Transcripts For CSPAN Washington Journal 20130507

in the gang of eight's and immigration proposal. we want to get your take on usa today's front-page story from monday -- and \ / \ send us a tweet, post your comments on facebook.com, or e- mail us. here is "usa today" -- here is a quote from mark zandi -- we want to know what impact this economic growth has had on your paycheck. start dialing in now. good social media, code twitter, go to facebook. facebook. few of from we want to hear about your wages during this economic recovery, during the recession, what has happened. a little bit more from "usa today," this was a front-page story -- we will focus on the impact of the recovery on the wealthiest americans on the last 45 minutes today of "washington journal." right now, what has been the impact on your paycheck of this economic growth? send us a tweet, if you go to spanwj..com/c here is the second page of this piece this morning, it shows some charts of the economic recovery. stock prices are up. in 2009see where it was and where it closed on the first of may, 2013. and then you see profits are higher. profits have reached all-time high, seasonally adjusted annual rate in trillions. that is from the fourth quarter of 2012 compared to what it was. inflation-adjusted wages stay flat despite the growth. average hourly earnings in 2013, it is in 2009. april 20131 paid in it is $23.87. patrick is a democratic caller. what do you think? caller: it is astonishing how easily manipulated the u.s. economy is. this is nothing more than a perception to give the american people the false reality that things are good. the only thing that is good is the pocketbook of the elite in america. other than that the american people are not prospering in any respect. inflation has gone up. all you have to do is go to any store, go to any retail store and you can see how your paycheck is instantaneously evaporated. there is the reason there's so much discontent in america and it is only going to get worse because as you see this situation continued to erode dc a formulation of greater and greater tyranny in america. this is the byproduct of it. the media is selling to lie and perpetrating the line. >> before you go tell me about your weight is for the last four years. caller: my wages have been relatively steady. i have had the sense to invest in things like gold and silver. i will not invest in the stock market in any respect. when people who are investing in the stock market -- they are .nvesting in a peak of flops just imagine this, a. quadrillions of a second in the stock market. you would see a huge difference if they changed the platform on wall street and allowed the average gas -- and allowed the average investor access in the same time frame rather than giving wall street a lamborghini. it is completely unfair. host: on twitter -- sidney in louisiana, independent college. make $23.80said we per hour? >> that is compared to $22.31 in december 2009. >> that is $49,000. yesterday on tv they said 50% of jobs pay less than $33,000. how was the average wage higher than what it would take to make $33,000? why is there so much -- my question is why is there so much variation in the facts that are given out on our standard of living. our working class people know that our standard is going down. host: we can ask our last guest who will be joining us. he'll be talking about a report they did on the recovery and who has recovered. their studies show it is the wealthiest americans that have done well while 93% of americans have lost wealth. mondayom "usa today" on -- let me set it up this way -- in ahead. pennsylvania, go caller: nobody is speaking to the pepole making $25,000 or less. i know families making $15,000 per year to live on. there are no raises in the future. i know people who have worked four years at a place without a race. -- without a raise. congress does not want to raise the minimum wage which i do not understand. that would help out so many families, especially in my area. it is a very poor place. wouldg the minimum wage help out so many families because there's so much unemployment. host: tell me about your wages for the past four years. caller:i am on ssi, and you can imagine i am living on very little money. i get about $720 per month. i have to pay my own rent, everything. the advances that we have gotten is anthe past five years exta $20. susan is calling in from ohio. your thoughts? caller: i think it is really bad because 30 years ago my husband made about what the average person makes now. things were so much cheaper. you just cannot keep up with that. i am on a fixed income because i do have extra money besides my social security. wages in theigher old days. i see prices keep going up and up and my wages are not going up. host: what did your husband do for a living? he made about $40,000 per year? caller: years ago. host: how many kids did you have? --ler: they have done well for their children but it is still bad for them. they still did not make a lot of money. the way things are going up i think it is terrible. i have one daughter who makes $8 per hour and she works like a dog. -- thepany she works for ceo makes millions and the workers are just not pay. i think it is a crime. just saw a marathon here in ,000 per year.0 host: susan telling us her ago.nd made $40,000 years that is the average salary today. here is "the hill" newspaper on immigration efforts -- this comes as we have told you the homeland security panel will take up the border security provisions of the proposal. that is live on [captioning performed by national captioning institute] -- live on c-span3. they have been following him back in his state during the recess. washington times," -- -- "the wall street journal" says this -- "the new york times" on this - "usa today," -- weighingington post" in on that heritage foundation report. it says -- something likely to be debated. gerry, ago to republican caller in texas. tell us your story. caller: it seems to get less and less. the future looks the same. i do not know what it is doing, actually. host: what did you make four years ago, what do you make today? to around was closer $100,000 and now i am making closer to $65,000. host: happened? caller: you tell me. host: what were you doing four years ago? caller: i was a doctor four years ago. wesley from san diego, a democratic column. thatr: i just want to say i think the minimum wage should be at least $10 per hour. right now i am unemployed. stroke five years ago and i am trying to get disability. it is very difficult. minimum wage should be at least $10 per hour because the cost of living in san diego has skyrocketed. carolina,, north democratic caller. your thoughts? caller: i guess i have been fairly lucky. i kept my job through the recession. 2009, 2010 we did not get a raise. i only got a 2% raise this year. when you facter in health in -- when you factor in health insurance going up i am making less this year. i have not been able to take it vantage of my 401k because i cannot forgo the money would have to put into it. it is not like a fine benefit plan where companies set up money out of their own pockets for your pension. i kind of let go of that money. you stopped putting in to your 401k? caller: i needed the money to survive to pay the bills, the mortgage, everything else. host: what is your biggest economic concern? caller: personally? my future. no job is stable these days. my dad worked for the same company for several years. am worried about keeping my job. not because of anything i have done but because the company could make the decision to close down. host: how much do you make? caller: i make roughly 50 grand prix year. host: is that what you made caller: four years ago a little bit more -- caller: i make roughly 50 grand per year. host: is that what you may four years ago? caller: a little bit more. host: they ask the following question about financial matters -- that poll released yesterday by gallup. we are talking about economic growth and the impact it is having on your paycheck. we will get back to your phone calls in a minute. i want to update you on south carolina's congressional dist rict. that is a special election. how was it looking? >> it is a super close rase. the most recent polling shows seperatedcandidates by 1 percentage point. of aeaks to how weak candidate mark sanford is. you writeour piece colbert bush elizabeth had an edge. caller: he revealed his 2009 extramarital affair and got divorced. court documents were leaked in which the former first lady accuses sanford of tresspassing on her property. "here we goike, again." he has spent a lot of time doing damage control, explaining to voters his side of the story, he had been at a superbowl party with his son. his ex- his son to wife's house and the two watched the super bowl together. he is leaving out of the back using his cell phone as a flashlight and a former first lady catches him out of the house. she said she is going to file some paperwork and taken to court. he is actually to in family court on thursday this week to answer to that charge. i think a lot of voters have agreed this isn't a horrible thing. but the new polls show he is rebounding. host: explain the first district. what type of voter lives there? south carolina is very much a red state, socially and fiscally conservative. this district is a little bit different. you have a lot of transplants here. people who have come here and more moderate than natives. they tend to be a little less socially conservative, a little likeforgiving of someone mark sanford. i don't think he could even attempt this run in any other state. this was a gop state. what should people be watching for today? turn out, at this point. it looks like it is going to rain. we are going to have to see who does a great job. democrats in this state are traditionally a lot better at getting voters to the polls. team we wrote the book in south carolina in 2008 on how to get out the vote. here are helping her. host: what about her brother? guest: he is not here. he has done a lot of fund- raisers. he has talked about her on his show. i do not know if he is here today. you for your time and update on that. guest: thank you. host: back to our question for all of you, what impact has this economic growth had on your paycheck. john from north carolina says t stacey from wyoming, democratic caller. what are your thoughts? -- ler: since the resession since the recession -- i was in construction before the recession. i had to get retrained. the impact was the thousand dollars per year to $12,000 per year recently, working retail. you work 84 hours per week and the pretty much do something with the ground. the cost of living since i is compared to what you're making 20 years ago with $20,000 per year host: mary from trucks built, maryland. a republican column. go ahead. caller: i have a couple of things. i love the program. i have to be honest, five years -- i was making around 72 $72,000. the cost of living has gone up dramatically. i am single. a lot ofi am making money, the problem is in making that amount. there is another side. less i wasmaking able to get more because i wasn't paying as much in taxes. when you are single living in a high income area you have to pay an astronomical amount in taxes. things that i am paying into when i'm getting ready to retire. i realize there are a lot of people out there without jobs. i do not really complain. it is kind of sad when you are to 16 -- your money goes towards taxes and food and saving for retirement. post," thisngton morning -- a it's as later this week president obama is scheduled to wrap up his outside game, facing the first of a series of public events across the country designed to jump-start his second term economic agenda. mark from cbs news tweeted out this picture yet today -- mark miller tweets that out from cbs news. more on the president obama's agenda. it's as north korea has withdrawn two ballistic missiles. that is coming from cnn.com as president obama is slated to meet with south korea's president. we will talk about korean peninsula in 15 minutes with eli lake. pittsburgh post gazette," -- senator bob menendez of new jersey offered legislation to arm the syrian rebels. that is in a headline in a "the new york post." "new york times" front page story says this -- "the wall street we will talk about that coming up with eli lake in 15 minutes. in other domestic news "the --lll street journal," here is from the style section from"the washington post," a feature piece looking at senator ted cruz, the republican from texas -- "the hill" with this headline. -- [video clip] >> texas is like the schoolyard bully. he pushes everybody around and is losing. he is not playing the game according to rules. he not only takes the ball home with him but changes the rules. that way, no one wins. leaderhe senate majority on the floor yet they talk about senator ted crease. we want to hear from you, what is economic growth has done to your paycheck in the last four years. from monday story showed that wages are stuck in place and profits have gone up for corporations. you can see wages have stayed flat from december 2009 to april 2013. mike from mount sterling, kentucky, independent caller, . caller: a. story would be great if he was a wal- mart or exxon mobile and so on and so on. as far as the regular people out here, people are struggling to pay their electric bills. host: what has happened to your paycheck in the last four years? caller: i get a little race every year. but it goes to pay my medical for local taxes around here. they give all of these companies all of these tax breaks and then they talk about how much money they get on the stock market every day. we pay all of their taxes. marcus is a democratic,. caller: i couldn't agree with that last caller anymore. my paycheck -- i am 23-years old. i am a student. i am driving home from work and overnight shifts. everybody's paycheck is stagnant. i have not gotten a raise in three years. the cost tuition has steadily gone up. the cost of food has gone up. our paychecks have stayed the same. if this is the free market working at its greatest then congratulations all of you free- market capitalists. the rich as rich, we are defeated. host: what do you do? you are driving home from a night shift? caller: i am working at a hotel at the service desk. there are a few jobs that cannot be outsourced as of right now. i work security. democrats -- for the republicans to say the democrats did not work hard, i work eight hours overnight, i rest for about an hour, head into class, and then come back. i guess that is what you are supposed to do. i am not the only student who works full time just so they can pay. it is $2,500 per semester. host: how much are you paying out of pocket? caller: about $1,000 out of my twoet and i get about thousand dollars out of it financially. host: you are taking out a student loan? caller: no, that is why i have a full-time job. i know i would be in trouble if i took a student loan. i have to pay out of pocket now. host: when the sleep? caller: i sleep after class and i go right back into work. host: john from florida, an independent college. hello. 