updated 3/30/2009 10:25:57 AM ET 2009-03-30T14:25:57

Guest: Joe Sestak, Elijah Cummings, Jim Richards, Chris Plante, Guy Lawson, Richard Engel

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HOST (voice-over):  Tonight, CEO summit.  The president meets with executives of the bailed-out banks.

UNIDENTIFIED MALE:  The basic message is we‘re all in this thing together.

SHUSTER:  But follow the money and the anger grows.  The executives that put AIG at the greatest risk are still there.

In Afghanistan and Pakistan, the terror forces are stronger than ever, so President Obama is escalating the war.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  We have a clear and focused goal to disrupt, dismantle, and defeat al Qaeda. 

SHUSTER:  A live update in Afghanistan from NBC‘s Richard Engel. 

Back home, 9/11 families are infuriated over the Ground Zero rebuilding debacle. 

UNIDENTIFIED FEMALE:  What I really would like President Obama to do is to come and physically visit the site. 

SHUSTER:  We will bring you the White House response. 

On Capitol Hill, the outrage over bailout company bonuses. 

UNIDENTIFIED MALE:  You disgust us.  You are disgraced professional losers. 

SHUSTER:  But these lawmakers and others keep taking campaign contributions from the losers and land in “Hypocrisy Watch.”

And the things I thought you should know.  The debate is on over legalizing marijuana, the White House Easter egg roll becomes a scalper‘s paradise, and Twitter time.

All tonight on 1600 PENNSYLVANIA AVENUE.

OBAMA:  Let me acknowledge, first of all, Your Excellencies... 

(END VIDEOTAPE)

SHUSTER:  Ratcheting up the Afghan war and ratcheting down the rhetoric about bankers, day 67 of the Obama administration. 

And welcome to the show, everyone.  I‘m David Shuster. 

President Obama told Jay Leno last week that he is capable of focusing on more than one thing at a time.  And today he outlined a new strategy for the war in Afghanistan, and then met a short time later with executives at top U.S. banks that have received billions of dollars in bailout money. 

The president called 13 bank CEOs to the White House this afternoon for a candid conversation about those bailouts, the plan for economic recovery, and the outrageous executive compensation packages in the financial industry.  Based on the president‘s news conference this week, there was every expectation the bank CEOs were going to be taking to the proverbial woodshed. 

(BEGIN VIDEO CLIP)

OBAMA:  I‘m as angry as anybody about the bonuses that went to some of the very same individuals who brought our financial system to its knees. 

Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayers‘ time is inexcusable, that the days of outsized rewards and reckless speculation that puts us at risk have to be over. 

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  The president isn‘t going to say one thing out here and a different thing in there. 

(END VIDEO CLIP)

SHUSTER:  So what kind of tone did the president take?  Did the bank CEOs get a lashing from the commander in chief? 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The basic message is we‘re all in this thing together. 

UNIDENTIFIED MALE:  I walked out of there—I believe all of us walked out of there knowing fully that we‘re all in it together. 

UNIDENTIFIED MALE:  The president is a terrific listener.  And he made a point of going around to each of the CEOs in the room, and he wanted to make sure that he heard from each one of them. 

UNIDENTIFIED MALE:  There was no tension.  It was all about cooperation. 

UNIDENTIFIED MALE:  Everybody was pretty much on the same page, one of cooperation. 

UNIDENTIFIED MALE:  It was like, we‘re all in this together and we‘ve got some work to do.  It was a cooperative, pleasant meeting, but again, with the recognition that we‘re not going to agree on everything. 

(END VIDEO CLIP)

SHUSTER:  Pleasant and Kumbaya is not exactly what the American public is feeling right now, so the president‘s approach today is making the banking story even more intriguing. 

However, we‘re going to begin tonight with what the president did today with Afghanistan, the war that is not going well. 

This morning, President Obama laid out a radical new agenda for fighting al Qaeda and Taliban extremists.  He ordered 4,000 more U.S. troops into battle, in addition to the 17,000 he deployed last month.  The president also plans to send thousands of civilians, including teachers and engineers, into Afghanistan to help build up the country. 

(BEGIN VIDEO CLIP)

OBAMA:  I want the American people to understand that we have a clear and focused goal to disrupt, dismantle and defeat al Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future. 

(END VIDEO CLIP)

SHUSTER:  The president‘s strategy also includes a deeper engagement with neighboring Pakistan, where Osama bin Laden is believed to be hiding.  President Obama demanded that Pakistan‘s government commit to rooting out al Qaeda within its borders.  Mr. Obama said the Pakistani people need to understand that terrorists like bin Laden are security threats to them, not just the United States. 

Just today, a suicide bombing at a mosque killed at least 48 people, the deadliest attack in Pakistan this year.  The mosque was located along the Afghanistan border in northwest Pakistan.  It‘s a route often used by U.S.  and NATO troops.  And people living there have been targeted in the past for cooperating with western forces. 

And late today, the U.S. military reported that a soldier in the Afghan national army killed two coalition service members and wounded a third before killing himself. 

Joining us now from Kabul, for more on the significance of President Obama‘s new Afghanistan/Pakistan strategy, is NBC News‘ Chief Foreign Correspondent Richard Engel. 

And Richard, thanks for coming on tonight. 

