Bringing The Hammer Down On Derivatives

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Bringing The Hammer Down On Derivatives

DAVE DAVIES, host:

This is FRESH AIR. I’m Dave Davies, senior writer for the Philadelphia Daily
News, filling in for Terry Gross.

As the Obama administration and Congress work to revive the economy, they’re
also beginning to consider reforms aimed at making the financial system less
vulnerable to the chaos that gripped the country over the past year. High on
the agenda is the regulation of derivatives, those complex financial
instruments that have brought big profits and dangerous volatility to financial
markets.

Among the most troubling of the derivatives are credit-default swaps. They’re a
kind of insurance policy on bonds. Tens of trillions of dollars worth of
credit-default swaps were sold in recent years. They had escaped regulation due
to laws passed in the 1990s and at the end of 2000. Thus, financial
institutions that sell these swaps don’t have to report what they’ve sold or
who they’ve sold them to. They also don’t have to have the money on hand to pay
off the contracts should the insured bonds fail.

When AIG was unable to make good on credit-default swaps it issued on mortgage-
backed bonds, it had to be bailed out with $170 billion of taxpayers’ money.

The Obama administration sent a letter to Congress a month ago proposing new
regulations for derivatives, and banks, many of which got billions of dollars
in federal bailout money, have hired lobbyists to resist new controls.

For some insight into the debate, we turn to Gretchen Morgenson. She’s a
financial and business columnist for the New York Times. Well Gretchen
Morgenson, welcome back to FRESH AIR.

Okay, so the Obama administration indicated several weeks ago that it wanted to
regulate derivatives. The Treasury secretary, Timothy Geithner, wrote a letter
to the Senate majority leader and others, and there have been other expressions
by the administration of its plans. What do they want to do?

Ms. GRETCHEN MORGENSON (New York Times): Well, what I would characterize the
letter that Mr. Geithner sent to Capitol Hill as is sort of a halfway step.
They want to try to get a lot more of these kinds of contracts to be traded on
an exchange or some type of clearinghouse where they could be overseen by a
regulator.

The difficulty is that many of the contracts are very highly specific and
written with the particular entities who are striking the deal in mind, meaning
that they’re not sort of plain vanilla. They’re not sort of white-bread,
everyday contracts.

They might have a particular aspect of them that’s highly unusual, and it’s,
you know, related only to the entity that’s buying the insurance, and those
cannot be traded as easily as, say, 100 shares of IBM, these people say, and so
the halfway aspect of this proposal is that those kinds of hand-tailored or
highly specific credit-default swaps will not see the light of day. They will
continue to be traded privately, and those were the very contracts that AIG
wrote and that got AIG into trouble.

DAVIES: That sounds very problematic.

Ms. MORGENSON: Well, it just sounds like there are going to be ways for dealers
and market participants to sort of say oh, well, this is one of those hand-
tailored ones. It can’t possibly trade on an exchange or a clearinghouse and
sort of keep a lot of the market away from the scrutiny that I think it really
deserves and merits.

And so you have to wonder who’s going to be making those decisions about which
contracts actually do see the light of day.

DAVIES: Okay, so there’s also the issue of when a company decides to write a
credit-default-swap contract, in other words to commit to pay in the event of a
default by someone. Don’t investors need to know whether, in the end, they will
have the financial reserves to meet that obligation if, indeed, the default
occurs? Does the Obama administration propose reserve requirements so that
people who are making these commitments – are we going to be assured that they
have the financial means to fulfill them?

Ms. MORGENSON: They will require what is called margin, and that is similar to,
as you describe it, a reserve. What that is is that’s money that is required to
be put up when the transaction occurs to satisfy, you know, the participants’
fears, as you point out, that maybe the person writing the insurance will not
have the money, you know, necessary to pay off if a default does occur.

But you bring up a good point, which is there is a difference between exchanges
and clearinghouses. They Treasury has proposed more of a – that this market go
in the direction of a clearinghouse. It has not required that these things be
traded on an exchange, which is far more transparent, and you know, we all know
how exchanges work, and they’ve been around for hundreds of years, and they
actually work pretty well.

But the clearinghouse, in my view, which the Treasury has sort of proposed a
little bit more strongly, has some problems associated with it that go to the
heart of what you’re talking about, which is, you know, who will be on the
hook, and will they be money-good when the time comes?

A clearinghouse relies on a central intermediary, a clearing party, as it were.
So I am a customer. Let’s say I am buying insurance from a bank. If I worked
this trade on a clearinghouse, then I would work with an intermediary. And the
intermediary is sort of that entity, for that period of time anyway, that has
to be money-good. And so you do add an element of concern there, that there’s
another party involved that would also have to be overseen and regulated quite
closely to make sure that, you know, if there were major defaults or a cascade
of problems, that this intermediary could, in fact, make good.

DAVIES: So if the requirement is that derivatives be traded on a clearinghouse,
that I guess sort of would be managed by all of those who deal in these, is
there a difference in the amount of public disclosure, how much information the
public gets about these?