34-er: if years ago -- i am years old now. i made about $75,000 a year in the last four years i have been lucky to make $25,000 per year. host: why is that? caller: my job and other companies i worked for, both of them cut regulated out of business. i do not see any end of this unless we put a tariff on things coming in. a consensus -- it incentivizes people to not outsourced jobs. host: what regulations are you talking about? caller: in my garage there were more business licenses and they wanted more and more all the time. with the water conservation company it was the same thing. they wanted to unionized our in theverywhere we went country. it just was not quite work that way. host: some more headlines. another headline from "the washington times," -- today," --"usa --itico on gun control this from "the washington post," -- next to that story, tom haburger amburger writes -- yesterday teh senate pased that he senate-- teh senat passed that internet sales tax bill. front page of "usa today" has a piece about onlniline shoppers. this graphic estimates uncollected millions in taxes. the total is approximately $11.4 billion. this is what states are not collecting from online sales. "the new york times closed " rights -- new york times" writes -- bernard in maryland, a democratic caller. co-head. what are your thoughts on this economic growth? what impact has had on your paycheck? caller: naturally i graduated two years ago and naturally my salary increased. is that i feel like a lot of people are finding ways to work and use the system, which is the american system, to grow. everything in this country is based on how hard you want to work and find out different avenues to increase your revenue for your wages. not everybody can find a way to get into college. there are plenty of ways to fight income in america. , feel as if people can do more surging more and doing more work. host: we will have to leave it there. coming up next we will turn our attention to national security issues with eli lake, newsweek and daily beast correspondent. will bela richardson here to talk about the federal government's role in the housing market. we will be right back. ♪ >> this home was a gift that 13 businessmen purchased to give to the grant family in appreciation for his service in the war. the room we are in now is the parlor, the entertaining part of the home. we know julia was an avid entertainer. the family spent a bit of time here. we know that mrs. grant and their daughter ellen play the piano. the men in the family sitting here, the other boys listening to their sister and mother play songs for them. grant launched his presidential campaign from his headquarters in downtown killeen up. the day after his election he and his wife opened up their home for people to file through and congratulate both of them on his election and the next step of their lives. lap book.lled a she probably kept papers and pants and her correspondence in here for when she was writing letters or receiving them. over on the dresser we have a bible that was given to mrs. grant by the methodist episcopal church in 88. thisis the dressing room, is the room where julia grant would come in to get ready in the morning, get ready in the evening, and to just come in and get a little solitude. we have a lot of personal things that belonged to mrs. grant. we have her sewing kit that she would probably used to mend some socks for the kids. we have a couple of her size 4 shoes. we have some persons that she would have used as they were going out on the town, on a sunday afternoon. this is where he came back after he was a military hero. he started a political career here, his rise to the presidency. this is where he was living when he was elected and she became the first lady. our conversation on julia grant is available on our web site. tune in monday for our next firstm -- for our next lady program on this the case. host: we are back with eli lake, here to talk about national security issues. let us begin with syria. what does the u.s. do next? what does this mean for u.s. strategy? guest:this is not the first time israel has struck inside of syria since this civil war began. the first strike in this context was in january. , not so much against sincehishes, they have come around to that view. before that the israelis had violated serious -- violated syrian airspace to send a message to bashar al-assad and ut creating any -- this latest strike is aimed at iran. israelis believe in the chaos of syrian advanced chemical weapons will find the ways in the hands of hezbollah outhernel's border in s lebanon or iran will take advantage of the chaso to ship weapons.ship the kinds of things they think fundamentally would give his beloved strategic reach -- would give hezbollah a strategic reach. host: jay carney talking about syria. here is "the new york times' this morning -- ers whato show our view ander carney had to say. [video clip] >> what the president made clear was that it was a red line and it was unacceptable and it would change his calculations because chemical weapons represent a kind of escalation and threat i just described. what he never did is to say if x happens y will happen. he never said what reaction he .ould take to a policy level simply that he would consider it a red line and that he would take appropriate action. as we have said all along he is looking at a range of options. he is not removing any option from the table. host: what is the impact of what you heard? guest: i think the white house is flailing. the common definition of a "red line" is it to cost something terrible will happen. the president has often said "i do not bluff." the united states has said that iran can not acquire a nuclear weapon. united states is trying to convince israel to trust that when iran crosses nuclear red line the united states is prepared to ask. we have to carney saying when we say "redline" the do not have an idea of what those consequences are. line" has lost its potency and meaning. the whole point is that your adversaries will respected and not cross it. it has changed quite a bit since august. at first the president may firstflubbed when he said the movement of those weapons was a red line. there is ample evidence that they have been moved to run the country. i have reports last week that they were -- some of the regular loyal militia to assad are being trained right now. now there is a lot of evidence that small amounts of sarin gas -- sarin gas was used. to have this explanation that just because we said there was a red line the president didn't articulate what that means -- that may well be the prudent series -- that may well be the prudent policy. i think it is a legitimate point that interventionists have raised. if you do not enforce it it gives the impression that you are weak and do not have to resolve to act. host: who give conversation -- confirmation that chemical weapons were used by the syrian government? some say it was a small amount. three you have intelligence services right now. you have french, british, and the israelis. it is not just based on sources saying they have evidence. it means they have samples that sarin was used. the question that the white house has raised is we do not know how the sarin got from the storehouse to the weapon to the exposure to the victims. they talk about the custody of the sarin gas. they made it clear they do not believe it was used as a false light operation by rebel forces. -- a false flag operation by rebel forces. we are still investigating and trying to wait for all of it to come in. -- all the facts to come in. the arab allies have said they do not have the intelligence capabilities. the rabbi has effectively been crossed. been mulling have more and more reports from the syrian of theion and elements opposition have asked for assistance from the united states. was a report last month in april that there was another incident outside damascus. the concern is you articulate it a red line, you did not do anything, and now you are waiting to push the red line for there. host: where are syria's chemical weapons? guest: they are on the move. most people think that. in march we saw the chairman of the joint chiefs of staff and the director of national intelligence all basically have to answer under oath in congressional testimony. they did not know an operation to secure this weapon -- securities weapons would be successful because they are moving them around. they weren't supposed to say it but they effectively told the truth. this is the assessment. they have the capability and the plan to send in very highly trained american forces to try to secure those weapons. the problem is they did not know where they are because they're moving across the country. host: what are the options for the white house? guest: i am not a military planner. but people have discussed is they can finally send the full assistance -- send a lethal assistance to the general. was a really important piece -- he has the best source and the cia. this is a guy who has pretty good sources. he wrote about that. it is a very important piece to read. that is one thing that is being looked at. they changed the line on that. you saw secretary of defense chuck hagel saying in testimony they did not know what the right rebels to arm would be. now the white house is going to do something -- your red line is the use of chemical weapons. your responses to the concern has always been we don't know what's clinton happened. we don't know who's going to be on our side down the road. what if you provide weapons and they end up in the hands of al qaeda's of kyliyah, who is also part of the rebels? that's always been this really big concern. fore there's no intention the u.s. travel long-term presence in syria, it's hard to say we will be there in the long haul to make sure the weapons don't end up in the wrong hands. host: senator menendez yesterday introduced a bill to arm the rebels. is he setting the foundation poured the administration to move toward that? guest: it's hard to say. senator menendez has favored sanctions against iran that were more sweeping than the administration had planned. so he's not a cut out for what the white house wants. there are signals from the white house that they are reconsidering their opposition disarming the rebels. you have to ask, armed with what? the u.s. as better weapons than anybody. would they send their best anti- aircraft and anti-tanks troubles they don't know much about? not likely. if it's just a matter of giving them any old guns, the middle east is awash with weapons. regional players like qatar, saudi, turkey, have been sending weapons for at least more than a year to anti-as sad rebels. it does not answer the question of how do you find the chemical weapons? the problem is you cannot just send drones to find where you think the trucks are and shoot them, because then you don't a shoreside's work for him. you need to actually get those weapons, secure them, and take them to another location. it requires on the ground presence, on the ground intelligence. people don't think it will have 100% success. if you get 98% of the chemical weapons, you still have a huge counterterrorism, a coma. host: we're talking national security priorities with eli lake. benghazi, north korea also on the table. we will get to those. first, josh in jacksonville, north carolina, republican. caller: hi. i served in the u.s. marine corps as a machine gunner in five years. i recently graduated from the university of north carolina with a degree in political science. focusing as much as you can in undergraduate on international security issues. while i may not be considered an expert on this subject, i am not a layman. about syria so far two-sidedfocused on a conflict, but let's not forget about the civilians that were slaughtered in homes in aleppo. that these -- atrocities will never happen again after rwanda is a total failure. humanitariant the blunders in rwanda and bosnia, darfur andvia, and now syria. we can do so much more, the united states of america, whether by ourselves or with a coalition like we did during the war under fo -- gulf bush number one. a lot of things we can do besides army rebels. this is a political thing that drives me crazy. host: let's get a response. guest: thank you for your service. that was the best c-span call and i've been doing the show since 2002. that was a very smart call. 2p,raised an issue of the r the right to protect their there's a notion in u.s. national security among liberal interventionist and we'll conservatives that believe the u.s. in addition to securing its national interest believe also have an obligation to the world to prevent genocide. and to intervene in the humanitarian areas or there are civilians being slaughtered not even by chemical weapons. the sharp side has used heavy military aircraft and scud missiles against civilian populations. that itself should continue to shock us. it is absolutely not awful and horrible. why think that there is a sense where failure to intervene earlier and failure to stop him be seen in some ways