First of all, tell us about the directions things are going there.  How bad is it? 

RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT:  It is—it needed a change.  I think that is the best way to describe it. 

There was a feeling among the senior leadership, among American commanders, that things were getting worse here and that there was no clear command of the war.  For the last seven-plus years, this has really been a NATO effort, and the leadership, the command and control efforts in place, have been very confused, very disjointed. 

What we saw today is the United States taking ownership of this conflict by sending in more troops, the 17,000 combat troops, plus the 4,000 trainers.  You‘ll have a lot more American forces on the ground, and their presence will mean a lot more American leadership, but also probably more American casualties. 

SHUSTER:  Richard, the effort, of course, involves focusing on training Afghan troops.  How effective has that been in the past?  And in terms of the overall plan, do you believe it can work? 

ENGEL:  Training Afghan troops is something that the U.S. has been focused on, particularly the national army.  There are plans to grow the Afghan national army.  It‘s currently about 80,000 to 134,000. 

Very little focus has been put on the Afghan police.  They are considered very corrupt, somewhat of a destabilizing element in this country.  There are also dangers involved with training the Afghan, as was witnessed today when that Afghan soldier turned his weapon and killed two American soldiers in northern Afghanistan before turning his rifle on himself and committing suicide. 

SHUSTER:  Richard, and what‘s been the reaction from the governments of Afghanistan and Pakistan? 

ENGEL:  The government of Afghanistan has welcomed this.  They said it should have been done a long time ago. 

They feel—particularly the government of President Karzai—that the war in Afghanistan has been neglected.  But Afghanistan is very nervous that more American presence here will mean more political influence. 

There have been many reports circulated, some of them unconfirmed, some directly denied by the United States, that Washington wants to replace Karzai, wants to appoint someone of Washington‘s own choosing, and that makes the government here very nervous.  But the government, as it is today, doesn‘t control large parts of the country, particularly southern Afghanistan, and that‘s where we‘re going to see a renewed focus.  A lot of these troops are going to be headed down to Kandahar and the base in Kandahar, which is one of the Taliban‘s main strongholds in Afghanistan, and will likely grow to be the biggest U.S. military base in the entire country. 

SHUSTER:  NBC News Chief Foreign Correspondent Richard Engel. 

And Richard, thanks so much for joining us tonight.  We appreciate it. 

For more now on the president‘s announcement today on Afghanistan and Pakistan, let‘s to Congressman Joe Sestak of Pennsylvania, a retired three-star admiral.  Congressman Sestak is the highest-ranking former military officer in Congress.  He sits on the Armed Services Committee and is a member of the House Afghanistan Working Group. 

Congressman, first of all, your reaction to what the president announced today? 

REP. JOE SESTAK (D), PENNSYLVANIA:  I think there were several points that are on the very positive side of the ledger. 

First, Pakistan.  It said definitively that exterminating al Qaeda‘s safe haven there is our number one goal. 

Second, Afghanistan.  It said really the purpose of being there is to ensure that the al Qaeda-ized Taliban do not continue to exist.  So once we exterminate the safe haven, al Qaeda will not be in Pakistan. 

So that moves us more to developmental assistance.  I basically look at Afghanistan now as the base from which we are operating against the safe havens.

Third, Iran.  It actually says Iran will be brought in to the compact (ph) group.  When General Eikenberry left there two and a half years ago and was asked my me at a hearing, “Does Iran work towards our interest there?”  He said, yes, they don‘t want instability and they don‘t want al Qaeda there, Sunni. 

And last, finally, the United States is accepting al Qaeda struck us from that region, and it is us, not finger-pointing at NATO, us, that must assume primary responsibility for exterminating it. 

And if I might, we still have two issues that need to be addressed.  It still is very opaque on exactly how we will do the best to exterminate those al Qaeda that are in Pakistan, covertness or not. 

And second, what are the costly benefits?  Sorry...

(CROSSTALK)

SHUSTER:  Well, no, I understand where you‘re going with cost and benefits.  But that all gets to sort of an issue that President Obama discussed on “60 Minutes,” and that is that any Afghanistan plan, or Pakistan plan, for that matter, would require an exit strategy. 

SESTAK:  Absolutely.

SHUSTER:  What do you understand the exit strategy to be? 

SESTAK:  And that was my next point.  Look, we don‘t have that yet.  And is it important to have one in this case?  It is. 

This is what I would characterize an important interest.  It doesn‘t immediately affect our survival, but it does impact the character of the world and our well being. 

Therefore, we have to know, particularly after this Iraq War, what are the costs attended to our interests there?  Do we do a containment strategy if it‘s not working?  And we don‘t have that yet.  And I believe that that is...

SHUSTER:  That‘s a problem, isn‘t it?

SESTAK:  They have said that they will come out with it in six to nine months, with metrics.  Now, this is a real conundrum, because one of the primary things that have to be done is to change Pakistan‘s military from looking at India as its primary focus and being trained by us, yet they don‘t want us inside their borders, towards counterinsurgency.

That‘s why, however, that if it is—and we have heard in a closed hearing the other day that this could take three to five years—what are the metrics by which we are going to measure progress?  And we don‘t have that exit strategy yet.  And on an important interest, not a vital interest, but a very important interest, American support is going to be needed over those three to five years.  And they need to know how progress is measured.