Ms. MORGENSON: Well, you ask a very shrewd question. The clearinghouse that is
vying for the biggest part of this business is here in New York, and it is
called the ICE Trust, I-C-E Trust, and it is an entity that’s relatively new,
but it trades other commodities, but it is very closely affiliated with the
major dealer firms who trade derivatives in very big size.

And so another concern that some have is that those dealers will be able to
sort of control how much disclosure there is on this ICE clearinghouse, and
they might be able to say oh, well, this should be traded privately. It’s
really not, remember, one of those plain, vanilla contracts, and so they might
be able to influence such decisions, which really do have a bearing on the
amount of scrutiny that the public will have on these kinds of transactions.

DAVIES: You know, at the risk of getting too technical, I want to ask you one
question about what you just said a moment ago, about the unlikelihood that the
government will be able to regulate these custom derivatives because they are
so arcane and intricate, and how could you trade them. It seems to me that, I
mean, if it’s a political problem that you won’t be able to get that through
because there’s such opposition, that’s one thing, but it seems to me that you
could simply require them to be disclosed.

I mean, there are certain – for example, certain loans, such as mortgages,
which are publicly on file in every city in the country. Can’t we at least make
the extent and terms of these contracts public, even if they can’t be traded
like, you know, shares of Wal-Mart?

Ms. MORGENSON: I think, Dave, you are absolutely right, and it’s very astute.
Disclosure and lack of disclosure is really at the heart of so much of this
crisis that we’ve been through and that we continue to go through, the
disclosure of mortgages in pools of securities that were defaulting, the lack
of disclosure about off-balance-sheet entities and obligations of our major
banks, which were not disclosed, which had to come back onto the balance sheet,
and so therefore, you know, were directly related to their, you know, huge
losses and difficulties.

So disclosure is absolutely crucial here, and so yes, I think that that is a
terrific answer to their allegations that these things cannot be traded. Well,
let’s just shine the light of day on them, and at least people will know the
kinds of obligations that are out there and who’s making them, and who’s
agreeing to them.

DAVIES: Now how have the banks and others who write and trade derivatives
responded to these threats of regulation?

Ms. MORGENSON: They have responded by, you know, getting together and forming a
coalition, or a consortium actually, which they are using as a lobbying entity
to try to get their point across to Congress. They have hired some of - the
same people are working together on this project that worked on it in 2000, and
they’re spending an awful lot of money to make sure that derivatives will
continue to be as profitable to them as they have been up until now.

DAVIES: They’re spending money on campaign contributions, lobbyists?

Ms. MORGENSON: Yes. Their lobbyist is a person named Edward Rosen, who is an
expert on derivatives, and he led the charge for the banks back in 2000, when
Brooksley Born of the CFTC lost her battle to regulate derivatives, and he’s
back, and you know, is a very formidable force and figure and lobbyist, and
this is a consortium of about nine major dealers, major banks both foreign and
domestic who are very huge participants in the credit-default-swap market.

DAVIES: And maybe this goes without saying, but I’m assuming that a lot of
these same banks who are spending money on campaign contributions and lobbyists
to protect derivatives are some of the same banks that got billions in federal
bailout money.

Ms. MORGENSON: Yes, these banks actually formed their consortium just about a
month after five of them received billions of dollars in TARP money. So you
know, that’s a paradox that I think is intriguing.

DAVIES: What’s their case? I mean, what’s the argument that derivatives ought
to continue to operate in the shadows?

Ms. MORGENSON: Their argument is that AIG was a rogue operator, that apart from
AIG, credit-default swaps have not produced problems in world markets, that in
fact they have helped corporations and large investors hedge positions reduce
their risks. You know, these are the arguments that you always hear. They
really aren’t any different from any of the other arguments that you have heard
over decades about why regulation is bad.

You know, if these things are regulated, these people say, jobs will disappear.
They will go to Europe or somewhere else overseas. Profits will decline. You
know, the corporations will no long be able to hedge their positions. You know,
they’re focusing a lot on the hedging aspect of it, not really so much on the
speculative nature of these things, which far, far outweighs the hedging that
credit-default-swap customers do.

DAVIES: We’re speaking with Gretchen Morgenson. She’s a financial and business
columnist for the New York Times. We’ll talk more after a break. This is FRESH
AIR.

(Soundbite of music)

DAVIES: If you’re just joining us, we’re speaking with New York Times business
and financial columnist Gretchen Morgenson. You know, the banks, you know, a
lot of the banks are getting together to oppose further regulation of
derivatives, but they were really harmed by this financial crisis, also. Why
would they want to preserve the status quo?

Ms. MORGENSON: Well, the derivatives business that these banks do is very
profitable. In fact, it’s one of their few profitable enterprises at the
moment, and it’s helping to offset, you know, massive amounts of losses. So
they’re just trying to protect one of their, you know, one of their very, very
sort of big honey pots, and a last one, as it were.

I mean you know, they do have other profitable areas, but derivatives are
hugely profitable. So that’s one reason, but you know, yes the banks were hurt
mightily by this mess, but hey, they brought us to the brink. They pushed us
over the edge, and their shareholders have paid the price, the taxpayers have
paid the price, the employees have paid the price, but I’m not sure the
executives who were, you know, on the scene making decisions and the boards of
these companies have paid the price.

