The Ed Show for Wednesday, June 30th, 2010
Read the transcript to the Wednesday show
Guests: Senator Sherrod Brown, Heather McGhee, Senator Ben Cardin, Andrew
Romanoff, Tim Carney, Laura Flanders, Jim Carr, Katrina Vanden Heuvel
CHRIS HAYES, GUEST HOST: Good evening and welcome to THE ED SHOW.
I‘m Chris Hayes, Washington editor of “The Nation” in for Ed Schultz.
These stories are hot tonight.
Senator Scott Brown is fighting tooth and nail to make sure big banks don‘t have to pay for Wall Street reform. He wants you to pay instead. The other Senator Brown weighs in on that.
Plus President Obama squashes John Boehner‘s ant metaphor with some tough talk today.
Hurricane Alex has thrown yet another wrench into the desperate effort to stop the oil leak in the Gulf. Jeff Corwin has a wide report.
And it‘s Clinton versus Obama in Colorado. Bill Clinton backs Democratic challenger Andrew Romanoff, the first time the former president opposed the current president. Well since that other Democratic primary.
Mr. Romanoff joins me at the half.
Our top story tonight is Republicans‘ desire to kill Wall Street reform analyst and the president‘s counterattack. For the second time in as many years, Massachusetts Republican Senator Scott Brown is threatening to drive a stake through the president‘s biggest domestic legislative priority.
Brown, along with a few other Republicans, voted for the Senate‘s version of Wall Street reform earlier. But when the conference committee added in a $19 billion tax on the largest hedge funds and banks, he balked.
Now, keep in mind, this $19 billion fee was to make sure the reform bill didn‘t increase the deficit. Take note deficit hawks. And it also had the added benefit of providing a disincentive for financial institutions to grow too big.
Brown, however, said he wouldn‘t support it. So yesterday the conference reconvened and they got rid of the tax replacing the money with some funds taken from remaining TARP money and higher FDIC bank fees.
OK, let‘s be clear about what just happened. The TARP money is taxpayer money. It‘s not some magical golden lamp that spits out doubloons. What Brown has succeeded in doing is transferring the burden of paying for reform from the big banks and hedge funds to you, the citizen.
Writing for “The Atlantic”, Daniel Indiviglio says, quote, “It‘s hard to see how pushing the tax to average Americans and smaller banks helps matters.”
Well, indeed it is. There are two ways of understanding Scott Brown‘s actions I think. A, he really wants to transfer wealth from American taxpayers and small banks to that same large reckless financial institutions that created the crisis. Or B, he wants to kill Wall Street reform as just searching for an excuse.
As evidence of the latter, Brown wrote a letter to Dodd and Frank today asking for more time to consider his support even after they gave him what he said he wanted. But maybe like his House Republican colleague John Boehner, what Brown really wants is to maintain the status quo.
Today President Obama in a town hall meeting in Racine, Wisconsin fired back at Boehner‘s comments from yesterday.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The leader of the Republicans in the House said that financial reform was like—and I‘m quoting here—using a nuclear weapon to target an ant.
That‘s what he said. He compared the financial crisis to an ant.
This is the same financial crisis that led to the loss of nearly eight million jobs. Same crisis that cost people their homes, their life savings.
Maybe I‘m confused. Do you think that the financial crisis was an ant and we just need a little ant swatter to fix this thing or do you think that we need to restructure how we regulate the financial system so you aren‘t on the hook again and we don‘t have this kind of crisis again?
(END OF VIDEO CLIP)
HAYES: Get your cell phones out. We want to know what you think. Tonight‘s text survey question is, do you think Senator Scott Brown is trying to kill financial reform?
Text A for yes and B for no to 622639. We‘ll bring you the results later in the show.
All right, joining me now as promised the other Senator Brown—no relation, of course. Democratic Senator Sherrod Brown of Ohio, a member of the Senate Banking Committee.
Senator, thanks so much for coming on.
SEN. SHERROD BROWN (D), BANKING COMMITTEE: Chris, good to be back with you. Thanks.
HAYES: I guess my first question is, what‘s your feeling what they did in conference committee late yesterday to appease Senator Brown? Do you think that was the right direction to go?
BROWN: I don‘t like it. I wish that—I don‘t get it why people like Scott Brown have this kind of impact in writing this bill. I understand 60 votes and all of that, but you know, I start with Scott Brown said—Scott Brown yesterday broke his no-new taxes pledge.
He said he wouldn‘t vote for taxes. Well, he doesn‘t want a tax on big banks but he wants a tax on other American taxpayers and he wants a tax on the medium size and smaller banks. So I start with that.
But, you know, I‘m just—and I‘m tired of hearing Republicans preach this fiscal responsibility when 10 years ago we had a bunch of surplus and then there was billions of dollars for the war in Iraq charged to our grandchildren, billions of dollars for the Bush tax cuts for the rich charged to our grandchildren, billions of dollars in giveaways to the drug and insurance companies, a bailout for them in the name of Medicare privatization.
And now they only care about balancing the budget when it comes to workers and when it comes to the health care bill and all of that. So I guess I‘m just tired of that hypocrisy more than anything, Chris.
HAYES: What do you think? I mean, obviously, Massachusetts is quite a more deeply Democratic liberal state than the Ohio you represent. And I imagine what are the politics of this bill look like to you? What do you hear from your constituents about what the politics of voting for or against this Wall Street reform package are?