potentially as a kind of rwanda failure. it is ironic, because through , a scholarresident on the prevention of genocide, she wrote a book that's extraordinary and she prevailed upon the president to intervene in a city called benghazi in libya to prevent qaddafi from using its military forces to wipe out the civilian population of that city. that is what president obama did. inyou looked at that speech which he said i felt like i needed to stop him from wiping out a city, he tried to bring that problem home in that we have this obligation. it was a kind of moment we're not seeing on syria. the question is, the syrian death toll has exceeded how many people that qaddafi killed. sooner or later, bashar al-assad will fall, but it will continue to be this enormous problem. what really needs to happen is somebody needs to fill the power vacuum. hopefully it's one that is amenable to our values and not interested in destabilizing the region, that would provide a , that all states need to succeed and live in security. the u.s. does not want to do that right now. i think there is some sense after iraq and afghanistan in the united states and i think there are some believe the u.s. cannot do that. not that they don't want to, but we're not cut out for the job of rebuilding these countries, rebuilding security services, staying these countries for years and years and measuring very slow progress as these places transform in some ways from dictatorship to democracy. host: on twitter -- that brings out the wall street journal editorial today. you talked about securing the weapons. about the no-fly zone and air strikes? guest: a no-fly zone is something that has been discussed for more than a year. it is important also from the perspective of trying to provide aid to the people that would be supported. i would say that there are very real peace is where it's difficult for the united states to separate friend from foe in the conflict. and i can say this because i had three reporting tours of iraq and covered the war very closely. when the u.s. came to iraq, they were greeted with cakes and flowers and people thought of them as liberators, because living under sadaam hussein was terrible. a year later, most iraqis probably felt the u.s. were occupiers. i think that dynamic and that experience is so burned into this country that it's very unlikely that it starts with the no-fly zone. there was a no-fly zone in iraq after the 1991 gulf war, because sadaam hussein was intent on trying to continue to cleanse the north of the kurdish population. he committed terrible atrocities against the shia population in the wake of the iraq war. that experience in some ways certainly motivated paul wolfowitz and neoconservatives day said they needed to finish the job in iraq. in syria, the question then becomes, you start with the no- fly zone, but will it eventually turn into we have inherited another country, the 51st state again? host: a tweet -- presse associated reporting this morning with the headline -- guest: well, we could respond to the tweet. it is true, he did not specify what the consequences are, but it's a little bit like being on the playground and telling a bully if you keep taking this kids' lunch money, you're going to get it. and then when you do not think, you say i did not say what i meant. red line means there will be serious consequences. it is understood. don't have to spell it out. people understand the consequences of crossing. if you are iran, you are fearing israel, because israel has enforced its own deadlines, which is the transfer of advanced weapons to hezbollah. i am not entirely sure that the israeli strikes are bad for the u.s. diplomacy, because you can always use the israeli example as the kind of crazy bad cop in the situation, saying if you want to continue to cobble bashar al-assad, as you have been doing, and arm him and half the military advisers in the country and do all these things, that's fine, but i cannot speak for our friend israel, because i cannot control them. benjamin netanyahu will do what he's going to appear that can sometimes be an effective if diplomatic tactic, because it makes you look like the good guy and you don't have to take responsibility for the negative comments. host: on twitter -- norcross, georgia, a democrat. thanks for waiting. caller: good morning. i love c-span. thanks for taking my call. in regard to benghazi, i had a comment. i want to say i have gotten tired of some journalists politicizing the national security aspects of it. the truth is, the way i see things, there's never been a case where there was initial and accurate clarity of what happened when a significant terror attack takes place. with twa, the of the i thought it had been shot down for a missile, for once, only to learn much later that it was a maintenance problem that caused the fuel tank to explode. yemen, it took the cia director weeks to decide attackers were from al qaeda. iranianexample, the hand in the attack on the u.s. air force barracks did not emerge for months. with all due respect, i would say that the analysis from mr. lake should not be taken seriously. thank you. guest: i would say you should take it very seriously. it's my reporting. respectfully, that was a smart point, and here's where the caller is wrong. first, we now know that everybody -- you can say we did not know it was a terrorist attack, but we had no reformation that it was based on some demonstration. we now know that everybody in libya at the time, nobody said it was a demonstration and that talking point that there was a demonstration got out of hand in noghazi appears to have basis on any reporting on the ground at least as far as we know. we also know the talking points that were given to susan rice and reduced by other senior u.s. officials and jay carney were edited. we know from an interim house republican report that there were edited in such a way astra excise references to prior attacks in benghazi, to make no mention whatsoever of all cotta- linked groups in benghazi. so there was an effort to try to spin the store in a certain way with very limited information. -- no mention of al qaeda linked groups in benghazi. but susan rice and the white house did not say we are still trying to figure it out, we don't know, it could be this or that. they said this is about a video -- in protest of a video we had nothing to do with. they seized that and it was a deliberate decision. so i think it's absolutely legitimate to ask how they came to that conclusion and not the other conclusion, particularly since the cia director did tell congress he thought that these groups linked to al qaeda. the other thing is there were other examples of this caller raising that happened before the era of twitter and social media. went on ahat al sharia facebook page and try to claim credit for this. anybody in benghazi at the time knew what his political agenda was. pretty hard core radical islam as well as anti- americanism and terrorism. wethat respect, i would say should recognize that the cia contractors did an admirable job of rescuing all but two -- the ambassador chris stevens and sean smith -- that evening. they performed really heroically. that's my response. host: the senate foreign relations committee will hear testimony today from chris stevens replacement in libya. and then you have the house oversight and government reform committee happening. they're hearing is wednesday to outline their report, their investigation they did about what happened. they have been leaking out to reporters some of the testimony from the benghazi whistle- blower. here's your headline -- what did you learn from the committee? guest: well, you have gregory hicks, was the deputy chief of mission and who took over for ambassador chris stevens when it was confirmed that he had died in the attacks. interview withs the committee staff of the house government reform and oversight committee that he was trying to adapt a second special operations team to benghazi and that they were on their way to the plane at 6:00 a.m. and there were told to stand down. there were two bursts of attacks. it was the initial attack on the benghazi diplomatic/intelligence mission that ended up torching the placed and ended up in the murder of stevens' and smith. then, after a pretty heroic rescue attempt where they took everybody in that facility, brought them to the cia and expert -- cia annex there was then a lull. as standard protocol, they established positions on the roof to guard. several hours later, at around 5:00 a.m. or so, there were then the two order strikes that killed more. attacks.e two waves of a getaway cars were also attacked. it was part of one battle. in the was the quick burst afterwards. and the special operations team would have left at 6:00 a.m., i guess, but according to gregory hicks's testimony, he wanted to also have some and jets scrambled over benghazi to send a message that we would be willing to attack you with a laser and shoot you. this is something that was dismissed by a lot of military types. there's something to be said that if you send an f-16 over situation like benghazi, it's very hard from the air to find out who is a good guy and a bad guy. having advanced targeting capabilities is no use if you don't know who you are aiming at. back then, it's interesting to hear his testimony where he says he believed that would been enough to scare off the attackers. at least potentially from a second wave. so there's still a lot here. i'm looking into other aspects of it as well. i think the other thing that's very important is that we now have the inspector general of the state department now investigating the accountability review board report the state department did as the white [indiscernible]. so many things the report did not get into. it does not answer all questions. it's interesting as they look at that again. i think the republicans will make it a pretty big deal. host: let me return to syria. --ouple tweets chris in milwaukee, wisconsin, an independent. on the air with eli lake. civil: before the syrian war started, we had -- syria was on the news constantly for just little things. i looked at my husband and i said that will be our next war. after iraq and all the lies that were told to us about weapons of mass destruction, why should we believe anything now, because we don't need to get in there? not only that. the syrian rebels have said they do not want our boots on the ground. all they want is arms and money. well, this is ridiculous. we cannot even afford to feed our people here or give them health care or do anything. and we are supposed to go over there to do this? what has happened in egypt with the overthrow? they are more radicalized now. libya is more radicalized now. host: let's take those last two points. guest: no doubt about it. the government of egypt is not as compliant to american interests as it was under mubarak. the old way of the united states interaction with states in the arab world, where we had very close relationships with dictatorships is over. and the government that replaced them are often resentful of american meddling. we have seen a rise in popularity of parties that espouse a version of political islam, which rejects the existence of israel, usually very anti-american, and rejects a lot of western values. and so, that is true. what i would say about the weapons of mass destruction is that i will say it was not a lie. most intelligence services all over the world believed that sadaam hussein was concealing weapons of mass destruction. inquiries into the alleged manipulation of intelligence or pressure on intelligence analysts when they looked at that from bipartisan committees and democratic-led committees like jay rockefeller's committee, there was support for initial stories. by all accounts, syria does have chemical weapons. and so, one thing can be true, if it turned out sadaam hussein did not happen to a mass destruction, it does not mean that if syria does not have the weapons of mass destruction. somely, the rebels -- rebel leaders have said they don't want u.s. boots on the ground. if there was a chance of success to secure those chemical weapons -- i would say there's a cost to allowing even small amounts of chemicals, gas, or other types of chemical weapons that can be used in terrorist attacks to fall into the hands above items for hezbollah or other groups and could be used to attack americans all over the world -- and have been used to attack americans all over the world in the past. if u.s. intelligence agencies know that a certain amount of the x gas or mustard gas was in qaedands of an al affiliate and we lost track backs chemical weapons precursor, that means you have to prepare for the potential that they could launch some sort of attack in a soft target in europe or who knows where. and it creates a lot of other costs that are then added to for the u.s. to do basic security for their diplomatic facilities, security for u.s. businesses overseas, and our allies and so forth. so there's a cost of not intervening. that is syra. i don't think anybody is arguing that they should send 200,000 troops into syria to convert their army and then sent a collision provisional authority and bring democracy to that country. that's what iraq ended up being. but the idea that is the equivalent of any kind of intervention is false. host: american hero says -- henry in michigan, a democrat. caller: good morning. andlake, lindsey graham john mccain, these are pretty much talking heads for the dick cheney neocon wing of let's go to war for the greater glory and good of israel. the united states has no dog in this fight. we are broke. if you can remember that. we've got people who don't have jobs who are starving in this country. i want everybody to please call and support the president's process. you say we have no dog in this fight. guest: i don't want to take this caller seriously. if you are watching, sir, i regard as a nonsense person. the notion that lindsey graham and john mccain, elected u.s. senators, are supporting the state of israel as part of a yourer conspiracy, enjoy basement, enjoy your