DAVIES: Are derivatives still profitable in this kind of economic climate,
where you know, defaults loom around every corner?

Ms. MORGENSON: Yes, they are still profitable because the person who is
constructing these deals, the intermediary, the dealer who sells them, is still
able to capture enormous profits because they are still being kept under wraps.
There still is no market that says here is what an investor or a buyer should
pay for that particular credit-default swap. It’s still kept under wraps.

And one of the reasons that the large dealer firms, who have been trading these
derivatives, selling them to their clients, want to keep them under wraps is
because the profits in privately traded credit-default swaps are far, far
larger than the profits will be when the customers can see what others are
paying for those similar transactions and what other dealers are charging for
those similar transactions.

DAVIES: So if you sell a credit-default swap - someone is purchasing, betting
on – you know, insuring some bond by some company - if that bond goes bust, and
I’ve written that credit-default swap, I assume I’m going to take a huge loss,
right?

Ms. MORGENSON: Yes, but the bank is not necessarily the person who’s writing
it. The bank who wants the – the dealers who want derivatives to continue to be
traded, you know, in the shadows are the facilitators. They’re the people who
make the transactions happen. They’re the people who put together the company
that’s writing the insurance with the buyer of the insurance, and that’s where
their profits lie.

DAVIES: And so the companies that are actually writing the insurance, they’re
not the ones that want to continue this stuff?

Ms. MORGENSON: Well, they are to some degree, but it’s really more about the
people who are acting as the intermediaries in this market, the facilitators,
you know, that step in to devise these kinds of transactions, sell them to
their customers and pocket the profits on those transactions. It’s just a fee-
based business. It just so happens that the fees are sizable because it’s an
obscure market. It’s not a market where everyone knows what a credit-default
swap with this particular entity should cost.

DAVIES: So you know, AIG bet way too much on these derivatives, on these
credit-default swaps and then got into terrible trouble.

Ms. MORGENSON: They were essentially betting that mortgages were not going to
default.

DAVIES: Right, and so they got into terrible trouble, and the taxpayers had to
bail them out, and if you have all these financial players out there continuing
to write these credit-default swaps in the shadows, in an unregulated
environment, and another coming calamity occurs, I mean whether it’s commercial
real estate or a credit card, and a bunch more of these bets go bad, what
happens? I mean, are they going to come back to the taxpayers again?

Ms. MORGENSON: Absolutely they will. I mean, have we not learned that when
these banks get in trouble, if they go to daddy, they’ll get what they want? I
mean, that’s the lesson that we have unfortunately learned from this mess, that
you know, the kid took the convertible, you know, went on a joy ride, drove it
off the cliff. He survived, the convertible didn’t, and he goes back and says
hey dad, you know, I want a new car. And dad says okay, here’s the money.

DAVIES: Any chance the government might say sorry?

(Soundbite of laughter)

Ms. MORGENSON: We’ve set such a precedent here for bailing out everybody, it
seems impossible to imagine that a large participant of any market that might
have, you know, a big impact if it failed would not be bailed out.

DAVIES: You know, Ben Bernanke, the Fed chairman, is a student of the
Depression, and it seems that he believes that an important lesson of that
catastrophe was that you have to maintain confidence in the banking system,
that once there are runs on banks that calamity follows. Has he drawn the right
lesson here?

Ms. MORGENSON: Well certainly confidence is crucial to, you know, the kind of
open-end fair operating of markets, but I would argue that we have not built
confidence by the way we have approached these failures. In fact, you know,
there’s been a sort of a sense that the government was picking winners and
losers without any kind of a playbook.

We arranged a marriage of Bear Stearns with JP Morgan when Bear was about to
fail, but we let Lehman Brothers go. Then five minutes later, we bail out the
world’s largest insurance company, which was not even overseen by the Fed or,
you know, any bank regulators.

So you know, that is not the kind of operation that instills confidence, and in
fact you have to wonder about the idea that these regulatory actions, you know,
that have sort of kept some of the larger banks afloat, like Citigroup, you
know, I would argue that that does not necessarily instill confidence.

I think what confidence is created by is a clarity of the problem, is a sense
that people understand where we are, how financially sound or unsound these
institutions are. And from my view, we’ve just been sort of papering over their
problems or allowing them to sort of do the least toughest thing that they can
do to raise capital. It’s been, I think, a very easy, sort of too easy, set of
actions taken by regulators, not tough enough, and I think that that has led to
a sort of feeling that we’re not sure where we stand, and if we had been a
little bit more aggressive and clear about companies that really should not be
allowed to go on, then you’d have confidence come back far quicker than you
will now.

DAVIES: Gretchen Morgenson, thanks so much for your time.

Ms. MORGENSON: Anytime, Dave.

DAVIES: Gretchen Morgenson is a business and finance columnist for the New York
Times. I’m Dave Davies, and this is FRESH AIR.
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Ed Helms: An 'Office' Drone Takes To The Big Screen

DAVE DAVIES, host:

This is FRESH AIR. I’m Dave Davies, filling in for Terry Gross.

