updated 10/19/2009 11:37:32 AM ET 2009-10-19T15:37:32

Guests: Sheree Silver, Arianna Huffington, Rep. Barney Frank, Eric Perry, Katrina Vanden Heuvel

ED SCHULTZ, HOST:  Good evening, Americans.  Welcome to THE ED SHOW.

This is one for the archives.  Tonight, the most bizarre story we have seen in a while.  It unfolded this afternoon. 

We watched as a homemade balloon took a wild ride across the Colorado sky.  We thought a 6-year-old boy named Falcon Heene was inside the balloon.  His family said that he had climbed in it before it floated away from their back yard. 

But when the balloon finally landed in Colorado, it was empty.  No little boy inside. 

There are reports there was another box attached to the balloon, and that it might have fallen off with Falcon inside.  Tonight, the Larimer County sheriff tells us they can‘t confirm if the box was ever attached to the balloon. 

So, now the search is on for a 6-year-old boy named Falcon.  We have a missing boy and a lot of unanswered questions tonight. 

About the Heene family, this is more than interesting.  They are self-described family scientists. 

They are storm chasers.  They love the outdoors.  They believe in extraterrestrial.  And this unfolded on this network today for some three hours, captivating audiences across the world. 

Yet another strange twist to this story—Falcon Heene and his family had appeared on “Wife Swap,” a reality show where the mothers of two families switch places.  It is really an unbelievable story. 

We thought we were going to have someone from that program tonight.  We‘ll work on that.  And I want you to know that if anything develops within this hour, we will go back to the story and bring you the latest on this missing 6-year-old boy in Colorado. 

Very, very strange. 

On Capitol Hill, there are some developments if you‘re a liberal that are troubling.  Me, I‘m tired of hearing that we don‘t have the 60 votes.  We don‘t have the 60 votes. 

Harry Reid is my target tonight.  I think Harry Reid would sell his soul for 60 votes and cave in.  Now, Leader Reid, you have the people with you.  It‘s your job to go get the votes.  You have to sell these guys. 

Leadership takes guts.  That‘s the job.  The rocks go with the farm. 

The majority leader is looking a little shaky after Senator Chuck Schumer in New York said this about the fate of the public option...

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK:  Leader Reid has the option of putting it in the final bill.  If he puts it in the final bill, in the combined bill, then you would need 60 votes to remove it.  And there clearly are not 60 votes against the public option.  And so we‘re urging him to do that. 

If it‘s in the bill, you don‘t have to have every Democrat vote for it, because if it‘s in the bill, to take it out would take 60 votes.  So that‘s one of the cases—one of those rare moments where this 60-vote rule which we usually abhor works in our favor. 

(END VIDEO CLIP)

SCHULTZ:  You know, this is about leadership.  There is a third way, by the way. 

Harry Reid alone can get the public option without the 60 votes, without reconciliation.  It has really an ideal solution here.  But when asked about this yesterday, Mr. Reid practically ran from the question. 

(BEGIN VIDEO CLIP)

QUESTION:  Senator Schumer says that he spoke to you whether or not to put the public option in this bill. 

SEN. HARRY REID (D-NV), MAJORITY LEADER:  He would rather say anything so it wasn‘t up to him.  OK?

(END VIDEO CLIP)

SCHULTZ:  I mean, look at that.  He walks away. 

Harry, here‘s what you should have done.  And I don‘t think this is a portrait of a fighter right now and it‘s not a portrait of leadership.  He should have said, you know, Senator Schumer is correct, I am the guy that holds a lot of cards, and I want the base to know that we are going to get this thing done with a public option, because that‘s what the people want. 

You know, there are at least 50 solid Democratic votes for a public option.  If not 50, very close to it.  But instead of strong-arming the other 10 Democrats to get in line, the Senate leadership is ready to gut the bill to fit the Republicans the way they want it. 

Come on.  The conservative Democrats are way out of step with the American people on this.  This is all about the club, the Senate club, my distinguished friend and senator on the other side of the aisle. 

You know what?  I don‘t care if these senators get along.  The culture of the Senate right now doesn‘t match the need of the American people or the way the vote came down last November. 

Senator Reid needs to say, the hell with the Republicans who were trying to screw this thing up.  They‘re obstructionists, and so are the Democrats who are trying to hold the whole doggoned thing back because they‘re conservative. 

Joe Lieberman is out there saying that he might help out the Republican filibuster health care reform.  Why hasn‘t he been stripped from his committee, leadership or any committee, for that matter? 

You‘ve got to play hardball on this, Harry. 

