, the type of company that we had, the securities firms in the 1930s and 1920s that had im sorry the banking firms that had securities affiliates had lower failure rates than the Banking Companies that didnt have securities affiliates. You can go back and look throughout history George Benson documents this very well somebody says oh the Investment Banking is what brought the system down and somebody repeats it and that is all that went on. Glass siegel is largely a myth. Host the next caller is greg on the independent line from massachusetts. Caller i want to ask julia who audits the Federal Reserve . And i also want to ask about the Consumer Financial bureau. I know honda just signed a federal agreement but im looking at the agreement from london hondas point of view. Host is there the london air bag recall you are talk the honda air bag recall . Caller no the Consumer Bureau got 25 million from honda for illegal practices. How do i tphoeknow there Consumer Financial bureau isnt going to be used as a Political Tool by one special party . Guest i think that the biggest way to protect the cfpb from being used by one special party is to keep it out of the congressional appropriations process, which is where that often happens because individual lobbyists are able to put things into Appropriations Bills just like right now senator shell pweur is attempting to shelby is attempting to roll back big chunks of doddfrank through an appropriations bill which is supposed to be about just funding the government. I will say auto lend something an emerging area of a lot of sharp practices and the cfpd and other agencies really need to be on the lookout for what is happening in sort of straight auto lending like the loan you get to buy your car as well as what is called auto Title Lending which is sort of like pay day lending where you pledge your car title in order to get some cash. That is another area where there is a lot fof that is a business that is set up specifically designed for the consumer to fail where at the tend it make more money by seizing the collateral than by the borrower performing over time. So it is really important to think about auto lending. To go back to the fed, i will note the head of the Federal Reserve right now january from the time yellin janet yellin frequently goes to the congress for oversight but it enjoys great deal independence. Again, the independence is important to avoid particular lobbyists lobbyists, but sometimes in the past particularly i think under Alan Greenspan who was seen to have magically mastered all the levers of power and had it all under criminal there was a lot of dark under control there was a lot of deference that there probably should have been a little more, to go back to the auto thing checking under the heard. Host senator shelbys bill was mentioned. Do you agree and can you tell us more about what it would do . Guest i dont agree with the characterization that it would roll back big chunks of doddfrank. What shelbys staff did is went through the house is of and senate and looked at bills cosponsored or passed the house or one of the committees with a large majority and i believe there are seven i could be off on the number. I think i did a forbes column on this. There are six or seven that passed the house unanimously some by voice consent. They were all like tweaks at the margin margin. One of them is a manufactured lending thing. One is a rural designation thing. There is Something Like 30ish different definitions of what a rural geographic location is. So one thing is aimed at fixing that. Those are the kinds of things that dominate that bill. There are some bigger things. There was some g. S. E. Related stuff that technically doesnt have anything to do with doddfrank although it would be pretty big. Most of them are just tweaks at the margins. Host we have a call from louisiana on the republican line. Go ahead. Caller i have three basic questions. Number one could you clear up the glass siegel thing. That is the one that bill clinton did and should have vetoed in november of 1999. What were they trying to accomplish . Can you define that . Number two the jenny maes didnt have a fallout in 2008 and freddie and fanny did. And for mrs. Gordon i dont know if you remember the difference between red lining and predatory. The answer was 2008. 2008 when you didnt get a loan because you didnt qualify, they would jump up and down and call it racism. Then after 2008 they changed the story to predatory lending practices so the bank would get a better commission. He forced them to have that. Could you elaborate on that . Thank you. Guest thanks for your call. Im not sure i understand the last part of the question. I can talk about red lining which is a practice that actually was created by the federal Housing Administration the Government Agency that now is the most frequent channel for people of color to get firsttime mortgages. When that agency was started they very much chose not to ensure mortgages insure mortgages in black neighborhoods and was called red lining because they would take a big map and take a red pencil and draw a line around where they didnt want to lend. That had nothing to do with the credit worthiness or lack therefore. Guest it credited an urban pocket. Guest interto address the fanny and i want to address the fan kwreu fanny and freddie question. We do have some unfinished work which is reforming the Housing Finance system. That is important. Fanny and freddie remain in federal conservatorship which is not a status they should be in for all of eternity around i hope congress, which had some bipartisan agreement last year around some important principles there should get back to work on that. Host