Our next guest, comedian and actor Ed Helms, is known to TV audiences as a
former correspondent for "The Daily Show," and for his current role on the NBC
comedy "The Office," where he plays the jocular and clueless Andy Bernard. But

Helms is also on the big screen these days starring in the new comedy "The
Hangover." It's about four guys who go to Las Vegas for a bachelor party and
wake up to discover their hotel suite trashed, the groom missing, and their
memories of the evening blank.

Starring with Helms are Bradley Cooper, and Zach Galifianakis. In this scene
from the film, the three are at breakfast. Helms character, Stu is wondering
why he's missing a tooth and can't bear the thought of Jagermeister, the booze
they'd been guzzling the night before. The three friends are trying to figure
out what happened, and where the groom, Doug, is.

Mr. ED HELMS (Actor): (as Stu Price) I looked everywhere, gym, casino, front
desk, nobody's seen Doug. He's not here.

Unidentified Man #2: Okay. All right let's, let's just track this thing.

(Soundbite of cough)

Unidentified Man #2: All right, what's the last thing we remember doing last
night?

Mr. HELMS: (as Stu Price) Well the first thing was we were on the roof and we
were having those shots of Jager.

(Soundbite of cough)

Mr. HELMS: (as Stu Price) And then we ate dinner at the Palm. Right?

Mr. HELMS: (as Stu Price): That's right. And then we played craps at the Hard
Rock, and I think Doug was there. That sounds right.

Unidentified Man #2: No. No. No. He definitely was.

Unidentified Man #1: What is this?

Mr. HELMS: (as Stu Price) Oh my God. That is my tooth. Why do you have that?
What else is in your pocket?

Mr. COOPER: (as Phil Wenneck) No, this is…

Mr. ZACH GALIFIANAKIS (Actor): (as Alan Garner) It's a good thing. No. No. No.
Check your pockets. Check your pockets. Do you have anything?

(Soundbite of coins falling)

Mr. COOPER: (as Phil Wenneck) I have an ATM receipt from the Bellagio, 11:05
for eight hundred dollars.

Mr. HELMS: (as Stu Price) What's on your arm? Phil, you were in the hospital
last night.

Mr. COOPER: (as Phil Wenneck) I guess so. Yes.

Mr. GALIFIANAKIS (Actor): (as Alan Garner) You okay?

Mr. COOPER: (as Phil Wenneck) Yes Alan, I'm fine.

Mr. HELMS: (as Stu Price) What the hell is going on?

DAVIES: Ed Helms, welcome to FRESH AIR.

This film, "The Hangover," is about four guys going to Las Vegas for a bachelor
party, or at least a, you know, a guy's night out before one of you goes for a
wedding. Have you done the bachelor party thing? Is this a familiar experience
to you?

Mr. ED HELMS (Actor): I, sure, I've been on a few bachelor outings, and I don't
know, it’s funny. A lot of people ask, what's the craziest bachelor party
you've been to? And I've never been on a really crazy bachelor party, and I
think that they're mostly not crazy. Even if all the intentions are to get
crazy, you just have a disparate group of guys that don't know each other and
it usually winds up being a little bit anti-climatic.

(Soundbite of laughter)

DAVIES: Right. Right. Well now your character in this, Stu, is kind of the nerd
of the group. He's a dentist. Can’t even - no?

Mr. HELMS: I resemble that remark.

(Soundbite of laughter)

DAVIES: Okay. Do you?

(Soundbite of laughter)

DAVIES: That's more like Ed Helms would be at one of these things?

(Soundbite of laughter)

Mr. HELMS: Yes. No that's fair to say. He's the archetypal sort of nervous
Nelly of this movie.

DAVIES: In the film, you four guys get an overly, extravagantly expensive suite
atop Caesar’s Place in Las Vegas, and then wake up in the morning remembering
nothing. But the scene of the hotel room is just - well, the suite - is just
hilarious. Do you want to just describe a little bit of what the wreckage that
you and your friends awaken to?

(Soundbite of laughter)

Mr. HELMS: Thank you. I love that scene too and it really is I think a
production designer's dream come true. It’s - somewhere the assignment was
given out, figure out as many ways as possible to completely mess up and
destroy a hotel suite. And the details, if you really pay attention and look
around sort of in the backgrounds of the shots as we wake up that morning, you
just see such glorious detail. For example, there is a bowling alley set up
with champagne bottles…

(Soundbite of laughter)

Mr. HELMS: …which cannot end well. There's a card house, miraculously. Somehow
in this insane party there's - we managed to erect a very delicate card house.
There's just a lot of fun little details.

DAVIES: Well, and you look up and then you see a chicken walking around.

Mr. HELMS: Yes. Of course. Chicken, the universal sign of chaos…

(Soundbite of laughter)

DAVIES: Right. Right.

Mr. HELMS: …the chicken. Anywhere you see a chicken, it’s chaos.