Now, I‘d like to see a little toughness.  We did get a little bit of toughness today.  President Obama did a town hall in New Orleans, and he turned up the heat on Louisiana Senator Mary Landrieu and two congressmen, one blue dog and one Republican. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  We are going to pass

health care reform by the end of this year with the help of Mary Landrieu, with the help of Charlie Melancon, and maybe with the help of (INAUDIBLE).  We‘re going to get health care done this year. 

Those folks who are trying to stand in the way of progress, they‘re all—let me tell you, I‘m just getting started. 

(APPLAUSE)

I don‘t quit!  I‘m not tired.  I‘m just getting started. 

(END VIDEO CLIP)

SCHULTZ:  Mr. President, are you just getting started?  Does that mean that you are definitely going to tell your aides to go up on Capitol Hill and get a public option, or is the trigger thing in this thing? 

Look, I think the president can get this thing done.  These people are out there and they are trying to stop this whole thing.  The people behind the public option have to speak up more now than ever. 

You know, I kind of admired the way the Bush people did things.  You know, when they wanted to get things done, they just went out and kicked a few legs around and broke a few arms, and stuff like that, and they had this way, the Bushes.  You know, when they wanted something, they kind of grabbed the jugular like that and they said, this is what we‘re going to do.  For some reason, the Democrats don‘t have that killer instinct when it comes to telling people this is what the American people want and this is where we‘re going to go. 

The Senate, 60 votes.  OK, not going to get it.  Reconciliation should still be there, but it has got to be a public option. 

To me, the Senate Democrats and the leadership lacking the bite that the American people need.  Why are we having this conversation? 

We have got breaking news tonight.  The child has been found alive at the house.  Falcon Heene, we are being told tonight, has been found alive, and KUSA TV is reporting this.  And KUSA TV, the Denver affiliate, is reporting that Falcon Heene has been found alive. 

The 6-year-old boy was never in the box, never in the balloon that captivated the American people for several hours today and, of course, our coverage here on MSNBC. 

A lot of intrigue to this.  We have found the boy.  He is a 6-year-old, and he was in the house. 

That‘s all the info we have at this hour.  And we will bring you all the details as this story unfolds. 

So, that is the breaking news and the latest on the saga of the balloon that was supposed to have a 6-year-old boy.  The boy was still at home.  That family is going to have to answer an awful lot of questions. 

It all started this afternoon, and the family—it‘s a rather intriguing story.  This is a family that was on a reality television show called “Wife Swap.”  Falcon Heene and his family had appeared on “Wife Swap,” a reality show where the mothers of the two families had switched. 

And it‘s as bizarre as it gets in the news business, my friends.  They‘re storm chasers.  They describe themselves—let‘s listen in to coverage in to KUSA‘s coverage on Denver on this. 

(INTERRUPTED BY BREAKING NEWS)

SCHULTZ:  So, there you have it, folks, here on MSNBC, the breaking news.   The missing boy in Colorado has been found alive, at home, hiding in a box.

In one of the strangest stories we have covered in a long time, there is good news tonight.  No one died.

The big thing here is that the boy is alive and he was hiding.  And he‘s a 6-year-old.  Use your imagination, how 6-year-olds can get scared when they think they‘re in trouble.

And having kids, I can imagine how that can unfold.

Falcon Heene is his name.  He‘s 6 years old.

The older boy went into the home and said that he had taken off—his younger brother had taken off in a balloon in a box that was apparently attached.  There was never a box attached to it. 

So, are these kids playing a joke on everybody, or was this just a miscommunication?  They will interview the 6-year-old boy who was in the home hiding in the box, the older brother had told his family and authorities. 

Do we have Sheree? 

All right.

Now, an interesting twist to this family.  Falcon Heene and his family had appeared on “Wife Swap,” a reality television show where mothers of two families switch.

Sheree Silver switched places with Falcon Heene‘s mom, and she joins us on the telephone exclusively, live—exclusively from St. Augustine, Florida. 

Ms. Silver, thank you for joining us tonight here on MSNBC, THE ED

In this “Wife Swap” show, you obviously got to spend a lot of time with Falcon.  Tell us, what was he like? 

SHEREE SILVER, ON “WIFE SWAP” WITH HEENE FAMILY:  Falcon was full of life.  He was absolutely bubbly.  He didn‘t worry about taking risks.  He didn‘t care what anybody thought.  He swore all the time, and he basically was a free spirit who absolutely adored all his father‘s experiments. 

SCHULTZ:  Would it be in his character to play a joke, maybe teaming up with his brother to play a joke on the family to do something like this? 

SILVER:  He was definitely a prankster.  But the thing is, it‘s very possible that he saw the thing go up and he was scared of how his father was going to react to it.  And that could have made him, you know, look like he‘s playing a joke. 

SCHULTZ:  Well, tell us about his father.  Would he have been very upset about this? 