BROWN: Well, I don‘t—I don‘t think anybody in Ohio looks at this financial crisis the way the Ohio Republican leader does—John Boehner—that it‘s an ant and we‘re killing it with a nuclear weapon. I think people see—I mean you just go around Ohio, go to Middletown, go to Mansfield, go to Lima and see the number of people who lost their jobs, then they lose their insurance.
Then their homes are foreclosed on and this crowd wants to deny them unemployment compensation and wants to take away the assistance that we‘ve provided the last year and a half so that people can keep their health insurance.
And I just don‘t get it. I just wonder if my colleagues really talk to people who have lost their homes, who have lost their jobs, who have lost their insurance. And I think they need to get out a little more and talk to real people that face these problems.
You‘ve got to explain to your kid that—to your son or daughter, honey, we‘re going to have to leave our home because we can‘t pay for it anymore. And I don‘t know what school you‘re going to go to. But we‘re sorry, we‘ve got—we don‘t have—there‘s nothing we can do about it.
I mean they need to talk to people like that. I don‘t think they‘d be casting these no votes and be doing what Scott Brown did yesterday or doing what so many of my colleagues are doing on extending unemployment benefits.
HAYES: Well, I wonder about that. I mean, given how the politics look to shake out and given the kind of amount of pain that‘s out there, and I agree there‘s a tremendous disconnect. What do you think the determining factor is to get those votes? To make the UI extension—unemployment insurance extension happen or to push over Wall Street reform over the final hurdle?
What do you see as the thing that citizens can do or can happen in the next little window of time that‘s going to make the difference on those votes?
BROWN: Well, I think it‘s the president of the United States who have the loudest microphone in the country standing up and saying who‘s side are you on? Are you on the side of the Wall Street banks or are you on the side of main street? Are you on the side of these people that don‘t care about unemployment benefits or are you on the side of Ohioans and Virginians and Montanans who have lost their jobs through no doing of their own?
I think it‘s important the president of the United States use that megaphone, that very loud microphone to say to the public which side are you on. And I think then Republicans are going to not want to be on the wrong side of history like they have been so many times in the last couple of years.
HAYES: Senator Sherrod Brown of Ohio, thank you so much for joining us.
BROWN: Thanks, Chris.
HAYES: I really appreciate it.
HAYES: Up with me now is Heather McGhee. She is the Washington office director for Demos, a nonpartisan public policy research and advocacy organization. She‘s been following financial reform as closely as anyone.
Heather, thanks so much for coming on.
HEATHER MCGHEE, DEMOS: Thanks, Chris, for having me.
HAYES: All right, Heather, I actually want to talk to you about Senator Russ Feingold. Senator Feingold has announced he‘s voting against the bill. He wrote on “Huffington Post” today about his opposition to it. And, you know, I think there are progressives who look at Senator Feingold and they think to themselves, wait a second, is it true what he‘s saying which is basically this doesn‘t fix the problem enough?
It‘s going to give us false security, ergo I‘m not going to vote for it. I wonder what do you think of that argument?
MCGHEE: Listen, I‘m as cynical as they come about the power of Wall Street to get around whatever regulations we try to put up, whatever fire walls we try to erect. But this bill I think really passes the test of strength in two ways. One is first politically.
For the past 30 years, Chris, you know, the banks on Wall Street have been writing the laws in this town. Whether it‘s the credit card, the bankruptcy bill, whether it‘s the repeal of Glass-Steagall, every single regulation that‘s come down has had the real thumbprint of the big lobbyists on Wall Street. And the major banks.
And so the fact that this is for the first time in really I would say since in my lifetime and in your lifetime that the bill has actually been written to protect consumers, to protect investors, to give shareholders a say on pay and corporate governance, and actually to say, regulators, hey, it‘s your job to rein in bank risk.
No one was even saying that was even possible three years ago. So I think politically, it‘s strong and I think we need to pass it because the alternative is to say Wall Street, you won yet again.
HAYES: Well, so—so tell me what you think the sort of biggest victory is coming out of this piece of legislation. There‘s been some very intense hand-to-hand combat in Demos and a lot of groups like a group called A New Way Forward and other coalitions have done a lot of the work on this.
What do you think the biggest victories are in this piece of legislation, the things you‘re proudest and most excited about and what are the kind of biggest tarnishes on it?
MCGHEE: Yes. That‘s a great question. Really I can start with the consumer agency but I feel like people understand that we‘ve now got someone in Washington watching out for the consumer and credit cards and mortgages and payday loans and things like that.
What hasn‘t gotten enough attention are the structural issues that I frankly have been working on to—and it‘s been very challenging to really go at, you know, Glass-Steagall, and really the way that Wall Street operates.
I didn‘t have a lot of optimism at all going into this process particularly around the issue of derivatives. The $600 trillion market that caused the gas price spike in 2008, that cost world hunger to spike around the world because of speculation in commodities and then of course, was at the center of the AIG debacle and really turned a housing crisis into a global financial crisis.
That‘s where the money is made. $600 trillion in derivatives and we‘ve won on that. We‘ve gotten 90 percent of the derivatives market that‘s going to be not in the shadows anymore. That‘s amazing to me and frankly I think everyone who was looking at this bill a year ago who looked at what came out of the House, even what came out of the Senate, didn‘t think we were going to end up this strong.