we are almost out of time. Guest i will try to address the caller. The freddie and fanny versus jenny mae it only securitizes government backed mortgages and freddie and fanny do not. The glass siegel thing the whole glass siegel issue is a split between the types of firms that can affiliate. If you are a Holding Company you cant have certain types of Financial Firms. Host that is Norbert Michelle and julia gordon. Thank you both for being here. Next up with major energy bills we will talk with john siciliano, the Washington Examiner of energy and environment reporter and forbes released the list of top 10 most conservative and liberal cities in america. We will get your thoughts on the city you live in. Yesterday in an almost 20minute speech ted cruz recounted prefer conversations with Majority Leader Mitch Mcconnell and lack of trust in the senate. Here is some of what he had to say toward the end of the speech. [video clip] [video clip] [video clip] senator cruz i sat in my office and told my staff the majority leader looked me in the eye and looked 54 republicans in the eye. I can in the believe he would tell a flat out lie. And i voted based on those assurances that he made to each and everyone of us. What we saw today was an absolute demonstration that not only what he told every republican senator but what he told the press over and over again was a simple lie. This institution should not operate at the beck and call of lobbyists in washington. This institution, the majority and minority leader arm in arm again again, should not team up against the american taxpayers. That is is why our children are going bankrupt. Cspan has the best access to congress. Live coverage of the house, congressional hearings and news conferences bringing you events that shape public policy. Every morning washington journal is live with elected officials, policy makers an journalists and your comments by phone, facebook and twitter. Cspan created by americas Cable Companies and brought to you as a Public Service by your local cable or satellite provider. Washington journal continues. Host our guest is john siciliano. He is the energy and environment correspondent at the Washington Examiner. He is hear it talk about Energy Legislation on the hill. Thank you for being here. Guest you are welcome. Host the Senate Energy committee introduced a bill this week. Can you tell us what is in it . Guest it is a bit of a companion to the louse house bill bill. It does a lot of what i would call tweaks to Previous Energy policies that have been around that senators have will had a mind to change. But it also provides some substantive components. One of them was the most controversial would be oil exports. It will address actually removing a 1975 ban on oil exports. The country cannot export crude oil. It was a measure put in place after the saudi or Opec Oil Embargo as a measure to protect us from having to be dependent on imports. As many people are aware now we produce a lot of oil and gas and that is the other component. Gas exports is another area. So they are focused on the changing fossil energy world. Although there is a big component, a title for Energy Efficiency. So we are not looking at beyond those measures for exports or theres also a state measure for revenue sharing which senator blur cows can i the murkowski has been interested for a number of years on trying to change that would give states a bigger share of Energy Royalties or revenues they gain from federal lands or federal waters from host are these the same it measures in the house version of the bill as well . What are the main components of the house version . Guest the house version is very similar. They did not go into the export issue as fervently as the senate bill. They are waiting for the senate to do that. Later, as the two bills come together, they can address that then. There will probably be some for action. Congressman barton who was the head of the energy and Commerce Committee in 2005 when they passed one of their last energy bills wants to move in amendment. With that bill a lot of the Energy Efficiency components are very similar. They want to improve Energy Efficiency in buildings, they want to do some tweaks to the Weatherization Program that the department of energy regulates that basically helps you increase your thermal insulation in your house as a way to reduce energy bills. Things like that there is one component that a lot of the senators and congressmen wanted to get rid of from 2007. Section 433, which is basically it is a sort of a ban on fossil fuels to be used in federal buildings. If i got the correct. In a bid to up Energy Efficiency. A lot of senators and congressmen dont like that section. They go after things like that. Things that sections of bills people have never heard of and would never want to hear of. They are being addressed in this bill. If you read through it, you will be scratching your head. Host thats one of the interesting things. What is not in it, which needs to be the most Controversial Energy issues, such as keystone. Can you talk about why those issues were not touched . Guest keystone is seen as a poison pill at this point. If you included, you will get huge debate on your hands and a lot of entrenchment. Senator murkowski in the house they want to pass something. They want to get something out during recess. You will have a hard time doing that if you address keystone. The Greenhouse Gas issue senator inhofe is addressing that issue. Which is mainly the rules coming out of the epa for power plants. Which is a huge thorn in the side of a lot of states and republicans are making it a top issue to go after. Host we will be taking your calls for this segment as well. You