Guests: Joseph Sangataldo, Majora Carter, Jared Bernstein, John Philis, Karl Smith, Annie Lowrey, Jamila Bey, Lisa Madigan
CHRIS HAYES, MSNBC ANCHOR: Good morning from New York. I`m Chris
Hayes. Libyans today are voting in their first free election since the
fall of former dictator, Moammar Gadhafi. Today`s vote will choose a 200-
member legislature which will then form a national government to replace
the ruling military commanders in Libya.
And record heat is expected again today across much of the central and
eastern U.S. after a week of record-breaking temperatures. We`ll have
details about today`s new records and what they mean for the politics of
global warming on tomorrow`s program.
Right now, I`m joined by MSNBC contributor, Jared Bernstein, former
chief economist and economic policy adviser to Vice President Biden, now a
senior fellow at the Center for Budget and Policy Priorities.
Joseph Sangataldo, former employment counselor who`s now been out of
work himself for 18 months, Majora Carter, founder of the non-profit
Sustainable South Bronx and host of the syndicated radio program, "Promise
Land," and John Philis, owner of a small business, a diner here in New York
called the Lexington Candy Shop, which is a great place.
President Obama and Mitt Romney yesterday continued their now monthly
ritual of sparring over the latest jobs numbers. The new jobs report
showed that private sector added 84,000 jobs in June while the public
sector shed 4,000, bringing the net total to 80,000 jobs for the month,
slightly lower than expectations.
The unemployment rate remains unchanged at 8.2 percent, and the
numbers are both familiar and frustrated. In Ohio yesterday, President
Obama looked at the numbers and the context of the past two years.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We learned this morning
that our businesses created 84,000 new jobs last month. And that overall
means that businesses have created 4.4 million new jobs over the past 28
months, including 500,000 new manufacturing jobs. That`s a step in the
OBAMA: That`s a step in the right direction.
OBAMA: But we can`t be satisfied because our goal was never to just
keep on working to get back to where we were back in 2007.
(END VIDEO CLIP)
HAYES: To put last month`s 80,000 jobs in context under the George W.
Bush presidency, not even counting the 2007 financial meltdown, the economy
added on average of around 65,000 jobs each month. Bad news for the
economy, however, is undeniably good new for Mitt Romney`s political
fortunes. He wasted no time blaming the jobs report on a failed Obama
(END VIDEO CLIP)
MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: We`ve looked at now almost
four years of policies that have not gotten America working again. We`ve
seen that his tax policies have not encouraged investment in America.
We`ve seen that Obamacare has made it less likely for small businesses to
We`ve seen his financial regulatory burden make it less likely for
small banks to make loans to businesses that need those small bank loans to
get started and to grow. His policies have not worked.
(END VIDEO CLIP)
HAYES: So, I think there`s a general consensus, and it`s correct that
the economy`s a driving issue to the campaign, but when we talk about the
economy, the economy is a big, big, big thing. And, it has so many
different facets to it.
I think the conversation can come on the abstract and -- so, Joe, part
of the reason I wanted you here and John I wanted you here and Majora is
that, you know, when we talk about the economy, what do we mean? Everybody
has very different experiences to the economy, and there are parts of the
economy that are doing very well.
There are parts of the economy that are doing terribly. There are
parts of the economy that are doing terribly, that were doing terribly 10
years ago and 20 years ago and 30 years ago. I just drove through Gary,
Indiana, it was like, Gary, Indiana (ph) things were bad 10 years ago and
20 years ago.
Joe, tell me a little bit about what your -- how you think about where
we are right now just from your own personal experience of being out of
JOSEPH SANGATALDO, UNEMPLOYED: I just don`t think we should sacrifice
the American worker. And there`s a number of ways you can job train and
escort people into work that we`re just not doing. What happens a lot is
you hear jobs, jobs, jobs, and then, you don`t see anything happen. I
don`t see any job programs. Do you where you are?
MAJORA CARTER, FOUNDER, SUSTAINABLE SOUTH BRONX: Oh, job training
SANGATALDO: Do you see some?
CARTER: But that`s about it.
HAYES: That`s part of the problem, right? I mean, we have -- there`s
been this job training consensus that built up over 10 or 15 years.
There`s a lot of job training -- there was job training money under
Clinton. There`s been some job training money and the recovery act, but if
you train people to have jobs and there are no jobs --
JARED BERNSTEIN, FMR. ECONOMIC ADVISOR TO VP BIDEN: There`s an "all
dressed up and nowhere to go" potential. You train folks people and the
jobs aren`t there. And then, they`ll question about it.