DAVIES: And then, of course, and this is not giving away too much because this
is in the trailer, but when Zach Galifianakis goes to the bathroom to relieve
himself, first thing, he looks up and sees a live man-eating tiger. You
actually used a real tiger for these scenes, is that right? What's it like
working with a tiger?

Mr. HELMS: Yes, we used a real tiger and it is crazy to work with a tiger. I
feel like you're just buying time. When you're working with a tiger, it's only
a matter of time before something horrible happens. And there's a little voice
in the back of your head that's just saying, stop doing this. Leave. Get away
from the tiger.

(Soundbite of laughter)

DAVIES: Were there any particular instructions you got on working around a
tiger?

(Soundbite of laughter)

Mr. HELMS: The first day that we worked with the tigers, we got this whole long
safety speech, you know don't be - don't hide behind things because then the
tiger will perceive you as prey. Act confident. Act like, you know, don't turn
your back on the tiger. Be sure of yourself around the tiger, which is sort of
like asking you to fly.

(Soundbite of laughter)

DAVIES: Right. Right.

Mr. HELMS: It's just like you know, and then a lot of sort of just protocol
about how the trainers will be handling the tiger, this, that, and the other.
Cut to like a half hour later, it was all pretty much out the window. Like
everyone…

(Soundbite of laughter)

Mr. HELMS: …was just, everyone just got comfortable. Once the tiger hadn't
killed anyone for about a half hour, everyone just got too comfortable, and you
had to sort of constantly remind yourself that this is a man-eating creature,
and it is a wild animal. So I - overall the tiger was exciting, exhilarating,
but I still can't shake this feeling that we just got away with something.

DAVIES: You're a dentist in the movie and when you wake up in the morning
you're missing a tooth. And it looks like you actually stick your tongue into
the whole. It looks so real. How do they do that?

Mr. HELMS: Dave, it is completely real. I had an implant when I was a teenager,
I lost a tooth and I had an implant put in, and I hadn't touched it in 20
years. It was perfectly healthy. And when we started to kind of try to figure
out how to give me a missing tooth, because it was always in the script, we
tried a couple of things. We tried to black it out. We tried to - they made a
prosthetic for me that sort of looked like a gap in my teeth and, but it
actually made the rest of my teeth look like a donkey…

(Soundbite of laughter)

Mr. HELMS: …mouth, so I vetoed that very quickly. And then very reluctantly, I
admitted well I do actually have an implant here. And Todd was like, oh great,
then we can take it out.

(Soundbite of laughter)

Mr. HELMS: And I was like well, I don’t know. And I called my dentist and he
said you know what? I think we can actually do that. So my dentist, who’s a
great guy, and actually came to the premier…

(Soundbite of laughter)

Mr. HELMS: …took it out. And I was toothless there for three months while we
shot the movie. And then I got a nice new implant.

DAVIES: Wow, you really were made for this role weren't you?

Mr. HELMS: Yes.

DAVIES: We’re speaking with Ed Helms. His new film is "The Hangover." We'll
talk more after a break. This is FRESH AIR.

(Soundbite of music)

DAVIES: If you're just joining us our guest is Ed Helms. His new film is "The
Hangover." You're now a regular on the NBC comedy "The Office." You play this
character, Andy Bernard. And I thought we'd listen to a scene from "The
Office." This is you and Oscar, who is the accountant, and you're away on a
business trip. You have proposed - you surprised everyone by proposing to
Angela, one of the characters who's a particularly sort of severe person. And
Oscar, in a moment of kind of inebriated candor is asking you about that
relationship. Let's listen.

(Soundbite of TV show, “The Office”)

Mr. OSCAR NUNEZ (Actor): (as Oscar Martinez) If you don't mind me asking.

Mr. HELMS: (as Andy Bernard) Anything. You can ask me anything.

Mr. NUNEZ: (as Oscar Martinez) Okay.

Mr. HELMS: (as Andy Bernard) I'm your wingman.

Mr. NUNEZ: (as Oscar Martinez) It's just that I sat next to Angela for a very
long, very long time.

Mr. HELMS: (as Andy Bernard) Right-o.

Mr. NUNEZ: (as Oscar Martinez) How could anyone stand that woman? What, what do
you see in her? What do you see in Angela?

Mr. HELMS: (as Andy Bernard) What do I see in Angela?

Mr. NUNEZ: (as Oscar Martinez) I want to know?

Mr. HELMS: (as Andy Bernard) I see through a hard exterior to a little jelly in
the middle. She is teaching me to be a better person. She's working really hard
on that. And she has the softest skin I've ever seen and I can't wait to have
sex with her.

Mr. NUNEZ: (as Oscar Martinez) You haven't had sex?

Mr. HELMS: (as Andy Bernard) No.

Mr. NUNEZ: (as Oscar Martinez) Are you guys waiting to get married or…?

Mr. HELMS: (as Andy Bernard) Honestly, I don’t know what we're waiting for.

Mr. NUNEZ: (as Oscar Martinez) Andy, something is wrong with that woman.

Mr. HELMS: (as Andy Bernard) What is wrong with her?

Mr. NUNEZ: (as Oscar Martinez) I’d like to know. You should call her and ask
her. I'd like to know what's wrong with her.