That‘s the piece we don‘t have yet.

SHUSTER:  Well, and as far as progress, I mean, among the objectives that were listed in the White paper the White House released on this new policy this morning included promoting a more capable, accountable and effective government in Afghanistan.  Now, the White House called this objective realistic and achievable, but Afghanistan‘s government, as you know, was rated the fourth most corrupt in the world.  Last year, President Karzai was sometimes called the “Mayor of Kabul” because he has so little control over the country. 

Do we really want to set ourselves up for the project of promoting a national government in Afghanistan where one has never existed before? 

SESTAK:  If you noticed, though, in his speech—and this is important, because I agree with you—it isn‘t the central institution necessarily, it‘s the grassroots up in the provinces that the president mentioned in his speech.  The ability to have stability of some form in Afghanistan is our objective.  It is not to leave behind a nation completely built, as we might have. 

I was on the ground in Afghanistan two months after the war began.  I saw what needed to be done, I brought my carrier battle group back for retaliatory strikes.  Then we went to Iraq. 

We can‘t do what we intended to do then because we had gone into too deep of a valley.  Stability in the populated areas where there—ability to work with the tribal chiefs and others, and to wean away about three-fourths, Dennis Blair, Admiral Blair has said, head of the intelligence, can be weaned away.  That‘s the goal for some modicum of stability. 

The central government is so corrupt, we hope to build some legitimacy once we get its police force corrected.  But that‘s a far-reaching goal on why we need metrics. 

Congressman Sestak, good of you to join us tonight.  It‘s an important issue for all Americans, and we appreciate you joining the program tonight. 

SESTAK:  Thank you, David.

SHUSTER:  Nearly eight years after that 9/11 attack that prompted the war in Afghanistan, Ground Zero in New York is still a rebuilding mess.  Last night, leading 9/11 families asked President Obama to get involved in that and help solve the issue.  We will bring you the White House response at the half-hour. 

But up next, “Follow the Money.”  We learned today the AIG executives who took the biggest risks are still there. 

We will have more on that and on President Obama‘s meetings with bank CEOs. 

And later, the White House Easter egg roll has boosted the fortunes of ticket scalpers.  They are happy and parents are not. 

We will explain.

And we‘re taking your questions and video suggestions over Twitter.  Just go to twitter.com/shuster1600 or click on shuster.msnbc.com. 

(COMMERCIAL BREAK)

SHUSTER:  The president met with the nation‘s biggest bank CEOs today, and the message out of the meeting was clear: We are all in this together. 

(BEGIN VIDEO CLIP)

LLOYD BLANKFEIN, GOLDMAN SACHS CEO:  You can‘t really distinguish Main Street and Wall Street.  And at the end of the day, we need a good economy for our businesses to grow, and we all know that Main Street needs banks to be able to lend and participate. 

(END VIDEO CLIP)

SHUSTER:  But there are fresh indications today that corporate America still doesn‘t get it.  “The Wall Street Journal” reports a group of top AIG officials whose job was to manage credit risk and whose decisions corrected to the problems at AIG are still in their jobs. 

Joining us now from Baltimore, Maryland, is Congressman Elijah Cummings. 

And Congressman, your reaction to this news? 

REP. ELIJAH CUMMINGS (D), MARYLAND:  Well, I‘m really not surprised.  I‘ve said over and over again that AIG, I think, has been quite mismanaged.  And keep in mind that not only are these people still in their jobs, but they‘re still playing a very significant role with regard to the kinds of deals that AIG is getting involved in.

And so it doesn‘t surprise me, but this is—and keep in mind, the government said and made it clear that, as Treasury made it clear, that they had to—that is, AIG—had to change this committee.  They did a few musical chair type things.  But yet and still, the players are still the same.  As a matter of fact, these five folks have been there since 2003, 2004, and continue to pretty much dictate what goes on there. 

SHUSTER:  Well, I think a lot of the public is going to find this simply outrageous, because this was the unit, as you know, that essentially caused so many problems. 

In case, here was the AIG response to “The Wall Street Journal.”  They said, “AIG is committed to strong risk management.  Recently consisted with the terms of the U.S. Treasury‘s preferred investment in AIG, the company has clarified the authority regarding the board‘s now-named Finance and Risk Committee.  The committee, among other things, reports to and assists the board in overseeing and reviewing information regarding AIG‘s enterprise risk management.”

What on earth does that mean? 

CUMMINGS:  It doesn‘t mean anything to me.  I know for a fact, based upon everything I‘ve read and seen, is that these folks are actually running the day-to-day operations with regard to risk management.  They‘re still doing that. 

There‘s a group of people who are from the board who are now the financing credit risk management team, but they don‘t run it from day to day.  The folks who have been there from 2003 to 2004 are still in place running that operation. 

And I‘ve got to tell you, we—if the American people‘s money is going to be spent effectively and efficiently, it does not make sense to give it to folks who are responsible for losing some $61.5-plus billion in one quarter, the largest amount ever lost by any corporation in the history of America.  Why are we giving it to them?  I mean, they‘re the last people we want to be managing anything. 

SHUSTER:  No, absolutely.  And I think almost every American would agree with you. 