HAYES: And you are working --
SANGATALDO: I`ve been doing this for 20 years.
HAYES: Doing what specifically?
SANGATALDO: Basically, job development, job training, working with
the private sector, working with disabled people, homeless gentlemen,
homeless adults, disabled, did I say?
SANGATALDO: And I`ve never seen a lack of commitment to the work
force like I do now.
BERNSTEIN: By whom?
SANGATALDO: By the government, by officials. Just turning on public
employees, for example.
HAYES: And you were a public employee before you were laid off.
HAYES: The irony being that they cut the program that was doing job
SANGATALDO: Yes. There was not enough to sustain the regular work
force and had to get rid of some of the public employees with union
benefits and that sort of thing. I didn`t really see the shortfall and the
funding that was supposed to be there, and I looked very hard.
So, I think what we`re having is an attack on policemen, firemen,
welfare workers, unemployment workers, and villanizing all of those and
also attacking the unemployed, making them take drug tests and going
through assessments -- no, it is your fault you`re unemployed, and that`s
really just not the case.
HAYES: Respond to that, because I think, actually, that`s one of the
really interesting things in this conversation. And John, I want to bring
you into this is where the blame lies. And I -- there`s been this kind of
interesting debate about when we look at the high jobless rate, right?
There`s two kinds of ways of talking about it.
We had a terrible financial crisis, and that produced a lot of
unemployment or the American workers are not properly trained, and there`s
this thing called structural unemployment which, you know, the subtext of
that is it is your fault you`re unemployed. There`s -- you know?
JOHN PHILIS, OWNER, LEXINGTON CANDY SHOP: If you had the skills,
you`d have a job.
HAYES: Right. And I wonder how you feel about that.
SANGATALDO: I disagree completely.
SANGATALDO: I have a bachelor`s degree in human resources. And I
went back and got an associate`s degree in accounting like last month, and
I still can`t find a job. And I can`t get hired (ph) to clean bathrooms.
That`s how bad it is right now. There`s a real lack of work.
But there`s a way to work with people to build their job skills, get
resumes, and keep their spirits up.
SANGATALDO: When I worked in the job center, I didn`t see one
official come through in 18 months and say don`t give up, keep trying.
People hid from the unemployed.
PHILIS: Well, one problem, even at the small business level, even
though it`s referred to as a big industry problem is the lack of certainty
coming from Washington, whether it`s the tax policies that are going to be
going on for the next few years, dealing and talking with the customers
that I have on the east side, nobody`s looking to hire.
Everybody`s become more efficient operating at this level. They`re
turning a higher profit. But they would like to hire, but they don`t know
BERNSTEIN: So, that`s something I`ve never quite understood. And I
want to -- now, they have a chance to actually get into it with someone
like you. Let me do that for a second.
So, if -- I always thought the uncertainty thing sounded sort of fishy
to me as an economist, because the idea is if you`re an employer, and
there`s people who want to the good or service that you`re producing,
you`re not going to leave money on the table not hiring someone you need to
achieve those profits because of page 799 of the affordable care that kicks
in in 2014. So, say a little bit more --
PHILIS: Well, there is something to be said for that, because even my
accountant told me, you wait till you see your taxes coming down the line
in two, three, four years. But it`s part of the whole bigger picture
because the uncertainty with the taxes and then throwing in what`s going on
with the local -- with the state and city, basically looking at the small
business person as an ATM.
And, you know, raise taxes here. I`m paying taxes that I don`t even
know what they`re for. I don`t know what my MTA tax goes to.
PHILIS: For what purpose, I don`t know.
CARTER: I`m with you.
PHILIS: And that`s the sort of, you know, problems that we face.
We`d like to hire. We`d like to expand our hours, but it`s an issue.
CARTER: And I`m also thinking, are we really creating the proper
environment, the proper climate to create more jobs? Look, I started one
of the country`s very first green college job training and placement
systems. It wasn`t just about training people to do jobs that didn`t exist
in the future.
It was really about looking at the trends and making sure that we
trained people to them. And in that case, it was things around urban
forestry, just climate adaptation, in particular, and there were jobs in
BERNSTEIN: During what period of time?
CARTER: Oh, that was actually during part of the second half of the
Bush administration. So, you know, not a time when people were thinking
about this at all, but what we really look for or what were the trend is
going forward, and I think that what happened with green jobs over the past
few years is there was an enormous amount of money through the recovery act
but going into job training, but no one was really thinking about, have we
built up the proper environmental so that we can get people employed.
PHILIS: Hire the people.