SILVER:  Well, yes.  You know, the first thought that I had was, I was at his house during the show in March, and he had built a flying saucer, and it was different to this one.  This one was a balloon.  And I had to spend a lot of my time on the show cleaning and polishing the flying saucer and carrying it out into the back yard. 

SCHULTZ:  So, during the show, they involved you in their science projects, their family science projects. 

SILVER:  The whole thing was...

SCHULTZ:  Go ahead.

SILVER:  The whole thing was their family science experiment.  I‘m a psychic, so what they did is they put all these different tests on me to test me. 

And they had copper cage that they had me in.  They had things on my head.  And I had to film in the middle of the night in the air to see if there was any UFOs out there. 

SCHULTZ:  How would you describe...

SILVER:  They were very much into—go ahead.

SCHULTZ:  Sheree Silver with us.  She was on the television show “Wife Swap” and switched places, and was with this family, the Heene family. 

What did you spend, a month with them? 

SILVER:  No, the show is only two weeks.  You switch lives for two weeks. 

SCHULTZ:  OK.  All right.

Well, how would you describe the family, Sheree? 

SILVER:  They‘re definitely a science family.  Their whole family is geared towards experiments and science and extraterrestrial.  And everything that Richard does with them has to do with anything to do with science and extraterrestrial and chasing storms. 

And my concern going on the show with him was the fact he had already been on the show before, so had I.  And we won the 100th episode.  That‘s why we switched, America voted for us. 

I had a dream that I was going to be going to his house and I was very nervous, because I knew he was into chasing storms.  But when I got to his House, he had built a flying saucer, and he had built this whole psychic testing whole thing for me.  And he said he knew I would be the one chosen also. 

SCHULTZ:  All right. 

SILVER:  So, basically, when I got there, I was his experiment. 

SCHULTZ:  Sheree Silver is with us here on THE ED SHOW on MSNBC tonight, and in a live exclusive interview from Florida.

She was on “Wife Swap” and spent several weeks with the Heene family. 

Richard Heene, the father, would you describe him as a responsible parent? 

SILVER:  That‘s a very difficult thing to answer, because I personally am more protective over my children.  They‘re very creative, artsy, dancing, theater.  I mean, they‘re very artistic children. 

His children are daredevils.  They‘ve grown up to have no fear. 

And basically, Richard is fearless, the father.  And so, I don‘t personally think that you should be taking children into tornadoes, and so I don‘t know how to judge that.  But as far as him caring about them, I believe that he cares about his children. 

Ms. Silver, what do you make of the news that the older son went in and told the family and authorities that his younger brother, Falcon, had gotten into a box and gone off into the balloon?  What do you make of that? 

SILVER:  Well, I don‘t know.  I don‘t know, because, you know, when children grow up to kind of play jokes on each other and be like that, they really don‘t think anything of it. 

SCHULTZ:  OK.  But do you think the two—do you think the two boys could have cooked this whole thing up as a joke? 

SILVER:  No, I don‘t think so. 

SCHULTZ:  OK.  So you think it just unfolded—unscripted or unplanned, it just happened and brought us to this point? 

SILVER:  Right.  Yes. 

I feel that it happened.  Maybe he didn‘t expect the ship to take—you know, the saucer thing to take off.  And then he panicked and ran, because I know he knows how important all these experiments are to his father and he always wants to please his father. 

So, you know, he actually took his father‘s side and was very mean to me like his father was, actually, during the show.  So, he‘s very impressionable to what his father would think.  So maybe he did it, but I don‘t think it was maliciousness. 

SCHULTZ:  OK.  You mentioned earlier in this interview that the 6-year-old boy used to swear a lot. 

SILVER:  Yes, he grew up—Richard gave them permission, his children, to swear in the house.  That was his thing.  He let them swear, burp, fart, carry on, be rude to people.  I mean, that was how they were being raised. 

SCHULTZ:  OK.  We‘re going to continue this.  I‘ve only got a few more questions, Sheree Silver. 

Would you describe them as a family that is safe? 

SILVER:  Would I describe them as a family that is safe?  You know, all I know is in history, it‘s the scientists and the historians and the people who go digging under the ocean to find out information.  You know, sometimes you have to be off the wall. 

Do I think Richard is a little off the wall?  Yes, you know.  But can I say that he‘s a bad parent?  I don‘t think I‘m in the position to say that. 

SCHULTZ:  What was your reaction when you heard the news that this had happened and Falcon‘s name was all over the news?  What was your reaction? 

SILVER:  I was in shock.  I was in shock. 

I just—I mean, like, is this a publicity stunt?  That was my first feeling, because I knew how much Richard (AUDIO GAP).

SCHULTZ:  OK.  If—hold on just a second, Sheree. 

