'Up w/Chris Hayes' for Sunday, May 6, 2012
Read the transcript to the Sunday show
Guests: Ann Lee, David Frum, James Fallows, Catherine Rampell, Melinda Liu,
Raj Date, Alexis Goldstein, Eric Schneiderman
CHRIS HAYES, HOST: Good morning from New York. I`m Chris Hayes.
Khalid Sheikh Mohammed and four other 9/11 defendants refused to
enter pleas yesterday before a military tribunal at Guantanamo Bay. The
next session for the tribunal will be in mid-June.
And France is voting today, polls suggesting President Nicolas
Sarkozy may be out. And that voters angry about the financial crisis and
unemployment may elect their first socialist president in 17 years.
But I want to start with the big political story of the week. What
we talk about when we talk about China.
This week, in China, a tense and awkward bit of sublimated
confrontation between the American and Chinese governments after blind
Chinese lawyer and dissident Chen Guangcheng escaped from house arrest,
fled to Beijing and enter the U.S. embassy, seeking refuge. This unfolded
on the eve of Secretary of State Hillary Clinton`s trip to China, making
the situation all more fraught.
And, first, it appeared as if the U.S. and China had cut a deal to
release Chen, with assurances that he would not be in prison or harassed.
But that deal fell apart. Chen`s friends and allies took to Twitter to
express concern that he would be double-crossed.
And now, it looks like China will grant Chen a visit to come study
law in the U.S.
But the basic contours of the story have triggered a predictable
round of campaign recrimination. It`s hard not to view the tale in deeply
moral terms. Here`s a lawyer taking on the powerful Chinese state for its
forced abortions and sterilizations, who is so desperate for freedoms, he
climbs a wall, even though he`s blind, badly injures his foot and limps his
way to the U.S. embassy, hoping against hope to be welcomed into the free
world, only to find himself caught up in the delicate, torturous
calculation of interest that characterizes the two countries` relationship.
And so, it`s more or less a lay-up for Mitt Romney to take to the
microphones and stay stuff like this.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Some of the press reports
coming from China suggest that we may not have been as effective in
protecting his freedom as we should have been. And if those reports are
true, that would be a dark day for freedom.
(END VIDEO CLIP)
HAYES: The stories we tell ourselves about China tend to be closely
bound up in our own myths about American exceptionalism and fears of
American decline. Which means that in American politics, the nation of
China with its 1.3 billion people serves as a kind of funhouse mirror, in
which we see our own fears and neurosis about what we see reflected back at
Both sides of the political spectrum see in China a grim, dystopic
vision of where the United States is headed and what it might be one day
For those on the right, particularly the religious right, China is
the natural endpoint of America`s slide towards a godless nanny state, a
tyrannical, authoritarian, communist regime that suppresses religious
expression and forces women to have only one child.
For the left, China is the corporatist neoliberal nightmare that
we`re in the process of becoming -- a place where the force of the state is
used to suppress dissent and aid the oligarchs who run sweat shops where
millions of poor workers with rights working in grinding misery to produce
goods for us to consume.
For establishment elites like Tom Friedman, China offers a model to
be feared and emulated, an efficient technocratic burg that can win the
future without dealing with the frustrating roadblocks of democracy and
progress. When China needed to relocate 1.4 million people to build the
Three Gorges Dam, they just did it.
Because China confound our domestic ideological assumptions and
divisions, the only reliable rule of our domestic politics is that the
party out of power will happily condemn Chinese abuses and taunt the party
in power for its cowardly appeasement.
Here`s Bill Clinton during the 1992 campaign.
(BEGIN VIDEO CLIP)
BILL CLINTON, THEN-PRESIDENTIAL CANDIDATE: I would be firm, I would
say if you want to continue most-favored nations status for your
government-owned industries as well as your private ones, observe human
rights in the future. Open your society.
(END VIDEO CLIP)
HAYES: Less than two years later, President Clinton renewed China`s
most favored nations training status over strenuous congressional
Then in 2000, George W. Bush had to say.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, THEN-PRESIDENTIAL CANDIDATE: The current president
has called the relationship with China a strategic partnership. I believe
our relationship needs to be redefined as one as competitor. Competitors
can find areas of agreement. But we must make it clear to the Chinese that
we don`t appreciate any attempt to spread weapons of mass destruction
around the world.
(END VIDEO CLIP)
HAYES: Of course, during Bush`s tenure, the trade deficit with China
hit a new record, his administration tried to tamp down Taiwan`s anti-
Beijing rhetoric and even attended the 2008 Olympics there with Mitt
Romney, who even before the Chen Guangcheng episode also made getting tough
on China a recurring campaign theme.
(BEGIN VIDEO CLIP)
ROMNEY: I will China as a currency manipulator.
We`ve got to clamp down on nations like China that are cheating,
stealing our intellectual property.
The time has come for a president that will stand up to China.
(END VIDEO CLIP)
HAYES: And we can expect that were he to be re-elected or elected,
Romney would go inevitably the way of Clinton and George W. Bush, in the
careful and diplomatic Obama administration. Because as much as we`re
convinced of our own might and influence, we need to recognize head on that
the United States government will not be the ones to change China, not be
the ones to bring democracy or protection of rights or accountability to
its people. The Chinese people will do that.
And if there`s a hopeful sign, it`s that all over the country,
Chinese people are pushing back against their government and demanding
accountability from their leaders. From the estimated 500 protests there
every day, to the new Internet-savvy dissidents who have found increasingly
ingenious ways to evade censors and the great firewall like these Chinese
activists who posted pictures of themselves wearing sunglasses on Twitter
in solidarity with Chen.
They`re going to be the ones to make the new China. Not Barack
Obama, not Mitt Romney.
Joining me today on the issue of American policy on China: we have
Ann Lee, author of the book, "What the U.S. Can Learn from China: An Open-
Minded Guide to Treating Our Greatest Competitor as Our Greatest Teacher,"
also a senior fellow at the Demos think tank and as a visitor professor of
Peking University, and formally advised the Chinese government during the
David Frum, author of the new book, "Patriots," which is his first
fiction foray, contributing editor at "Newsweek" and "The Daily Beast" ands
the former speechwriter for the man we just saw, former President George W.
James Fallows, author of the forthcoming "China Airborne," which
publishes in a week if I`m not mistaken, a national correspondent for "The
Atlantic" magazine and former speechwriter for President Carter.
Ad "New York Times" economics reporter returning to the program,
It`s great to have you all here.
All right. Let`s start with what we saw this week. First, I think we
should stipulate before the discussion is that the facts are incredible
difficult to discern, partly because most of this is very much locked down
by the U.S. and China and the U.S. government hasn`t been particularly
forthcoming about what the details are.
And then we`re getting these -- Emily Parker wrote this great piece
in the "New Republic" about the new factor, which is that what was formerly
would have been a one-to-one diplomatic, kind of behind closed door deal
was being subverted and advertised and undermined and published on Twitter
because Chen was talking to his friends, who were taking to the Internet --
and reporters were saying like, oh, wait a second, Chen is telling his
friends who are going on Twitter saying that`s not the deal at all. I
don`t like this.
And, Jim, that struck me as a new dynamic in this very tense and
awkward relationship that we`re seeing constantly seeing played out.
JAMES FALLOWS, THEATLANTIC.COM: And you opened the segment saying
what we talk about when we talk about China. And what was charming to me
or striking in the intro and also this episode is when we pretend to be
talking about China, we`re talking about things in ourselves.
FALLOWS: For example, I bet you would agree with me that most of
what`s wrong with the U.S. right now would be exactly wrong with the
whether China existed or not.
FALLOWS: And yet we project our fears on China.
And in the Chen case, the instant assumption that the Obama
administration had mishandled this or on the other hand, they`re being
tough, had almost nothing to do what going on on scene, which is very
murky, very fast-moving. We still don`t know the exactly the tensions
being played out on the Chinese side that led to this apparent flip-
flopping from the Chinese government`s position, having to deal
HAYES: There`s also interesting political subtext in this, which is
that -- you know, as I said before there are different parts of the
ideological spectrum in American politics that have different reasons to
loathe, fear China. And what`s interesting politically here in terms of
the political balance is much of the work that Chen was doing was against
the policy that`s most hated by Christian conservatives on the political
right, which is One Child Policy and forced sterilization, things like
that. So it has kind of and it has a sort of political resonance among
Republicans and the base of the Republican Party for that reason, right?
ANN LEE, AUTHOR, "WHAT THE U.S. CAN LEARN FROM CHINA": Absolutely.
I think that he becomes this lightning rod where people can use him as a
way to project their political platforms. And we have to remember that
this is just one individual. And the relationship between U.S. and China
covers so many issues and we have billions of people at stake and we need
to think about the bigger picture. And not just on his individual case --
yes, I understand that.
HAYES: This sounds like a tacit endorsement of just cutting Chen
LEE: No, but honestly, he is a great human interest story. And so,
it`s great he`s getting a lot of publicity. My heart goes out to his
But let`s not forget that we have major economic issues to work
through, environmental issues to work with China on. And so, these are the
things that we want to not forget about and not let certain political
people to take charge and reinvent the conversation.
HAYES: Yes, Jim?
FALLOW: And just to add one other thing about that as Ann says, you
know, in the political right this was seized as though he must be a pro-
life guy, we`re for him. In fact, he`s a loyal communist citizen. His
appeal is to hold the communist government to its own communist standards.
That`s why I think he`s popular among a number of average people in China.
HAYES: In fact, what was fascinating about his case is that him
taking on the policy of forced sterilization, and in some cases forced
abortion, they`re incredibly gruesome stories. He was taking them on after
the practices had been outlawed by the central party in Beijing and was
still being done by the local party, and much of his activism actually has
been in this fascinating way, going over the heads of the local officials
to the central party, forcing the local officials to live up to the laws
and pronouncements and the policies of the central party. And that`s part
of the reason that his life is hell essentially in the local province in
which he lives.