conspiracies. back to reality, i will try to cover the world as it is. host: let me talk about israel as our ally. is there pressure on this administration, on this congress to act because of israel? guest: i don't think there is pressure necessarily. i think israel, as i wrote and then said publicly, has intensive diplomacy with the united states on what it considers to be its red line. the difference is israel is a sovereign state. it does not view would ever did -- it does not do whatever the u.s. tells the to do. it gets a an enormous amount of military aid and probably that's more important politically than it is to israel as a thriving economy. there's an argument they're for cutting the aid and that should be debated. but i don't think that intervention in syria in this sense is like something for the united states. the other thing i would point out is that syria devolving into a civil war, the potential for chemical weapons getting in the hands of terrorists is a problem for all of syria's neighbors. it's a problem for jordan, turkey, iraq, saudi arabia. it's a problem for a lot of american allies in the region. and yet there are certain segments that are a small fringe that are dedicated internet users. it is all about israel. model calls a -- monocausal for me. host: on twitter -- funding for state department security. guest: that is something we know from charles lamb, deputy assistant secretary for diplomatic security, but there was no decision -- the overall funding decision on diplomatic security did not affect the specific funding decisions for security in benghazi. it's a red herring. the other thing, there was an enormous increase after 1998, bombings in tanzania and kenya by all, on our embassies. a huge increase in diplomatic security funding. and numerous government accountability office reports have shown the u.s. has not been able to really keep track of how it spends the enormous increase in diplomatic security funding. if you ask me what i think happened, the state department believed that they had a kind of understanding with the cia station over there that in case of emergency there would be in a local militia that would be their protector and act as the state would in a place like benghazi where the state is not fully established yet, and that the cia would come to the rescue. and the cia, unfortunately, or somebody unfortunately made the wrong decision. so that the militia did not end up doing its job. so you can argue that there could of been more diplomatic security officers, but when you've got a crowd of all these guys, the first line of defense is supposed to be the state itself. so it does not happen in a country like france or greece , then they would deal with it -- if that would happen in a country like greece or france. that's how consular agreements work. that failed in libya because it was such a young state emerging from its revolution. host: the south korean president coming to washington today. what's on the agenda? guest: i don't want to answer that, as i have not focused as much on that and i don't want to give you some -- i imagine there will talk about north korea. you know what i'm saying? i have not done the reporting on it. i know that south koreans are heard johnhen they kerry say last month that the u.s. would be willing to not extend its missile defense shield to south korea in exchange for china putting more pressure on north korea to basically dial back some of its lunatic threats. so we will see how that plays out. south korea is a very strong u.s. ally and some concern about north korea. i know that the south korean defense establishment, although their defense minister recently denied this, believe that the north koreans certainly have the capability at this point to at least create a nuclear warhead, not necessarily deliver that on a multistate rocket, but they are going down that road. host: the ap wire reporting -- she's in town today and wednesday, i believe, meeting with the president. guest: started our conversation about red lines. desk of north korea, kim jong un, making a lot of st -- of threats. if you don't back them up, people start not taking you very seriously. people were at first freaks out about him. he might be crazy enough to start a war, they thought. if it looks like this is just the kind of thing that he says because he's young and inexperienced as a leader, if you can call him a leader. i don't think we should call him a leader, by the way. the condition of north korean, the depravity they have to live in because of their and across city, where they still believe kim il-sung is the leader of their state. i was in north korea with madeleine albright in 2000. it is one of the saddest -- it's not the case for intervention, but i think in 2013 the world can do better than to allow that kind of state to exist. unfortunately, north korea is a gulag state. host: on twitter -- guest: yes, i've written a lot about this. the current director of national intelligence, clackers, when he was the head of the intelligence agency, believe that there could in this movement of weapons. or these convoys. in is never been confirmed. lots of very smart people including u.s. ambassador at the time in syria believed it was not true that they were doing that. i'm inclined to this point not to think that those convoys d and now they were in syria. at the time it was something the israelis believed was happening and it was something james clapper said. at this point i don't know if james clapper believes that. but there were overhead photographs of these convoys before the war going into syria. they may have contained gold and hard-currency. it's not clear. the israelis claim at the time to have line of sight photographs, which means they had somebody on the ground watching that stuff. that said, syria did not need iraqi chemical weapons. they have their own chemical weapons program. thelso know, because upon 2007 stuff, and the israeli drop this nuclear facility, there were north korean engineers there. it was a videotape shown to congress in 2008 about them. that point that the north koreans had an active program that there were helping with nuclear stuff with syria leads one to believe why would they need sadaam hussein's stuff? host: is it true that syria is the third largest -- as the third largest stockpile of chemical weapons? guest: let me tell you about the stockpile arguments. we know they have a lot of it. syria is not departed to the chemical weapons conventions. all of its based on some kind of estimates. so i think they have a lot. let's does leave it there. i've tried to drill down on this a couple times. there's a lot of classified estimates on this. it is interesting. there's a whole fascinating world of how the united states tries to trap the proliferation of this stuff. a lot of it is by work. so the companies that sell these precursors and stuff off and are working for the two masters. it, but youlk about can find examples of how sensitive equipment of a nuclear program that would be useful for a row proliferators like iran might have a low jack on it so everybody could know where that piece of equipment was that would lead to a secret site. counting happens a lot. host: we go to lorton, virginia, independent. caller: good morning. i would try to steer the debate back to where the revolution or uprising started in syria. the syrian people needing to have a democracy, freedom, dignity against a corrupt kind of regime. is chemicalear weapons, chemical weapons, chemical weapons. they have been used, like the very objective gentleman here is saying, they're used in a very limited way by whoever used them. my question, is this more important than having this very, very notre-radical islamistss who are supported by saudi , their heavytar weight on the syrian people, on the chests of the syrian people now, the syrian people who are very dignified, and middle- class, more than 2 million people are refugees now. nothey are seeking to survive. in order to survive for you and your family, what choices are left for them? musrah, the most radical themistss who can provide with foods and a home. the syrian people are in a very desperate situation where the world has shifted its attention from going to defend democracy and freedom to actually trying to have the debate now in congress about whether to send weapons that would definitely end up in advance of the strongest party on the ground, radical islam. host: where are you from? caller: originally from syria. host: you have family still there? caller: a lot. host: what have you heard from them? caller: very huge desperation. about a huge number of those who have supported this uprising initially against the dictatorship and corruption, a lot of these people are so scared now that this country is going to end up being governed by semi-taliban people in syria. the syrian people are very moderate mediterranean people. this new culture is being imposed by saudi arabian and qatar forces. host: your family and friends, are they able to work? caller: no. and are upper-middle-class they are trying to live on whatever is left for them. my sister-in-law had to immigrate to egypt. are inf my relatives lebanon and jordan now and egypt. host: hang on the line, caller. guest: i mean, this is an argument in some ways for why obama should have become more involved in the conflict much islamisto that this group would not fill the power vacuum. it's a great call. what is the choice? desperation between the terrible regime and the terrible islamist fight. if you don't have another force countering that group, i would sometimes it looks like the best option. i actually think there's an argument for why he should have intervened earlier. you start army people in the middle east, you think they are the right people and they're iing to be your friend -- live in egypt. you never by anybody in the middle east. you only read them. -- rent them. point, whichortant is that the majority of syrians, the majority of people in the entire islamic world, i think, don't believe in the aesthetic, radical, hayfield, bigoted -- ideas of al qaeda. doleywhere they go, they create out islamic punishments. the vast majority of muslims don't want to live that way. the question then becomes -- and he's right, there are very well. very wealthy are individuals in saudi arabia who do support this. host: we have run out of time. we want to thank our last caller. beast andith daily newsweek. thanks for your time. guest: thank you. host: we turn our attention to the housing industry and talk about the federal government's role in it with nela richardson of bloomberg government. later, richard fry will join us about the pew research center poll about how americans are fearing during this economic recovery. first a news update from c-span radio. >> president obama and south korea's new leader reid at the white house today. the mark the 60th anniversary of the u.s.-south korean alliance and the that that's amid continued threats from north korea. president obama and park geun- hye plan to present a strong front against north korea's nuclear threats, but they also want to leave the door open to talks with p'yongyang. their news conference is expected to begin around 1:30 eastern time today. you'll hear it live on c-span radio. a house panel today is expected to approve the most substantial changes to the dodd-frank financial overhaul since its enactment. by rolling back most of the contentious section known as the push-out rule. that provision forces banks to split off their derivatives trading activity into separate units that are not federally insured. and that provision has been the object of intense lobbying by wall street. some of the latest headlines on c-span radio. weapons of war in previous centuries, but now symbols of sovereign authority. blackrock is in charge of in the house of lords. the baroness there. with theng purse speech. the duke. and the lord chamberlain. and the queen and the duke of edinburgh. >> my lords and members of the house of commons, my government legislative program will focus on economic growth, justice, and constitutional reform. >> queen elizabeth to libbers her government's priorities for the upcoming year during the state opening of british parliament. a light simulcast from bbc's quentin morning at 5:30 eastern on c-span2 and c-span.org. "washington journal" continues. host: we're back with nela richardson of bloomberg ever talking about the federal government and the u.s. housing industry. if the stock about the federal government's role in the housing industry by way of fannie mae and freddie mac. our viewers are very familiar with those two cross-eyed agencies. what is the current state of them? guest: currently they are still basically wards of the state, under federal conservatorship. there regulator pretty much makes sure the company is on track. and they are being shifted a little bit with the new year. they're not profitable, which is a big change from two years ago. basically, most of their profits are accruing to the u.s. government. host: the that mean they are lending money? guest: they don't make loans. what they do is issue lots of debt. they use that debt to buy lots of mortgages and they bundle them up and sell them off to investors. they are still doing that function. they are doing it to the tune of about 100 billion mortgages per month. that is what is keeping the mortgage market afloat. host: how long is the conservatorship to last? guest: that's a good question. now it looks like indefinitely. we have put out research that it's very unlikely there will be substantial reform to these companies during the current obama term. so that is an open question. we don't know all -- know how long conservatorship last? host: who is heading that up? guest: ed demarco. he's been acting director for about four years, since 2009. we have a new nomination now with representative mel watt, which caused a stir on capitol hill and in the industry. host: why is that? here's a piece that you wrote -- guest: to understand this, you have to know a little bit about the background between -- the tension between ed demarco and the white house. when house really wanted freddie and fannie to do principal reduction to help struggling homeowners who were underwater on their mortgage. ed demarco refused to allow these companies to reduce the principal on mortgage loans, saying it would be too costly for taxpayers. watt, who has advocated and supported the principle forgiveness for struggling homeowners, now on the same page on this issue as the administration, and the reason why some republicans are very dismayed by it. host: does he need to be confirmed by the senate? what are the prospects for his nomination? 