If you could just repeat that statement.  We lost you on the satellite for just a moment.  Just repeat what you just said, please. 

SILVER:  My first initial feeling was, is this a publicity stunt? 

That was just my first initial feeling. 

Afterwards, I didn‘t feel like that anymore.  But my first initial feeling was, oh, my God, is Richard trying to get himself back in the news?  That was just my feeling.  You know? 

SCHULTZ:  Well, let me ask you—go ahead. 

SILVER:  He didn‘t mind acting off the wall and everything during the show.  And he doesn‘t mind having—you know, being crazy or being perceived as crazy.  So, anything‘s possible with somebody like Richard. 

SILVER:  Do you think that Richard Heene, the father of Falcon Heene, could have cooked this up for a publicity stunt?  Do you think that that is within the realm of possibility? 

SILVER:  No, no, no.  At first, my first feeling was that.  Then afterwards, no. 

I didn‘t feel like that anymore.  Please don‘t say that.  I didn‘t—my initial feeling was that, but then I felt like, no, no. 

This is—that basically I think they thought would be funny, but I don‘t believe his son would absolutely do anything.  No, I don‘t think—

Richard wouldn‘t let his balloon go up in the air and have it be ruined.  I don‘t think so. 

SCHULTZ:  OK.  Well, I asked you a follow-up to that because I wanted clarification for our audience on exactly your thoughts on this. 

Sheree Silver, I appreciate your time tonight on MSNBC on THE ED SHOW.

SILVER:  Thank you.

SCHULTZ:  Thanks so much. 

SILVER:  You‘re welcome.  Bye-bye.

SCHULTZ:  We‘re going to continue to cover this.  This is a bizarre story unfolding. 

The good news is, a 6-year-old boy named Falcon Heene has been found alive, hiding in a box in his home. 

And that was Sheree Silver, who was part of a television show, “Wife Swap.”  She had spent time with the Heene family and gave us some insight. 

She said that the 6-year-old boy hiding in the box was known for being a prankster and also had a habit of swearing a lot, and his father let him swear inside the house. 

They are a family that believes in extraterrestrial.  They are storm chasers.  They love the outdoors.  And very ironic that the boy‘s name is Falcon. 

You‘re watching THE ED SHOW on MSNBC.  We‘ll continue to cover this story and bring you the latest here on MSNBC. 

Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW here on MSNBC. 

The story of the hot air balloon, the good ending here.  A 6-year-old boy named Falcon Heene has been found alive in his home in a box.  A very bizarre story as it unfolded over three hours today. 

For more, let‘s bring in Arianna Huffington, founder and publisher of “The Huffington Post,” which was all over this story as well today. 

Arianna, have you ever seen anything like this? 

ARIANNA HUFFINGTON, FOUNDER, “THE HUFFINGTON POST”:  Ed, it is definitely a very strange story.  There‘s no question that the beginnings of it, when the little boy had disappeared, made everybody sort of anxious about the fate of the little boy.  But here‘s what I want to ask you.  Now that the little boy has been found, why are we still talking about it? 

SCHULTZ:  Well, first of all, I think it‘s very interesting to the American people.  And also, if it was a prank, and if it was organized, it‘s a hell of a story, Arianna. 

And the more intrigue is the fact that this family was involved in a reality television show.  And you don‘t find too many self-described scientists who believe in extraterrestrial that end up with a kid involved in a prank with a balloon that goes across the sky. 

So, the good news is the boy is found, but we need to know if this was some kind of a prank, if it was organized.  And so, that‘s why I‘m asking you about it.  It is very bizarre, to say the least. 

HUFFINGTON:  Right.  But my question to you and to everybody covering it exhaustively—I mean, I‘ve had so many breaking news alerts on my BlackBerry, you would have thought something major had actually happened. 

(CROSSTALK)

SCHULTZ:  Well, let me just say—Arianna, let me just say this—at NBC and at MSNBC today, we had some very serious and painful discussions on this, because when this broke, we thought that there was a boy in a box, and we were told that it was not connected very well to the balloon.  And no one wants to see a 6-year-old boy fall from 8,500 feet.  Now, so, that is why it was covered. 

At this point, I think this network, a network of record, obviously, got the hottest interview that‘s out there, someone who could give us some insight on the family.  Now, I don‘t know how you handled it at “The Huffington Post,” but I think we undoubtedly did the right thing. 

It is a story of tremendous intrigue, and it‘s probably a good lesson to parents across the country, to make sure that you always know where your kids are.  And kids do get into mischief, 6-year-olds do get scared. 

We find out that the father was a very serious scientist on the homemade level and took his work very seriously.  The kid probably knew that, and that‘s why he got scared when the balloon took off, and went and hid out.  So, I think it is a good lesson for all of us. 