LEE: Yes, because he actually trusted the central government to be
on his side, actually. And I think a lot of people in America don`t
understand that there`s a central government and then there`s the local
government. And most of the corruption happens at the local government
level, not that it doesn`t exist at the central government level as we`ve
seen with Bo Xilai.
But that is where the majority of the protests happen. And so, this
is another way of to shed a light on China, and how complex the politics
HAYES: Bo Xilai, just so folks know is the mayor of a city called
Chongqing, which is actually the biggest city in China. It`s a huge
regional area wrapped by Three Gorges Dam. He was a rising star, profiled
in "New York Times" and just had a spectacular downfall in which
essentially he`s been kicked out of the party for charges of corruption.
We haven`t heard from him since that announcement.
FALLOWS: And to filibuster this one more second.
HAYES: Please --
FALLOWS: As Ann was saying, you can imagine different circumstances
in which the central government decided to defend Mr. Chen. You know, a
couple of months ago, there was an uprising in a province in southern China
about local abuses. And the central government decided rather than
cracking down on them, they would stand up for the rights of this local
people. So, you could imagine the central government having played this
differently if the balance between the foreign ministry and the security
apparatus, turned out differently from what it is.
CATHERINE RAMPELL, NYTIMES.COM: If you look at local papers,
national papers in China. You`ll often see stories about local officials
getting imprisoned for corruption and that sort of thing.
HAYES: Right. And there`s also tremendous kind of publicity and
propaganda victories to be garnered by the central party in appearing to be
on the side of people against the corrupt locals.
DAVID FRUM, "PATRIOTS": Chris, you and Jim have agreed when we talk
about China, we`re usually talking about the United States.
FRUM: And you say that as if it`s a bad thing.
FRUM: I think it`s a very good thing. We have seen a collapse of
government standards in this country over the past 20 years. We are much
more indifferent to the situation of ordinary Americans. We have been much
more indifferent to the competitiveness of the country.
I don`t think it`s coincidental that that`s a period where the United
States have felt invulnerable to a great power challenge. And the
existence of a great power challenge has been one of the things that has
always forced social reforms in the United States. So, you don`t want to
lose sight of China because --
HAYES: It will keep us on our sort of democratic aspirations.
FRUM: Because it makes us better. It`s what -- in a most of the
things we need to do, as Jim said, to be competitive, are things you would
do China or no China. In a free trade world, actually it`s -- you know,
the idea of countries competing with each other is kind of an illusion.
FRUM: But it`s a useful illusion, it makes the United States more
focused on national savings that it would be and it makes us less ready do
write off the bottom two-thirds of our country than we would otherwise be.
HAYES: Barack Obama -- I think the reason the president has used
China rhetorically in precisely that way, as a kind of way of reminding us
what we should be investing in.
We`re going to go live to Beijing. I want to talk to a reporter who
has known Chen for more than a decade, and got the first interview with him
when his case became an international crisis, right after this.
HAYES: I want to bring Melinda Liu, Beijing bureau chief for
"Newsweek" and "The Daily Beast," who recently interviewed Chen during this
ordeal, and joins us today from Beijing.
Melinda, thank you so much for joining us.
MELINDA LIU, NEWSWEEK/THE DAILY BEAST: Hi.
HAYES: Can you give us the latest updates? There`s been a lot of
back and forth, it`s been difficult to track the details. Where is Chen
now? And how confident is he and how confident are you as a reporter that
what has been reported was that the Chinese government is going to give him
the visa paperwork to come study in the U.S., is actually going to be seen
LIU: Chen is still at the hospital where he has been seeking medical
attention. And he`s in a real good mood today, seems optimistic that this
thing -- this deal will really happen.
I think the deal will happen, I think he will get a Chinese passport
and an American visa to go to the States.
But I still have big questions about the case, including, how long
will it take to get him there? And especially, will he be able to come
back? And also, what happens to all his friends and relatives who will
presumably be at great risk of retribution, especially after he`s gone.
HAYES: That seems the big, the big sticking point and one of the
sticking points that emerged in the course of whatever details we`ve
learned about the negotiations -- which was that he has a wife and he has
two children and obviously other family members, kin and friends, and if
I`m not mistaken, some of whom have already been subjected to maltreatment
at the hands of the local authorities.
What is your sense of what`s going to happen to his wife and family?
LIU: I think his wife and two children will be allowed to go with
him to the States. I mean, look, this is a blind man. His wife has been
his interface with the outside world, so it would be cruel to only let him
But he -- his mother is still here and he`s very worried about her.
He`s got a brother who has been detained. He`s got a nephew who may -- who
is actually missing and may face criminal charges, because he got very
upset, is accused of attacking someone.
And then, all the people who helped him, what about them?
The weird thing is, driving him from Shandong to Beijing should not
have been a crime, because he was supposedly let out of prison. He had
served his time. So, his house arrest since September 2010 was extra-
legal. It wasn`t according to law at all.
HAYES: That`s the really important point, because it`s been reported
in the press here that he was under house arrest. But that house arrest
was informal retribution from local authorities who wouldn`t let him move
about at this free will. There was no actual sentence of a house arrest.
I want to read something from "The Beijing Daily" because I want to
get a sense of how this is playing in China, what the coverage has been
like, people`s awareness of the issue. "The Beijing Daily" calls Chen an
American pawn, said, "This so-called rights defense hero has been packaged
by the United States and western media and given an eye-catching political
label and set up as a representative figure against society and against the
system. Chen Guangcheng has already become a tool and a pawn of American
politicians seeking to blacken China`s image."
Is that more or less in line with the tenor of coverage of his case
in China right now?
LIU: Well, in terms of the mainstream media that`s been the only
coverage. I mean, you know, his flight, his dramatic flight into the
embassy and all that, there was no coverage in the mainstream media until,
you know, this name-calling.
However, the, the blogosphere, microblogging, especially Weibo, that
is less easy to censor, less easy to control. And so, there have been a
lot more positive and complimentary tweets and things about him.
So, I would say the Chinese public is probably split and confused
about what the case is all about.
HAYES: Melinda Liu, Beijing bureau chief for "Newsweek" and "The
Daily Beast," had just interviewed Chen. Thank you so much for your time
this morning. I really appreciate it.
LIU: Thank you.
HAYES: I think the last detail strikes me as pretty interesting and
important, which is the fact that the Internet has made it harder to keep -
- to have a monopoly on information in these cases.
FALLOWS: There`s a fascinating detail about the quote you were
reading to Melinda, which is that the national media in China basically
weren`t covering the story, and the abject burden was shipped on to one of
local papers in Beijing. And one of them last night in its Twitter, Weibo
feed was saying we`re sorry. We`ve been put in this awkward position.
Later in the show, I`ll call it up --
HAYES: Really? Apologizing for their own propagandistic tone?
FALLOWS: Yes, exactly.
FALLOWS: They`ve been forced to take.
HAYES: I want to play a quick -- to get back to the theme of the way
that China looms in the American imagination, I want to play a quick
montage of some of the kind of congressional ads or political ads that
feature China as the menacing threat. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Once upon a time, America became its own worst
enemy. With all their money ran out, they capped spending, out of control.
UNIDENTIFIED MALE: Is Baron Hill running for Congress in Indiana or
China? Baron Hill supported the $800 billion failed stimulus package that
created renewable energy jobs in China.
UNIDENTIFIED FEMALE: Thank you, Michigan Senator Debbie Spend-it-
now. Debbie spends so much American money, you borrowed more and more from
UNIDENTIFIED MALE: America tried to spend and tax itself out of a
great recession. Of course, we owned most of their debt, so now they work
(END VIDEO CLIP)
HAYES: Super racist. All right. Let`s -- let`s talk about why
that, why people that make political ads think that is going to be an
effective tool, on whether or not it is, and the gap in opinion between
average voters and people that are in government and in big business after
we take a quick break.
HAYES: We`re talking about the relationship between U.S. and China
in the wake of the very dramatic Chen Guangcheng case in China this week.
Ann Lee, you wrote a book called what the U.S. can learn from China
and you`ve taught in China and you speak fluent mandarin I believe and
Cantonese, right, both? There`s a perception gap of folks between how they
think of China and this threatening menace, but also sort of being envious
of it, because they seem to have their act together and we don`t have our
What do you think accounts for that gap between people that are
actually working with China on a day-to-day basis and those that see it
from a distance?
LEE: Sure, I think the folks who work with the Chinese understand
how complex the system is. And that the central government leaders are
really trying their best to move reform forward, to try to lift a lot of
people out of poverty. And so, they don`t see China as a threat.
However, the people who have never had any experience with China,
they often are fearful of the unknown. And certain people who are in
establishment and power, would understand this fear and like to capitalize
on it, because I think there`s a vested interest in making China look bad
so that they themselves don`t look bad.
HAYES: But, don`t you think -- I want to push back a little bit. I
feel there is, you`ll see a lot of praise of China from folks like Tom
Friedman and it always seems to dovetail with an anti-democratic strain
that runs through a certain element of the American elite, which is that
the problem in America is that we have too many of these ideologues who are
yelling at each other. In China they can just get things done. It always
seems to be revealing of a fairly dangerous skepticism of democracy itself.
LEE: Well, the Chinese, I don`t think see themselves as un-
democratic necessarily. We might spin it that way. But in fact, they see
themselves as being quite democratic in that they`re helping the common
interests, because if you gave the vote to the people, what would they
want? They would want to put food on the table.
LEE: The right to eat is a democratic human rights. And the fact
that they`ve been able to lift so many people out of poverty and enable
them to make a living, a decent living, and put food on the table is
frankly quite democratic. And so --
FRUM: And, Chris, you shouldn`t allow your feelings about Tom
Friedman to shape your views about China.