HAYES: All right. Heather, I‘m going to save your worst thing about the bill until after the bill passes so we can have a conversation about what the next fight is.
HAYES: Great. Heather McGhee of Demos, thanks so much. I really appreciate it.
MCGHEE: Thank you, Chris.
HAYES: All right. Coming up, BP‘s latest fight. Hurricane Alex.
Winds and waves are ripping up in the Gulf and impacting BP‘s clean-up.
Alex could hit land tonight. Jeff Corwin joins me live.
And day three of the Kagan hearings where some of the most noteworthy developments came from the questions rather than the answers. Democrats using the day to lay out what‘s wrong with the Roberts court.
Senator Cardin joins me in a moment.
All that, plus Harry Reid won‘t give up the fight and Sharron Angle wants to cut all unemployment benefits. Shocking stuff.
You‘re watching THE ED SHOW on MSNBC.
HAYES: Coming up, the Colorado Senate primary has divided Bill Clinton and President Obama. Clinton endorsing Andrew Romanoff against Obama backed candidate incumbent Michael Bennett. But this is really about loyalty. Clinton and Romanoff go way back.
So just who is the candidate progressives should be supporting?
Andrew Romanoff responds at the bottom of the hour. Stay with us.
HAYES: Welcome back. Just moments ago, the Senate Judiciary Committee wrapped up its questioning of Supreme Court nominee Elena Kagan. I‘ve mentioned it before and I‘ll say it again—full disclosure—my wife works in the White House Counsel‘s Office.
Now, you know, Republicans have a knack for taking a word and simply through incessant repetition transforming it into an insult like liberal or in the context of the court activist or—hide the children—a liberal activist judge.
And the technical definition of an activist court is one that‘s eager to strike down or invalidate federal or state statutes if they don‘t jive with its jurisprudence. In practice, activist is a word Republicans employ to degrade justices who don‘t do what Republicans want.
It is a label of convenience after all. No one has a problem with an activist who‘s acting on their behalf. The current Roberts helm court which has lively overturned precedent and struck down local laws in the recent gun cases is a conservative activist court and Democrats on the Judiciary Committee have decided to pull back the curtain.
During questioning, the senators have been vocal about the problems with the current court particularly its consistent privileging of corporate interests over citizens interests. A decidedly rare and unabashed in the Citizens United ruling.
(BEGIN VIDEO CLIP)
SEN. PATRICK LEAHY (D), CHAIRMAN, JUDICIARY COMMITTEE: Five conservative justices rejected the court‘s own precedent, rejected a bipartisan law enacted by Congress, rejected 100 years of legal development, in order to open the door for massive corporate spending on elections was such a jolt to the system.
(END OF VIDEO CLIP)
HAYES: Joining me now is Senator Ben Cardin of Maryland. Senator Cardin is on the Judiciary Committee.
Senator, thanks so much for making the time.
SEN. BEN CARDIN (D), JUDICIARY COMMITTEE: My pleasure. It‘s good to be with you.
HAYES: Senator, I wonder, you know, watching the hearing today, it really seemed like the members of the committee were having a debate about what constitutes activism and Elena Kagan was kind of the—punitive reason for it.
I wonder if you can give a definition of what you see as activist and whether you think it‘s a really relevant or a clear distinction to make.
CARDIN: Well, I think my Republican colleagues believe activism is when the court reaches a decision they don‘t like. Activism is when are you creative on your law where you don‘t follow precedent where you use it to restrict constitutional rights for individuals, where you allow government to have more power and special interests to have more power.
That‘s what this activist conservative court has done. By the narrowest of margins 5-4, they have reversed legal precedent, they had ignored congressional action, and they have restricted the rights of individuals against the abuses of government and against the abuses of special corporate interests.
That‘s a very activist court but it‘s a very conservative activist court.
HAYES: I thought it was interesting because there was a very strange theme the first few days around Justice Thurgood Marshall. You were quite spirited in defense of him. We have a piece of tape I‘d like to roll—
I‘d like you—to get your response to it.
(BEGIN VIDEO CLIP)
SEN. JON KYL ®, JUDICIARY COMMITTEE: Justice Marshall‘s judicial philosophy, however, is not what I would consider to be mainstream. As he once explained, you do what you think is right and let the law catch up.
He might be the epitome of a results-orient the judge.
SEN. JEFF SESSIONS ®, RANKING MEMBER, JUDICIARY COMMITTEE: Miss Kagan has associated herself with well-known activist judges who have used their power to redefine the meaning of words of our Constitution and laws in ways that not surprisingly have the result of advancing that judge‘s preferred social policies and agendas.
(END OF VIDEO CLIP)
HAYES: Aside from sticking up for a local hero from Baltimore, I wonder what you make of the strategic reasoning behind the Republicans seeming attempts to want to kind of rewrite the history of Justice Marshall?
CARDIN: Well, as a senator from Maryland I take this personal because, as you know, Justice Marshall was born in Baltimore. I also take it personal because of Brown v Board of Education. I attended a segregated school, public school, in Baltimore City as millions of children benefited from his Brown v. Board of Education‘s successful arguing that case before the Supreme Court.