HUFFINGTON:  Ed, I completely agree with you.  I said that at the beginning.  That is while the boy was missing.  That was a very legitimate, important story, because everybody wanted to find out what happened to a little six-year-old boy. 

But once the boy has been found, this simply becomes voyeurism.  This is a couple that was in a show called “Wife Swap,” that believes in extra-terrestrial.  And this is merely a story that simply feeds into the worst voyeuristic instincts of our culture. 

SCHULTZ:  No, it doesn‘t.  Arianna, we found out less than 15 minutes ago that the boy was alive.  Now it‘s still breaking news, whether you like it or not.  We found out just 15, maybe 20 minutes ago, that the boy was still alive, which is good news.  And we had a chance to interview someone who really knows the family. 

So if we‘re still playing it tomorrow morning, I might agree with you on that.  Right now, it‘s still very relevant and there‘s many people coming who are home just finding out what‘s going on.  So I‘m surprised that you would question something in the first hour of breaking news, why are we covering it? 

HUFFINGTON:  I‘m questioning it because once we gave people the news -

·         the news is the boy is found.  The boy is safe.  Then you have an important show that can address many of the other issues that we are facing. 

SCHULTZ:  Yes, we are.  Let‘s go to one of them.  You have suggested, switching gears, that the vice president of the United States should resign if the president of the United States sends 40,000 troops to Afghanistan, based on his principled position.  You think that Joe Biden, if this happens, should step down as vice president of the United States? 

HUFFINGTON:  Ed, what I wrote is that, based on what the vice president has said, and in interviews that have appeared—off the record interviews, mind you, in the “New York Times,” in the cover story of “Newsweek,” he opposes the escalation in Afghanistan.  He actually asked a very significant question in the White House Situation Room: how much money are we spend thing year in Afghanistan?  The answer was, 68 billion.  How much are we spending in Pakistan, where al Qaeda was?  And the answer is 2.5 billion. 

So his point is, does it make strategic sense?  If he doesn‘t believe it makes strategic sense, then I believe in resignations on principle.  I believe that this has been a very honorable tradition in this country.  Remember Elliott Richardson resigning when Richard Nixon asked him to fire the Watergate prosecutor.  Remember Cyrus Vance resigning because he disagreed with the position that Jimmy Carter was taking in Iran. 

SCHULTZ:  Arianna, I have to take issue with you.  This is almost as bizarre as the balloon story, suggesting that the vice president of the United States should resign if we send more troops to Afghanistan.  I understand the principled position that you expect the vice president.  But we‘re talking about Joe Biden.  We‘re not talking about Sarah Palin.  Joe Biden is not a quitter. 

Joe Biden has been in the United States Senate for over 30 years.  He was elected as vice president.  He was chosen for his foreign policy expertise by the president of the United States, Barack Obama, in the campaign.  And I don‘t think Barack Obama chose Joe Biden because he thought he might quit some day.  Don‘t you think you‘re out on a limb on this? 

HUFFINGTON:  Well, Ed, I don‘t know what you‘re talking about when you use the word quitting.  There‘s nothing more important—no more important decision that a country can take than a decision that affects sending our troops to a war of choice, and not a war of necessity.  Now if Joe Biden believed that this was a war of necessity where we needed to escalate, that‘s another story. 

But he doesn‘t.  And I‘m tired of leaders, political leaders who come out after the fact and write mea culpa memoirs, explaining how forceful they were behind closed doors and not in public. 

SCHULTZ:  Arianna Huffington, I appreciate your time on THE ED SHOW tonight.  I appreciate the conversation.  Thanks for joining us. 

HUFFINGTON:  Thank you.

SCHULTZ:  Coming up on THE ED SHOW, they‘re talking financial regulation on the Hill.  Barney Frank will join us talking about that.  Katrina Vanden Heuvel will also be along from “The Nation.”  So much coming up.  Stay with us.  You‘re watching THE ED SHOW on MSNBC. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  You are looking live at a press conference that is taking place outside the Heene home in Colorado.  There is the father, Richard Heene, talking to the media, with the six-year-old boy, Falcon Heene, who was the subject of a search and find in the home of the house, safe this afternoon hiding in a box.  That‘s the latest here on MSNBC. 

You see these numbers right here, folks?  Let‘s talk a little about the economy for a moment.  Now, I really don‘t care about, you know, these numbers.  These aren‘t the real important numbers about where America is in the economy right now.  Goldman Sachs posted three billion in profits today.  JP Morgan Chase reported 3.6 billion in profit yesterday. 

Meanwhile, a half a million people applied for unemployment.  Foreclosures have jumped five percent.  The last three months have been the worst for foreclosures in the history of the country. 