Real quickly, before we have to let you go, it does appear that everything was sort of happy today at the White House.  Everybody seemed to get along.  A lot of CEOs, the bank CEOs, described this as a pleasant meeting. 

Do we want our commander in chief in this environment to be pleasant to these CEOs? 

SESTAK:  I want him to do what‘s necessary to work with them to have their cooperation so that we can lift America up.  People in my district cannot get loans for their kids to go to school, or cars, and things of that nature.  And so, if it‘s going to take the president sitting down—and, you know, he‘s the kind of guy who gets along with most people.  If it‘s going to take that to get them to do the right thing, so be it. 

SHUSTER:  Congressman Elijah Cummings from Maryland. 

Congressman, thanks for coming on the program.  We appreciate it.

SESTAK:  Thank you.

SHUSTER:  You‘re welcome.

And up next, lawmakers have been going nuts over some of those companies that got government bailouts.  But some of those lawmakers are also taking bailouts from those companies in the form of campaign contributions. 

“Hypocrisy Watch” is watch. 

And later...

(BEGIN VIDEO CLIP)

OBAMA:  There was one question that was voted on that ranked fairly high.  And that was whether legalizing marijuana would improve the economy and job creation. 

(END VIDEO CLIP)

SHUSTER:  President Obama dismissed that possibility at yesterday‘s Web town hall.  But never mind job creation.  Could legalization cut down on drug war violence?  And should marijuana be legalized regardless? 

The debate is later, here on 1600.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.

Over the last few weeks, several members of Congress have been outspoken in criticizing companies that found themselves needing government bailouts.  And that takes us to tonight‘s “Hypocrisy Watch.”

First, the background. 

Lawmakers in both parties have been going nuts lately over companies that received company bailouts and then award executive bonuses. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, MINORITY LEADER:  I think this is outrageous and I think the American people are rightly outraged. 

UNIDENTIFIED MALE:  I think the American people are looking at this, just scratching their heads, wondering, why isn‘t it that Washington gets it anymore? 

REP. EARL POMEROY (D), NORTH DAKOTA:  Have the recipients of these checks no shame at all?  They failed in their work.  They wrecked a corporate icon.  They contributed mightily to the economic crash. 

(END VIDEO CLIP)

SHUSTER:  But speaking of contributions and having no shame, last month all of these congressmen took campaign contributions from these bailed-out companies. 

According to Federal Election Commission records for February, Democratic Congressman Pomeroy took $1,000 from Chrysler.  Republican House Whip Eric Cantor took $1,000 from Chrysler, $2,500 from Citigroup, and $5,000 from Bank of America.  Republican House Minority Leader John Boehner took $1,500 from U.S. Bankcorp, $5,000 from American Express, and $5,000 from Bank of America. 

And they weren‘t alone.  At least 40 members of Congress last month took campaign money from bailed-out firms.  And at least nine firms that received more than $1 billion each in taxpayer help last fall handed out more than $250,000 in campaign cash. 

Congressmen, I know there‘s that temptation to raise campaign cash at every opportunity.  But when you attack companies that need government bailouts, and then you bail out your own campaign coffers with their cash, that‘s hypocrisy.  And it‘s wrong. 

Up next, families who lost loved ones on 9/11 pleaded with the president right here on our show to help solve the rebuilding problems at Ground Zero.  Today, the White House responded. 

That‘s next. 

You‘re watching 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600. today, the White House focused on the war against al Qaeda.  But for weeks, we‘ve been telling you about the hallowed grounds related to that war, Ground Zero in New York City.  Nearly eight years after the 9/11 attacks, the site remains a symbol of bureaucratic bungling, delay and surrender. 

The site remains mostly a big hole.  And while some work has been done on the proposed Freedom Tower base, the entire plan is one that most 9/11 families detest.  Last night on this show, several 9/11 families pleaded with President Obama to get involved.  They want the president to take a tour of the site and look at some models for an alternative plan that city officials refuse to consider, a plan that would stop the Freedom Towers, and rebuild the Twin Towers, instead, taller, stronger, and safer. 

We promised to follow up with the Obama White House.  We have.  After all, the president has repeatedly spoken about the importance of his office tackling the tough issues and making decisions.  Today, NBC‘s Chuck Todd tried to help us get an answer about Ground Zero at the White House press briefing.  Chuck posed the crucial question to spokesman Robert Gibbs. 

(BEGIN VIDEO CLIP)

CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT:  -- had asked the president to get involved with the rebuilding at Ground Zero. 

ROBERT GIBBS, WHITE HOUSE SPOKESMAN:  I will check on that.  That is not on my stuff either.  I will have somebody work on that. 

(END VIDEO CLIP)

SHUSTER:  This afternoon, we continue to follow up the White House.  Late this afternoon, we received this statement from White House Spokesman Bill Burton.  Quote, “from the first days of this administration, we‘ve had an open dialogue with the 9/11 families and the families of the victims of the USS Coal attack.  We‘re familiar with their concerns and are willing to discuss them.  But it appears that this is an issue that should be resolved by state and local government officials.” 

Joining us now is Jim Richards, a retired chief of the New York City Fire Department.  His son was also a firefighter and died on 9/11.  Last month, Jim was part of a group of 9/11 families who met with President Obama at the White House to talk about Gitmo.  He was told by the president the families would always find an open line to the White House.  Jim, what do you make of the White House response?