Justice Thurgood Marshall was one of the great Americans, one of the great jurists, one of the great legal scholars and he certainly represented what mainstream America needed, and that is a person who would stick up for the rights of ordinary Americans so that everyone could advance in our society.
HAYES: We finally come to a close here. I think there‘s been a general consensus that Elena Kagan has acquitted herself quite well. Though that quote in 1995 from the article when she called the—you know, the proceedings vapid and hollow.
How would you characterize these three days of testimony? Do you feel like you got a better substantive sense? Was it really a kind of debate between the members of the committee about the Roberts court?
CARDIN: No, I think that Solicitor General Elena Kagan really got the
the American people got to know her. She‘s a very bright person. She has a great sense of humor. She‘s extremely capable and she was responsive to our questions. We learned a lot about her views in education and election laws, on religion, on privacy.
I thought that she was very forthcoming to the committee. More so than in recent confirmation hearings. And the American people know that they have a person who will give them a fair shake.
She‘s made that a key part of her opening statement and it‘s something that I believe in and something we needed on the Supreme Court.
HAYES: All right, Senator Ben Cardin from Maryland on the Senate Judiciary Committee, thank you so much for taking some time with us tonight.
CARDIN: Thank you.
HAYES: Coming up, the latest mess BP is dealing with. This one not caused by them. Hurricane Alex is threatening to make it worse. NBC‘s science and environment expert Jeff Corwin joins me live from Pensacola up next.
HAYES: Hurricane Alex is barreling across the Gulf toward Mexico and south Texas with winds up to 90 miles per hour. The storm is expected to hit land later today as a strong category 1 or even a category 2 hurricane.
The eye of the storm is 500 miles away from the oil spill in the Gulf but it is still reeking havoc on containment efforts. BP says so far, they‘ve been able to continue work on the relief wells but 12-foot waves and 25-mile-per-hour winds have forced the Coast Guard to stop skimming operations as well as dispersing chemicals and conducting controlled burns of oil on the ocean‘s surface. Rough seas are also washing up more oil on coasts as far as away as Florida.
Joining me now live from Pensacola is NBC‘s Jeff Corwin.
Jeff, thanks so much. What are the latest news down there about relief efforts?
JEFF CORWIN, NBC NEWS CORRESPONDENT: Well, Chris, good afternoon to you. Here I am on the lovely famous ivory white sands of Pensacola beach in Florida. That is the Gulf of Mexico behind me.
Now normally, Chris, can you see my hand?
CORWIN: Can you see this?
CORWIN: This is what the sand should like—look like. This beautiful postcard perfect sand. Unfortunately, this is what it really looks like this. Can you see that?
CORWIN: This is what is now glazing this entire beach.
Chris, as far as my eyes can see for hundreds of miles along this coastline, we‘re seeing the kiss of death coming from the Deepwater Horizon. And what is really spooky is just hours ago, they cleaned this beach.
But unfortunately the tide‘s come in being pushed by that storm surge and every time a wave laps up in the sand, it brings more oil.
HAYES: Jeff Corwin, thank you so much. That is disturbing report from the Gulf.
Coming up, Bill Clinton and President Obama on different sides in the Colorado Senate race. The White House is quiet.
Clinton backed Andrew Romanoff joins me ahead. And John Boehner defends himself for his ant comment. The DNC has a new ad slamming him for it.
Is this “the fundamentals of our economy are strong” moment of 2010?
My panel responds.
All that plus Putin rips the U.S. on the Russian spy-eress (ph). I love that story. And I have proof that oil and booze don‘t mix. I‘ll explain.
You‘re watching THE ED SHOW on MSNBC.
HAYES: Welcome back to THE ED SHOW.
In the battleground story tonight, the Clinton versus Obama primary take two. Well, sort of. Former president Bill Clinton has broken with the Democratic establishment, including President Obama in the Colorado democratic primary. Clinton is backing Andrew Romanoff over Democratic Senator Michael Bennett. In his endorsement letter, the former president wrote, quote, “We need Andrew‘s leadership in Washington especially now when so many Americans are losing so much.”
Joining me now is Andrew Romanoff, democratic candidate for senate in Colorado. Thank you so much for being on.
ANDREW ROMANOFF (D), COLORADO SENATE CANDIDATE: Thank you, Chris. I appreciate it.
HAYES: Mr. Romanoff, I want to start by asking you, I mean obviously the endorsement is a big deal politically and I think it comes out of a sort of personal relationship you have with President Clinton. But what are the reasons that progressives should be looking to you rather than Michael Bennett in terms of substantive policy? Where is the daylight between the two of you?
ROMANOFF: Sure. I think the reason that so many progressives have logged on to andrewromanoff.com just in the last 24 hours is because they recognize that the oil industry, the big insurance companies, the big Wall Street banks have enough politicians on their payroll. We need a senator for the rest of us. You know, I‘ll give you a quick example. Just a couple weeks ago, the senate had a chance to remove $35 billion in tax breaks from the oil and gas industry and use the savings to reduce the deficit and invest in energy efficiency and conservation. My opponent voted against that plan. And rocketed to the number two spot behind Blanche Lincoln among Senate democrats on the ballot this year as recipients of oil and gas money. I would have voted for the proposal to remove the tax breaks because I believe it is critical for us to accelerate our transition to a new cleaner energy economy.
