Out of the Senate and Into the Squawk Box

Update: I just did Squawk Box and will post my impressions in a bit. In the meantime, you can check out some clips from the show here. I'd love to hear what you thought of the show. Please post your reactions in the comments section.

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I spent Wednesday afternoon in DC, taking part in a Senate hearing on the future of journalism, organized by John Kerry, chairman of the subcommittee on Communications, Technology, and the Internet.

I was joined by Google's Marissa Mayer; James Moroney of the Dallas Morning News; Steve Coll, former managing editor of the Washington Post; Alberto Ibarguen of the Knight Foundation, and The Wire creator David Simon.

I have to admit, my favorite moment of the hearing came when Sen. Maria Cantwell of Washington, during her questioning of the panel, said she likes reading HuffPost on her BlackBerry and held it up.

You can check out my opening remarks and an exchange I had with Sen. Kerry here.

Now it's off to New York, where I'll be guest hosting CNBC's Squawk Box Thursday morning 7 am - 9 am EDT. Among those I'll be interviewing: Eliot Spitzer, Elizabeth Warren, GM CFO Ray Young, Yale economics professor Robert Shiller, and economist Simon Johnson. I'd love to have your help deciding what to ask them. Please post your suggested questions in the comment section of this post.

Comments

[loncowber]

Isn't the argument that there are businesses that are 'too big to fail' an argument that the regulations should have been left in place and the people who removed them held accountable for their actions?

[Naresh Caruso]

it seems as though government sachs won the shogun award ....they have control of the market ....my question ......isn't this a monoply? anti-trust ? something like that?

[Wael Nawara]

Arianna, Please ask professor Robert Shiller and economist Simon Johnson this question:

Shouldn't the government or the Fed issue new regulations which would either remove or greatly diminish the size of the CDS market (Credit Default Swap)?

In my view, the CDS is a highly toxic instrument which was largely responsible for the global meltdown. The size of CDS market is 60+ trillion dollars while US total GDP is some 13 trillion dollars (20% of the CDS market). This means that any small drop in real-estate prices can result in huge losses in the CDS which largely back mortgages (toxic assets rising), a blow which the United States economy can not withstand or easily absorb because of the huge size of the CDS market. It is just too much exposure with unnecessarily enormous degree of risk. It is like someone who makes $100K a year yet goes to Vegas and gambles with $500K ! Huge leverage which is good if one wins, but is catastrophic when one eventually loses.

Perhaps CDS should only be traded on regulated exchanges directly involving the bond owners themselves as Soros had suggested?

Have a great show!

[res-nyc]

We wouldn't have a CDS market and the need for long term regulation and its associated overhead if there weren't for CDO's (Credit Default Obligations). CDS's were the straw that broke AIG's back, but the CDO's and related complicated derivative products that sliced and diced loans were and continue to be the root of the problem. These instruments didn't reduce risk (as supposedly intended); they increased it and spread it around the globe. They created the incentive to only think short-term, generate quick large fees, and take huge risk.

Adriana, I urge you to ask economists and legislators - why we need these derivative products going forward and why new regulations shouldn't outlaw them? If the objective of regulation reform is to mitigate this crisis from happening again, we need these questions openly asked and answered. If we don't we're arming the banking lobby.

Can regulation reform bring back boring banking: where lenders have adequate capital to cover their loans, lenders loan to borrowers they know are credit worthy, the terms of the loan are clear, and the lender and borrower are in the relationship for the length of the loan?

[pfrogger]

hell ya!
booyaka!

[cordyc]

While inflation will help the debt burdened middle class, it will devastate the retired workforce who depend on interest from saving to live and supplement soc security. How can we get a balance?

How do we get Americans back to work at good paying jobs? Ask Warren about her book about 2 income families. It's great work.

When and how can the "shadow" finance system be regulated? The "private equity"/hedge funds have no controls?

Will the stock market ever return to a state were it is an "investment" vehicle for the middle class 401K, etc? The current rally is made up of the worst companies rising and good companies not so much. What gives?

[Andrew Saunders]

Hi Arianna, I am deeply troubled by the perspective offered by Simon Johnson on the likelihood of a 'lost decade' for the US economy. I hope (as I suspect he does too) that this does not come to pass. I would be interested to know what would be the signs to look out for if he is wrong? What would, in his opinion, be a good signal of the financial industry getting back to normal practice?

[twistedknickers]

The financial industry is already back to normal practice. They're stealing everything that isn't bolted down.

[pfrogger]

you said it. the only one who has the lost decade is the taxpayer. we're going to have to pay for this for the next decade.

what are we getting out of this deal? the execs responsible still have their jobs, salaries, bonuses, and golden parachutes. the "geniuses" responsible for these "fancy" financial tools, ie. derivatives, and derivative insurance, got paid handsomely, and are still getting paid astronomical figures. they decreased lending. the lower tier people were fired. mortgages are setup to favor banks, and that hasn't changed. there has been no significant reform on Wall Street. the crooks are still in charge. Geithner and Summers have legislated corporate welfare with no benefit to the taxpayer. how is this worse then letting these companies bankrupt?
what are we getting out of this?

[Dredd]

Arianna,

You are doing a wonderful job with Huffington Post and getting around to the pundit shows to spread some fresh air and sunshine.

It may not be sufficiently kosher to ask this, but after what Naomi Klein said on Rachel Maddow tonight, that we are currently experiencing "the greatest heist" in American history in this series of "bailouts", perhaps it is not too radical to ask the question:

Has The United States of America once again fallen helpless as prey to the robber barons?