Mr. HELMS: (as Andy Bernard) Honestly, I should call her and ask her, what is
wrong with her?

Mr. NUNEZ: (as Oscar Martinez) Do it. It's a - call her. Oh my God, don't call…

(Soundbite of laughter)

Mr. NUNEZ: (as Oscar Martinez) …don’t call, Andy. Andy.

(Soundbite of laughter)

Mr. HELMS: (as Andy Bernard) It’s too late.

Mr. NUNEZ: (as Oscar Martinez) Oh my.

Mr. HELMS: (as Andy Bernard) It’s too late. It's dialing. Now it's ringing.

(Soundbite of laughter)

Ms. ANGELA KINSEY (Actor): (as Angela Martin) Hello? Hello?

Mr. HELMS: (as Andy Bernard) What is wrong with you?

Mr. NUNEZ: (as Oscar Martinez) Why won’t you do Andy?

Ms. KINSEY: (as Angela Martin) What?

Mr. HELMS: (as Andy Bernard) That's Oscar and he wants to know why you won't do
me and I think it's a valid question.

Ms. KINSEY: (as Angela Martin) Are you drunk?

Mr. HELMS: (as Andy Bernard) This is Andy Bernard.

Ms. KINSEY: (as Angela Martin) I know who this is.

Mr. HELMS: (as Andy Bernard) I want to take you to sex school.

Ms. KINSEY: (as Angela Martin) What?

Mr. RAINN WILSON (Actor): (as Dwight Schrute) Who is that, Monkey?

Mr. HELMS: (as Andy Bernard) Is somebody there?

Ms. KINSEY: (as Angela Martin) Are you drunk?

Mr. HELMS: (as Andy Bernard) I have needs.

Ms. KINSEY: (as Angela Martin) We'll discuss this later.

Mr. HELMS: (as Andy Bernard) Naked.

Ms. KINSEY: (as Angela Martin) What?

Mr. HELMS: (as Andy Bernard) We'll discuss it later, naked. I want to see you
naked.

DAVIES: That's our guest, Ed Helms, from "The Office."

(Soundbite of laughter)

DAVIES: Speaking of Oscar Nunez, who plays the accountant, Oscar speaking with
Angela. And then the whispering voice there was the other character Dwight, who
Angela is actually cheating on Andy with. It's all so funny and complicated.

(Soundbite of laughter)

DAVIES: Tell us about this character. He's kind of a hard guy to figure out,
Andy Bernard, your guy in "The Office."

Mr. HELMS: Yes. He's a bit of an enigma. He's actually pretty simple when you
think about it. He's desperate to be liked. He's eager, very eager to impress.
A little bit hot-tempered, but ultimately, very earnest and eager to love, and
wants to share himself with other people.

DAVIES: You know you did a lot of years of standup and sketch comedy where you
have an audience and the feedback is live, and you know what works and what
doesn't. I mean, "The Office" is so different. I mean, A, because you're in a
TV studio and you're not in front of an audience, but it's also that the humor
is sort of often in these sort of awkward spaces and silences. Is it kind of
harder to know when you've nailed it with that kind of a show?

Mr. HELMS: I…

(Soundbite of laughter)

Mr. HELMS: It's funny, because nailed it is one of Andy Bernard's sort of…

(Soundbite of laughter)

DAVIES: Trademark.

Mr. HELMS: …trademark lines. But you know we laugh a lot on that "Office" set
and usually the shots, the scenes are pretty quick. So even if there's no
laughter in an actual take, if it's a great take, people are laughing right
afterwards. And a lot of times people are laughing during takes, myself
included.

(Soundbite of laughter)

Mr. HELMS: I'm pretty bad at ruining a lot of takes. So there is a lot of
laughter. And you can tell on the page when something - when the writers have
nailed it and all you got to do is say it. There is instantaneous feedback even
on a TV set or a movie set.

DAVIES: The other thing that's interesting about Andrew Bernard is that it uses
another tool in your kit, which is your music. I mean, you sang a cappella and
you play the banjo. And there are various points…

(Soundbite of laughter)

DAVIES: …in the series at which…

Mr. HELMS: The two most annoying musical forms on Earth.

(Soundbite of laughter)

DAVIES: How did that get into the show more? Was that something they just kind
of saw you had or did you ever improvise, just break in at song?

Mr. HELMS: Well, yes, well it, though that's a great - one of the great things
about "The Office" set is the - it's so open to improvisation. You really don’t
need to very often because the writing is so good. But if you're inspired or
want to, it's just an open field and you can kind of mess around. So those
first eight episodes, the writers endowed Andy with such fun, funny little
traits, one of which was being an a cappella singer and obsessed with a
cappella music. It just so happens that I too, Ed Helms, am kind of obsessed
with a cappella music.