On Wall Street, pay is up.  But on Main Street, they are hurting.  What is going to happen when it comes to regulation in this country?  Let‘s go to Barney Frank, who is the chairman of the House Financial Services Committee.  Congressman Frank, good to have you with us tonight on THE ED SHOW.

REP. BARNEY FRANK (D), MASSACHUSETTS:  Thank you, Ed. 

SCHULTZ:  The profits on Wall Street—I mean, I‘m a business guy.  I love profit.  But they got back there with no regulation.  Is that a case that we don‘t have to do anything?  Or does it make the case that we‘ve really got to get some legislation and get some teeth in it, to make sure we don‘t run into what we ran into before?  What do you think? 

FRANK:  Oh, it‘s essential that we regulate.  We‘re in the midst of a partisan fight.  Yesterday and this morning, the committee that I chair voted out some pretty tough rules about derivatives that would force most derivative trading onto exchanges, and would get some clear look at others.  It was almost unanimously opposed by the Republicans. 

I think we have to do several things.  First of all, let‘s talk about the money that‘s being made.  There are two things we need to do.  In August, the House passed a bill—we passed it two years ago, but the Senate was too closely divided.  The House passed a bill to put some restrictions on pay at places like Goldman Sachs in two ways.  First of all, you get this cozy relationship between the board of directors and the CEO.  And they‘re each other‘s best friends.  And they have these salaries that are way too high.  We think the shareholders ought to be able to vote, which includes some good union pension funds and others.  So we did put through the House what we call Say on Pay, subject that to a shareholder vote. 

Secondly, the problem with these amounts is not simply the total, but the way in which they‘re structured.  They give them the incentive to take too many risks.  They have a situation where if they take a risk and it pays off, they make a lot of money.  If they take a risk and it doesn‘t pay off, they break even. 

SCHULTZ:  Congressman, how aggressive do you want to be to control that? 

FRANK:  We passed a bill in August that says two things.  First of all, all pay packages for the top executives have to go on the annual proxy vote, so shareholders can vote.  You can‘t make it binding for a couple technical reasons.  But the experience in England, where we are borrowing this from, is that when the shareholders vote no, they reduce the salaries. 

Secondly, we have given an instruction to all the federal regulators in this bill—and I hope the Senate will soon pass it.  I know Senator Dodd is working on this—that says you cannot allow any financial company to have a system whereby there is an incentive structure that gives them the incentive to take risks with other people‘s money.  They have to have their own money at risk.  If they get a bonus, and six months later, it turns out that deal didn‘t work out, they have to give it back. 

SCHULTZ:  What about—

FRANK:  There‘s one other point, Ed.  One other point; and that is let‘s not forget this: we should be taxing these profits, because that‘s—we ought to be paying for health care with a surtax on the profits, these fabulous profits of these extraordinary wealthy people. 

SCHULTZ:  What about the talk of a second wave of foreclosures?  The last three months have been the worst this country has seen.  And what about the selling of mortgages and knowing where those mortgages go, so they don‘t spin off into outer space, and nobody knows what fund they‘re in? 

FRANK:  Excellent point.  There‘s both what we do now and what we do in the future.  For the future, I‘m determined that the committee I chair is going to pass a law that says mortgages from here on in can only go forward if somebody is always responsible, for any given mortgage, for that mortgage and for modifying it.  You have a situation now where they all blame each other and they claim they can‘t deal with it.  And the past laws were too lax on that.  There‘s no question.

Beyond that, to deal with the current situation, I‘ve been pushing a bill—the Tarp money is getting repaid at a faster rate than I expected.  We are making some profit on it, because we did put in—

Can I finish?  You asked about unemployment.  What I want to do is to take a couple of billion dollars of these Tarp profits we‘re getting, and make them available to people who are facing foreclosure because they‘re unemployed.  These are people who got good, reasonable mortgages, and the only reason they‘re facing foreclosure is you can‘t afford to pay your mortgage out of unemployment. 

So I want to take some of those Tarp profits we‘re getting back from the banks and make them available to working people who lost their jobs, so they won‘t be foreclosed.  

SCHULTZ:  Congressman Frank, you know you can always finish on THE ED SHOW.  Appreciate your time. 

FRANK:  I apologize.  It‘s been a rough day.  I broke my gavel today pounding it with the Republicans on derivatives.  Until now, I always thought—

SCHULTZ:  Still got the adrenaline going, I got it.  Thank you, Barney, appreciate your time. 

All right, we gave 800 billion dollars to Wall Street, but they aren‘t giving it back to us.  There are 29.6 million small businesses in this country.  They can‘t get credit in the economy.  The Obama administration created a small business loan program called America‘s Capital Recovery Act as part of the stimulus package.  It was a good plan.  It provides no interest loans to small businesses owners for up to 35,000 dollars. 