can ask questions or comment with john siciliano. If youre a democrat, call 2027488000. Republicans, 2027488001. Independents can call 2027488002. You can send us an email. One of the interesting things you mentioned is that there was an effort to actually get this bill passed. The bill was introduced and sponsored by Lisa Murkowski republican from alaska. It was also sponsored by cantwell, a democrat from washington. You dont see a lot of bipartisanship these days. What is behind that . Guest some of the revenue sharing things, the priorities set number cars go senator murkowski has that senator cantwell is on board with. They are not addressing Greenhouse Gases. This is not a Climate Change bill in the least. They are not going down the road of keystone. That may come up on the floor, but we will see. Right now, they want to get a bill they want to get a bill marked up before recess or as they recess. And address it and have a boat with a get back in the fall. Have a vote when they get back in the fall. Senator cantwell is very much in tune that is not the case a few years ago where they got stalled. The Energy Committee was completely stalled over the issue, over revenuesharing. Senator murkowski wanted to do that and the leading democrat wanted to do the president s priority, clean energy standards. Its been a few years. That is how the mythology goes. How it went back then. There was entrenchment and they did not do anything. Host we will check the phone lines now. Tommy from tennessee on the independent line. Go ahead. Caller yes. The United States produces 39 of the worlds energy, yet we only use 9 of it. What we need is legislation that will make us Energy Independent and selfsufficient before we start selling it across to other countries. I was wondering what your take was on that. Guest the caller raises an interesting point. There are a lot of congressman and senators concerned about moving to swiftly to export energy. Especially when we still import a lot of oil. We have reduced that by a great degree as well. There is a big push on one side to say export you are producing more than we have ever done over the largest natural gas producer. Oil production is through the roof. Why not move forward now . We have seen a lot of Drilling Operations curtail operations because of the low price of oil. And because there is a glut. We are producing too much. Theres too much oil in the market because the u. S. Has stopped imports but has continued to increase its production. The lot of people want to see us remove this ban on exports. A lot of people say they are concerned it could drive up gasoline prices. That is keeping a love people from supporting it. Host our next caller is kevin from New Hampshire on the democrat line. Caller hello. How are you this morning . I just want to give the caller that just called in some props because he is absolutely right. The legislation and all this stuff going on is to copy things. These Oil Companies have made so much profits, all the Energy Companies they are not going to get any bailouts from the taxpayers. They had so much money that whatever is going to happen, they are going to absorb the cost. The American People are not going to be micromanaged on energy when they have made so much money and we are in so much trouble. The people are not going to be the bailout. Guest one thing the caller raises is this tax he implied tax credits for Energy Companies. That was another thing that the senators moved on this week as well. There is no Energy Component to that. An Energy Component of that. He did not move forward with the president s proposal to remove subsidies for possible fuel companies and create permanent subsidies for renewables. That is continuing the house has to do their measure. They did pass a oneyear extension, sort of piecemeal stuff on some of the energy credits. The big one was for the renewables, the production tax credit which pays to offset the cost of wind producing electricity. A lot of the concern is exports might harm the American People. Theres a lot of people on the hill that are concerned that issue. Host this is a question that came in over twitter. Is government leading the way were dragging its feet on switching vehicles to natural gas . Guest interesting question. There was a net gas bill natural gas bill which addressed vehicles in the last congress. I have not seen that bill come back up. Part of the reason is because fleets especially heavy duty are seriously looking into tractortrailers. Converting their fleets. The epa proposed a new heavyduty standard for vehicles that would help move that transition forward. A lot of it is happening on the industry side. That is why you are not seeing as much on capitol hill on natural gas vehicles. You are seeing it in the agencies, though. Host the senate will be in session this weekend to talk about highway funding. There have been some efforts to link oil revenue to highway funding. Here is the story in the wall street journal. The senate is considering legislation that would partly replenish the west Highway Trust Fund with 9 billion u. S. Highway trust fund what is the Strategic Petroleum reserve . Guest good question. The highway bill is one bill. The act also does this. The spr was part of this ban on oil exports passed in the same bill in the 1970s which basically put in place this reserve of oil. If someone turns off the spigot oil to the United States, we could tap into our reserve and produce diesel. We have not used it in that capacity to stave off the embargo. We have used it for Hurricane Relief efforts and other things. The department of energy manages that. They have done some test sales of oil to see there are some issues with