The fact is China is growing richer. Wealth is power. And a 21st
century China is more powerful, very different kind of 21st century than
one that is dominated by traditional liberal democracies. It will be run
by different rules and we will find it more uncongenial.
And those campaign ads you showed, you may dislike the language of
them, but they`re speaking to something real. The experience of decline is
a true experience for millions of Americans. They are worse off.
HAYES: That`s true.
FRUM: They are worse off than their parents were.
HAYES: But that`s conflating decline as decline in wages and decline
of the great power in the U.S.
FRUM: People are looking for language to express this. And language
that is effective in -- we have shown an amazing willingness to live with
absolute declines in the living standards of very large numbers of people.
If you`re trying to get people to focus on that in a way that the
political system acts on saying, this will also translate, as it may, into
decline of American power vis-a-vis China in a much less congenial 21st
century. Now we`re talking in ways that will influence the American elite
and that they will hear.
I think that is a good thing, because I would like to live in a 21st
century world order totally dominated by the United States, one that shares
power with China because it will be much less comfortable for everybody
with human values.
FALLOWS: The use of foreign models has been around the world and the
United States, one of many tools you can use to motivate people for change.
So, I approve of the use of China in that way, if it spurs us into doing
things better. I actually like the Chinese professor add from the 2010
election cycle, because I though it was a not particularly ominous version
of the Chinese menace.
And so, if we talk about China in a way that what we say, they solved
problem X, Y, and Z, why can`t we solve that problem? I think that`s good.
I think if it portrays them number one as this undifferentiated
foreign yellow menace, that`s bad. Number two, if it suggests that they
are much more successful than they are, successful in some things, it`s
still a poor country.
Their political system is blowing up right now. And so, if it
suggests that overall, they have more influence than we do, which is also
HAYES: That aspect of it, the two things that my pet peeves on China
coverage. One is the notion which you saw in some of the ads, all of those
ads were from 2010, and they are all Republican ads. But in the past,
there have been Democratic ads that use a version of China as the
RAMPELL: As a new red scare.
HAYES: It is a new red scare.
I mean, the two things that drive me crazy one is that China owns all
our debt, which is just not true. It`s not an empirical fact.
FALLOWS: We have all their money.
HAYES: Right. And the other thing I think that drives me crazy is
this -- is this vision of China as this sort of uncomplicated success.
When the fact of the matter is, the political -- it is really an open
question of how sustainable the political system is in the long run and
how, how much it can engender the high road, high-wage growth --
FALLOWS: Which is the theme of my book.
FRUM: Chris, in the 1980s, the United States and its closest allies,
the democracies of Europe and Japan, together that group of countries
produced half of the output of the planet. If present trends continue in
2020s, which I hope we`ll also see, the United States and other countries
will produce a third of the output of the planet.
FRUM: And that`s going to be a different planet. I find it a -- to
some degree, it`s inevitable. But to the degree it`s not, I find it`s
FALLOWS: But the only way in which it couldn`t happen is if our
relative wealth compared to the Chinese remained the same disproportionate
gap. We have four times as many people as they do. They only had one
segment of the average wealth --
HAYES: And, in fact, let me button this up with Mitt Romney in 2007,
giving some real talk on exactly this topic. Here he is singing a
different tune about China in 2007.
FALLOWS: A surprise.
(BEGIN VIDEO CLIP)
ROMNEY: It`s important first for the American people and our
leadership to understand that China is not like the Soviet Union of old.
The Soviet Union, Khrushchev, in particular, wanted to bury us. China
doesn`t want to bury us. They want to see us success and thrive so we can
buy more Chinese product. China is really key in many respects as they
become a very large economy. Their GNP is going to surpass us at some
point, just given the scale of the nation`s population. We have to
recognize they`re going to be an economic powerhouse like us.
(END VIDEO CLIP)
HAYES: Mitt Romney echoing David Frum`s point and also making a
very, very different rhetorical mode.
I want to thank Ann Lee, author of the book "What the U.S. Can Learn
from China," a senior fellow at Demos, for joining us this morning. We`ll
have you back. Keeping talking more about China, perhaps not when there`s
some sort of high profile, dramatic human interest story.
After the high profile legislative battles, Wall Street dismantles
reform behind closed doors. That`s next.
HAYES: Oh, hi. How are you?
All right. On Wednesday, Mitt Romney went directly after President
Obama for one his signature legislative accomplishments.
(BEGIN VIDEO CLIP)
ROMNEY: Dodd-Frank, another piece of the president`s agenda this was
a piece of the legislation aimed at the financial services sector. It was
advertised as having as part of its mission keeping the too big to fail
banks from getting too big.
What`s happened since it`s been passed? They`ve gotten bigger. And
the small community banks are the ones that have been most hurt, because
again, the burden of regulation falls heaviest on the smaller enterprises
that don`t have the funds and the personnel to follow all the new
(END VIDEO CLIP)
HAYES: The folks at the table are taking deep breaths because the
sheer jiu-jitsu, disingenuousness of that comment.
But Wall Street Reform and Consumer Protection Act, better known as
Dodd-Frank, was signed into law almost two years ago. At the time,
President Obama called it the toughest financial reform since the ones
created in the aftermath of Great Depression. The law was passed over near
total Republican opposition and is one of the chief reasons that so many
Wall Street donors who rallied to the president in 2008 have now turned on
It`s those same Wall Street interest now fighting full force to stall
and weaken the actual implementation of Dodd-Frank in a whole variety of
fierce but largely invisible battles over regulatory rule writing. Which
means the degree to which we will have actual regulation and accountability
for Wall Street remains quite unclear.
It`s important to know one of the reasons that Dodd-Frank passed is
the law was written with enough ambiguity that it left many of the real
battles over financial reform to the regulatory process and the folks on
Wall Street knew it.
Now the financial power brokers are trying to game the regulatory
process. And if they continue to succeed at it, the risk of another global
crisis will be just as great or greater as it was before the last one.
Joining us now, it`s my great pleasure to welcome to the table -- Raj
Date, deputy director of the Consumer Financial Protection Board, which was
created by Dodd-Frank, the brain child of Elizabeth Warren.
He`s a former Merrill Lynch and Morgan Stanley -- sorry -- former
Morgan Stanley information technologist, Alexis Goldstein, returning to the
table, now a member of Occupy the SEC.
New York Attorney General Eric Schneiderman, who`s been here before,
co-hair of the president`s mortgage crisis unit financial fraud enforcement
Great to have you all here.
Maybe, Raj, I`ll start with you. I`ve been incredibly impressed by
the work of the Consumer Financial Protection Board. I`m giving you a real
question to start off here.
RAJ DATE, CONSUMER FINANCIAL PROTECTION BOARD: Thank you.
HAYES: But just in terms of the way, the transparency on the site,
the ease with which you can navigate it its openness to the public, tell me
a little bit about what, what the vision is for the entity and how you guys
are staffing up, because you really are building the first 21st century
financial regulatory agency.
DATE: We are. And thank you by the way for having me. We are so
excited about what we`re doing at the Consumer Financial Protection Bureau.
As you mentioned, Dodd-Frank created the agency to have a pretty
simple mission, and that`s to major sure that the consumer finance markets
actual work for American families. Markets like mortgage and credit card
and student lending.
People should know what they`re getting into. People should
understand the risks what they`re signing up for. They should be able to
participate in markets where there are clear rules and where cheaters don`t
prosper. There`s a reasonable set of aspirations. A pretty reasonable set
of objectives, but getting it right, just like anything worth doing is hard
And I`m proud that we have been assembling a team, I`m talking about
economists and lawyers and market experts and former bankers and I.T.
specialists who are up to the task. It`s hard but we take it very, very
HAYES: There`s a famous the article by Elizabeth Warren, that is in
some ways the genesis of this entire bureau, and she talks about the
Consumer Product Safety Commission. Consumer Product Safety Commission has
to clear products before they can go on the market. She has a great
analogy. In you sold a toaster that had a one in three chance of blowing
up and burning down the house, of course, that would never be allowed.
But certain kinds of mortgages that had crazy teaser rates and
ballooned in the end would be allowed. So, she draws the analogy. That`s
the kind of conceptual foundation of how much you were built.
The question is, do you have the power, the Consumer Product Safety
Commission, which is to say -- the Consumer Product Safety Commission says,
no, you can`t sell that toaster. Does the Consumer Financial Protection
Bureau have the authority to say, no, you cannot make that kind of loan?
DATE: Well, two things about the toaster situation. First, what
we`re doing is actually more important than toasters. You can live without
DATE: American families can`t get by without mortgages, access to
student loans, a way to save money for the future. What we`re doing is
just fundamental to Americans and their success over time.
In terms of authority, Congress has given us the two sets of
authorities that matter most. One is a range of tools, so that we`re not
trying to fit a square peg into a round hole. We have the ability to make
rules. We have the ability to supervise entities. Importantly, we have
the ability to enforce the law and to educate consumers.
With that full suite of tools, we`re actually able to do a better job
over time. No federal agency has had that before.
Second, we regulate the entire waterfront, so it doesn`t matter if
you`re a bank or a thrift or an industrial loan company or an investment
bank, if you want to be in the consumer finance market --
DATE: -- you ought to play by the same rules as everybody else.
It`s a pretty common-sense approach and Congress has given us that ability.
HAYES: The power to regulate and accountability for those who break
the laws is one of the themes for today and something I want to turn to
you, Attorney General Schneiderman and you, Alexis, after we take a quick
HAYES: Alexis Goldstein, you and Occupy the SEC have been doing a
great job of tracking the implementation of Dodd-Frank, one of the things
you can find on the CFPB Web site is the rules you`ve proposed and there`s
space to comment on them.