JIM RICHARDS, FMR. FIR FIGHTER:  I think they have a lot on their plate now, with the economy and everything else.  We as families, it‘s a disgrace to America and my son, and everybody that died day.  There‘s a hole in the ground.  And they‘re talking about wasting 40 million dollars a year on a museum. 

I think it ought to be looked at.  Nobody is in charge down there.  Nobody is taking the forefront to do anything, Mayor Bloomberg, the governors of New Jersey and New York, Paterson and Corzine.  I think it‘s a disgrace.  We can‘t even get the ranks of the men, the firemen, lieutenants and captains at the Fire Department, on the memorial.  I find that hard to believe.  We have a general from the Pentagon that won‘t even know who he is.  His name will be on it, that‘s it. 

They ought to sit down, somebody ought to step up and take charge.  The Obama administration should tickle somebody‘s feet, because the Port Authority and everything is getting done down there.  There is no one leader.  We need one commander. 

SHUSTER:  In addition to the whole issue of the memorial, itself, it‘s going to be subterranean, as a lot of people have criticized and don‘t understand.  There‘s also that issue with what was known as the Freedom Tower, which was the plan that was essentially forced by government officials.  Nobody ever considered rebuilding the Twin Towers. 

Now, the Freedom Tower, which has had a difficult time getting any tenants, the Port Authority has decided to rename it World Trade Center One.  As we were talking last night, World Trade Center One was one of the Twin Towers.  What do you make of that and how does that strike you?  

RICHARDS:  It strikes me at unusual.  There‘s going to be no American flag down at this memorial that we‘re having.  I think that‘s a disgrace.  I think for someone to change the name of the Freedom Tower shows their arrogance and their ignorance.  And it‘s an insult to my son and all the others that died that day.  They don‘t want to be too American or what it is?  This is an American tragedy.  American heroes died that day.  And they deserve the best down there. 

For us to waste all the money—we‘re looking for something simple, and that will be respectful, and it will be the right kind of tribute to our sons and the people that died that day.  Hopefully, someone will step up and take charge.  Right now, there‘s no leader that‘s stepping up. 

SHUSTER:  Jim, the White House did say they‘re willing to discuss your concerns, although, of course, right now they‘re leaving it to state and local officials.  Is there an effort, then, that‘s going to be made by 9/11 families to try to talk directly to the White House? 

RICHARDS:  We‘re going to reach out and keep trying.  We‘re not happy with what they‘re doing down there.  They‘ve not listened to the families at all.  The Port Authority has made their own decisions of what they want to do, and have disregarded the governors and the people at the people‘s word. 

They picked this Freedom Tower design, even though it wasn‘t the one that was selected.  I think it‘s outrageous.  We‘re upset.  We‘re going to continue to fight, because our sons can‘t speak for themselves so we‘ll speak out for them. 

SHUSTER:  John Richards from the FDNY, whose son died on 9/11, thanks again for coming on tonight.  We appreciate it. 

RICHARDS:  Thank you.

SHUSTER:  For reaction to the White House approach on this issue and others, let‘s bring in our panel.  Guy Lawson writes for “Rolling Stone.” And Chris Plante is a conservative radio talk show host on WMAL here in Washington, DC.  Chris, what do you make of this? 

CHRIS PLANTE, RADIO TALK SHOW HOST:  You know, if they need, as he said, the White House to tickle their feet a little bit, maybe the White House should tickle their feet a little bit.  It‘s a mess.  It should be a pretty straight forward effort.  Obviously, there‘s too much government, too much bureaucracy.  No Freedom Tower, for what reason?  Maybe somebody else should be put in charge? 

SHUSTER:  Guy, your view up in New York? 

GUY LAWSON, “ROLLING STONE”:  We‘re supposed to be entering this new age of responsibility.  It seems to me that someone should be put in charge of this.  I live in New York and see that hole all the time.  It‘s really a disgrace. 

SHUSTER:  I want to ask you both about some stuff that was happening at the White House today.  The president focused on both Afghanistan, but also talking with the bankers.  And here‘s Robert Gibbs first sort of describing the meeting that the president had.  Watch. 

(BEGIN VIDEO CLIP)

GIBBS:  The president believes they had a good, productive, and frank conversation.  Also discussed were issues of compensation and the importance of recognizing what the American public is going through in this economic crisis. 

(END VIDEO CLIP)

SHUSTER:  Now, then reporters followed up and asked him specifically about this issue about what was discussed with compensation and watch this. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  And what did they say about his message on compensation?  Were they receptive?

GIBBS:  Yes, look, I think—again, I think as you heard the bankers say, they understand—they understand that.  I think—

(CROSS TALK)

GIBBS:  I did not hear that.  It was discussed, yes. 

(END VIDEO CLIP) 

SHUSTER:  That‘s a bit of a mystery.  Indeed, the CEOs said it wasn‘t discussed.  Compensation did not come up. 

LAWSON:  Well, I‘m saying you understand thing is one of President Bush‘s great ploys.  Saying, I understand, I understand.  They need to act and they need to act in a responsible fashion.  Again, the age of responsibility.