50-50.some say it's a i'm actually more positive than he will be confirmed. the reason is our housing market has changed fundamentally. more and more people are leaving the status of being under water, just because the housing market has improved. so principal forgiveness is becoming less of a political issue. less of a policy issue. the key issue right now is what to do with fannie and freddie now that they are profitable? what ared that means -- the options on the table for changing fannie and freddie? guest: several. president obama and the treasury put out a couple years ago paper laying out the different options for fannie and freddie of away from complete privatization to liquidation to keeping them in government control. so there's a variety of options and a variety of disagreement on what to do with these companies. distilled all know. there's a consensus that they need to be smaller. that the government footprint in the housing industry needs to be substantially reduced. and we need to get private capital, wall street banks, mortgage lenders, back in the business of funding american mortgages. host: you said fannie and freddie have turned a profit, back to doing what they were doing before. the that mean they are at risk of losing money again and taxpayers having to bail them out? guest: the mortgage business is not risk free. when you extend a mortgage to a person for 30 years, there is a risk that they will lose their jobs or their family will get divorced and there will have to sell the house or something will happen, if so it's not risk free. but the housing market has improved substantially. what is crazy to me and astounding to me is that fannie mae posted record profits last year. $17 billion. they expect to do that for the foreseeable future. it looks like these companies are going to be making money for a long time. calls for reform are a lot softer when companies are making money instead of losing, like they were before. host: we're talking about the federal government and the u.s. housing industry with nela richardson a bloomberg government. the president nominated mel watt, the congressman, to serve as the head of the fhfa. guest: federal housing finance agency. host: i want to show our viewers what the president said about the congressman. we will come back and get your phone calls. [video clip] >> he has led efforts to rein in unscrupulous mortgage lenders -- lenders. he has fought to give more americans in low-income neighborhoods access to affordable housing. the congressman have that record? guest: he has a 20-year track record of supporting affordable housing in the united states. that track record is up to scrutiny now. some say that he has gone too far to the left in making sure that a wider array of americans have access to mortgage credit. maybe everyone does not need to have it. you do need some controls on this process. that is a valid criticism from the other side. balancing sensibility and affordability will be a key going forwardatt for this position. host: mel watt, 12th district of north carolina, known for its big banks. guest: right. bankamerica is in the center of that. -- bank of america. he has had the support of the banking industry. in some sense, his critics cannot have it both ways. the cannot be both in the pocket of liberal and left-wing housing groups and in the pocket of the banking industry. he definitely has to have some kind of independent role in this. and maybe his role will be merging these mutual interests. we want the housing market that increases affordability and keeps mortgage rates low. but we also want a market in which investors and banks are active participants. that's the key balancing act we have struggled with for the past 15 years. host: we want to get our viewers involved in this conversation. if you have a question about the federal government and the housing industry, nela richardson can answer that. all other callers, it 3882. david in grand rapids, first period caller: good morning. the last couple months they have been talking about how the housing market has kind of taken off again. what the evidence is showing is that corporations are pulling all their money together and buying houses, thus falsely inflating the housing prices. placeo we get to a where we are really paying for the house for what it's really worth and we're not doing this fake -- a house that's worth $100,000 is really not worth $200,000. guest: very glad you asked this question. the housing market is improving, but it's not doing so in a way that is consistent with a normal market. kind ofs are really getting the inventory and buying of all homes that are available, leaving traditional home buyers that need mortgages are competing with these investors. if it is still very difficult to get a mortgage loan in this country right now. and so, investors are grabbing up house prices -- driving up housing prices. we have not returned to normal market yet. what is normal? we will only know that when we have a good demand and a good supply and we're not there yet. so that the problem. host: let me add this headline to the mix -- guest: absolutely. for the housing market to be healthy, you need to have first- time home buyers in the market. generally, they're not the ones with the highest credit corsican put 20% down. so those people are blocked unless they go through the fha groups. so that burdens and other government housing program to swell up all these people who would like to get a conventional mortgage loan but cannot. if if you have great credit and a sizable down payment, you should be able to find -- get a loan. you may not able to find a house you want, because inventory is so low. host: what about the administration opposes role in helping the housing the housing industry? they launched a program in 2009. 2 million modifications started. 54% have been cancelled. the oldest modifications defaulting again at a 46% rate. guest: the program has struggled. it has had some successes. it has had some failures. really got people on the same page on how to the modification. the industry had never confronted this massive scale modifications before. because of the systems that replace by hamp, they're now able to do their own modifications without government involvement. that's a huge advancement. where it fell short is the fact it did not target as many people for as long as the administration wanted. wassecondary default rate really high and with the program. host: john is a republican caller: in louisiana. caller: good morning. i'm 70 and on a fixed income. i bought a house in 1981 when interest rates or 16.5%. money, ied more refinanced the house. but i paid it off 15 years ago. now i'm in a position if where i am being asked to my taxes to help out somebody who was not responsible, and perhaps did not operate under the rule if you cannot afford it don't buy it. there is something for people who cannot afford a house. it's called renting. i did that until i could afford it. itmy position in life now, gets me a little riled up to be asked to help somebody who did not help themselves. they were irresponsible. they may be did not read the fine print. i did. i'm still waiting for the first person to be brought forward if that's a somebody put a gun to their heads as a sign that mortgage. host: nela richardson? guest: johns concern is widespread. there is this tendency not to want to help people who got into homes they could never afford in the first place. both under president clinton and under president bush the pendulum in access song too far. so it makes sense that a homeowner -- to buy a home they need a down payment, they need to save, and they need to be able to afford them home. that's where things went awry, when we pushed the credit risk a little bit too far open and did not require people to have strong credit scores or down payment to get housecoat. host: dickey is next in florida, a democrat. -- vicky. hi.er: hoser: and duster the statement from your guests a fannie mae made a record profit this year. sometimes i think they are not data.all the real resistanistic i have 34 closed bank owned homes across the street from me that all fha. they have not moved since 2007. in all the county's people make the numbers look good to send out to the public that everything is going well, when in fact if everyone goes to each and everybody's neighborhood, things are not moving as quickly as people to think they are. so maybe there's one area of the country that's having a good economical boost, but there are parts of this country that are not. myself in my own business, i have -- i am a massage therapist. my business is the service industry. it has declined over the years, because my clients, even though i have the world's best clients and never advertised in a day in my life, i've been a therapist 18 years, if my clients have been struggling. a client of mine the other day went into bankruptcy and foreclosure. situation ist the still happening out there. that wewish sometimes - would paint realistic pictures instead of saying fannie mae is making a profit. if they are making a profit, some accountants should be looking at their books. guest: she's absolutely right. one thing that has not changed in the mortgage market and the housing market and probably never will change is real estate is local. if its location, location, location. there are still pockets of america that have not seen a house price increase. still a lot of foreclosures on the streets. the banks have been scared off by government lawsuits and the like, processing foreclosures in some states it takes longer for the foreclosures, to put houses on the markets. so we still have problems. when it comes to the company's profitability, most of the losses the company took on happened between 2005 and 2008. since 2008, they of only been getting the highest credit scores investments. these loans are very conservative. it means it's really hard to get a mortgage on the positive side. this money now accrues to the federal government. it means profits into the foreseeable future. host: see of tranquillity has two questions -- --sea of tranquility -- i guess the biggest difference between fannie and freddie is age. fanny was chartered in the 1930's after the depression. freddie mac came around in the 1970's. they both do essentially the same function, which is to package mortgages, by them, sell them to investors, and guarantee the principal and interest gets paid back to investors. fanny is a little larger than its sibling, but that is basically the biggest difference. why do we need two? people it is -- what don't understand is they get lumped together, they of always been very competitive. the duopoly keeps interest rates low, because they're competing not only with the banking industry but with each other. we all of them together as the same company in our policy narrative, but they are different companies that are very focused on the bottom line and have been historically. host: let me just jump in. american hero wants to know -- you talked earlier about what fannie and freddie do. guest: as a consumer, i cannot go to freddie mac and knock on the door and say could you give me a mortgage? would go to as bank of america. bank of america would give me a mortgage. what does bank of america do with the mortgage? they could keep it on their books forever, but they could also sell it to fannie and freddie. fannie and fresh to issues corporate debt to investors, like central banks, pension funds, a lot of global investors can use that money to buy the mortgage from bank of america? and then takes my mortgage and puts it with a bunch of other mortgages, packages them up into securities, and sells them off to different investors. insurance companies, pension funds, hedge funds. that's essentially their function. they provide the money the bank of america to give me alone. host: who lets go to the second part of the tweet. it's asking what are the changes they have undergone since 2008? guest: now they're under complete government authority and that's a huge change. there are no longer controlled by stockholders. they are controlled by the federal housing finance agency and the administration. they have a c e zero and a board that administers daily activities. all of their activities have an overlay of federal oversight that was not there before. host: does that mean congress has a say? guest: congress has always had a say and we are waiting for congress to say something, because they not given a firm direction with what to do with these companies. if if fannie and freddie are to be overhauled in any way, it has to come from congress, because it is a congressional charter. we're so we are still waiting for that to happen. host: "the new york times" would like the senate to say yes to congressman mel watt to head up the federal housing finance authority. that is their editorial in "the new york times" this morning. to the think this does prospects of his nominations in the senate? guest: mela has a 20 year history. he knows the banking industry. he has been involved with the house financial services committee for a long time. his qualifications are one bucket that people may scrutinize, but i think he passes muster here. on thing they may center this is policy stances. what the administration suggest by nominating mel watt. to me what this suggests is that we are going to see fannie and freddie sticking around for awhile. we will not seek conservative ideas of breaking up companies. we will see more of us the status quo. companies may be smaller, more