Just so people know the way the regulatory process works is that a
rule is put out for comment and taken with the comments and revised and put
out again and finally made final. And generally what happens is the
comments come from the industry, because they`re the people that are
keeping the closest amount of attention. I`m not going to the SEC to see
what, how big should a bank be to qualify for a swap facility or whatever
the rule is.
What would you say is happening broadly in terms of Dodd-Frank
implementation? And is it encouraging or worrisome?
ALEXIS GOLDSTEIN, OCCUPY THE SEC: I mean, I think it`s worrisome, we
have a lot of rules that haven`t been finalized yet. But I`m actually more
worried about Congress than I am about rule-making part of the process.
HAYES: That`s interesting.
GOLDSTEIN: Because we`re starting -- so Dodd-Frank is big, a big
chunk of it is what`s called Title 7, it`s all about derivatives reform.
And it does a whole bunch of really important things to bring more
transparency to the derivatives market.
And it`s basically under attack right now in congress. There`s about
eight bills total that are chipping away at different pieces of Title 7
about derivatives reform in Dodd-Frank and some are getting bipartisan
HAYES: Let me remind people, just so they know, derivatives are
financial instruments whose value derives from an underlying asset, which
is why they`re called derivatives. They can be used essentially to make
bets. In some cases, they can be used to hedge. I use a lot of oil, I bet
on oil, so that I can hedge against my oil cost.
But in some cases, you can say, I bet Greek bonds are going to go up
or Greek bonds are going to go down. If you`re right, you get a lot of
money. If you`re wrong, you lose a lot of money.
AIG, of course, was doing a lot in a certain kind of derivative
called credit default swap, which was the thing that magnified the crisis
from a housing bubble crisis, to international global financial crisis.
So, people are clear on the stakes here, because the derivatives were the
thing that actually blew the hole out of the global economy.
Talk about the bills, you`re telling me one that has to do with a
small part of Dodd Frank, a little bit of information that has to be
GOLDSTEIN: Oh, this one is funny. This one is actually not about
derivatives. It`s HR-1062 and there`s a part of Dodd-Frank that says you
have to publish the ratio the CEO compensation to median worker
compensation. If you`re a publicly-traded company, you have to publish
So, there`s a bill called the Burdensome Data Collection Relief Act.
That is basically says, strike that you do not have to publish CEO-to-
worker pay ratio.
RAMPELL: Does the bill only strike that or --
GOLDSTEIN: That`s it.
HAYES: So when you say there`s bipartisan support for this, is this
GOLDSTEIN: That one does not have bipartisan support, there`s lots
of other things that do.
HAYES: But there are things that would march back parts of the Dodd-
Frank that you are worried will gain Democratic votes in Congress.
GOLDSTEIN: I mean, pick a part of Dodd-Frank, the chances are
there`s probably either a bill that`s already out there trying to gut it or
someone is brewing (INAUDIBLE).
It`s really under fire and it`s a lot of this is not being reported
on or only in the financial media. And a lot of people don`t necessarily
read the financial media.
And what drives me crazy is we are -- we have so many people out in
the streets now. There is such clear popular support for financial
regulation, for reining in the banks. And yet we, one thing you see at
Occupy Wall Street a lot is when the cops go and stand in front of the
banks when we`re protesting outside and people trying to move their money,
the cops look like they`re guarding the banks. And we`re saying, who do
you serve, who do you protect?
And that`s sort of my question for Congress right now, is, are you
serving the American public who are on the side of the reform or are you
serving your wealthy campaign contributors?
RAMPELL: But the public doesn`t necessarily understand what reform
should be or is or what`s actually in Dodd-Frank, right? It`s a gigantic
piece of legislation. A lot of the regulatory and other statutory pieces
of it that you`re talking about are sort of in the technical stuff.
And maybe in the big picture, you know, Americans would say -- well,
we kind of like this idea or kind of, we kind of don`t like that idea. But
the problem is that so much of it is so -- technically small-bore, even if
it has big financial consequences. I think it`s sort of hard to have a
greater narrative about what it should be.
GOLDSTEIN: But it can be broken down and it can be explained.
ERIC SCHNEIDERMAN, NY ATTORNEY GENERAL: I think the public gets in
the broad picture, that what Mitt Romney was just saying is absolutely
false. The idea that there`s an effort to rein in a period of reckless
deregulation, people get that. I think we have to keep the story as simple
as we can and explain it. It`s not like we don`t know how the bubble went
up. We know that they made a determination not to regulate derivatives in
the Commodities Modernization Act.
We know in 2004, the bank regulators preempted states who are trying
to rein in predatory lending. There are few things that happen that people
get. I think we have to keep our story simple and keep our focus simple.
All of the lobbies you`re talking about, doctorates in complexity. I
mean, they benefit from the complexity, they benefit from these nuances.
You see it in legislation all the time. I think we have to draw a pretty
clear line though between at least the message the president is carrying
now, which is, you know, everyone pays their fair share, everyone gets a
fair shot, one set of rules for everyone.
And this bizarre conduct to me of some of the folks on Capitol Hill,
really you know, talk about the Consumer Financial Protection Bureau. Who
is opposed to protecting consumers from financial fraud? Well, a lot of
people in the House of Representatives seem to be. These guys have been
under attack, including Rich Cordray`s appointment, since day one.
HAYES: Right. And they`re trying to change the funding stream to
make sure that you have to get yearly appropriations. Right now, you get
your money through the Fed.
I want to talk about the final piece in this to me, which is the only
way regulators actually can have an impact is if there`s accountability on
the other side ,and that`s when you come in, Mr. Schneiderman. We`ll talk
more about that after this break.
HAYES: Great pumping from our director with the Hall & Oates, "You
Make My Dreams."
Regulators do make our dreams come true. See, I`m not even joking.
Regulators make our dreams come true. If your dream is to own a house and
not have your mortgage go under water, regulators do make your dreams come
Attorney General Schneiderman, you were at the center of a whole lot
of publicity and press about first a big mortgage settlement that was being
negotiated because of systemic malpractice and fraud being conducted by the
banks in the foreclosure proceedings. You were appointed with great
fanfare, announced by the president, announced at the State of the Union, I
believe you were his guest at the State of the Union, to head up a working
group on mortgage-backed securities that was going to look into the
possibilities of fraud and malfeasance in the run-up to the big crisis.
Where are you at on that? There was a very savage op-ed in the
"Daily News" that said there`s no headquarters, there`s no phone that you
can call, this whole thing is smoke and mirrors. No one is meeting.
You wrote reply saying we have 55 attorneys from the DOJ, we`re
I want you to lay out where things are and what this working group.
HAYES: Because there`s a lot, a lot of expectation put on it.
SCHNEIDERMAN: Well, the working group, I mean, it`s first of all,
important to understand that it came in the context of this earlier
settlement. The earlier settlement, the focus was the abuse in the
So, after the market wind up and crashed and people were under water.
And there were a lot ever problems, people should have been allowed to keep
their homes, people who are being misled by the lenders. So, we`ve set up
rules to deal that. We got a lot of money in New York that are going into
legal services and housing council to make sure no one is wrongfully
But the point I made in the process was, that we still needed more
resources and a better-coordinated investigation into the conduct that blew
up the economy in the first place, that`s what the president announced with
the working group. So for the first time, we have coordinated
investigation and it`s taken a little bit of time to get the framework up
because it`s such a big operation.
But the DOJ, heads of the civil and criminal divisions, co-chairs,
the SEC, the head of enforcement, (INAUDIBLE) is the co-chair and
representing the U.S. attorneys office who is are critical in this, John
Walsh from Colorado. There are I think 10 U.S. attorneys` offices engaged.
We`ve had them in and out of our office already. I`ve probably had direct
contact with six or seven different prosecutors working on different
One of the -- you know, one of the -- we have about 14 or 15 people
in my office who are still working on it. The advantage now is we`re
sharing information. They`ve been working on setting up a database. We
can share data confidentiality agreements.
We`re going to have 11 or 12 other states that are going to join to
participate. So for the first time, we have state jurisdiction. The
federal laws have in some cases a ten-year statute of limitations on
criminal and civil penalties. We have broader jurisdiction under the
So, there`s a combination going on that`s never happened before.
HAYES: Let me articulate a concern that people have, which is about
the resources. There`s 100 investigators on Enron, there are about 1,000
investigators on the savings and loan crisis. So, there`s a scale that
And obviously, everything in the space of regulation financial
regulatory reform feels like David and Goliath, whether you`re talking
about regulatory rule-making, whether you`re talking about trying to go up
against, you know, Deutsch Bank`s lawyers or Suisse`s lawyers.
So, I think I want to hear from you what the resources are and what
they`re going to look like, and talk a little bit about Alexis sitting in
your office this week, right after we take this break.
CHRIS HAYES, HOST: Hello from New York. I`m Chris Hayes.
With me this morning, have Raj Date, deputy director of the new
Consumer Financial Protection Bureau; "New York Times" economic reporter,
Catherine Rampell; former Wall Street information technologist Alexis
Goldstein, now with Occupy the SEC; and New York state Attorney General
Eric Schneiderman, co-chair of the president`s mortgage unit, Financial
Fraud Enforcement Task Force. That`s a mouthful.
So, you were -- you were on the program, Attorney General
Schneiderman, were you on the program five months ago. And we asked you
about what we can expect to see from the task force, I want to play this
little bit of sound.
(BEGIN VIDEO CLIP)
ERIC SCHNEIDERMAN, NY ATTORNEY GENERAL: In the next few weeks, I
think you will see indications that this is an active investigation going
forward. You will see more subpoenas, 11 were announced on Friday, you
will see action by other agencies, you will see cases being filed.