CARTER: In particular, in the renewable energy industry. And guess
what? Nobody bothered to do that work as best far as I can see. So, when
you`re looking just to keep it really current, you know, you`ve got a whole
bunch of thing.
You know, the southeast and central parts of America right now just
went through because of the heat wave and all sorts of awful things are
going on. There`s a huge --
HAYES: Lot of work to be done.
CARTER: A lot of work to be done and a lot of people without power
right now. If we had done the work of adapting to the change in climate,
dug deep down, and buried those utility lines, guess what, people would
have been working. That`s climate adaptation. I don`t care if it`s God or
man or whatever, but you`re employing people doing that work.
HAYES: Yes. Why don`t we put our power lines underground?
PHILIS: I say that every time we have --
HAYES: Or even just like watching the -- even watching the -- I mean,
again, this is not like a sophisticated economic argument. It`s a common
sense one, but I think it`s actually economically right, too, which is to
watch the storm go through D.C. and be like, well, clearly, there`s some
work that needs to be done if we don`t have power for seven days.
PHILIS: That`s right. This is 2010. This is -- you know, jobs ready
to go. You have unemployed t electricians, construction workers --
PHILIS: Bury the wires. How are we going to get the money?
HAYES: All right. We`ve come up with a solution, John. I want to
hear about what your customers look like and what your operating margins
look like in this environment right after we take a break.
HAYES: Twitter is pushing back hard on burying the power lines
argument, so maybe we haven`t solved the country`s economic problem.
HAYES: -- that it would be a huge mess. You have to dig up a lot of
PHILIS: You do have to dig up a lot of things.
HAYES: Much more difficult than it first appears. So, we`ll bracket
that. It`s brainstorming here.
John, I want to ask you about demand. I mean, there`s an argument --
there`s sort of two arguments I think we get in this economy about
uncertainty on one hand, which is something you talked about before and
then demand. You know, the businesses don`t have enough customers. What
are you seeing in terms of your business? And obviously, I should
You know, the upper east side of Manhattan is a different environment
than Youngstown, Ohio, or Baltimore, Maryland. I mean, you know,
obviously, this is not necessarily representative, but I`m curious what
PHILIS: Well, you`re absolutely right. It is different. And also,
in my case, people still have to eat.
PHILIS: But we`ve seen a decline in demand, so to speak. We lost
tourism. And this is a direct effect of the Euro. You can easily see it
we have less French, Italian, and Spanish tourists. This was a good chunk
of our business.
And basically, by around the end of February or so, we saw a big drop-
off in tourism coming to New York. And I`ve spoken to other restaurant and
tourists, and they all agree. This is a big base that we`ve lost, and it`s
HAYES: It also points to something I think is so interesting about or
some important to keep in mind about the economy which is that, you know,
no -- with the exception of high unemployment or, you know, massive drop-
off in growth, different things have changed about the economy helped
different people or hurt different people, right?
So, a weak Euro is bad for you because Europeans don`t come but maybe
good for someone who`s trying to export products to say Spain, right? And
so, you know, the problem is that all of the economic news cuts in
different directions for different people.
BERNSTEIN: What I find interesting about John`s story there is that,
you know, I walk around thinking that the Euro crisis is shaving half a
point maybe more of our GDP growth, and that`s big. And then, to hear the
granular story about how it`s playing on on the ground is important --
PHILIS: It`s more than a point.
HAYES: Can we talk about this? I want to dig into this in certainty
idea, because it`s something you hear a lot. And I just want to get a
little more concrete about what it means. I mean, you don`t have to say,
well, it`s this, this, and this. It could just be a feeling. And part of
the thing I can`t quite get about when we talk about uncertainty. We (ph)
told them that the economy.
Is it just -- look, I feel uncertainty in a general sense in that,
like, I don`t trust that any of the world`s economic machinery actually
works. Like, you know, they`re rigging rates in London and I don`t trust
Wall Street not to blow up tomorrow. You know, everything seems kind of
like on quicksand, more or less.
But that`s different than I have specific regulatory concerns about
affordable care act or Dodd-Frank, et cetera. Which of those two is it
when you talk about uncertainty?
PHILIS: I think it`s more the -- what the government could do. I
think that`s the most uncertain thing.
HAYES: But did that -- and that is playing -- the federal government.
Let`s talk about federal government. That is actually -- in what ways is
that playing a role in what decisions you`re making the business?
PHILIS: Well, you know, we sit down, we formulate our budget, or we
foresee what we expect to do. And, you know, we pay a lot of taxes.
PHILIS: And, there`s an uncertainty. You know, with business down
and there`s a lot of other -- it`s not just uncertainty in that regard. We
also have a problem with -- I know the economists all say there`s no
inflation. I can give you inflation, but everybody here, there`s no
inflation. And it`s another factor that`s hurting our business.