that. The spr is being addressed by senator murkowski. Murkowski does not like this idea. A lot of other people dont like this idea because they think the spr should be reformed but should not be used as a piggy bank. It has a lot of oil. A lot of experts have said if you are going to sell off now the price of oil is abysmal, the lowest ever, why not make your money back . It is an expensive proposition to build that thing. Wait until if you are going to do this, at least let the oil price go up. It is there is opposition to it. It is a great offset. Because we are producing a lot of oil, lawmakers dont think we need it any longer. Why not use it for funding resources, which is the washington way to go. Host our next caller is gregory from pennsylvania on the republican light. Republican line. Caller good morning, john. Im going to shed some light on some of these stories im aware of. I would like your take on it. Years ago, the Energy Business in texas and other oklahoma and wyoming, took allowances. When that came to an end they were buying oil cheap from the middle east and the putting it back in the ground in west texas and that is what caused the blowout in the gulf of mexico which was a major problem. In the way of energy, i think there are certain adjuncts which are not justifiable once. They existed and do today. The bigg e, some of his trucks are on the road. Enron, the big e. What a mess. To this day, we have dealt in the middle these companies are adjuncts of the Energy Business. They are just an added cost to the consumer. Guest the callers points, im not aware of the depletion allowances he is talking about or links to that with the gulf. As a broader point, the Energy Industry is a huge, vibrant part of the United States economy. It has a lot of investments. Pension funds, various other industry segments, telecom and other subsidiaries they own. They have been part of the economy for a long time. It should not be any surprise that there are various companies that might not seem linked to energy that are part of the energy world. That continues to happen. It is a big, major part of the u. S. Economy. Host dan from the massachusetts on the independent line. Good morning to you. Caller good morning. Thank you for having me on. I agree with something george bush said a few years ago. Not that i agree with much that he said. Something he said was that we are addicted toil, like a drug addicted to oil, like a drug. I think that is correct. It seems in our Capitalistic Society where everything is based on the bottom line and profit, when you have a product that needs to be pumped out of the ground, sloshed around a little bit and then sold to the public, but there has been no price put on oil as far as the benefit of having oil in the ground and our planet. Oil is a hydraulic fluid that can be put under enormous treasury not breakdown. This pressure and not breakdown. Enormous pressure and not breakdown. Preorganic material is a volatile place. I see us pumping up the lifeblood of the planet, basically. Burning it, releasing the carbon back into the atmosphere and at the same time, it greases all the wheels and everybody is making a lot of money. It is a double bed. Double bad. Host this question somewhat related from twitter guest california is a very particular animal in terms of its energy market. There are a lot of constraints for moving fuel there. Theres refinery capacity there which is good. There are refiners there. Getting the feedstock from west texas and other areas into the state. It is a big concern. That is rudimentary, but there is also recent spikes that people are blaming on market manipulation. I have not been tracking the issue as much, but it is a concern. The west coast in general, people are very aware that prices are higher there than anywhere else in the United States and they would like to see those addressed as some point. California is doing a lot with Renewable Fuels. They have a low carbon fuel standard which has been in the courts up and down. The oil industry has had problems with it. They are trying to address that through that and electric vehicles. There is a lot going on there. Host one more caller. Tina from alabama on a republican line. Go ahead. Caller why do you think 535 people in congress are smarter than 300 million out here . I just wonder where all that money went for the infrastructure. Didnt a lot of that go to the Renewable Energy . Thank you. Guest on the one thing, a lot of whats in the bills is lawmakers responding to their constituents. To the engineers, to the Energy Industry. To be fair to the oil industry has a lot of tax breaks and benefits. There is a fossil Energy Research part of the government. There is a Renewable Fuels Renewable Energy part of the research that the government does. Im not sure exactly what the caller is referring to, up with there has been ups and downs in trying to maintain funding for this programs. I would not say that the renewable Energy Industry is getting a lions share. Funding for these programs. They are always telling them. The incumbent industries are well entrenched and run the show. Renewables is a new player. The administration is trying to help them along. Theres been problems with that. The funding mechanism, loan guarantees, stuff like that. It has not really broken the bank, so to speak. I would just tell the caller to bash it is a great question it is a great question. Keep watching cspan to find out all the answers. Host thank you so much for joining us this morning. Next up, forms magazine recently released its list of the most liberal and conservative cities in america. We will take a look at that and talk with an m. I. T. Professor who did research on the same