HAYES: Is there a timeline to it?
SCHNEIDERMAN: There`s no timeline. But I assure you -- if we don`t
have some concrete results within the next six, eight months, I`m going to
be very disappointed.
(END VIDEO CLIP)
HAYES: And at the time that it was announced, there were a lot of
stories published, people at your office, off the record, saying look, if
this isn`t serious, we`re not going to have anything to do with it after a
certain amount of time.
There`s -- we`re getting to the point where five months now. We
haven`t hit your six to eight-month window. There is I think a sense of
frustration that the process isn`t moving fast enough or you don`t have the
resources that you need. That was of the big things in terms of talking
about 100 investigators in Enron, 1,000 in savings and loan.
So part of that was what motivated Occupy the SEC, they held a sit-in
in your -- -
ALEXIS GOLDSTEIN, OCCUPY THE SEC: It was not Occupy the SEC. It was
Break Up the B of A. Go ahead.
HAYES: Sorry, I want to get the group affiliation.
SCHNEIDERMAN: We`ll start to rumble.
HAYES: Yes, exactly.
So, this was an action that happened on Thursday, I believe.
HAYES: In Friday, in your office take a look.
(BEGIN VIDEO CLIP)
CROWD: Whereas (INAUDIBLE) aim to disrupt ours will be different.
Our goal is to propel you forward. President Obama has asked you to co-
chair the residential mortgage-backed securities fraud task force. And the
last thing we want to do is to get in your way. However, since the
creation of this unit, over 400,000 homes have been foreclosed on. That`s
over 4,000 a day. And not a single bank or corporate criminal has been
brought to justice.
(END VIDEO CLIP)
HAYES: Over 400,000 homes have been foreclosed on. That`s over
4,000 a day, and not a single bank or corporate criminal has been brought
I guess I want to ask you, what do you need to make this work? How -
- what slingshot does David need to bring down Goliath? Because it seems
very likely that the resources are not going to be sufficient, given what
the resources are on the other side -- and given the profound complexity.
I mean I understand making a case like this and I`m not a lawyer, but
I know enough lawyers to know this is not easy stuff, right? This takes
time and it takes resources. The question is, what resources do you need?
SCHNEIDERMAN: Look, it takes time and it takes resources. But
prosecutors all over America all the time go up against larger numbers of
lawyers and prevail. This is not, it`s very important for people to
understand that this is very doable.
When the president set up the task force, he gave us a combination of
agencies that have the jurisdiction. The Department of Justice has really
been the driving force in putting new resources in. There are people being
detailed. Contractors are showing up.
I was on the phone Saturday, yesterday, with one of my colleagues at
DOJ, talking about setting up a way they can view the massive number of
documents, remotely through technology.
So, we`re working on making sure we can do a thorough investigation.
There are a lot of institutions involved. The big cases that everyone is
waiting for, the big platform cases of patterns of conduct, they do take a
lot of time. But I think here will be some case on more limited but
equally important issues that get brought more quickly.
I`m sorry I was out of town, but you know, I appreciate what the
effort to call attention to the problem and to continue to keep the public
focused. But I think that the working group is certainly grown -- the last
60 days have been an extraordinary change. I think there will be
announcements about staffing and offices and all this stuff that ordinarily
prosecutors don`t talk much about.
The one thing you will not hear is people saying we`ve issued another
10 subpoenas, we`ve called in, sent notices to these five banks and they
have to go to the SEC and essentially argue why they shouldn`t be pursued
in a case.
But people from my office have been at meetings like that. We`ve had
had people from different U.S. attorneys` offices doing briefings in New
York with us. We have shared depositions, we`re sharing documents.
The kind of comprehensive investigation that everyone was asking for
had started up.
Now, am I happy with any level of progress? No, I`m always
impatient, I`m from Manhattan. But it is happening. It is coming, it is
And I think the most important thing is to help me and my colleagues
stay on track, encourage us if you want. I always want more lawyers. I
always want more help faster.
But I think you`re going to see some announcements in the next week
or two that are going to do a little of a -- as transparently as we can do,
at least identify numbers of folks who are working on things, just to get
that nonissue off the table, because we have I think two weeks ago I spoke
to the Congressional Progressive Caucus and we did a count. At that point
it was over 50 people, it`s more now than it was then and I`m getting a
couple more people in the next week who are going to be helping us. We`ve
got folks from the Consumer Financial Protection Bureau. We`ve got folks
The inspector general that oversees Freddie and Fannie has people
working with us, in addition to the people from the Justice, the state
attorneys general and the SEC. So, if you combine everyone, it`s a lot of
people. The count we`re keeping is to show the new people who are being
deployed, essentially by DOJ.
But there are a lot more people than that working on it.
CATHERINE RAMPELL, NEW YORK TIMES: I have a question about all of
this. Staffing in terms of quantity is great but the argument that I often
hear that expresses concern about the ability of regulators to actually
have utilized the power that they`ve been granted is that you can`t really
pay your employees comparable wages to what they would earn in the private
sector, given the body of knowledge that they have.
And I`m just curious, you know, do you have trouble finding the
talent that you need?
SCHNEIDERMAN: No, no.
RAMPELL: Ggiven the people are turning down multimillion-dollar
salaries, bonuses --
SCHNEIDERMAN: The job market is not quite as good as you`re making
it out to be there are a lot of really good lawyers and there are a lot of
people who want to take a break from private practice and come to work in
our office. So, we have not had a problem with getting good people to work
HAYES: You`re recruiting them from the Death Star to the rebel
SCHNEIDERMAN: Well, yes, and we`re letting -- thanks for letting
everyone know, Chris. We`re looking for great lawyer who want to get
involved in the cases.
But people do want to do it. I think the challenge here is for us to
be able to move forward as aggressively as we can, with people
understanding that we`re not regulators, we`re prosecutors and we can
enforce all the laws that were previously in existence, it`s very important
for us also all to keep track of the fact that we`re fighting over what the
next set of laws are going to be.
HAYES: And that`s why you`re brought here because I want to keep --
SCHNEIDERMAN: And the Dodd-Frank, but we`re enforcing the securities
laws as existed and there were some changes to the law that weakened the
prosecution, and we want to call attention to that as well.
HAYES: And the reason that I want you both on the same time because
I think there are two sides in the same coin in so far -- I`m of the theory
that nothing focuses the mind on compliance like people going to jail, like
your peers going to jail, right? BP is going to pay $8 billion or $15
billion or $30 billion for what happened in deep ocean, but you know what,
they make $12 billion in profits a quarter, they`re going to write it off
on the balance sheet.
There`s a certain specific, visceral, emotional force to the threat
of actual criminal sanction that I think is unlike a fine on a balance
Alexis, (INAUDIBLE) you think?
GOLDSTEIN: I mean, we have so many questions. You`ve said
repeatedly no one is above the law and no one is too humble for the law.
But I think there`s a climate in this country right now where people do
think that the banks think they`re above the law.
And about the task force, I`m curious if you could explain to me why
there aren`t banking regulators on the task force, because I`m talking
about the fed, the FDIC, the OCC, the people that know banking law, banking
regulations in and out. Why don`t we see representation from them on the
SCHNEIDERMAN: Well, we certainly have access to all of the other
federal agencies and information. We wanted this to be an aggressive
prosecutorial task force, I`m not sure if you`ve named groups that fit into
that category. You know, and I work with all of my federal colleagues.
But I think that the folks that we`ve got involved are the folks we
need to do something more quickly, more effectively. The Consumer
Financial Protection Bureau, the DOJ, the SEC, my office, HUD, we have --
the IRS, the FBI, it`s a pretty carefully-selected group.
GOLDSTEIN: So the FBI is on the task force?
SCHNEIDERMAN: Yes, yes. We have FBI agents that have been deployed.
Again, we don`t go around saying, hey, here`s a list of the names of
the FBI agents, what offices they`re in, but that doesn`t mean they`re not
GOLDSTEIN: Well, I think there`s concern for example, like there are
500 FBI agents announced a couple of days ago, looking into health care
fraud. Why don`t we have 500 people looking into the biggest financial
crisis since the Great Depression?
SCHNEIDERMAN: Well, the health care fraud project started up a few
years ago and they have staffed up. So, we started in February, we had
bloggers attacking us in March that we hadn`t done enough. You know, it
takes a little time to get the confidentiality and the database set up to
recruit the people to, as you say, you have to post listings for people to
comply with the law.
We now have, you know, there`s a lot of people working on it the
count is way over 50 at this point.
GOLDSTEIN: Are they full-time?
SCHNEIDERMAN: Yes, yes.
GOLDSTEIN: These are full-time? Except you of course, you have two
SCHNEIDERMAN: No, this counts as one of my full-time jobs. But no,
the folks -- there are some folks who have some other projects, like people
in my office, but it`s essentially full-time work for everyone that`s
working on it and more people coming every week.
I think the point that -- about personnel is very important. It`s
important to have the personnel but it`s important to plan out a structure
of how to use them. We set up a coordination team. That`s going to make
sure that we all know what each other is doing.
We`re trying to do this smart. We`re reviewing all of the other
civil cases that have been brought out there with other litigant, so that
we can build on work that`s already been done. We`re looking at other
So, we`re trying to do this smartly and efficiently, knowing that the
number of people you have doesn`t do you any good if they`re not deployed
HAYES: Alexis just made mention of the banking regulators and you --
and what you said was interesting. One of the things I think is
underappreciated in people`s understanding of the crisis is the degree to
which existing regulations were not enforced or regulators went easy on the
banks they were regulating -- partly as a process of regulatory capture,
partly a process of the massive pay gap that`s opened up. There`s a great
paper by Thomas Ferguson and Rob Johnson that tracks actually the
difference in pay between regulators and people in the finance sector and,
of course, a huge wedge opens up.