PLANTE:  Ignoring the disconnect between what the CEOs said and what the White House said.  These guys came out of this—I was watching them earlier on your show.  They sounded like they had just come out of a meeting with a dictator.  They were terrified.  They had been beaten.  They had been beaten into submission and forced to come out and say, we want to cooperate.  We want to cooperate.

I‘ve got to say, we live in strange times when the White House is bringing CEOs in.  I understand, now the government is paying their salary.  If we‘re going to get into this business, that‘s the going rate of their executive job. 

SHUSTER:  There were also some CEOs who seemed to think that everything was pleasant, that they had a pleasant conversation, a nice conversation.  Again, maybe those were the same ones who didn‘t hear or didn‘t catch the president talking about compensation. 

PLANTE:  These guys are grownups.  They didn‘t get to where they are by being chumps.  They came out and gave the PR line.  They know how to play the game.  They‘re playing the game.  But it was very strange watching them come out and behave like contrite children who have just been brought to the principal‘s office, when these are big guys.  These are—

SHUSTER:  What‘s wrong with saying, you know, look, some of these people are responsible for this mess because of the risk.  What‘s wrong with saying, we want them to bow down and get a pound of flesh out of them? 

PLANTE:  Because it‘s fake.  Because they‘re scapegoats.  If you want to find the core of this problem, let‘s bring Barney Frank over to the White House, let‘s bring Chris Dodd over to the White House.  Ask him about his relationship with Countrywide.  Ask Barney Frank about his relationship with Fannie Mae and his lovers‘ relationship with Fannie Mae, and the fact that they pounded the Bush administration into the ground when John Snowe, then Treasury secretary, went up there and demanded that they do something about Fannie and Freddie.  They were sent out being accused of being racist. 

Let‘s look at Washington first, because Washington is giving themselves a free pass and looking for any scapegoat they can find.  They‘re doing a good job of it.  Too many people in this town are playing along. 

LAWSON:  You can‘t seriously be suggesting that this isn‘t the consequence of Bush administration policies and the rampant greed on Wall Street, can you? 

PLANTE:  Look, there are a lot of factors here.  I will concede that the Bush administration should have done more to reign in some of this nuttiness, including the regulation of Fannie Mae and Freddie Mac, gobbling up this money and sending out the derivatives.  Look, Washington is in bed with Fannie and Freddie, and they have been in bed with the Wall Street guys and the AIG guys.  And David was talking about the more than 40 members of Congress that have been taking money from the very people that they‘re now attempting to brow beat.

The hypocrisy coming out of Washington is something that needs to be addressed sooner rather than later.  I‘m fine with whipping the bankers, the Wall Street.  Let‘s go ahead and do that.  We‘ll all feel better. 

(CROSS TALK)

LAWSON:  Let‘s whip the mindset, the mindset of greed, the mindset of tax cuts for the rich, the mindset that says the middle class and working people don‘t matter. 

PLANTE:  Nobody believes that the working class doesn‘t matter.  Everybody believes that the working class matters.  Everybody believes that there‘s a problem and we need to straighten it out.  But if we look at the situation and discover half of the problem, and ignore the Washington end of the problem—the Washington end of the problem is a huge end of the problem. 

It‘s funny.  I‘m in Washington and I‘m attacking Washington.  You‘re in New York and you‘re attacking New York.  These Washington guys bear a great responsibility here.  They‘re getting a free pass.  That‘s corrupting the fix.  We won‘t fix the problem if we ignore part of the problem. 

SHUSTER:  Guy, I promise we‘re going to let you have the first word and the last word of the next segment.  We have a great next segment coming up.  Guy and Chris are sticking around. 

Up next, supporters of legalizing marijuana say doing so could stop violence and actually give the government more money.  Critics say that‘s what happens to your thought profession when your brain is on drugs.  Marijuana legalization debate is up next. 

Your Twitter questions coming up at the end of the hour.  Go to Twitter.com/Shuster1600 or use the link at Shuster.MSNBC.com. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  There was one question that was voted on that ranked fairly high.  And that was whether legalizing marijuana would improve the economy and job creation.  And I don‘t know what this says about the online audience.  The answer is no, I don‘t think that is a good strategy to grow our economy. 

(END VIDEO CLIP)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE, where pot-related queries were among the more popular with the 3.5 million who went online to vote for their favorite questions for President Obama yesterday at the town hall.  Mr. Obama laughed off the economic argument for legalization.  But this week, new attention on the drug-fueled violence in Mexico, which has killed more people in the last year than the wars in Iraq and Afghanistan combined, has rekindled the marijuana debate. 

Should legalization be on the table?  Secretary of State Hillary Clinton addressed the US involvement in border violence during her trip to Mexico this week. 

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE:  We do have responsibility for what‘s happening in Mexico.  It is drug demand in the United States which drives the drugs north across our border. 

(END VIDEO CLIP)

SHUSTER:  Back with us now are Chris Plante, WMAL radio host, and Guy Lawson of “Rolling Stones Magazine.”  He‘s got a compelling report in this month‘s issue called “the Making of a Narco State,” which takes an in depth look at the violence that has irrupted in Mexico.  Guy, make your case.  Why do you support legalization of marijuana? 