(Soundbite of laughter)

Mr. HELMS: And so, I just sort of messaged that character trait and kept
bringing it up - just inject little pieces of music here and there into my
lines in very inappropriate places. And so it became this fun sort of symbiotic
feedback loop with the writing staff of, I would give Andy some trait and then
they would play with that and expand it in some way. And with regards to the
banjo, the showrunner, Greg Daniels, was just so tickled that I played the
banjo…

(Soundbite of laughter)

Mr. HELMS: …and wanted to stick it in the show. What I love about that is that
it doesn’t make any sense. My character, Andy Bernard, is a preppy,
Connecticut, yacht club kid. Why on Earth would he play the banjo? But for some
- it's just one of those fun mysteries about Andy Bernard, I guess.

DAVIES: Right. Don’t think about it too much.

Mr. HELMS: Right.

DAVIES: We should give the audience a taste, here. And I thought we would share
this moment from “The Office” where you’re in the break room with Dwight, one
of the other characters. And you’re - Dwight has his guitar, you have your
banjo, and you’re trying to impress the new receptionist. Let’s listen.

(Soundbite of TV show, “The Office”)

(Soundbite of song, “Country Roads”)

Ms. ELLIE KEMPER (Actor): (As Kelly Erin Hannon) (Singing) Country roads, take
me home, to the place…

Sorry. I like the song.

Unidentified Woman: You’re good.

Mr. WILSON: (As Dwight Schrute) You’re good.

Ms. KEMPER: (As Kelly Erin Hannon) Thank you.

Mr. HELMS: (As Andy Bernard) That was great, but it’s just sort of – it’s still
a little choppy, like - but don’t worry. It’s hard. It took me a while, too.
It’s like…

(Soundbite of song, “Country Roads”)

Ms. KEMPER: (As Kelly Erin Hannon) Wow.

Mr. HELMS: (As Andy Bernard) What? Oh, my God. You heard that? I’m so
embarrassed. I’m so, like, rusty.

Mr. WILSON: (As Dwight Schrute) Good. You’re really coming along. It’s really
technically proficient, but, you know, there’s really no heart or soul in it.

Mr. HELMS (As Andy Bernard): Really?

(Soundbite of song, “Country Roads”)

Mr. WILSON: (As Dwight Schrute) Hey, you want to sing with me?

Mr. WILSON and Ms. KEMPER: (As Dwight Schrute and Kelly Erin Hannon) (Singing)
Almost heaven, West Virginia, Blue Ridge Mountains, Shenandoah River…

Mr. WILSON: (As Dwight Schrute) In German. (Singing in German)

Mr. WILSON and Mr. HELMS: (As Dwight Schrute and Andy Bernard) (Singing in
German)

Mr. WILSON and Mr. HELMS: (As Dwight Schrute and Andy Bernard) (Singing) Take
me home, country roads, to the place I belong, West Virginia, mountain momma,
take me home, country roads.

Mr. WILSON: (As Dwight Schrute) Take it, Andy. (Singing) Take me home.

DAVIES: That’s Ed Helms in a scene from “The Office.” His new film is “The
Hangover.” More after a break. This is FRESH AIR.

(Soundbite of music)

DAVIES: If you’re just joining us, our guest is comedian and actor Ed Helms.
His new film is “The Hangover.” You grew up in Atlanta, right? And went to…

Mr. HELMS: Yes.

DAVIES: …school at Oberlin in Ohio?

Mr. HELMS: Yeah. That is correct.

DAVIES: Were you the kid breaking up the class in school? Was comedy always a
big part of your life?

Mr. HELMS: Comedy has always been a huge part of my life. I was not
particularly funny, I don’t think, in school. I wouldn’t consider myself the
class clown, by any means. But comedy just was always something I was obsessed
with, comedy television and movies. And, you know, when I was eight years old,
I started watching “Saturday Night Live,” and it was Eddie Murphy and Joe
Piscopo and Martin Short and all those guys. And I didn’t even understand it.
It was just an energy that I wanted to be a part of. I really think Eddie
Murphy’s stuff is what sucked me in. I just really wanted to be a part of that.

DAVIES: And you went to New York after college, right? And started just doing
sketch comedy and stand up?

Mr. HELMS: Mm-hmm.

DAVIES: How hard was it to get started to make a living, to know that you could
do this?

Mr. HELMS: You know, it was hard logistically, but I never questioned it. It
was always sort of like just what I had to do. And I was so excited to be in
what I thought was sort of the center of the comedy universe, and, you know,
going to comedy clubs and there’s Jim Gaffigan right there, you know, one of my
standup sort of heroes. Or there’s Dave Attell. And before a long, you know,
after a few years, I had had sort of carved out an actual place for myself in
the New York comedy community.

And, you know, looking back, they were may be sort of lean years and a little
tough, but it was so fun and such an exhilarating, optimistic time. And the
stakes were very low - no agents or moviemakers or dealmakers were coming to
shows. It was just a bunch of really eager, young comedians trying to impress
each other and support each other.

DAVIES: So, there came a point where you got into a tryout and became a regular
on “The Daily Show with Jon Stewart.” And I thought we would listen to a cut
from one of your field reports. This is about a small town in Texas that
changed its name to get a commercial benefit. I don’t know if you remember this
one. It was called…

Mr. HELMS: Of course.