streamlined. they may have smaller investment portfolios and they may charge higher fees, which means higher interest rates, but there will still exist through the obama term. host: can anyone really trust banks today to get along? what will happen to their mortgage papers? will they be traded on wall street? guest: most probably they will be. securitization, which is the process of bundling mortgages is part and parcel of the american mortgage market. as long as americans want low interest rates and 30-year fixed loans available to them to keep housing affordable, you are going to see securitization. possibly you will see fannie and freddie. host: regulation, a free market housing and foreclosures? go figure. governor interference is the problem. independent caller. caller: good morning. a couple of questions. i am a general contractor. i had my own company for 30 years. well qualified. but i am eventually retiring out. in 2004, i saw the bush economic collapse coming and tried to warn everybody i could. by 2006, i realized it was a minute so i sold spec properties and got out when the market was strong, and told everybody in 2007 that the stock market would fall 50%. everybody said i was nuts. in october, 2007 when it did crash, when it did fall 50%, the principal product of that as i see it was the oversupply of housing. now as i understand it, the big banks and fannie and freedie millions in their coffers not. how will they meter putting those back in the market? it would crush the market again if they put them back in the market. at some bases, they have to put them back in the market in a controlled way. what are fannie and freddie is planned for releasing their backlog of foreclosed houses back onto the market? guest: i think fannie and freddie have been transparent about their foreclosure is and how they are handling them. the caller is absolutely right. the worst thing that could happen right now in this nascent recovery is for banks to again start dumping properties onto the market. you are not seeing that. and there are also these programs that help distressed home waters, hopefully keeping them in their homes so we will not get this new onslaught of foreclosures. going forward, we are seeing serious -- prices are improving. i think you are going to see fewer, becoming less and less of a problem. fast areaverage, how short sales moving? and what is the estimated inventory of these homes? guest: i think that depends on location. it varies by location. we have seen the sales of distressed housing flow a lot. investors, these all cash buyers, private equity firms and other firms that we talked about earlier, they have actually been successful in buying up these homes. and converting them and putting them on as rentals. what is left on the market are the more challenging properties. along girl home stays and foreclosure, the more problems occur. -- the longer a home stays in foreclosure, the more problems occur. caller: good morning. i agree with you that the housing market is improving, but i have also discovered that it is the of salary costs that the banks tack on -- the a uxiliary costs that the banks tack on. my mortgage payment, $250 of it, goes to the principle. to homeownerses insurance. when i investigated why the insurance costs were so high, it is because the mortgage that i have with bankamerica requires that you carry replacement cost insurance, which is not based on market value of your home. in the past, you always made sure that you insure your house for market value. or the banks used to require at least you had insurance on your house to protect their investment. so here i am owing, having a house that is having to be insured for $250,000 based on replacement value, and i -- so it eats up and makes the cost of my mortgage higher than the cost of the principal. guest: right. so one of the things the banks have been doing, it is an example of tighter requirements. and yes, mortgage insurance is one of them. if it is a fannie and freddie loan and it has less than 80% equities, it requires mortgage insurance. but it has got more expensive, because housing is considered are riskier asset for insurance companies. so what you're caller described is very consistent with the new reality and the housing market, hard to get a mortgage. there are more costs. this is a problem that hopefully time will heal. host: our topic for all of you this morning, we have 10 minutes left, talking about the housing industry and the federal government's' role in it. if you have a question for our guest nela richardson, cfall us. -- call us. we have a democratic column. caller: good morning. thank you for keeping the topic of front for everybody. it is very important, actually. you have the alchemy that goes on when they are securitiz ing. will you let the folks know what fannie and freddie are doing to loosen up those, the alchemy going on in the background to allow for refinancing of homes. guest: another government program that is available is targeted atd is homeowners that maybe underwater, meaning they owe more on their mortgage than their homes are worth. and it is a program that allows homeowners to refinance without a lot of unnecessary costs. basically a streamlined refinance, or the banks and fannie and freddie bit those costs. the program had mixed results because fannie and freddie were initially slow on the uptake, and they did not start refinancing deeply underwater mortgages until late in the game. so the program has not had as much success as the government would like. and it is also isolated to fannie and freddie. so any mortgage outside of fannie and freddie's ownership does not have access to this program. so what the obama administration has asked is for congress to take up this legislation, extend this program to non-gse mortgages and congress has not yet. host: how many people have participated in hart? guest: there are millions. i do not know the exact figures. several million, i can say. but it is below the administration's estimates. and i think the disconnect between what the administration wanted to target and what is actually being targeted is the key problem in the policy. republican.uri, caller: good morning. so much for taking time to answer questions. my home was paid for, and ended up upside-down on my equity because of a major ellis. i ended up filing bankruptcy and my home went into foreclosure. two days ago, i received a check from an independent foreclosure review. and it says that earlier this year, i guess i will name the bank, citibank entered into an agreement with federal banking regulators, the office of comptroller and the board of governors of the federal reserve system, this agreement resolved the independent foreclosure revere required by regulators. it goes on to say that regulators determined to your payment amount based upon the stage of your foreclosure me a $300d sent check. i am looking at this and thinking, is this real? do i cash this? it or cachedeposit it? guest: i was afraid that if i would catch it, i would be on the hook for the house again. i do not want to own this house again. the bank wanted it. the bank and have. are lifted in very good shape. but i do not know, is this real? -- i left it in very good shape. it came from a private consulting corporation, a paying agent that call themselves. that: i cannot verify individual check, the situation is real. there were a lot of abuses going around the system, and one of the banks did is the robo signing of banking foreclosures. because of those violations, the government took action. and one of the results of that action was a settlement that was supposed to benefit those who were deemed to be violated through this foreclosure process, which she was. host: that looked like she was it deemed to get some money back. viewers who have been reading newspapers might be familiar with the headlines about this. this is brought on by the attorney general's in the states. it is a $25 billion settlement. pavements, have they started to go out? guest: i have not been keeping track. it is very likely that they have so far and a settlement has been reached. massachusetts, independent caller. problem withve a wells fargo. wells fargo turned around and they were trying to get our mortgage reduced because it was 6%. it still is. and it is way down in interest on anything. and they carried us through with lies, deceit. it was terrible because they claimed they did not, it was different offices. oftop of that, we spent $400 our own money to turn around and try to have this appraised for them. and then they turned around and said, come up with -- they came up with stories. the last star was, is because i owe to bills and it was wrapped around the building. anythingcould not do to get the loan through from the government. and nothing of this, where is my $400? i have never seen that much of anything and all they do is tell us lies. host: are you familiar with that? isst: the program hart supposed to solve this issue and supposed to streamline so you do not need an appraisal to get refinanced. maybe this mortgage is not owned by freddie and fannie. maybe it is, but this is exactly the problem that harp is trying to remedy and what the administration has called on congress to extend. interest rates are at an all- time low. ouldike to see struggling homeowners, refinance into lower interest rates so they can lower payments. but is good realize this 6% when compared to the last caller -- he said that he bought his house for 16%. so there is a wide disparity of interest rates in this country. we would like everybody to get the lowest rate, but we cannot have a stable housing market with higher interest rates. host: democratic column. caller: i have one question, how you get your house and refined as we do not have a fanny or freddie may blac loan? guest: if it does not have equity, it may be difficult. it is very hard if your home is underwater to get it refinements. as the previous caller illustrated. that is why, again, the administration wanted congress to take up legislation and help ansple with non-gse lo to do it. host: how much would that cost the government? guest: whatever costs would be weighted against the benefits of keeping people in their homes paired for closures are costly, costly to banks and the government. and they are costly to communities. one of their caller said that she had three foreclosed properties on her street. that lowers home values for everybody. i am sympathetic that we should not help people who bought a home they could not afford. when we help those people stay in those homes, it is best for communities if they can keep those payments going forward. host: a california republican caller. go ahead. ladies.good morning, i have a question, looking for your professional opinion on the theory i have on the housing market in the market crash of 2008. my theory is, instead of the $685 million that went to the banks and the automakers to bail them out, it did not seem to help the citizens of american. my theory is have the government chosen to give $1 million to just every legal working, taxpaying citizen in the country, would that have helped because people would have taken that money and paid their notes and in so doing bail out the banks? people would have bought cars or paid off the car that they had at the time. in so doing, bailed out the automakers. with that not make more sense and would not the money had gone the-- i know that obama thinks we cannot do anything with a penny. instead of banks and auto makers getting built up, start at the bottom and the people will rescue the banks and auto makers. i want to hear your professional opinion on that and whit did not happen. host: ron tweets the same things. tarp payments could have gone to homeowners. guest: personally, i would have liked $1 million. i think the approach was a bit lopsided. there was definitely a targeted effort towards the banks. they felt the banks were in a crisis situation. so if financial markets were allowed to crash, it would be chaos for not just the u.s. but the entire global economy. but given the crisis scenario, i think what was lost is that homeowners were struggling, too. and the wild wild west activities of wall street had spilled over into main street. it was seen by many americans as unfair that he would build up these banks and not help the struggling homeowners. so i think the government programs that came along to soothe that concern work well intended but did not do enough quickly enough. and i think that is a valid criticism of housing policy. host: council, md., democratic caller. caller: good morning. what i was calling about, your speaker spoke earlier about the banks receiving $25 billion to help out with people that work owing, that were losing their homes due to foreclosure, but yet, the banks were only giving up something like $2.3 billion to help customers. i think that is a rip-off. the banks are making the money, not the people that are in default of their loans. guest: so now you are seeing the discontent between the banking community and some of your callers. and i think when you look at the financial-services industry, it has been an industry that was supposed to help capital, help movement of capital between homeowners and small businesses. and banks played a big role in helping people get mortgages. now we are seeing a little bit of distrust between banks, that maybe they will put me in a market i cannot afford or that they will not be as helpful going forward. new regulations by the government should help going forward, and in building that trust again. but the best way for banks to build that trust is to keep lending. host: 1 last phone call from bob in new york. democratic caller. caller: i am calling regarding the situation of the 100 million people who rent. and i think that something really has to have a national program to help these people. i happen to live in new york and they are putting up mostly luxury housing and the middle income people are vanishing. and i think there is a waiting list of seven or 10 years for the 150,000 people who need public housing. perhaps one way to solve it which would