And part of that produced a culture that wasn`t a culture of zealous
enforcement of regulation. A culture that was cooperative and cowed among
the bank regulators.
I want to talk about that culture with you Raj right after we take a
MADDOW: Still mourning Adam Yauch today, who passed this week, the
Beastie Boys there.
The culture of litigators -- a lot of literature about what happened
in 2003, 2004, 2005, 2006, 2007 has to do with the culture of Wall Street
and also the culture of the complicity of regulators.
Are regulators -- are the bank is the reason that you`re necessary
because the other regulators are too captured?
RAJ DATE, DEPUTY DIR., CFPB: I will say this: the reason why I`m so
confident that the Consumer Financial Protection Bureau is going to do a
great job at our big mission is that we have features that make us pretty
uniquely immune to what people call regulatory capture.
So here are a few examples. Number one: a clarity of mention.
When I started at the Treasury Department helping Secretary Geithner
and Elizabeth Warren set up the bureau, we had like 20 employees. We have
800 today. They are fantastic.
They have come in because they understand what we`re doing. There`s
no ambiguity. We`re making these markets work for average ordinary
American people and nothing could be more important. So, clarity of
Two, a sensible structure. You know before Dodd-Frank, the bank
regulators literally had to compete for bank`s business. If you were a
bank, you could choose a charter. And the long-term effect of that is you
should expect a bit of a race to the bottom in terms of standards.
Now, I`m not particularly calling out anything in particular. But
that is what one would expect at the time. And we have an advantage.
HAYES: We have evidence of regulators referring to their banks as
clients, because a lot of them, the OCC, for instance, they are funded by
bank fees and they need those bank fees to survive. And so, there becomes
those sort of client-dependant relationships.
GOLDSTEIN: And I think you drew an important distinction, unlike the
SEC, who if they make fees above their budgets has to give it back to the
Treasury, the OCC does not have to do that.
DATE: This is literally the case. The Consumer Financial Protection
Bureau has supervisory authority over the biggest banks and nonbanks in the
country. It doesn`t matter what charter you choose. You`ve got to play by
the same rules as everybody else.
HAYES: Right, right.
DATE: And then finally, talent and capabilities really matter in
this. If you depend on everything that know about an industry, on its paid
representatives to tell you, you are in trouble. You have got to get the
best people in the marketplace. You have got to get great people.
HAYES: How do you do that, right? It`s exactly the point that
Catherine was making, right?
RAMPELL: When I talk to people I know through work and through, you
know, college friends and other friends of friends who work in finance, one
complaint that I`ve actually heard frequently is they really wish that the
SEC, in particular, paid more money, because they`re tired of dealing with
people who don`t know what they`re doing or whatever. I mean, maybe they
would say that regardless of who they`re dealing with.
But that the argument is that they`re because they can`t afford to
pay the best people, they`re getting lower quality.
DATE: Well, you know I`ve -- I`ll just speak from personal
experience, I`ve hired people in the consumer finance business, in the
commercial banking business, investment banking business, I have never seen
anyone who doesn`t want more money. That`s always a constraint.
The reality is no once to the CFPB in order to retire early. That
isn`t going to happen. However, they do come to the CFPB for clarity of
mission, because it really matters, because it`s hard to do. And they know
they can succeed. Because they know that we are being built with a set of
values that will stand the test of time.
GOLDSTEIN: And can I just really quickly --
HAYES: Yes, please.
GOLDSTEIN: Sometimes people quit the industry because they cannot,
like me, I mean I didn`t, I wasn`t fired from my job, I quit because I
couldn`t take it any more. And there are a lot of people on Wall Street
that are disgruntled who do not believe that what they are doing is helping
the wider world.
And, you know, I do think there is room not just for bribery, right?
I think there`s room for ethics and wanting to do the right thing.
SCHNEIDERMAN: Well, and listen, I didn`t quit my law firm because I
couldn`t take it any more, but I did decide I was interested in doing more
public interest work and -- you know, lots of people make that decision all
the time. There are great people who want to work in government, again, if
you have the sense of clear mission.
I mean, I hope that we --
RAMPELL: Wen the pay gap is so phenomenally huge, I mean --
SCHNEIDERMAN: People still are coming.
GOLDSTEIN: Look, it`s a good point. I would love to see that
HAYES: Right. I mean, the point is that we should pay regulators
more and --
SCHNEIDERMAN: But who`s trying to cut funding for the CFTC and the
SEC? It`s, you know, it`s big campaign under way in the Hill.
HAYES: Right. We should talk about the appropriations here, because
they are key. There`s $55 million appropriation request from the White
House for staffers.
SCHNEIDERMAN: Right. We`re staffing up and the DOJ has the
resources for us to hire more people and we`re doing that.
But the October budget that the president has requested a $55 million
addition just for the mortgage-backed securities working group and that`s
going to be very important. I`m sure it will be a fight.
HAYES: And CFPB, if I`m not mistaken, has a $200 million annual
budget, more or less.
RAMPELL: They`re trying to cut it down --
HAYES: Oh, they`re trying to cut it down. Right. I`m sorry, you`re
So, you right now get your money from the Fed and so it`s not
congressionally appropriated every year. Is that correct?
DATE: Like the bank regulators we`re not subject to congressional
appropriation. The idea being, really over the last 150 years, is that
you`re going to have a banking system and you`re going to have a credit
system. You should not want it susceptible to short-term political
influences. That is what the nation has embraced over the past century and
a half and that`s the system that we work under as well.
SCHNEIDERMAN: That might be a good model for solving some of the
issues you`re raising, if that was extended more broadly.
HAYES: And the Republicans are now moving to change the funding
stream so that you do have to be approved for appropriations.
GOLDSTEIN: I think it`s important to talk about, the House Financial
Services Committee on over completely partisan lines, passed something that
said, the CFPB have to go hat in hand, after 2013, you get a $200 million
budget through 2013, then you have to go beg for a budget.
They killed something called the Office of Financial Research --
well, they`re trying to. This is what the bill says.
And then something interesting happened, which is Barney Frank put in
an amendment which ultimately failed that said, if you`re going to do this
to the CFPB, the Fed can no longer print money and the Fed has to go hat in
hand, the OCC has to go hat in hands, and those amendments were killed.
But that was an interesting thing that came out of committee.
HAYES: It gets us to the point of independence and accountability.
What it comes down to. As Bob Dylan once said you`re going to have to
I mean, no one is truly independent in any profound complete and
total sense, you`re going to be dependant on someone, your money is going
to have to come from somewhere. The question, is, how do you increase the
structure that increases the likelihood of regulators or prosecutors acting
as independently and frankly as adversarially in certain circumstances to
the industries it`s regulating.
And I don`t -- we clearly have not gotten that right up until now.
SCHNEIDERMAN: Well, I think you have to distinguish between two
periods. We`re coming out of a period of reckless deregulation and efforts
to defund lots of agencies, and we have to understand how that led to the
bubble and the crash.
The response to it has been -- going forward over the last couple of
years. Dodd-Frank was really one of the key steps, setting up the CFPB,
the investigation, the working group we start I see as a part of the
I think there are people in government who really do want to do the
right thing. I think there are folks who are a little more inclined to go
along with industry. We got to support folks who want to do the right
The president has turned around a lot in response to the rising voice
of the people in America.
SCHNEIDERMAN: That`s good political leadership. I believe in
movement politics. Leaders do what you get them to do, and you have to
help people, even your friends, do the right thing.
HAYES: Let me ask you this final question, which is that you
actually strike me as someone who has quite a bit of leverage. If you felt
things weren`t going well. If this was a dog-and-pony show and you walked
away in a very public way this year, that would create a huge amount of
political fallout and it`s something that I would imagine the White House
would not like to see happen.
Will you walk away if you feel it`s a dog-and-pony show?
SCHNEIDERMAN: If it`s -- yes. But I do have no dogs and no ponies,
just lots of lawyers and agents doing work.
But I`m going to keep talking about it and one of the things I am
doing is urging my colleague that we can`t -- if you can`t talk about
subpoenas and depositions, at least let`s open up a little more and talk
about what we`re doing in macro sense, talk about how many folks we got
doing it. I think you`re going to get more information I like that.
I think you`ll see Web sites going up and things like that over the
course of the next few weeks that are going to make it a little more clear
what we`re doing. This is so far, appears to all of us involved to be a
pretty aggressive effort. But, you know, we`ll keep talking about it.
HAYES: Eric Schneiderman, attorney general, head of the working
group on residential mortgage-backed securities, Raj Date, deputy director
of the Consumer Financial Protection Bureau, that was the awesomest
regulatory conversation I`ve had in at least a week.
All right. We`ll be right back after this.
HAYES: All right. James Fallows, national correspondent for "The
Atlantic" magazine, and David Frum, contributing editor at "Newsweek" and
"The Daily Beast" are back with us at the table.
You gentlemen saw the conversation we were having on regulation.
David, regulation that has become a signatory rhetorical cudgel for
the Republicans dating back from a very long time actually, but
particularly has increased salience I think now because of the passage of
Do you think it`s a winning rhetorical strategy? Do people still
have the same appetite this abstract sense that regulation is bad?
DAVID FRUM, NEWSWEEK: I think it is a sign of a backward-looking
turn in the party. In the 1970s and `80s, some of the most important and
dramatic successes in the American economy came about through the
deregulation of transportation and energy. Those were things that were
good to do -- the end of the energy shortages, to deregulate oil and gas.
And we`re all dramatically better off by the deregulation of trucking and
rail and air.
HAYES: I`m not sure about that, but continue.
FRUM: Especially rail. One of the stories is that success is
boring. People don`t pay attention to and it`s transformed the way we --
HAYES: And we should note that particularly in transportation,
trucking, rail and airport, there was a left-right synthesis on that, Ralph
Nader worked with Ted Kennedy --
FRUM: Stephen Breyer --
HAYES: Stephen Breyer, right.