issue. We will be right back. Its almost as if they were matter and antimatter. Inequality. Hes always to the right and almost always in the wrong. Filmmakers Robert Gordon and Morgan Neville talk about their documentary, best of enemies on the 1960 debate between William F Buckley and gore but vidal. Very unlike today. Today, there is someone saying the numbers are dwindling, talk about hot topics, hot topic number two. I dont think that was the norm in tv at the time. I dont think these guys needed that. The moderator was a distinguished news man who was really kind of embarrassed by this. He was moderating, but he disappears for sometimes five or more minutes at a time. Today, you would not have a moderator not jumping in every 30 seconds. Everybody at abc stood back and let the fire burn. Sunday night and it is not and pacific on cspans q a sunday night at 8 00 eastern and pacific on cspans q a. Establishing the china collection she was interested in womens issues and help create funds for Johns Hopkins university on the condition that it admit women. She was the first general of the daughters of the American Revolution. Caroline harrison, this sunday night at 8 00 p. M. Eastern on cspans original series first ladies, influence and image. From Martha Washington michelle obama. Two michelle obama. To michelle obama. Washington journal continues. Host our next segment is on the most liberal and most conservative cities in america. Forbes recently published a list looking at which cities are the most liberal and most conservative. A survey on an m. I. T. Looked at this issue. We will be taking your phone calls through the end of the show today. Democratic line, 2027488000. Republicans can call us at 2027488001. Independents can call us at 2027488002. You can send us a tweet. We are on facebook. Or send us an email. Tell us how you think your city ranks. We are joined on the phone life by christopher workshop, a professor at m. I. T. He published a study that looks at the liberal or conservative nature of American Cities. Christopher warshaw. Can you tell us a bit about how you conduct your study and how you rank the American Cities . Guest looking at the relationship between Public Opinion and policy output. How much of cities spend, how much they tax, a variety of policies. We ranked cities by combining the survey data from seven large previous surveys. The views and opinions of 75,000 people. The combined that information with statistical methods to estimate how conservative or liberal population was. The survey data is saying on National Issues like samesex marriage, obamacare, abortion, gun control, people in view of the National Issues as highly correlated with their views on local issues. Some people argue that peoples views on local issues like roads or smoking bans are unrelated to their views on national politics. We found this was not true. Peoples views on these local issues are similar to their views on National Issues. Host did you find that people view that better city as as liberal or conservative as it actually ranked that that people viewed their city guest technically, they are not on the same scale. We did not ask this directly. The same cities where the public is liberal, has the most liberal policy outcomes. Places like boston have the most liberal citizens in the country. In our scale, the second or third most liberal large city in the country. In terms of foreign policy, its one of the most liberal cities in the country. Its best about four or five times as much as conservative cities in our scale it spends about 45 times as much. Host how do you define liberal or conservative policies . By the local budget . Guest great question. One of the challenges for studying local politics is that there are not great in nisource is available on local policies. Great data sources available on local policies. The main source of information is information on fiscal outcomes, how much they spend per capita, how much they tax per capita. Far and away, this is not a perfect source of information but generally speaking, the best one we have available. This is the main what we look at. We looked at a survey conducted by a nonprofit on environmental policy. The most liberal cities also tend to have the most liberal environmental policies. We looked at the relationship between Public Opinion on samesex marriage and city gay rights policies. Once again, the cities with the most liberal Public Opinion on samesex marriage also tend to have the most liberal policies in a variety of different gay rights policies measured by the human rights campaign. Host the Pew Research Center compiled your data into this chart here that shows that mesa, arizona is the most conservative city america. San francisco is the most liberal city in america. The chart also shows that the most liberal citys more liberal than the most conservative city is conservative. Can you explain that a little bit . Guest not surprisingly, the most liberal pockets in america tend to be cities. Whereas conservatives tend to live in suburban areas. Even a most conservative cities are not that conservative relative to the average american. On our scale, the average american is zero. Fairly simple to interpret. Two thirds of americans are between negative one and one in our scale. The most conservative city is only about. 