HAYES: Let me ask you this. And this is a bit out of left field and obviously endorsements are not reciprocal. So, you don‘t have to have agreed with President and everything. But I was watching the financial regulation for today and one of the key bills was the Gramm-Leach-Bliley bill which essentially repeals Glass-Steagall, happened, it was signed by President by Clinton. I wonder if you think looking back if that bill, that deregulation was a mistake?
ROMANOFF: I believe we should restore the Glass Steagall wall of separation between commercial and investment banking activity. I also believe we should prevent banks from ever becoming too big to fail. As I told you, my opponent in this race voted against a proposal to do exactly that. And now serves on the banking committee. Has become one of the top ten recipients of Wall Street cash. I‘ll tell you what, you know, if every progressive listening to this show today logged on to andrewromanoff.com, chipped in $15, $20, $25, we could beat the corporate machine we‘re up against in the special interests that are bankrolling the opposition here.
HAYES: All right. Mr. Romanoff, thank you very much. Kudos for your deft insertion of your URL. And it was a pleasure to have you on tonight.
ROMANOFF: Thanks Chris. I appreciate it.
HAYES: All right. Now let‘s turn to our panel for some rapid fire response on these stories. Will one more republican step up and provide some relief and desperately needed help to people whose unemployment benefits are about to run out? Democrats have two, they need one more but it appears they are all Jim Bunnings now.
Democrats are seizing on House Minority Leader John Boehner‘s likening of the economic to an ant from DNC web videos on YouTube to President Obama hammering Boehner in a town hall in Wisconsin today. Is this the fundamentals of our economy are strong movement 2010? And Tea Party Back Senate Nominee Sharron Angle tries to win in the trivia a little bit in an interview with Nevada Political Reporter Jon Ralston. She‘s been freshly scrubbed by GOP consultants and she no longer wants to privatize Social Security, she just wants to personalize it. Will this late conversion be enough to beat Harry Reid?
With us tonight Laura Flanders, author of “Blue Grit” and host of Grittv on Free Speech TV which you should definitely always watching. And Tim Carney, lobbying editor for the Washington Examiner and author of “Obamanomics.” Thanks for both of you coming on. I‘m used to being on the other side. So, I wanted to automatic follow there. Tim, I want to go to you first. I really wonder, do you think, is there a real reason to block this unemployment extension? I mean, even from a very kind of bedrock libertarian perspective, do you really think the people who have exceeded the 99 weeks are doing it because of misaligned incentives as opposed to an economy that‘s just thrown fallen through the floor?
TIM CARNEY, “WASHINGTON EXAMINER”: Well, one of the first things you have to remember is that Nancy Pelosi who said this democratic Congress is going to pay for everything as we go and that‘s the roadblock that republicans are throwing in the way saying, you have to pay for this. On the other end, you do have even Paul Krugman saying that extended unemployment can lead to the benefits, can lead to unemployment. On this particular issue, I‘m not sure that the jobs are really out there and so that the incentive structure is being thrown out a lot. But it‘s about paying for it, and democrats are not doing that.
HAYES: I‘m going to take that concession and toss to Laura. What do you think?
LAURA FLANDERS: Well, you know, I think that you‘re right. The Nancy Pelosi was kind of backed herself into a corner. What we really need is a government job creation scheme. Government job. Rooseveltian kind of plan. With that off the table, they‘re in the situation of hoping that some GOPer will wise up. Do we really want to be defending the use of taxpayer dollars to protect banks but leaving the unemployed who are unemployed through no fault of their own to fend for themselves? You know, it‘s going to be an interesting midterm season if the GOP really continues to resist this. The painful thing is that people are hurting day by day that the struggle goes on.
HAYES: Well, it‘s interesting, I mean, It looks like, I‘m going to roll a piece of tape here from Sharron Angle. She‘s does seem to be, I mean, whatever she‘s backed off on some other comments, she does seem to be going to the mat on this unemployment issue. Take a look.
(BEGIN VIDEO CLIP)
JOHN RALSTON, NEVADA REPORTER: You‘re saying that there are tens of thousands in the bed, they‘re sitting on their couches, they are all spoiled, they don‘t want to go out and get a job and I‘m going to cut off their benefits. That‘s your attitude.
SHARRON ANGLE, GOP SENATE CANDIDATE: No, come on, John.
RALSTON: You said they‘re spoiled.
ANGLE: I said that it had spoiled our citizenry. That‘s a little different. They‘re not spoiled. What has happened is the system of entitlement has caused us to have a spoilage with our ability to the go out and get a job.
(END VIDEO CLIP)
HAYES: Tim Carney, we are all welfare queens now I suppose. What do you think of how spoiled we are? I personally think the military industrial complex is spoiled. What do you think?
CARNEY: Yes. You know, I don‘t get upset about regular welfare as I do about corporate welfare.
HAYES: That‘s why we have you on, buddy.
CARNEY: But if I‘m Sharron Angle, I go after all the job killing proposals that Harry Reid has such as the Obama care and the global warming stuff. So, I mean that she‘s got to, you know.
HAYES: But don‘t you think this is bad politics—I mean, honestly, what do you think of the politics of this?
CARNEY: Yes, I don‘t think it‘s great politics. This is what happens when we get Tea Party candidates. This is why it‘s funny how so many of the guys on the left go after Rand Paul at the first place, go after Sharron Angle, you are making sure that every future republican is an establishment republican. Not for you guys are doing.