But here‘s the deal: the banks are sitting on the money.  My guest is a small business owner from North Carolina who says he can‘t get a 20,000 dollars loan to survive the recession.  Joining me now is Eric Perry.  He owns a construction company in North Carolina, which, by the way, has an A Plus rating from the Better Business Bureau. 

Eric, good to have you with us tonight.  What is happening?  Tell us what‘s happening on Main Street.  What are you seeing? 

ERIC PERRY, SMALL BUSINESS OWNER:  Well, you know, Ed, truthfully, we‘re starting to see some movement in the economy.  There‘s some good signs.  But the problem is not the longer term.  We can see the sun coming over the mountain.  But the problem is, can we survive until the sun comes over the mountain? 

And you can take some of that Tarp money that Barney was talking about and throw some of that at small businesses too.  Because so many of us, you know, we‘re going to survive—you know, we‘re going to be all right, but we just need some help.  We need a bridge to get through to, you know—until when things pick up. 

Because regular guys like me and many others can‘t wait.  We can‘t wait.  We can‘t wait on health care.  We can‘t wait on health, period. 

SCHULTZ:  Now, as far as jump-starting and putting a financial steroid, you could say, into a business, credit‘s tight right now.  Is it too hard to get the money?  Talk to the Obama administration.  What do they need to do to fix this? 

PERRY:  It‘s pretty simple.  The guidelines in the ARC program are pretty straightforward.  They make sense.  You have to meet certain caveats to qualify for the loans.  It‘s not for start-ups.  It‘s not to be used for speculation.  It‘s just so businesses can survive the short-term.  It says right on it that it‘s for temporary cash flow issues.  You‘ve got—like you‘ve been saying, we need money—

SCHULTZ:  But are the banks being tight with the money, Eric?  Are the banks being tight?  Is it too hard to get this money? 

PERRY:  It‘s impossible to get this money, Ed.  What we found in our case is we got froze out just because we happen to be at the wrong bank.  We met all the qualifications.  There‘s 11 banks in the state of North Carolina that are doing the loans.  But ours isn‘t one of them.  And where‘s the justice in that? 

I‘m going to get punished because I chose to support a small, local bank instead of one of the big ones?  It‘s insane.

SCHULTZ:  How long can you stay in business at the current rate? 

PERRY:  Ed, I‘m blessed because we have recently had a signed contract on a very nice piece of work that will keep us alive through the holidays.  But we need to do marketing.  We need to expand our business.  And it takes capital to do that.  There‘s a lot of guys that are regularly working with me that are sitting at home right now. 

SCHULTZ:  I don‘t want to paint the wrong picture to our viewers tonight.  The bottom line is, Wall Street got damn near anything it wanted, and you guys out there who are creating jobs, trying to stay afloat, it‘s like you‘re in a different world, operating under a totally different set of rules.  And you want the Obama administration to redo this thing, loosen up the credit, and tell these banks to get on the stick. 

PERRY:  Absolutely, Ed.  Absolutely.  I can‘t tell you how many times I‘ve heard small construction businessmen tell me, where‘s my bailout? 

SCHULTZ:  Eric, great to have you on.  Eric Perry from North Carolina tonight, small businessman.  These are the kind of stories we‘re going to bring until the Obama administration gets it together and understands, because nobody on their economic team has ever had to meet a paycheck. 

Eric, way to speak up, my man.  An average American, right there.  He‘s a working dude.  Got his own company.  He‘s not a professional word smith.  He‘s not a media guy at all.  Just an American trying to get by. 

Coming up, it‘s legal in 45 states to tell a woman she can‘t get health care unless she gets sterilized?  This is not the worst of what they were told on Capitol Hill today.  There‘s more.  “The Nation‘s” Katrina Vanden Heuvel will be here coming up on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Six-year-old Falcon Heene is safe and sound tonight.  He was not in a hot air balloon that had been hiding—he had been hiding in the attic all day in a box.  Here‘s a portion of an exclusive interview with Sheree Silver, who was on “Wife Swap” with the Heene family. 

(BEGIN VIDEO CLIP)

SILVER:  He was definitely a prankster.  The thing is that it‘s very possible that he saw this thing go up and he was scared of how his father was going to react to it.  And that could have made him, you know, look like he‘s playing a joke. 

SCHULTZ:  Tell us about his father.  Would he have been very upset about this? 

SILVER:  Well, yes.  You know, the first thought that I had was—I was at his house during the show in March.  And he had built a flying saucer.  And it was different to this one.  This one was a balloon.  And I had to spend a lot of my time on the show cleaning and polishing the flying saucer, and carrying it out into the backyard. 