LAWSON:  The president‘s answer to that question typifies the America way of looking at marijuana and drugs generally.  This is a president who did blow, as he wrote about in his own memoir.  To laugh at the problems marijuana raise in Mexico—in Mexico, I should say, it‘s no laughing matter.  As you say, so many thousands of people have been killed. 

Marijuana is the cash crop for the cartels.  It enables them to branch out into different kinds of drugs.  It is literally destroying Mexico.  If America doesn‘t get over its hypocrisy in this regard, they‘re going to have a national security catastrophe on the border.  Simple as that. 

PLANTE:  I just love this.  There is drug violence in Mexico, therefore, we need to legalize drugs in the United States, ban guns in the United States.  And finally, the liberals have some excuse to secure the border.  They don‘t want to secure the border for America.  They want to secure the border for Mexico.  They want to protect Mexico from the United States. 

Look, legalizing pot, what a joke.  My feelings about this aside, I‘m fairly libertarian on this issue.  The reality is that they run cocaine and heroin, too.  What are you going to do?  Legalize heroin and legalize cocaine?  The drug lords will happily move over to cocaine. 

LAWSON:  Look at the economic models we‘re experience right now, what‘s happening to General Motors.  These cartels are the businesses on that scale.  When you take away 50, 60 percent of their income stream, you radically alter their ability to operate.  These cartels have command and control through hundreds of cities in the United States.  If we don‘t do something about it, then the catastrophe that‘s happening in Mexico will begin to be visited in the United States, the corruption, the violence, the spill over, which is what the DEA and the various authorities in America are scrambling to catch up with, after the buffoonish foreign policy that had the FBI and the DEA in Mexico chasing after al Qaeda. 

PLANTE:  The “Washington Times” has a headline on Hezbollah moving people across the border. 

(CROSS TALK)

PLANTE:  Believe that legalizing pot in the United States will do away with drug lords and cartels in Mexico and in Colombia and in Bolivia.  And the buffoonish approach that was taken by the H.W. Bush administration is what forced them to move to the land roots.  We‘ve been successful at squeezing them out of sea and air transport across the Gulf of Mexico. 

(CROSS TALK)

LAWSON:  Colombia still produces the same amount of cocaine that they did before this whole fiasco. 

PLANTE:  Yes, Guy, and now they move it through Mexico.  That‘s what the cartels will go to.  The violence will persist.  Then I‘m sure you‘ll have an article advocating legalizing cocaine. 

SHUSTER:  Never mind the violence and these narco-states.  What about this simple issue?  Put that aside for a second.  The simple fact, a lot of people have an appetite for this stuff.  Why shouldn‘t the government get a piece of the action? 

LAWSON:  What happened with prohibition?  Prohibition ended the organized crime organizations in Chicago.  What happened to the New York City Mafia in the ‘80s was largely to do with legalizing gambling.  Hillary Clinton said yesterday that we have this problem with demand.  I guess people are going to stop wanting to smoke pot.  Like that‘s ever happened. 

PLANTE:  You just contradicted yourself.  We wiped out the mob in Chicago by legalizing alcohol.  But it persisted in New York, for some reason, until the ‘80s, when we legalized gambling. 

LAWSON:  Legalizing gambling destroyed the Mafia.  It was their income stream. 

PLANTE:  Now it‘s legal.  If you legalize all crime, we won‘t have any criminals at all.  Let‘s legalize all drugs.

LAWSON:  That kind of moralizing is exactly what is destroying Mexico, sir. 

PLANTE:  Moralizing?  We‘re not destroying Mexico.  Since when did the consumer become the problem here?  I grew up—

LAWSON:  If you want to see a picture of irresponsibility, there it is. 

PLANTE:  I grew up being told that the drug user was the victim and the drug provider is the bad guy.  Suddenly, the United States can be demonized.  You guys are blaming the user and vindicating—now we‘ve got to legalize drugs so that criminals aren‘t criminals anymore. 

LAWSON:  Can I ask you this, not to put you on the spot, have you ever been to Mexico?

PLANTE:  I was in Mexico last week. 

LAWSON:  What did you think of it? 

PLANTE:  I was offered drugs at every stop.  I talked about it today.  I was offered pot and cocaine, by the way, at every stop, three stops along the west coast.  I didn‘t accept. 

SHUSTER:  I have not been to Mexico for at least ten years, but I think it‘s time for a fact-finding mission. 

LAWSON:  Still a great place.  Go take your holiday.  It‘s true.  It‘s a wonderful country. 

PLANTE:  I did last week. 

SHUSTER:  Guy and Chris are sticking around. 

Up next, disgraced former Governor Rod Blagojevich may have a new job on the horizon.  Nope, he‘s not going to be a radio DJ.  His publicist has something much bigger planned.  That‘s ahead on 1600.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  There‘s a lot going on today.  Here are a few things we all thought you should know.  Marking up budget legislation can be stressful.  But we were surprised to hear about some of the trash talk that happened during a Senate committee hearing on the Hill yesterday. 

It all started when Senator Charles Grassley asked Budget Committee Kent Conrad to support one of his resolutions.  Grassley reminded Conrad that Conrad owed him payment from a favor to years ago.  That‘s when Conrad said to Grassley, “you know, I used to like you.  Let me just say, oh, you are good.”  Grassley apparently shot back, quote, well, “your wife said the same thing.” 