HAYES: Laura, what do you think?
FLANDERS: I mean, this is the person, Sharron Angle who looks at the oil gushing on the coast of the gulf coast and says, let‘s do away with the EPA. It‘s entirely in keeping but she would look at the third depression coming our way and say, the unemployed don‘t need any help from us.
HAYES: I wonder what you guys think about this. Speaking of bad politics. Obviously, you know, anytime you start getting e-mails from the DNC about something that a republican just said, you know that everyone over there thinks they‘ve got the political upper hand. And that‘s the case with this ant comment from Boehner. In fact, the president himself responded today which I think is a little out of ordinary here. Take a look at this piece of tape.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The leader of the republicans in the house said that financial reform was like, I‘m quoting here, using a nuclear weapon to target an ant. That‘s what he said. He compared the financial crisis to an ant. Maybe I‘m confused. Did you think that the financial crisis was an ant and we just need a little ant swatter to fix this thing?
(END VIDEO CLIP)
HAYES: Tim, because you‘re honest, I wonder do you think Boehner got it right. Do you think the financial reform is actually an overreaction?
CARNEY: No, I think that what‘s going on is the democrats are targeting an ant while termites are eating the house. You have Goldman Sachs said, we will be a prime beneficiary of this bill. Fannie Mae, Freddie Mac completely left alone. So...
HAYES: They‘re delisted.
CARNEY: And so, the problem here is that they are going after the ants but there are other problems going on. It‘s not a nuclear bomb, I don‘t think it has a dramatic effect on any of the big banks and I think that‘s part of the reason why you don‘t see Goldman, you don‘t see the hedge funds opposing it, now that you‘ve got the $19 billion tax pulled out of it.
HAYES: Laura, what do you think?
FLANDERS: I think if we‘re going to talk ants and nukes in our crisis right now, they‘ve got it the wrong way around. This is like sending this financial reform unfortunately while it has some good parts, you talk about it earlier, it is like sending an ants to, you know, diffuse a nuke. That‘s the problem.
HAYES: Very good. You guys both get awarded metaphor points. Laura Flanders of grittv and Tim Carney from the Washington Examiner, I really appreciate you guys coming on.
CARNEY: You‘re welcome.
FLANDERS: Thank you Chris.
HAYES: All right. Coming up, Washington has a very full plate these days. Unemployment, war strategy, on going oil spill. But there is something else I think needs to be back in the spotlight. That‘s next.
HAYES: Let us know what you think. Tonight‘s text survey question is, do you think Senator Scott Brown is trying to kill financial reform? Text A for yes and B for no to 622639. We‘ll bring you the results later in the show.
HAYES: Since Ed is on vacation, I‘m putting a spin on his Playbook and calling it my Nerd Book this week. So, in tonight‘s Nerd Book, I‘m sounding the alarm on something, I think we all need to pay attention to. A new report shows that nearly one out of every three homes sold in the first three months of the year were foreclosures. That‘s slightly down from the same quarter last year but in a normal market, foreclosed homes only make up between one and two percent of all sales. The scourge of foreclosures continues wreaking havoc not just in people‘s lives but by blighting neighborhoods and creating massive legal inefficiencies in the housing market. And yet, somehow, there doesn‘t seem to be a lot of motivation in Washington to put a stop to it.
Joining me now for more is Jim Carr, the Chief Business Officer of National Community Reinvestment Coalition. Jim, thanks so much for joining me.
JIM CARR, NATIONAL COMMUNITY REINVESTMENT COALITION CEO: Thanks, Chris. My pleasure.
HAYES: Jim, we‘ve seen the foreclosure crisis kind of continue and continue. It‘s been a little off the radar screen. I want to start by asking, what grade would you give the White House, the Obama administration on their foreclosure mitigation efforts?
CARR: Well, the grade I would give the program that‘s put into place which is the home affordable modification program, I‘d have to say that program is failing the test. As of right now, there have been about maybe 340,000 permanent modifications, Chris. And just last month alone and that‘s in the entire year since last March. So, for a whole year about, about 343, 350 permanent modifications.
HAYES: Wait a second. Wait a second. Three hundred and forty three and 350, that‘s it? Not 350,000?
CARR: Three hundred fifty thousand, no, 350,000. Sorry.
HAYES: OK, OK.
CARR: But last month, thank you, but last month alone, we had 322,000 foreclosures. Since the beginning of this year, we‘ve had already more than 1.6 million new foreclosures, we‘re on route to three million this year. So, clearly that program is not up to par.
HAYES: So, we‘re looking at these modifications happening in the neighborhood of ten percent of the foreclosures that we have.
HAYES: So, what should the president be doing? What should Congress be doing if the current program that‘s in place to do these workouts and modifications isn‘t working, what is a plan for a solution that would work?
CARR: Well, Chris, from the very beginning, it was very clear the foreclosure crisis had a number of dynamics going on. We knew that for example, program elements such as having the program be voluntary and letting the services volunteer to participate was a problem. We had seen that all the way through the Bush administration. It‘s still a volunteer program. When the half program was put into place, it didn‘t have penalties to actually compel the services who did volunteer to be in the program to actually comply to the program rules. So, we‘ve had a host of problems with compliance with the program.