DAVIES: It was the town of Clark. And in this case, you are interviewing Bill
Merritt, who is the mayor of this town of Clark, population 125. And I’ll just
mention for reasons that’ll be clear in a minute that it’s hundreds of miles
from any coast. Let’s listen to you interviewing the mayor.

(Soundbite of TV show, “The Daily Show with Jon Stewart”)

Mr. HELMS: In recent years, rural communities have suffered as residence have
left in favor of places that offers things like stimulation, or (beep) to do.
In the north Texas town of Clark, a sleepy backwater with 125 residents, it has
become a matter of survival.

Mayor BILL MERRITT (DISH, Texas): When I first moved here, this town was not a
place that people were inclined to move to. There were very few positives, and
it was pretty sad.

Mr. HELMS: Really? It looks like you did a great job cleaning up after the
hurricane.

(Soundbite of laughter)

Mayor MERRITT: No hurricanes hit here.

Mr. HELMS: I looked around. It looks like…

Mayor MERRITT: Uh-uh. No.

(Soundbite of laughter)

Mr. HELMS: Any mayor could mask a town’s flagging appeal by courting industry
or tourism. But Mayor Bill had a more innovative solution.

Mayor MERRITT: I bought everybody who lives here free satellite service for 10
years.

Mr. HELMS: And all the town had to do in return was change its name from Clark
to DISH.

(Soundbite of laughter)

Mr. HELMS: As in DISH Satellite TV.

Mayor MERRITT: You know, this is very progressive. There’s - as you’re aware,
there’s very few people and towns out there that have ever done anything like
this.

Mr. HELMS: And while NFL Package, Wisconsin and Adult On Demand, Missouri might
take exception to that, it’s clear Bill’s initiative has revived the town.

DAVIES: That’s our guest Ed Helms on a piece from “The Daily Show.” And this
brings up something that I’ve often wondered about in these field reports,
where you’re going out and you’re doing a comedy piece on somebody who feels
very strongly about whatever they’re doing. In this case, he’s the mayor of a
small town. It might be somebody who has an attachment to a fringe political
cause or some obscure product they’ve invented. And you’re there, really, to
poke at them. And I’m wondering, do you tell him before hand, look, I’m going
to kind of make some fun of you here? Or do you just do it and apologize
afterwards? Or what - how does that go?

Mr. HELMS: Well…

(Soundbite of laughter)

Mr. HELMS: …first of all, I want to contextualize that clip a little bit,
because the mayor of that town actually sold out that town and was a pretty
cynical character. So I would always approach those interviews with – it wasn’t
as much about making fun of a person as much as trying to kind of expose some
hypocrisy somewhere or make myself look stupid. But to answer your question,
no. I mean, we would not prep people for the interviews in any way. But that
said, a lot of people obviously are familiar with “The Daily Show” and had some
sense of what we might be up for. This particular guy was just happy to get
some publicity for his town, so he would have done anything.

DAVIES: Before we let you go, Ed Helms, I wanted to ask you a couple other
things. You do voice work - voiceover work for commercials, or did do it. Do
you still do that for - I mean, you did Burger King and Doritos and stuff.

Mr. HELMS: Yeah, I did a - when I was doing standup in New York, that’s – that
ultimately became how I supported myself, was just doing voiceovers for TV
commercials and radio commercials.

DAVIES: Do you have a favorite pitch?

(Soundbite of laughter)

Mr. HELMS: You know, I did hundreds of them, and I can’t – they just all sort
of blurred together.

DAVIES: It’s interesting, because in a lot of your characters, you are often
sounding all knowing and authoritative, but in a way that’s kind over the top
and self mocking.

Mr. HELMS: And ultimately not knowing of anything.

(Soundbite of laughter)

DAVIES: Right.

Mr. HELMS: Right.

(Soundbite of laughter)

DAVIES: And I wondered if it’s ever tempting when you’re selling the Whopper to
- I don’t know, just throw a real little irony in there, like, do you really
believe this?

(Soundbite of laughter)

Mr. HELMS: No, Dave. I’m a professional. If I’m recording a commercial
voiceover, I try to make it sound like I believe in it, whether or not I do, I
guess.

DAVIES: All right, all right. I also read that you’ve sold a comedy pitch for a
movie about Civil War re-enactors. Is that right?

Mr. HELMS: Yeah, yeah. I’m very excited about…

DAVIES: Yeah. What’s your experience with them?

Mr. HELMS: Well, I just, you know, I grew up in the South and Civil War
nostalgia is just sort of more present there than elsewhere in the country. So
it’s always been something that fascinated me. And my writing partner and I
just got this idea about Civil War re-enactors who get sent back in time to the
actual Civil War and have to find their way back. It’s sort of a big, crazy
“Back to the Future,” “Monty Python” kind of kooky, fun movie.

DAVIES: Well, I look forward to it. Ed Helms, thanks so much for speaking with
us.

Mr. HELMS: My pleasure. Thanks for having me.

DAVIES: Ed Helms - you can see him Andy Bernard in “The Office” and starring in
the new film, “The Hangover.” You can download podcasts of our show at
freshair.npr.org.
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