[pfrogger]

Boy where to start?

for Spitzer:
what actions would he take if he was still the Governor in the context of Wall Street's reckless greed? what investigations would he undertake? which institutions? or a general investigation into all institutions?
what about indictments for any of these CEOs or executives that are still in charge of their companies even after massive bailouts? is there any responsibility or accountability for big business?
what is the responsibility of the government after this financial crisis? how does one ensure that it won't happen again?

for GM CEO:
where has GM gone wrong in the last 3 decades that they were unable to stay competitive?
what is there overall plan for the next few years in the context of hybrid and green tech?
since Honda and Toyota dominate the hybrid market, what is GM's plan?
the Honda insight sells for approx. 20K. how is GM going to compete with that? the Chevy Volt may sell for approx. 30K, but released in 2010, how is that competitive?
why are American car companies so behind their Japanese counterparts?
Japanese companies have some of the highest reliability ratings? how is GM going to compete with that?
why were green technologies not implemented sooner? where are they going with green technologies after hybrids?

[pfrogger]

for the economists and Ms. Warren:
President Oabam/Geithner/Summer's plan for this financial crisis, is following FDRs lead, a good idea?
how has this plan differed from FDR? mainly, FDR nationalized more institutions, and Obama has yet to do the same to any bank, is this a good or bad move? what are the issues, pros and cons, with the current plan?
since the execs are responsible for the decisions leading to these problems, why haven't they been fired, because they seem to still be in the driver seat, and the lower tier people are fired?
why isn't the burden placed on those who caused this crisis, ie. Wall Street, instead of on the tax-payer? shouldn't they have their salaries, bonuses, perks slashed, especially in those companies that get a bailout?
is it appropriate to have those who are closely linked to wall street shaping the policies that are trying to deal with this financial crisis? ex. Geithner, Summers
since the American taxpayer is saving these firms and the financial institutions in general, what are we getting for it? so far, lower tier people are fired, lending has actually decreased, and most of the execs responsible are still in charge with high salaries, bonuses, and parachutes?
why is the government so resistant to helping the tax payer out? businesses get a bailout, execs keep their job, but credit companies raise rates at will, and the mortgage bill dead at the behest of companies. their opinion of this?

[pfrogger]

one more thing for the economists:

is it appropriate for these companies in financial crisis to determine the value of their asset, when in the case of property values, have dropped precipitously?

why isn't there a full investigation and accounting of these companies, such as AIG? Receivership, split it up, re sell the good parts, and deal with the bad parts?

why does the government believe that these companies, responsible for the crisis, will "fix" themselves, or not hide whatever other misdeeds they were up to? why are we trusting them?

[luziannagirl]

pfrogger

"is it appropriate for these companies in financial crisis to determine the value of their asset, when ...property values have dropped precipitously?" you asked.

I believe you're referring to the decision to NOT require toxic assets to be marked-to-market, which I believe means mortgage/finance-related companies get to count their "toxic assets" at their inflated, false, pre-Wall Street bust value rather than at their current, real-market, post- "correction" value. Which is, in some cases, near-worthless.

So much for the free market, aye? It's free to soar and make a few people immensely wealthy based on a bubble, but when the bubble pops and the lie/con game is revealed, the wealthy must be protected at taxpayer expense.

Good question.

[mmogu77]

Arianna--For all your guests: Do they believe that an organized political movement of community organizations, unions, and Democratic and grassroots activists building popular support for a more aggressive stance to restructuring the banks and other financial institutions that created the financial meltdown, putting some of the insolvent "too big to fail" institutions into receivership, and breaking them up into discreet units that can be effectively regulated, would be helpful a moving Obama to think beyond the Summers/Geitner banking plan?

[Kirk Kinder]

Ask these folks how they expect to fix our economic problems by undertaking the same actions that put us in peril to begin with. Increasing debt and the money supply can't fix an indebted, over-leveraged America.

[booboo111]

Ask them how, with the loss of the manufacturing sector, and the U.S's starting to lag behind in I.T. due to the failure to graduate enough qualified engineering and science students, where the well paying jobs will be in the near future to support our economy that's 70% consumer driven.

[educatedfoolz]

Why did the administration & party that believed in "free markets" and deregulation all of a sudden want bailouts and government intervention?
Shouldn't we, the voters and taxpayers, have demanded that those companies fail and go into bankruptcy if their decisions led them to that end?
It might have caused more financial meltdown, but by bailing them out and propping them up, we only exacerbated the problem. To let them fail would have angered the public enough to show the failure of Reaganomics, "voodoo economics", "trickle-down", "supply-side", or whatever name you want to give to the failed economic theories and straegies of the GOPers.

[Paul Christopherson]

I would ask Eliot Spitzer if he thinks the Wall St. bailout is anything more than a bank heist in reverse, and if not, should there not be an investigation.

[Michael Maraist]

To Eliot Spitzer: Do you believe Hedge funds ultimately caused the current economic crisis? Do you believe that regulating the hedge funds might be the end of the stock market as we know it? And more generally, do you believe short-selling is adversely affecting small businesses trying to go public?

To Ray Young: Could a Government subsidized health-insurance plan be part of GM's salvation?

To the economists: Would it be in our government's interest to promote a little inflation (to benefit debt-burdened citizens), given more than a decade of very low inflation.

[Calvin B]

Arianna: Do your experts feel that this recent upsurge on Wall Street plus all the 'good news' we've been getting recently is for real, or is it a 'false dawn'?

[arcanepsyche]

I watched your testimony today. I thought you did a great job of representing the new vision for journalism.