FRUM: All right. You overlearned -- those lessons were taken to the
next frontier, the last great regulated industry, which was finance. And
it turned out that treating finance like energy and transportation was a
terrible idea. Which is by the way, also a left-right coalition, because
that was done -- most of the work was done in the Clinton years. It is a
HAYES: It was a Democrat/Republican coalition, I don`t know if it
was a left/right coalition.
FRUM: OK. But the important work was done in 1998, 1999 and 2000,
not during the Bush years. It led to the trauma.
But I think people want -- you want to be careful with your language.
No one would want to go back to regulating rail rates and nobody thinks
regulating the price of natural gas is a good idea. Finance is different.
Maybe you do.
FRUM: Oh, no.
HAYES: We don`t have to get into that. But --
FRUM: That`s an answer that is so old we`ve already forgotten the
JAMES FALLOWS, THE ATLANTIC: As a matter of the politics in this.
Almost nothing in public life is ever all or nothing, black or white. And
over the eons in American history, it`s a matter of business and all of its
energies being subject to some kind of control. From the time of Alexander
So I think the challenge for whichever administration is in power and
the easier challenge for Democrats now is explaining as Raj Date said,
making business work better. You know, we`re talking about China earlier,
part of the reason that things are bad in China is no regulation, no
environmental problems or workplace safety or things like that.
So the achievement of Teddy Roosevelt, as an activist Republican, and
making business work better through the right kind of regulation is a point
that can be made.
HAYES: Let me actually make this point, to return to that, I mean,
in terms of natural gas. What I want to see is a cap-and-trade regime or
some sort of a carbon tax, right? I want to see a regulation of the price
FRUM: Taxation is not regulation.
HAYES: Right. But let me make this point. Cap and trade I think
you can call regulation and one of the things I think is most important
about this is that regulation gets talked about incredibly abstract terms,
right? You`re a deregulator, you`re a regulator, are you for regulation,
against regulation, it really matters what the regulation is -- a
It`s like saying you`re for laws or against laws. I mean there are
bad laws and there are good laws, and what ends up happening is that
regulation becomes a sort of ideological signaling device and because of
the asymmetries of information and resources of power that we`ve talked
about in terms of the gaming of the regulatory system in Dodd-Frank, it`s
very hard to have the granular dispute.
FALLOWS: And so, to the extent this is discussed as an issue of
regulation, the Democrats are losing.
FALLOWS: And to the extent it`s discussed as a matter of avoiding
foreclosure, avoiding unsafe food, avoiding this or that abuse, then it
means that they are succeeding in making the case.
HAYES: But I also there`s a way -- there`s a case to be made and I
think the president has done this fairly well, in just reviving the
semantic power force and prospects of the word "regulation." I mean, that
it`s not a dirty word. That it is something --
RAMPELL: I don`t feel that. I feel like regulation still seems like
a pretty dirty word and it`s used politically.
FALLOWS: You`re making things harder for yourself if you use that
GOLDSTEIN: I think there`s a tremendous amount of public will to
regulate the financial industry.
RAMPELL: But I don`t know regulate is the right --
FRUM: The president talked about regulation in the last State of the
FRUM: He emphasized his deregulatory successes, not his regulatory
FALLOWS: So nobody cares about the process of regulation, they care
about the results.
HAYES: The results, right. And so, what you do is you tout the
results. And what you tout the results of in as we go into you know the
purity and after the crisis, although the crisis continues to cast this
incredibly long shadow and grind people down to misery and debt is what the
last era of what it produced. An EPA regulator who gets crucified, when we
HAYES: It`s not just Wall Street that tries to game the system by
going after regulators. On Tuesday, an obscure bureaucrat in the
Environmental Protection Agency resigned after Republican Senator James
Inhofe called attention to a video of him at a meeting at a town hall in
Texas. At the meeting at the town hall, residents expressing fear and
concern about the effects of fracking chemicals and their water from nearby
gas drilling the town`s inability to do everything about it.
Regional EPA Administrator Al Armendariz responded by assuring
residents that the EPA would go after drilling companies or polluters who
broke the law. Here`s what he said, and keep in mind, he specifically says
he`s talking about companies that violate the law. >
(BEGIN VIDEO CLIP)
AL ARMENDARIZ: It was kind of like how the Romans used to, you now,
conquer little villages in the Mediterranean. They`d go into a little
Turkish town somewhere, they`d find the first five guys they saw ands
they`d crucify them, and then, you know, that town was really easy to
manage for the next few years.
So, you make examples out of people are in this case not compliant
with the law. Companies that are smart see that they don`t want to play
that and they decide at that point that it`s time to clean up.
(END VIDEO CLIP)
HAYES: In artful perhaps, but a fairly standard explanation of the
logic of deterrence more broadly. Armendariz said those words on May 10th,
2010 and received no attention for his comments.
But two years later, Senator Inhofe staffers got hold of it and
decided to make an example of him. Inhofe took to the Senate floor to
condemn him, and FOX News took up the cause, as well.
(BEGIN VIDEO CLIPS)
UNIDENTIFIED FEMALE: If you can`t beat them, crucify them?
UNIDENTIFIED MALE: These rogue administrators that President Obama
appointed that are out there, killing American jobs, the administration has
to be held accountable.
(END VIDEO CLIPS)
HAYES: Faced with the standard conservative hissy fit, the White
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The official`s comments are
not only inaccurate as a representation of -- or characterization of the
way that the EPA has operated under President Obama, they are provably
inaccurate, by our record on these issues.
(END VIDEO CLIP)
MADDOW: And so, for articulating the very purpose and process of
enforcement, that is to hold to account those companies not in compliance
with EPA regulations, Armendariz found himself joining the club of Van
Jones and Shirley Sherrod, those casualties of right wing campaigns that
ironically produced the same deterrence effect, scaring good people away
from life in public service ands putting put fears in the hearts of
regulators everywhere that they will lose their job if they step out of
line. That`s whey found so disturbing about this.
The grand irony here of course is that the reason that the effects of
someone like Armendariz having to resign his post is that regulators will
be watching what they say and making sure not to run afoul of the people
It should be noted, Armendariz is a civil engineering, environmental
engineering professor at Southern Methodist University. Before he became a
regulator he was doing studies showing that particular matter that was
being emitted from natural gas exploration to the west of Dallas-Fort
worth, was contributing quite a bit to smog and ozone in the Dallas-Fort
worth area. And Dallas-Fort Worth is what`s called an EPA nonattainment
zone, right? ,It is not in compliance with levels of particular matter
that are required by the Clean Air Act and was having very contentious back
and forth with the oil and gas industry.
The kind of person I think that you want to be a regulator in the
first place, and now, of course, he has pissed them off.
FALLOWS: Let me put this in the life is unfair category. If you`re
in public office as he was after his academic career, there are certainly
things you can`t say. You can`t say we`re going to be out crucifying
people and there`s also a Texas angle, too, which is that I remember
Governor Perry was talking about lynching Ben Bernanke. So, maybe this is
a kind of political discourse which works within the state boundaries.
I think it is unfortunate that he said these things. It`s
understandable having said them, he got in trouble.
HAYES: I don`t think that`s true.
GOLDSTEIN: I do think, I was saying this during the break. There`s
a cultural sensitivity for some things and not for others. We see
references to Nazis all the time or this person is behaving like Hitler.
And I think there are people who find that offensive.
And yet there`s --
FRUM: The sensitivity is not what is said, it`s who is saying it.
This is a man charged with some portion of the power of the state. He`s
not an adjudicator. But he comes from an agency that does adjudication.
And the suggestion that that adjudication is -- that agency is one of
the sees its role as prosecutorial, is one that`s going to make people
nervous. And --
HAYES: But should it make them nervous? It should make them nervous
in the same way that criminals are nervous if there`s a prosecutor who
swears to zealously prosecute the laws, which -- let`s be honest -- no one
talks tougher than prosecutors, right? We all love that.
FRUM: If you heard, if a federal district judge gave a speech about
how much he liked sending people to prison, that would make people nervous,
right? Because a judge is supposed to be neutral on the question of
whether any particular defendant deserves to go to prison or not, maybe
even a little skeptical.
If you`re the agency that enforces the environmental laws --
HAYES: Is it a proper analogy for a regulator, the judge or the
prosecutor, that`s the question.
FALLOWS: It`s a specific case of while he is in this job. It`s the
wrong kind of thing for him to say. If he were not in this job, he could
say this and then say things more flamboyant. But that`s the problem.
FRUM: He could have said he was declaring peace on the war on
Christmas, then maybe he would have been --
HAYES: Let me reaffirm the fact, that as colorful as the analogy
was, he specifically mentions in the quote, that`s what -- this pertains to
people that are out of compliance with the law. This is not that just --
FRUM: For the first half, equating it to the Romans, the Romans are
the people that are actually guilty. The quote starts as being a defense
of random terror tactics in law enforcement.
HAYES: Fair enough.
FRUM: And random terror is not the way to enforce environmental
RAMPELL: Well, I was going to say the exact same thing, that it`s
the way that the crucifixion analogy was set up was that was not
necessarily fair thing.
HAYES: It strikes me as the power also just the ability of the
conservative media to pluck something from obscurity and turn it into a
story that ends with someone resigning a week later, which we have seen
I want to talk about that right after this break.
MADDOW: Talking about the EPA administrator, Al Armendariz, who used
the word "crucify" to talk about his regulatory enforcement approach and
has found himself now out of a job. And I compared him to Van Jones and
Shirley Sherrod and other figures elevated about I this conservative media
complex that`s able to take a discrete incident that has completely flown
under the radar.