create not only a social need unemployment would be to put middle-income housing and partnership between the government and private industry under the infrastructure or bank they're talking about. i wonder whether that would not solve some of the problems. even under rent control, many of the tenants cannot afford the rents. and i think some attention should be given. it is a real social need. ni the 1940's, they have the title i housing. it seemed to work out until involved.e got befuddled government has withdrawn completely except for voucher. host: the front page of "the wall street journal" says that president obama budget proposal included a proposal to restrict how many years people can get these housing vouchers. right now you have the voucher indefinitely. on average people in new york are staying in these housing developments 20 years. what do think about that? if they are with in the income limits, that is fine. if not, then they -- the problem is very little private housing being built for middle income. they have this 80-20 situation in new york. you see most of these tall, residential buildings going up, particularly in new york city, are basically luxury, condos or for rent. they are charging $5,000 for a two bedroom. who can afford that? guest: affordable housing is a key issue especially when you put it next to the housing problem. home ownership in this country has taken a nosedive. it is the lowest it has been in 15 or 20 years. that means that more and more people are going into a rental housing. the effect of that is to boost rents, especially in urban areas. affordable rental is a problem. it is something that fannie and freddie to address. they have the multifamily sector that build homes. for middle-class family. i agree. more should be done to help with the middle class and getting them into affordable rental housing, so they can save money and buy a home one day p. host: nela richardson is a senior economist at bloomberg.com. talking to much for our viewers. coming up next, we will turn our attention to a new study that shows the income gap is widening in the sprawling the economic downturn. richard fry is a senior economist and co-author of the report. first, a news update from c-span radio. >> the senate takes up water resources bill today. that is not free of controversy. environmentalists are upset with language decide to expedite refuse that would assess penalties on any agency with a role in the environmental permitting process that misses the deadline. that is a requirement opponents say could stifle meaningful evaluations. the white house has also criticized the that bill. although its statement stopped short of an outright veto threat. the senate comes in at 10:00 a.m. this morning, live on c- span-2 and c-span radio. meanwhile, the house starts work on a measure that would let private employers give time off instead of premium paid to employees who work overtime. the senate is not expected to consider the measure. and the president has threatened to veto it. the house begins legislative work at noon. it will be in at 10:00 a.m. live on c-span television and c- span radio hd2. finally, secretary of state john kerry is making his case to russian president putin for russia to take a tougher stance on syria. this at a time when israel's weekend air strikes have added a new factor to the talks. secretary kerry arrived in moscow today. some of the latest headlines on c-span radio. ralds leading the way, again, weapons of war in previous centuries bu =t now symbols of sovereign authority. in charge of security. you will see more of him and a while. chancellor, bearing the per se with the speech. the duke of norfolk and the lord great chamberlain, the marquis. of the queen and the duke edinburgh. >> my lords and members of the house of commons, my government's legislative program will focus on economic growth, justice and constitutional reform. >> queen elizabeth delivers her government's priorities for the upcoming year during the state opening of british parliament. live some of cost fr-- a liuve wednesday at 5:30 a.m. host: we are back with richard fry co-author of our recent report that shows the growing wealth gap and the united states. you call 2009 to 2011 and on even recovered heard why is that? guest: the nation's wealth did rise during the first two years of the recovery, but the census bureau data suggest it was on even. ,n average, the bottom 93% their net worth fell about 4%. 7%, their netiest worth rose by about 28%. so wealth is up, but for many american households, the wealth probably continue to decline, gains have largely been among nation's wealthiest 8 million, 7% of u.s. household. host: when you put that in dollars, this is what you show -- a 4% decline for 93% of americans. that means a wage of $139,000 a year. and now at about, on average, $134,000. for the wealthiest of americans, that was $2.50 million. you have seen that grow 28% to $3.2 million. guest: i should probably explain quickly what wealth is. this is basically your nest egg. it is what you have, what you have accumulated. normally, it is the total value of what you all, your home, your car, stocks, bonds and financial assets minus what you owe. so this is not your income. what you're getting over your wages and salaries. this is well. this is what you have built up, accumulated over time. 93% of americans see a decline of 4% in the world? wealth? guest: your listeners are aware of what has happened to the economy. the results, they are a sensible. for most american households, the way they are accumulating their biggest asset is in their homes. and during the first two years of their recovery from 2009 to 2011, many metropolitan markets, many home markets, homes continue to decline in value. so for many american households, their home is their biggest asset and it was continuing to fall in value. so once you start to think that for most households, a whole is where their wealth this, it wealthense that their continue to drop. as opposed to that, the wealthiest american households have homes, but they also have the bulk of the nation's financial assets. so we can get into the details, but much more of their wealth is in financial assets. and now just think about what we know about what happened to let's say the s&p 500, to the stock market, from march 2009 to the end of 2011, the s&p 500 rose about 34%. if we looked at sort of interest rates and the prices of bonds, another particular kind of financial asset, interest rates were dropping. bond prices are going up. so for those wealthier households, yes, they lost some value on their homes, just like many american households, but they also have a lot of non- housing wealth. they own the bulk of the nation's financial assets. they experienced a lot of gains on those financial assets. so that is why for the vast bulk, there was actually some losses because most of the nest egg is in their homes. for the wealthier households, much of their wealth has been and financial assets. host: we have been showing net worth of those making less than a 10% losshey took on their homes and cars. at 10% gain in their financial assets. for those of a network of $500,000 and more, lost 18% from their homes and business property. i want to focus on this 10% number and the 63%. how are those making less than $500,000 investing? basic reason you're getting this resolved is for the households with less than $500,000 in net worth, they have some exposure to wall street and financial markets, but it is mainly in the form of their retirement accounts, what is called a defined contribution accounts. their 401k's. as opposed to that, the households with more than $500,000 of net worth, they will have a pension account, but they also directly own stocks and mutual funds and we can get into this, for a small share of them, about 3% of the nation's wealthiest households, they also have in their portfolios corporate and municipal bonds and treasury securities. and during these two securities, the price of bonds rose appreciably. so corporate and municipal bonds, not many american households own them, but those wealthy households that do, that part of their wealth holdings also markedly rose in value. so the reason and you see 10% in a gain of financial assets for the less than 500,000, and a 63% gain -- is that they earned investing differently. i do not want to imply that the under 500,000 do not have exposure to the stock market. they do, mainly in their retirement accounts and it is not a big portion of their portfolio whereas, financial assets are much bigger part of the world for the 500,000 and over household. it is partly a mix of where there nest egg is. host: we heard from a call earlier who said that i have a 401k, but i have not been putting money into it because i cannot. i need the money paycheck to paycheck. if people like him, is that a trend? if so, how would that impact this 10% number if people had not been pulling money out of their 401k? guest: i cannot speak to what extent over, since 2009, workers have been contributing to their retirement account or not. i do not have data on that. what i do know is that when we take a look at exposure -- how many households have some exposure to the stock market in the sense of they have a 401k or an ira or a keo account. or the fewer households that directly own stocks and bonds. what it will see, i looked at these numbers, roughly 57% of america's households have some connection to the stock and bond markets. and that actually has not changed substantially since 2009. so i think it is not so much that necessarily that people got out at the bottom. it does not look like there was a mass exodus from the stock and bond markets. it is still the case that over half of american households have exposure. what is really different for the wealthy households as they have so much more of their wealth in stocks and bonds. where, again, for the typical american household, yes, they have exposure, but that is not where the bulk of their nest egg is. host: this chart, share of aggregate household wealth owned by the upper 7%. and see the numbers and 2009, 56%. now is 63%. guest: as a result of the 4% decline for the bottom 93% and the 28% increase for the upper 70's -- 7%, the total wealth pie got bigger. but because of gains largely in the upper 7%, they basically got a growing share of a growing pie. and they're sure we estimate, they own 66% of the nation's wealth, that of households own, to about 63%. so a growing share of a growing pie. recovery uneven is the title of pew research center latest study. and richard fry, author of that report is here to take your questions. arnold and tennessee, a democrat caller. caller: good morning. yes, this wealth gap that is in the nation, it is quite me, isly a moral, excuse stutter, it is a moral issue. which also makes it a religious and spiritual issue, too. um, excuse me. host: take your time. caller: yes, my name is arnold joselpph white. and i have a website where i have co-authored a book and it is free. and there is no charge. and it deals with this wealth. it deals with a lot of things, but this well the issue is one of them. and the website is godislove.org, if he would like to go take a look at some time. host: what about this question about this being a moral issue? in past economic recoveries, has this been the trend? know. i do not while the data we do not collect as readily as we do income data. so because of the way the data is collected, i have not had an opportunity to look at previous recoveries. suggest thatuld this recovery probably is a different to my knowledge then earlier recoveries in this sense -- we were talking earlier about the importance of housing and the value of homes to the wealth of american households. this recovery is different than earlier recoveries. typically, housing will be to recoveries. that is the housing market and construction and rising home values tend to occur early in recovers. this recover, it due to part with the nature of and the fact that some of it was largely due to problems in the nation's housing market, until this past year, until 2012, housing has been lagging. recently, there has been signs of growth, so i suspect this recovery in terms of its wealth implications probably is different because we know that housing in the nation's home market is playing at different role than it has an earlier recoveries. host: what about household income? when you take a look at income from 1990 to 2011. in 1990, about $50,000. that is where we are now off. that is where it ended in 2011. guest: i think it is important to talk a bit about how well, your nest egg, who you own minus what you owe, how does that fit into the larger economic picture? what we are more familiar with this house called income. that is what you get in over a year. and it includes wages and salaries. unemployment compensation. the nation's seniors, social security income. it is what you are getting over the year. we measure that closely each year. the census bureau does. and what is interesting is here pew is reporting the nation's uneven wealth recovery. when we look a household income, that recovery has been uneven as well. the e following sense, is recession ended officially in 2009. but, according to the official data, median household income, the typical income of the typical american household, during the recovery, meidan household income has continued to drop from 2009 to 2010 to 2011. and, as a matter of fact, it actually fell as much during the recovery as it did during the two years the recession itself. sell household income during the recovery and has grown as a whole. the income pie is growing. again, half of american households, their median income continue to decline. one caveat. we are into 2013. we will know this fall when the census bureau releases the annual income-poverty report what has occurred during 2012, during the past year, but at least to what we know now, through 2011, household income also was declining. so that was an uneven recovery as well. so the world picture complements what we know about the decline in household income. host: steve, northampton, pennsylvania, and