Yowza. 

We continue to track President Obama‘s NCAA tournament picks.  It was last week when the president made his selections to ESPN.  He correctly picked 14 of the Sweet 16.  He‘s not doing so well for the Elite Eight.  He is two for in the first round of games.  He correctly picked favorite Pitt and Uconn, but he also picked last night‘s losers, Duke and Memphis.  Villanova beat Duke and Memphis was ousted by Missouri.  Mr. Obama is still alive with his national championship pick, North Carolina. 

In the annual White House Easter Egg Roll, a lot of parents are now getting rolled.  In previous years, tickets were rewarded on a first come, first serve basis.  It was basically, get in line early and your kid would likely get to participate.  This year, the Obama administration tried a new approach, using the Internet.  The online tickets were released in batches randomly over the web.  Soon after that effort started, the website got jammed.  Many parents who could log on were advised tickets were not available. 

So capitalism kicked.  Some parents are now engaged in ticket scalping.  That‘s right, just like for sporting events.  On Craig‘s List, some of the free tickets were reportedly tickets were selling for 50 dollars a piece.  On eBay, a set of six tickets went for nearly 980 bucks.  That‘s about 163 dollars per free ticket. 

The Easter Egg Roll takes place April 13th

First, he was a guest DJ on a radio talk show.  Now, could former Governor Rod Blagojevich get his own reality TV show?  “Chicago Sun Times” columnist Michael Sneed reports that sources tell him a Blago reality show is being discussed in the former governor‘s inner circle.  Blagojevich‘s publicist isn‘t confirming anything.  Glenn Selig says, quote, “we are focused on all kinds of things.  But there‘s nothing beyond talk, not even a reality show.” 

Those are just a few things I thought you should know. 

It‘s Twitter time.  Before we get to our panel, I want to play a portion of something that‘s been getting some traction on the web, taking aim at Twitterers. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Now that you know that a credit default swap is nothing more than Billy selling frog-backed securities while getting magic rabbits foot protection from Davie—

UNIDENTIFIED MALE:  Anyone know any good apps for my iPhone? 

UNIDENTIFIED MALE:  Craig, what are you doing? 

UNIDENTIFIED MALE:  I‘m Twittering.  Did you get my Tweets?  I just Twoted all over the place. 

UNIDENTIFIED MALE:  What‘s Twitter? 

UNIDENTIFIED MALE:  It‘s the latest cell phone networking micro-blogging thingy. 

(END VIDEO CLIP)

SHUSTER:  The key with Twitter is not just to say here‘s what we‘re doing, but to ask people for feedback, guidance, suggestions.  Just some advice.  In any case, Chris Plante and Guy Lawson.  One of the things we do, of course, is we run a video that the Twitterers have suggested.  You guys score it.  One is bad, ten is good.  Here‘s the video.  Watch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Now that you know that a credit default swap is nothing more than Billy selling frog-backed securities while getting magic rabbits foot protection from Davie, see how we‘ll get out of this economic mess in “Leverage Me Tender.” 

Any plan is better than no plan.  Here‘s Timmy‘s plan.  First, find some risk-taking investors with a little money.  Fourth, see if the frog-backed securities are worth anything.  If they are, investors are happy.  If they‘re not, investors are happy the money they invested was 85 percent someone else‘s. 

(END VIDEO CLIP)

SHUSTER:  Chris Plante, your score? 

PLANTE:  I‘ll give it a three because it leaves Washington out of it all together once again.  If these guys broke a law, if they violated SEC regs, then charge them with something.  In the meantime, let‘s get Barney Frank on the dot. 

SHUSTER:  Guy, your score on the animation.

LAWSON:  I think three is fair.  I just don‘t want to agree with anything Chris says.  So I‘m going so say four. 

SHUSTER:  Twitter questions for both of you.  Real quickly, Chris, someone wants to know if you would have favored prohibition? 

PLANTE:  Absolutely not.  I‘m an Irish Catholic. 

SHUSTER:  Guy, since you raised it, when was the last time you were in Mexico? 

LAWSON:  A couple weeks ago with my wife and kids. 

PLANTE:  I win. 

SHUSTER:  I think that argument has been settled.  Guy Lawson from “Rolling Stone,” great stuff as always.  Chris Plante from WMAL, he‘s got a great show here in D.C. for anybody who wants to listen.  It‘s really great stuff.  Thank you both for being part of the panel.  We appreciate it. 

That is the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Remember, you can get the latest political news and a sneak peek of what‘s coming up on the show sent straight to you inbox with the 1600 daily briefing.  Sign up at Shuster.MSNBC.com or text Penn to 622639 to have alerts sent to your phone.  If you Twitter, I‘ll be online right after the show at Twitter.com/Shuster1600.  Remember, go get those White House Easter Egg tickets, even if you have to pay.  It‘s worth it. 

I‘m David Shuster.  “HARDBALL” with Chris Matthews starts now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

Transcription Copyright 2009 CQ Transcriptions, LLC  ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon NBC and CQ Transcriptions, LLC‘s copyright or other

proprietary rights or interests in the material. This is not a legal

transcript for purposes of litigation.>

Discuss:

Discussion comments

,