For instance, his comments at a town hall in 2010 and amplify them
through a series of different parts of the machine. James Inhofe takes the
Senate floor, there was an editorial published in "The Wall Street
Journal," FOX News and talk radio and all that creates a firestorm and,
predictably enough, he`s out of a job.
FALLOWS: What`s significant is it shows the machine in action and
also unfortunately he made himself vulnerable to this, which shows you how
remarkable it is the Obama administration has been so scandal-free, because
that machine would be cranking. You know?
HAYES: That is a really good point. I remember when Darrell Issa
was coming in as the new chair of government oversight in the House, there
was all this talk about how he was going to town on scandals and there was
a ton of subpoenas that happened and we have not seen anything like the
payoff from that that was being hyped at the time.
FRUM: There`s a term "macaca moment" reminds us, that the casualties
of new technology are not always Democrats. It happens to be a Democratic
administration, so they`re going to be the casualties.
HAYES: But there`s a difference -- think the interesting difference
here, though, is that this is the random civil servant, essentially and
he`s not a presidential or Senate candidate, right? I mean, that to me is
what is chilling about this.
Whether the language is right or wrong, the guy has a career -- and
here, let me read you something. I thought it was funny. This is after
Armendariz has to resign. This is the Koch brothers statement, the Koch
brothers talking about this man.
"We worked cooperatively and productively with the EPA and Mr.
Armendariz concerning air permitting issues under the Clean Air Act in
Texas in 2010, and were able to resolve those issues in a mutually
satisfactory manner." Ergo, we were not crucified, right?
The point is that how is he actually doing his job should be the way
that he`s judged.
FRUM: This is, I`m afraid, all of our futures.
FRUM: I`m now going to forget the name of the obscure pastor in
Fayetteville, North Carolina, who gave the sermon about smacking kids who
don`t conform to gender stereotypes, that guy is also one of the most
famous people in America and he may not be resigning from his pulpit. But
he`s had a pretty uncomfortable couple of weeks.
The point is, we live in a world in which we are all liable to
surveillance, by not by the state but by our neighbors at all times.
GOLDSTEIN: And by the state I would say.
HAYES: And by the state as well.
I should say, I think there`s a big substantive difference between
that sermon, which was odious and hateful in a way I don`t think
Armendariz`s statements were.
FRUM: OK. That`s the just the example that pops into mind. I mean,
there are going to be Little League coaches, and school superintendents who
are going to find themselves saying something bad or stupid or wicked, and
there`s a cameraman phone there and it`s going --
HAYES: And that I agree with. One of the things we have done, the
word is that privacy erodes for private citizens, while secrecy
metastasizes among government and big entities, right? That if you`re
someone who gets caught on a camera phone because you`re saying something
stupid, then you`re on FOX News, whereas we still don`t know how many
drones are flying over Waziristan.
FALLOWS: And so, I think these are all important big points about
the top-level secrecy and the Panopticon state. But this is the wrong fact
case to attach them to, because unfortunately, this was a public official.
HAYES: In a public speaking.
FALLOWS: Yes. So, it was an unfortunate case for him and even 20
years ago, I think he might have got in trouble for that.
HAYES: I was very impressed. I spent time last night going through
Al Armendariz`s work and CV and the stuff that he did and he seemed he was
doing really righteous work. So I hope he can return for doing that really
What you should know about the week ahead right after this.
MADDOW: So what should you know for the week coming up?
You should know that the family of NFL linebacker Junior Seau has
announced they will allow scientific researchers to study the deceased
player`s brain to see if he was suffering from the effects of traumatic
brain injury after a 20-year NFL career.
You should know that Seau killed himself by shooting himself in the
chest, same method of suicide used by former Bears defensive back Dave
Duerson who killed himself last year after sending a text message asking
that his brain be studied by scientists for evidence of trauma.
You should know that neurologists at Boston University found that
Duerson suffered neuro degenerative disease linked to multiple concussions.
You should know the evidence is mounting that professional football
takes a toll on the lives of its players that is difficult to square with
some of our most basic moral commitments to each other.
As you hear Republicans and Mitt Romney attacking the president in
the wake of disappointing April jobs report, you should know there`s
actually a net private sector job creation under Barack Obama of 35,000
jobs, which is not very much but also way more than under George W. Bush
who oversaw a net job loss in the private sector of 663,000 jobs.
You should also know that since President Obama took offense, the
nation has lost nearly 600,000 public sector jobs and you should know that
usually government increases public sector hiring during a recession as
this chart shows, and if Republicans had allowed it to increase in this
recession, as we have in the past, we`d be in much better economic shape.
You should know that Chinese dissident and lawyer Chen Guangcheng is
still in China, thought with what appears to be an agreement from China`s
authorities to let him travel soon to the U.S. to study here.
You should know that China`s defense arrive in the U.S. on Friday and
will meet at the Pentagon with Secretary of Defense Leon Panetta and other
U.S. officials on Monday. We should keep in mind that the U.S./China
relationship is easily caricatured on the campaign trail by opposition
politicians. Those criticisms tend to be forgotten in favor of a policy of
continuity by more or less each successive American administration.
We should know China is also home to some of the most courageous,
inspiring, and innovative protesters and protest movements in the world.
And you should that it is those people who will change China, not us.
I want to find out what my guests think we should know for the week
Mr. Fallows, what should people know?
FALLOWS: You should know there`s going to be another look at
dysfunction of American politics coming out tomorrow. The Alliance for
Justice is putting out a report on the state of the judiciary. One federal
judgeship in 10 is vacant now. there`s a historically high level of
blockages of judicial nominations.
And so, in the first three years of George W. Bush`s time in office,
the number of vacant judgeships went down by 60 percent. In the first
three years of Obama`s time in office, it`s gone up by more 40 percent.
So, one more thing showing how our government is working.
HAYES: Yes, what happens in terms of the norms of the Senate and how
the rules have failed to keep pace with the degrading norms is a huge
source of that dysfunction.
Catherine, what should folks know?
RAMPELL: That over 300,000 people dropped out of the labor force
last month, which I think is a very concerning thing. Usually when the
economy is getting better, you see people who`ve been sitting on the
sidelines hopping into the labor force.
HAYES: Because they think they can get job.
RAMPELL: Yes, they say, oh, well, my friend got a job, maybe it`s
time for me to start looking again, pounding the pavement, sending out
resumes. And instead, you have people are dropping out. And it`s not
really clear why that is it`s very concerning about the state of mind of
workers right now.
HAYES: Yes, the jobs reports have been -- there are a little noisy
in each individual month. A feeling in January, February --
RAMPELL: Actually, we have the exact same pattern the last two
years, where the beginning of the year started out quite strong and dipped
and a lot of concern that will happen now. It is noisy as you say, so who
knows? You know, a lot of economists I talked with about this report on
Friday, had said, well, maybe the numbers will get revised upward.
RAMPELL: They are wrong, maybe the numbers are wrong. That`s how we
can have --
Alexis Goldstein, quickly, what should folks know?
GOLDSTEIN: Two things. We mentioned it before, there`s a big fight
against the derivatives reform of Dodd/Frank. It`s hard to fit into a
sound bite. So, if people want to read more, Americans for Financial
Reform has a good blog, blog at financialsecurity.org, where people can
And next week on May 9th, Bank of America shareholder meeting in
North Carolina. I think we`ll see a lot of people protesting that, and so
if you want to learn more, go to ncagainstcorporatepower.org to hear about
some things they have planned.
HAYES: That`s May 9th. There`s been a variety of shareholder
actions. This is proxy season in corporate America, where there`s a lot of
annual shareholder meetings, a lot of shareholder meetings directed at too
big to fail banks and other big corporate entities and this part of that
David Frum, what should folks know? Aside from the fact -- I`ll do
this for you -- that you have a new book out. It`s called "Patriots."
It`s a fiction. You should give it a read.
FRUM: Thank you. You should also know that French voters have faced
an agonizing choice in this recent presidential election. The socialist
Francois Hollande looks like he`s likely to win. He looks he`s going to be
a voice against austerity in the eurozone.
I think Americans should welcome that. It means that the hope of
averting a European depression is improved.
However, he is also opposed to labor market reforms that France needs
to do to be successful in the long term. And it`s a terrible dilemma. The
man is right in the long term, is wrong for the short term, and vice versa.
HAYES: I want to thank my guests today, James Fallows, author of
"China Airborne" and national correspondent for "The Atlantic" magazine;
Catherine Rampell of "The New York Times"; Alexis Goldstein from Occupy the
SEC; and David Frum, as I said author of "Patriots" also with "Newsweek"
and "Daily Beast" -- thank you all.
And thank you for joining us. We`ll be back next weekend, Saturday
and Sunday at 8:00 Eastern Time. Our guests will include writer and radio
host David Sirota.
You can stay up to date on info about next show by checking us out
online at Up.MSNBC.com.
Coming up next is, of course, "MELISSA HARRIS-PERRY".
Melissa, what have you got today?
MELISSA HARRIS-PERRY, MSNBC HOST: Well, first, Chris, thanks for the
concert today. I really appreciate every bit of music in and out of break
it was fantastic.
But we`re going to dig into the president`s re-election launch
message and we`ll ask a counterintuitive question that maybe, in fact,
we`re better off than we think we are. We`re also going to look at the
other side of the "stand your ground" law and ask why women who try to use
self-defense can`t get a break in our courts. And then we`re going to talk
about the dream of every little girl to grow up and bring a ballerina.
We`ve got Misty Copeland here.
HAYES: That sounds great. We will definitely be checking it out.
That`s Melissa Harris-Perry, who is coming up next. And you`re
definitely going to want to stay tuned for that.
And as for you at home, thank you for watching this weekend. And we
will -- as always, see you next week here on UP.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
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