At the same time, the problems of foreclosure have morphed since the program was put into place. So for example, foreclosure is now driven principally by unemployment. There is no real program in place right now to deal with the unemployment components. There have been—they‘ve introduced some program elements. They‘re not fully in place yet. Principal reduction has been a major issue for more than a year now. The rules on principal reductions still are not in place for the half program.
HAYES: So, let‘s talk about principal reduction for a second because I want to make sure the viewers are with us. I mean, you know, the mortgage has two components, it‘s got the interest on the loan, it‘s got the principal which is, you know, the actual value of the home that you paid for. The point is that it seems like to get to a place where it‘s sustainable for a lot of people to keeping their homes, banks are going to have to write down the value. That‘s what you mean by principal reduction.
CARR: That‘s exactly correct. And the fact of the matter is the banks receive hundreds of billions of dollars in bailout and the borrowers didn‘t. And the fact of the matter is that every failed loan was a compact between a bank or an investor and a borrower. And putting the money on the investor side has helped the banks recover. But it hasn‘t done anything to stem the foreclosure crisis. So we need to address the fact that many homes are severely upside down and to make them actually affordable to the borrower, we need to reduce that principal. Now, here‘s the interesting thing. In many cases Chris, people could actually sustain their home, you know, avoid foreclosure with basically a 30 percent, a 40 percent write down in the value of the loan. But instead, the services are allowing those loans to go to foreclosure at which point in many cases, these homes are worth less than or about 40, 45 percent of the value. So, the reality of it is that allowing consumers to modify these loans to make them affordable is actually in the best interests of the investors and that‘s not happening.
HAYES: Last question real quick here. I guess as a practical matter, what does the president have the authority to do independent of Congress on things like, you know, going after the principal or write downs or does there need to be statutory, some legislation passed in Congress that could make that happen?
CARR: Well, there needs to be statutory changes passed. And to be fair to the White House and the president, they actually proposed one of the most powerful tools to stem this foreclosure crisis. Would have been to reform the nation‘s bankruptcy laws to allow a bankruptcy judge to weigh in and create a modification that was suitable both to the investor and the borrower. The president asked for it. Congress has rejected it. And Chris, what‘s interesting about that is that alone could have addressed 30 percent of the foreclosure crisis at absolutely zero cost to the American taxpayer.
So, instead, we have these very expensive alternative approaches rather than going to bankruptcy modification and why is that? Because the banks don‘t want it. We need to really challenge the status quo on the banking system and really put into place mechanisms to require modifications where they‘re in the best interests of the consumer and the investor. And to allow bankruptcy judges to weigh in, it would cost no money at all. And final thing, Chris, we need jobs. And Laura, in your previous segment pointed out the fact that we need jobs, Chris. If we don‘t get jobs going, we‘re going to see this foreclosure crisis continue and potentially expand.
HAYES: Jim Carr from the National Community Reinvestment Coalition, I really appreciate you coming on tonight.
CARR: Thanks Chris. My pleasure.
HAYES: A couple of final pages tonight. Russian Prime Minister Vladimir Putin is slamming American law enforcement for breaking up that alleged Russian spy ring which the “The New York Post” is loving, where 11 suspected spies were arrested. Putin brought it up with President Clinton on a visit to Moscow yesterday telling him, “You have you to come to Moscow at the exact right time. Your police have gotten carried away, putting people in jail.” Putin had no specific comment on the accusations but Russia has acknowledged the suspects are Russian citizens.
A group of progressive and environmental groups are launching an $11 million ad campaign for clean energy future. The first one goes right after Senator Ben Nelson. It‘s pretty shocking and funny stuff. Take a look.
(BEGIN VIDEO CLIP)
Unidentified man: We pulled one out of the water this morning.
Completely covered in oil.
Unidentified woman: Oh, he‘s covered.
Unidentified man: The name Senator Ben Nelson.
Unidentified man: Senator Nelson‘s record is a little oily. Big oil has showered him with hundreds of thousands in campaign cash. And when it came time to hold polluters accountable, Senator Nelson voted no.
Unidentified man: We‘re trying our best out here but until he supports clean energy climate legislation, I don‘t think we can save him.
(END VIDEO CLIP)
HAYES: Spot was sponsored SEIU votethat.org (ph), the League of Conservation Voters and the Sierra Club. Finally here‘s proof oil and whiskey don‘t mix. British oil futures trader Steve Perkins bought seven million barrels of crude last year and single-handedly pushed crude prices up two percent. The problem, he did it during a drunken binge where he was reportedly blacked, he was trading from home. The financial services authority barred him from the UK securities business for at least five years. I‘ve heard some good stories about drunk people but this one might be the best.
And finally, we have a winner on Wall Street today. Team USA Star Landon Donovan and his coach Bob Bradley rang the clothes in bell today at the New York Stock exchange. At the wall clock, Donovan scored three of team USA‘s five goals including this goal heard round the world against Algeria.
Coming up. Sharron Angle finally met the real press. And we got the same results. She said something dumb. She wants to cut unemployment benefits. I think she actually speaks for a lot of people that agree with that, which is scary. Katrina Vanden Heuvel, my boss and leaders, joins me on that, next.