41 where is the most liberal city is a negative one. The most liberal city is much more liberal than most conservative city is conservative. That is driven by the geographic bearings in america were liberal people tend to live in cities and conservative people live in suburban areas. Its not surprising that the most conservative cities are in the midwest. Host christopher warshaw, thank you for joining us this morning. Guest thank you for having me on. This was great. Host we are taking your phone calls. Is your city liberal or conservative . Nancy from Virginia Beach, virginia. What do you think . Caller this is nancy from Virginia Beach. I would just like to mention one thing you have Virginia Beach as most conservative. I want to point something out. The last president ial election, obama took my district. If i wanted to, i could take a i live right across pat robertson. A hater of gays. His voting district, the people who work for him, its a conservative area. The last president ial election obama took my voting district. I think Hillary Clinton should establish an office down here early on. There are a lot of northerners that moved down here because we got sick of the weather in new jersey. The taxes are lower. Everything was cheaper here, including the houses. Host nancy from Virginia Beach on the democratic line. Color is john from augustine, georgia calling on the independent line. Our next caller is john. Caller another consideration not being talked about is many of the cities are ruled by graduates from the college institutions. There are so many fundamentals that are being utilized to continue the downward slide. George bush s signed showed up and i asked the question george bush iss son showed up. I asked him if he knew how much irans currency was worth to the u. S. Dollar. Why has iraq been selling to the chinese 10 times the volume of oil and what kuwait is selling to the chinese . Host how does this relate to how conservative or liberal augustine is . Caller augusta georgia is a collection of people that are totally right. Totally ignorant. Host robert from birmingham, alabama on the republican line. Is your city conservative or liberal . Caller surprisingly liberal. I have only lived here for three months. First of all, i really do enjoy this topic. I studied political geography at West Virginia university. Birmingham is surprisingly liberal. There is still a big contingent of people that are very interested in civil rights. There is a lot of support for gay marriage and gay rights down here. With your guest from m. I. T. Virginia beach was ranked as the number three conservative city and your own democratic caller was aware i lived in Virginia Beach for 23 years. Virginia beach is a very very much more conservative than birmingham. Host in terms of Government Spending, do you find Government Spending is high per capita . Caller i dont know enough about birmingham. Virginia beach spends extremely low and very much in line with core conservative economic principles. Host robert from birmingham, alabama. Our next caller is bruce from baltimore, maryland on the independent line. Caller good morning. Very liberal. Unfortunately. Today, is the gay is the gay pride parade. It has gotten ridiculous. Weve always had Democratic Leaders and because of that, the School System is terrible. The bureaucracy our illustrious mayor is not a good administrator. The reason there were rights is because the local npr station put out the most ridiculous racist propaganda, talk trash about white people on a regular basis. Im tired of it. I would like to see some republicans or conservative liberals like me on the city council or elected mayor. Host that was bruce from baltimore, maryland. A few comments from twitter our next caller is steve from new york on the democratic line. Good morning to you. Caller hi there. Host tell us about a lot. Belmont. Caller new york city is not a liberal city if you know what the people say. Just because somebody is progay doesnt make them a liberal or conservative. I question the basis for this guys study. They are extremely prowar. If you hear the comments that people make outside of a survey or whatever, you would know that new york is a very conservative place. Host that is steve on the democratic line. Our phone guest, the Massachusetts Institute of Technology Professor had said that one of the reasons his study was so skewed towards the number of liberal cities is that liberals prefer to live in cities. Conservatives are attracted to small towns whereas liberals prefer to live in cities. The percentage of people who say they are consistently conservative, 41 of them live in a rural area were us those who say they are consistently liberal, 11 of them live in a rural area. You can see the geographic divide between conservatives and liberals in this chart. Our next caller is from san antonio, texas. Good morning, mike. How are you . Caller good morning, cspan. I just want to let you know that i think the survey is fl awed. I pray that federal funds were not funding this type of survey. The data points are skewed. The definition of what a conservative in what is liberal, that is an individual thing. Host how would you rank san antonio . Caller probably conservative. It is mostly military. A lot of military down here. It is a very forward thinking city though. The agenda is great down here. With surveys like this, i question it because people eat this stuff up. The survey said this and that. You can mix and match. Tomorrow, you can do the same survey and change the numbers and what you want. Host our next caller is duane from jamaica, new york on the independent line. Go ahead. Caller queens is somewhat moderate. Theres parts of queens that are conservative. It is ok to have a liberal and conservative city that you want to choose your politicians the way you want to choose i dont have a problem with that. The survey gives people an idea of where they should let. Should live. Host are you still there . How would you rate jamaicas Public Policies . How much the government spends on each person. What the Education System