(END VIDEO CLIP)

SCHULTZ:  So a successful ending.  No one hurt.  Everybody‘s alive.  Six-year-old Falcon Heene has been found alive.  The Colorado balloon story -- it is a bizarre story. 

Coming up, outrageous stories about insurance companies getting between you and your health care.  Katrina Vanden Heuvel from “The Nation” next on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  I talk a lot about health care on this show.  But I want to take a minute to remind the shaky Democrats, who are they protecting?  The insurance companies and the bad guys.  Here‘s the insurance horror story a Colorado mom told a Senate Health Committee in a hearing today. 

(BEGIN VIDEO CLIP)

PEGGY ROBERTSON, DENIED INSURANCE AFTER C-SECTION:  We applied with Golden Rule and I was denied coverage based on having a Cesarean with Luke in 2006.  I‘m in perfect health and I was shocked that Golden Rule would decline my application.  I called Golden Rule and they said that if I would get sterilized, they would then be able to offer insurance to me. 

I discovered that in all but five states it is legal to discriminate against women because of a previous Cesarean, either by denying coverage, requiring sterilization, or charging significantly higher premiums. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Katrina Vanden Heuvel, editor of “The Nation.”  It‘s amazing what we‘re finding out is really happening in America. 

KATRINA VANDEN HEUVEL, “THE NATION”:  You know, that testimony so important, Ed, because we learn once again that lives are in the balance.  All the lobbyists want us to forget.  But there‘s a reason that you fight every day on your program for a public option, to reign in the rapacious insurance companies, which are doing that to this woman. 

So I think we need to listen to the lies.  We can listen to all the CBO scoring and all the bend in the curve.  But at the end of the day, human rights should not be a for-profit commodity. 

SCHULTZ:  Thank you, Katrina, because it is a priority.  It‘s not a price tag.  It‘s a priority.  It‘s what the American people want.  I don‘t see the marches in the streets of people saying gosh, this cost too much money.  In fact, recent polls show we‘re willing to pay for this.  The majority of Americans are willing to do that.

We‘re now down to the crucial hours of this.  It may be the next four or five weeks.  What roll, in your opinion, does Harry Reid play, especially after what Chuck Schumer said the other day about the public option being on his shoulders? 

VANDEN HEUVEL:  Critical role.  It‘s a test of Harry Reid‘s leadership.  But it‘s a test, also, of democracy in our country.  If you have a majority for the public option, is the Democratic party, majority—and its future at stake here.  Is it going to stand up for the rights of people in this country? 

Harry Reid is also—he‘s tested, because you‘ve got the Ensign scandal in Nevada, some people say, a little bit off his shoulders.  He‘s in a better position.  That should not be on his mind.  On his mind should be bringing together robust public option, affordability, allow states to experiment with single payer, and mandate—some mandates.  And don‘t let Olympia Snowe run the show. 

SCHULTZ:  Have you ever seen one senator have so much power? 

VANDEN HEUVEL:  They‘ve given him the driver‘s seat.  I think that‘s a test also.  There are other senators.  Jay Rockefeller has emerged as the Teddy Kennedy of this fight.  Tom Harkin, Sherrod Brown, people who have been on your show.  These are senators who can stand up, block a Republican filibuster, and show the country what they are about. 

And Harry Reid, everyone who listens and watches you should be pushing him and those Democrats.  And don‘t allow people to talk about centrist Democrats.  They are conservative Democrats.  And they better represent the insurance companies than they do their constituents. 

SCHULTZ:  Do you think Harry Reid can do it? 

VANDEN HEUVEL:  It‘s a test of all of us.  It‘s a test of the American people too.  But listen, a fight is on.

SCHULTZ:  This is what leadership is about. 

VANDEN HEUVEL:  This is the end of the beginning, not the beginning of the end.  This is what leadership is about. 

SCHULTZ:  The rocks go with the farm.  This is what leadership is all about. 

VANDEN HEUVEL:  And the insurance companies, I think, have overplayed their hand a little in this last period.  They‘ve come out.  We now see them full frontal in the testimony here.  And you have six lobbyists to every representative.  Is that the kind of country we want to be?  The mugging of the people‘s good is under way and fast in Washington.  I think we need to bring all the attention to bare.  Harry Reid—and get Obama in their too.  If he was lobbying for a public option behind the scenes last week, he‘s got to do it more. 

SCHULTZ:  OK.  Katrina, thanks so much. 

VANDEN HEUVEL:  Thank you.

SCHULTZ:  That‘s THE ED SHOW.  I‘m Ed Schultz.  Coverage continues with “HARDBALL” here on MSNBC.  We‘re back tomorrow night.  You‘re watching the place for politics, MSNBC.

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