depended caller -- independent caller. caller: i differ on your opinion of the growth and wealth amongst the middle income. what i am finding is that over the past 10 years, and in the past six years, the median wealth and from where i live as the industrial belt, the industrial jobs have been taken away in this country. they have eliminated a lot of them. and we have precious metals that precious m-- that are not mineed in our culture. child in the a 1970's going into the 1980's, the jobs in our area were very well paying jobs. now what has happened is over the past 15 years what i have seen being in and out of work for the past 8 years, is your hiring wages are $12 and under the top wages are $15 and under. so the median household income has dropped drastically, compared to what you're saying with 10%. and that taxes have gone up across the board, like say maybe taxes for a candy bar and your home income taxes, and what really disturbs me is the high earning wage jobs that were in our country at one time, when i get out of high school up until now, have for to be banished. in our area and other areas of the united states. -- have virtually vanished. picked upbtpwages to an average $23.00. guest: ok. i want to -- i don't disagree. i agree with some of the spirit of the caller's remarks. i want to be careful about what we are measuring and discussing. and it is notth the same thing as income. as far as median wealth, the typical welfare of the american reportld, this pew focuses on the last two years, but we do have a sense of what the trends are paired for the typical american household, largely because of the decline in housing values from 2006, it's clear the great recession and now sort of the tepid recovery, for the typical american household, there measured wealth fell, the great recession lowered it nationally housing prices housing prices1/3. -- housing prices by 1/3. some households borrow on their homes. the value of wealth and housing declined. you are correct that for the typical american household, their nest egg as a result of the great recession and tepid recovery, it is clearly back to where it was in the middle 1990's. maybe as severely as for the typical american household, maybe as early as 1991. their world has not gone up at all in 20 years. again -- their wealth has not gone up in 20 years. that is due to the great recession and the tepid recovery that hit housing. let's switch gears and talk about household income. you are right. for the nation's working age population, when you think about household income, where is the action? you are 100% correct to start talking about wages and salaries and what is happening in the nation's labor market. what are would say there is, as the earlier chart showed, the typical american household, not only has their household income not risen during the recovery, foragain, it's fallen far, the medium household income, it was back to where it was in 2000. for the nation's working its household, you are right, it is because of the tepid labor market that we have experienced. and i do not disagree that for a share of wokerkers, either they can't find nwork, or they are not getting as many hours as it was had. or because of the surplus of labor, employers to not have to quickly raise wages. i agree for working age households, where the source of their income difficulties, for most of them, the answer is in the nation's weak labor market. and that is sort of why this recovery has been lost from many american households, because we have not seen substantial improvement in the labor market. host: laura on twitter. how can the trends of income and wealth distribution be reversed? over the course -- i do not know looking for. i do not want to speculate. but we do know over the course of the 20th-century, there are income, decades when and wealth disparities are large. during the 1920's. fter the great depression, in what some consider the golden days of american capitalism, during the 1940's and 1950's and into the 1960's, there was wage compression. and it was more equal growth. tideoat was rising but the was lifting all boats. it is not written in stone. we have times in american history where these disparities of income and wealth are ofrowed, partly perhaps part a progressive tax policy, conscious measures taken by the government to sort of reduce disparities. that may contribute to the disparities. it may be other factors as well. we know during the 1950's and 1960's that the difference in pay between college educated in high school educated workers and neyra. there was more opportunities for high school educated workers. but there is no necessity that these wealth and income disparities we experience, that they are written in stone. there are periods with the american wage structure does compressed. has, and it may again and the future. host: one individual wants to know about interest rates. are they not held artificially low, below 1%, due to growing federal debt and servicing? is that playing a role in the wealth disparities? one of the surprising findings for me in doing this research was there is a category of wealth identified in the census data. and it's households that directly on treasury securities and corporate and municipal bonds. and so these are what we know is fixed income assets. some households will own bonds in retirement accounts. that is not what am talking about. i am talking about households that directly own treasury securities and corporate in missable bonds. how many households? 3%. all households that have a net orth of 5000,000 or a-- $500,000 or agofe. how surprising is how well those assets did from 2009 to 2011. if you are familiar with the bond market, to know what i am going to say. it has been a conscious policy of not only our central bank but central banks around the world, to bring down interest rates, to lower interest rates. part of quantitative easing as i understand it is direct purchases of bonds. so interest rates have come down, bond prices have gone up, and for those 3% of american households that directly own treasury securities and corporate and municipal bonds, that portion of their portfolio did quite well. host: do we know the number? guest: yes. basically, throughout the whole market, corporate and municipal bonds rose by $2.20 trillion. for thatpointing out, particular asset, who owns that? it is entirely owned by the upper net worth household heard most american households do not directly own corporate missable bonds. they have them in their retirement accounts. i am talking about bonds that are directly house. so part of it but interesting findings of these two years was, we can talk about the s&p 500, the stock market, but a lot of the wealth gained was the bond market and then narrow share of households that own those kinds of assets. host: you go to pewre search.org, inside the report big break down the mean asset of values by type of assets from 2009 to 2011. these are in 2001. you can see the change. the gains and what industries and the losses if you go down through the list. let's go to mike, in florida, republican. caller: i have a unique situation. my wife and i, we were trying to sell our house and alabama after the death of our son. we had all our money in that house. we put a large cash down payment, we put another $50,000 into fixing it up, and we thought we would be fine. our business and our allies have taken us to sarasota, florida. i paid for that house to keep my credit. i am trying to buy another small condo in sarasota or house. for 90 days, i have been battling banks to get a mortgage. to the point were they want a $38,000 to close on a $100,000. we have credit scores that are good. some of us do not invest in wall street. we do not believe that investing in stuff that does not earn or make anything isn't what needs to be moving forward. we should be making jobs. host: we'll take that point, mike. guest: i think that you are our, first of all, not unique. ofre is a wide swath american households to that to not own their homes are right and who got caught in the downdraft of the nation's housing downturn. and what i think, if i understand your situation, is you are trying to, you have got a lot of money, all of your wealth tied up in your property in alabama. and right now you cannot sell it for what it is worth. and so you are hunkering down and trying to sort of weather the storm. i do not know about the particulars of your housing market, but starting in 2012, housing market did finally begin to start, at least nationally, we hit bottom and they started to turn upward. and i think you are struggling through the financial difficulties and also possibly as being a property manager of how to wait out and start to wait for your property and alabama to begin to appreciate. and you may be waiting for a while. housing markets do have, they do not turn quickly. and it may be awhile. but i appreciate the struggles and difficulties you are having in trying to wade out until it is a better time for you to sell. host: illinoise, independent caller. caller: good morning. i cannot disagree with anything you are saying. it is unfortunate that people are listening to late. the fix was in starting with the 1980's when i started my career. i am retired. it is unfortunately because people find themselves with so much credit card debt and there is no where to turn. so the only thing i can tell people is that credit cards are the kiss of death. unnecessary spending, all of those things. in addition to the inflated housing markets, we came from california, so we saw that coming they tried to get us to borrow against our house. a lot of people did. they found themselves, when the market slipped, that they are under water. unfortunately, people have learned too late. so i would say start enjoying property. host: we will leave it there. does offshore banking affect wealth? are secret offshore tax havens part of the equation of the unequal recovery? guest: i do not know. i have not looked in detail about the prevalence of offshore accounts and tax havens. and i cannot comment on the prevalence or their role for the nation's households. host: isn't recession a realignment of values? the 1932 was a realignments of the in balance of the 1920's. same today. guest: i did not know. clearly, it is not called the great recession for no reason. of for a wide swath america's households, including the wealthy, the great recession caused a large decline in housing values, housing wealth, as well as the stock market was noticeably down as well. so financial wealth, overall wealth was lost. as far as sort of what the causes of that are, i think we have had whole congressional commissions. society and scholars have -- are dissecting what the causes were. and i cannot way and on what the nature of the imbalances were. host: jane in georgia, republican. you are on the air. caller: thank you. what do think the influx of all of the illegals have done to the wages in our country? host: what is that important to you? what do think it has done? caller: common sense will tell you that when you legalize all these illegals, that they are. to bring in all their families and how many more will that bring in? affect wages in this country? host: is that something you guys have looked into? guest: we are getting a little bit far afield, but i think the pew research center has done quite a bit of work on this. ofre have been a lot economic studies and a lot of economic work on what the undocumentedf migration. what i would point out is that undocumented workers tend to be low skill. many of them have not completed high school. so what i would say is that to the extent we are worried about wage competition, it is only a segment of the wide, big, american 150 million workforce that directly competes and is directly affected by undocumented migration. educatedgely, less workers, many of them hispanics and african-americans. the majority white population, most of them have high-school diplomas. they are better educated. i am not saying that undocumented or migration to or migrationbid down wages, but i think it is probably a certain narrow segment of the nation's work force. it is not having a big, broad average impacts on wages. i think that is the consensus of economists who have looked at the issue. host: guestgrace says time to admit reaganomics is a failure. response with, time to admit keynesianism does not work. let's strow this -- was show this chart. this is the case schiller home price index. the first quarter of 2009. up to 135 in the first quarter of 2012. index.s the s&p 500 an you said that it takes a lot longer for the housing industry and economy to recover versus the stock market. can you talk more about this? guest: yes. s&p, case- on the schiller home price index, a common and widely distributed. it is the nation's most recognized measure of national home prices it would have been more helpful if i had shown the early 2006 is when home prices peaked. cannot do the i math quickly in my head, but basically it fell about 30% to get down to 132. then during the first two years of but recovered, but not a recovery in the nation's housing market, because housing prices fell another 5%. it is only in 2012 that we got back that 5% that we lost during the recovery. nationally, at least, we are still roughly about 30% down from where we were at the pkea. -- at the peak. granted, it depends on what housing market were talked about. yes, home prices have appreciate it more in some markets in 2013. but it is still the case, it is a fair statement that nationally at least, according to national home price indices, we are nowhere near in most housing markets the peak of where we were at in 2006. as opposed to that, when we turn io the s&p 500, it peaked, believe roughly speaking in october, 2007. the s&p 500 at about 1600. went down to 600. but now over two years, has recovered much of its value and just this past march, it crossed 1600. it made up its entire ground since the bottom in 2009. host: richard fry, we have to leave it there. for more information, pewresearch.org.

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