is like. Caller we have married a mayor who is very progressive. It is high in rent and taxes. It is a liberal county, but still high in texas and School Vouchers and stuff like that. It is pretty high. Host duane from jamaica, new york. Our next caller is eddie from massachusetts on the independent line. Good morning. Caller good morning. Host what is marlborough like . Caller mostly liberal. A lot of section eight public housing. I live on a side street, 20 houses or so. I hang around with mostly gun owning conservative people. Just by happenstance, our state representative who is as liberal as you can get is driving by mcgibbon yesterday looks and stuff. Driving by, giving us dirty looks and stuff. The gentleman at the beginning the town he worked in m. I. T. Is in cambridge. I was shocked that i did not see cambridge on that original list. They are the east coast equivalent of San Francisco. I thought that was strange that boston was on there and i did not see cambridge. Cambridge is about as liberal as you can get. That is my comment. Host next caller is also from marlborough arrestee. From marlborough. This is rusty. Caller my name is christie. Host sorry about that. My eyesight is not that good this morning. Caller im undeclared. We are mostly conservative. Host what makes you say that . Caller we have a good mayor. The taxes are relatively reasonable. Host what about on social issues . Caller i have to speak from my point of view. Im quite conservative. Im more republican gop than host are there smoking bans in your city . Where does it stand on samesex marriage . Caller i dont smoke. I guess im on the phone still. Host thank you so much, christie. This comment from twitter. Here is the chart again on the most conservative and most liberal cities in america. The chart shows that mesa arizona is the most conservative city, followed by Oklahoma City and Virginia Beach. Ranking among the most liberal cities, seattle, washington, washington d. C. And San Francisco, california. The Pew Research Center also showed that conservatives tend to live in rural areas whereas liberals tend to live in cities. Those who are most consistently conservative, 41 live in rural areas and those were consistently liberal, 11 live in rural areas. We are still taking your phone calls. You can tell us what your area is like. Call us at 2027488000. Republicans can call at 2027488001. Independents can call at 2027488002. We are on social media. We are on facebook. Or, you can send us an email. We will turn out to a few News Headlines that we were not able to get in earlier in the show. The first is from the washington post, calling the recent shooting in lafayette, louisiana part of a summer of bloodshed. The theater gunmans motive is a mystery. The article says in the new orleans advocate, theres also this profile of the government. The gounman. He suffered for decades from mental problems. He had become something of a correct or after being evicted from his alabama home last year, rested he had a minor criminal history before he shot two people and injured nine others at the grand 16 theater. He was known to us, said the police chief. We want to know, is your study liberal or conservative . St. Paul, minnesota resident mark calling on the republican line. Caller i am in st. Paul, which is a little bit more conservative, but its the twin city minneapolis is nextdoor , which is a liberal city. I think minnesota is a liberal state. The comment i wanted to make was that if you were to look at the racial achievement gap between white and black students in the public School Systems, minnesota consistently ranks in the bottom 10 with regard to that racial achievement gap. The local press is frequently indicating that our Public Schools are also very poor with regard to the racial achievement statistics. I find it kind of ironic that here in the land of liberals, all the good intentioned people it seems they are not doing very well with education between the races. Host mark from st. Paul, minnesota. Our next call is janet from louisiana on the independent line. Go ahead. Caller hi. Louisiana from one end to the other is extremely conservative, to the extreme, to where if you have a different opinion, you are criticized, you cannot say publicly, you cannot put it on facebook. Socially, new orleans may be more liberal. Politically, the entire state is extremely conservative. You are not free to express your opinion without being criticized in mass. Host our next caller is laura from baltimore, maryland on the democratic line. We had another caller who said baltimore is extremely liberal. Do you agree . Caller i think it is socially liberal. I think the political the people in power are very conservative. The federal government has been number one employer in maryland. The number two is Johns Hopkins university and the number three is the state of maryland. Because we have a lot of younger people from International Areas because of these schools and these bodies, we have a liberal social politics. Marijuana was decriminalized but the paraphernalia law has been killed by the republican governor. We only get one step forward and then he thousand steps back. Maryland is one of the original founding colonies. Us and virginia are the two most heavily old law states. There is a rainwater tax. Theres so much Government Politics in this state that it is run very conservatively. The social politics are because of these progressive people, we wanted to be more liberal. Host laura from baltimore, maryland. Caller is kevin from vermont on the unit and line. Good morning to you. Caller good morning. On the republican line. The caller from Virginia Beach counted the liberalism that she wanted touted the