HAYES: Senate republicans have successfully blocked the extension of unemployment benefits time and time again as we have been discussing on this show. But Senate Majority Leader Harry Reid is still trying to get it done. Today he acknowledged, he may not have the votes to get a bill through before the July 4th recess. Meanwhile, Reid‘s opponent this November, Sharron Angle finally came out of hiding and provided her take on unemployment benefits.
(BEGIN VIDEO CLIP)
ANGLE: System of entitlement has caused us to—to have a spoilage with our ability to go out and get a job because they have to enter at a lower grade and they cannot keep their unemployment. They have to make a choice now. We‘re making them make a choice between unemployment benefits and going back to work. What we need to do is make that unemployment benefits go down, not just completely remove the safety net from them while they go out and go to work.
(END VIDEO CLIP)
HAYES: Hear that, folks? Go out and get those crappy jobs and make Sharron Angle happy. She‘s making it clear that if she gets to Washington, she will be in lock step with her republican colleagues, in fact, she‘s giving voice to what they really want to say.
Joining me now is Katrina Vanden Heuvel, Editor of “The Nation.” The woman who keeps me from joining the ranks of the unemployed. Katrina, how are you doing?
KATRINA VANDEN HEUVEL, THE NATION: Grill away, Chris. Just don‘t ask for a raise.
HAYES: I‘m going to really grill you tonight, boss. You know, I wonder what you think the kind of tipping point is going to be on this. It‘s gotten to this point where I don‘t think—I didn‘t think it would have gotten to this point that they think they can manage this politically stonewalling this. And I wonder what you think could be the tipping point. And I asked Senator Brown that earlier.
VANDEN HEUVEL: Well, I mean, I think we have a jobs crisis, not a deficit crisis in this country. It‘s unusual to see someone like Sharron Angle who is incoherent as well as heartless. She should speak to one of the 300,000 teachers who have gotten a pink slip or one of the more than a million who are losing their unemployment benefits and cobra health coverage. I think part of the problem, Chris, is too many of the elites, too much of the establishment media, too many of the pundits has bought into this line that debt and deficits are the greatest fear we have. So we have a political debate that is more about posturing and pandering than about the fact that the greatest threat to our economy is unemployment and the failure to rebuild our states and cities. So, I think we need a new debate in this country but we need to understand that there are lives in the balance.
HAYES: Yes, the math that you refer to Annie Lowrey, who is a fantastic writer of “The Washington Independent,” she calculated out how much the unemployment bill would add to the debt. And I sort of stopped breathing after like nine or ten zeros after the decimal.
VANDEN HEUVEL: But Chris, you know, I mean, the key thing is we need in the short term to spend.
VANDEN HEUVEL: And we spend in a productive way. We spend to invest in the future of this country and the future of our children. And the future of our safety and the future of health and the well-being of this nation. What is truly scary as well is that the whole world is now on this austerity kick. We saw this at the end of the 1930s but it is more dangerous today because at least then for better or worse, the Europeans were building up to fight World War II. Today the entire world is withdrawing from stimulus. And that is going to be on the backs of working people around the world in this country. So, I think we need to fight hard.
The good news, Chris is I met with someone this afternoon who you wrote about for The Nation, George Gale, National People‘s Action. There are groups coming together, street heat, but also popular mobilization, working inside and outside, La Raza, NAACP, SEIU, Center for Community Change, others are mobilizing in October for a March for jobs. There needs to be attention paid and our president today in Wisconsin, he speaks well. We‘ve got to hold him accountable. He said, the greatest danger is that we don‘t reverse the damage of this great recession. We‘ve got to put people back to work. Let‘s hold him to that.
HAYES: Yes, and I agreed. I thought the rhetoric today in Racine was really good.
VANDEN HEUVEL: Was very good.
HAYES: Yes. And, you know, in those environments when he‘s actually being combative and putting out kind of where the obstacles are, it‘s also worth remembering, I‘m interested about this sort of mobilization around jobs. Because I think you‘re right that there has to be pressure put. And part of it is that, you know, the unemployed I think are—even though they constitute such a large percentage of the populace at this point, they still are marginalized by this notion that we‘ve had for 20 or 30 years that, you know, there is something kind of indolent.
VANDEN HEUVEL: Well, you heard it from Sharron Angle.
HAYES: Exactly. Right.
VANDEN HEUVEL: It was heartless, it was wrong. The greatness of this country is giving people an opportunity to move through, the mobility is dying, Chris, as you know. It was interesting in Racine where Obama was asked about mortgages and your previous guest was so right. If we don‘t get jobs right, it metastasizes through our society. We‘re going to see more foreclosures about education and access to education, about what we can do to build our infrastructure. And you know, President Obama responded wisely but he needs to respond to the urgency of this moment because we do need to understand that the health of this country. The pew study came out yesterday, it said that of the 13 recessions this country has faced, none since the great depression have been of the breadth, depth and length, so punishing in that Troy, ca.
HAYES: On that note, I‘m going to say good-bye to our fearless leader of the “The Nation,” Katrina Vanden Heuvel. Thank you so much.
VANDEN HEUVEL: Thank you Chris. Thank you.
HAYES: Tonight, in our text survey, we asked you, do you think Senator Scott Brown is trying to kill financial reform in its quicker? Ninety seven percent say yes, three percent say no. Thanks for watching. I‘m Chris Hayes of “The Nation.” “Countdown” is up next. No, “HARDBALL” is up next.
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