liberalism. She said we moved here because of lower taxes. Being in vermont and the way vermont turned in the 1970s, the college mentality moving in, we ended up a liberal state. We are now running a president bernie sanders. Bernies whole thing of coming to power by winning by two votes , he has been living in the public eye his whole life. My opinion here is, set up a good system vermont was about let live and let live scenario. Once they get in, live it the way we want you to live in. Host our next caller is from san diego, california. Hector is calling on the democratic line. Caller thank you very much. Its interesting, the other colors youve had in terms of how liberal they are. San diego, california was more conservative when i was growing up. Now, the change in generation is my parents have been here for a long time. My parents and grandparents have been here for a long time. They were very conservative. The last couple rounds have gotten way more conservative than the republicans they voted for. I found it interesting, the statistics you showed about the more rural areas been so conservative because you were not exposed to different cultures. They live in that republican bubble. It just reinforces everything people are saying about the generational shift in this country. Host in what ways do you see san diego becoming more liberal . Caller just the example we have recently come a big controversy with their previous mayor involved in a sex scandal. He got kicked out. The guy that took over for him has the same platform in terms of economic platform, how much he is investing, infrastructure. The republicans of yesterday would be considered liberal right now. It has to do with the generational shift going on overall. Host hector from san diego california. Our next caller is vivian from fredericksburg, virginia. Good morning to you. Tell us about fredericksburg. Caller berry tea party very tea partyish, but we have an older publishing. We have the Confederate Flag and 95. With the unger generation coming up now, its going to change. You can see it changing with younger people. With the Younger Generation coming up now. I think the republicans forgot about bush he wanted everybody to have a home. The home market did not go bust until he got in office. The republicans have a lot of amnesia. Host vivian from virginia on the democratic line. Our next caller is paula from new york. Public alike. Go ahead. Caller good morning. Paul from new york. Republican line. Im a registered conservative. My comment this morning would be in reference to the town in which i live in, the county in which i believe to be extremely liberal. I did some jury duty in the court. There was a copy of the constitution. Above the constitution was a statement, the living constitution. That term for conservatives is a misnomer. A living constitution suggests it can be interpreted as people wishing to be in todays liberal fashion. That is an inappropriate interpretation. The constitution should always be interpreted strictly. Host are there examples of ways in which you feel homestead is a liberal town . Caller and the tax structure the allocation of school taxes im an educator. I believe in Public Education deeply. The allocation of tax dollars for our schools in homestead, a feeling system, soon to be taken over by the state, perhaps, the allocation of those dollars the evidence of those dollars being used appropriately is less than one in three students graduate from the high school. It is a terrible situation. Host that is paula from homestead, new york on the republican line. Our next caller is ron from st. John, washington on the independent line. Go ahead. Caller good morning. I just wanted to make a quick comment. I live in a small rural town in east washington. Which you would define is fairly conservative. I currently work in seattle. I also lived in oklahoma. The misnomer that i wanted to point out is that whenever we label a city conservative or liberal, it immediately alienates the seattle is hailed as a highly liberal city. Im a university professor. Ive done a tremendous amount of research on a lot of things in this region, historically. While seattle does have many liberal aspects, look at the disparity of economics im driving downtown seattle right now. Theres a homeless situation the rise in land values, Property Values, the huge disparity in income in western washington in general, a lot of people get alienated. Mental Health Institutes are known as an issue in San Francisco as well. Things have become so expensive that Mental Health facilities are shutting down in the spokes are turned to the street. And those folks are turned to the street. Even if a city is defined as liberal, you have to be very hesitant on how you define those. Host is income inequality in political issue a political issue . Caller it is certainly a political issue based on tax policy the regulations you have within states within the nation. That also leads to situations where you see low income for minority groups in urban areas. Even in area considered liberal you still have many africanamericans in the city that are disenfranchised from much of the conversations. Host brian from st. John washington calling on the in line. That is our show for tonight. We will be covering the National Governors association meeting. Tomorrow on cspan, talking with the National Veterans Service Deputy director. We will be talking with the acting president and ceo of the American Association of people with disabilities. Joining us will be jason mars, the Deputy Director at the logic counsel. Atlantic council. We will see you then. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable satellite corp. 2015] [no audio]