BERNSTEIN: You know one thing about that? The reason economists say
that -- is because they`re talking about core inflation which is pretty
low. Core inflation takes --
PHILIS: Which includes food prices.
HAYES: Which are extremely volatile.
BERNSTEIN: And he owns a diner.
PHILIS: Yes. And people say there`s no inflation, and then, you try
to raise prices and then you try to list, you know, rent, real estate taxes
which are constantly going up, you know, all that stuff.
HAYES: You`ve been doing this for 32 years.
HAYES: You`ve been through a lot of different recessions.
HAYES: How does this one look different?
PHILIS: This one is tougher because it`s got more factor. You know,
with the internet, it is a wonderful thing and everything, but it`s also --
news is out there every second of the moment, and it affects you. You
know, there`s the credit card industry, which has grown enormously now.
PHILIS: We are hit with a lot of fees.
HAYES: You pay them a lot.
PHILIS: A lot of fees every month. And this is basically for the
privilege of collecting money.
BERNSTEIN: Yes. Right.
PHILIS: Which I understand the way written credit works in the
system, and I use credit cards myself. But there`s a lot of fees that
never existed before.
HAYES: Customers, I think, don`t realize --
PHILIS: Customers do not realize.
SANGATALDO: We went through a really bad recession around 1992, and I
worked through that -- through programs and different non-profits and I saw
us turn around a lot easier and a lot faster than we are now. And I don`t
see us taking the steps nationally or locally the way we did going 1992.
I`m just really concerned that we`ve pretty much turned our back this
time, threw our hands in the air and said every man for himself.
HAYES: You work in the white house. So, respond to that. I mean, I
feel like the recovery act doesn`t get nearly enough credit for what it was
able to do --
HAYES: My argument -- and what the hell do I know?
BERNSTEIN: You know a lot.
HAYES: No, I don`t.
HAYES: The recovery act, you know, I think doesn`t get enough credit
for the attempt. And then, at a certain point, I think the paralysis in
Washington, particularly, Republican Party and Republican Congress, really
did say -- Republican just said, we don`t want to do anything more.
We have a story to tell about this economy, actually, that`s grounded
in this uncertainty thing. We`re going to remove uncertainty as opposed to
BERNSTEIN: I thing that`s exactly right. I think you`re both right.
The recovery act actually worked quite well when it was implemented in
terms of fairly quickly breaking the back of the great recession and
turning GDP losses into gains and kind of pulling forward the job growth we
got. The problem is, and Joe`s right, it didn`t last long enough.
BERNSTEIN: The difference between now and 1991 and 1992 and pretty
much any earlier recession go back to the great depression is the depth and
the length of this downturn. And that calls for more counteractive kind of
medicine to offset it, and that`s where we`ve fallen short.
CARTER: Absolutely. I totally agree with that. And I think that one
of the things that we might want to consider doing -- actually, one thing I
do have in common with the Tea Party is that there`s a bit there that I
think we can use to have a smaller government, you know? And that`s where
I agree with them.
But I think we should do it, you know, by continuing things, whether
it`s the recovery act or even thinking about, you know, are there real jobs
programs that we can create. And so, I`m thinking about how do we support
our America`s most expensive citizens.
I mean, they`re the people who are generationally impoverished, people
that are veterans coming back from our oil wars, people who are coming in
and out of the criminal justice system and how do we create jobs for those
BERNSTEIN: I`m curious. How do you do that -- how do you do more and
have a smaller government?
CARTER: Oh, my gosh, because those people are already
disproportionately used a bigger amount of social service dollars.
HAYES: Get them back to work. Yes, right.
CARTER: Get them back to work. And specifically, they don`t get any
better. So, we`re creating accessible jobs for them whether it`s through
climate adaptation jobs, whether it is, you know, actually making it so the
southeast and southern states are actually doing better, you know, after
like some major storms that are going on down there.
Whether it`s through, you know, creating systems that actually
naturally conserve energy. All of these things that we`re talking about.
Then, that is the kind of thing that supports our America`s most expensive
citizens and gives them dignity. So, it`s really important --
HAYES: I want to talk about dignity. I want to talk about mood, the
mood of the country because that`s -- in some ways, that`s what`s going to
define the election, the (INAUDIBLE) that defining our politics right now
right after this break.
HAYES: Joe, we`re talking about the mood of the country, and I want
to turn a little bit to the politics of this ultimately because that is
important. It`s going to determine, I think, in some senses which of these
stories we`re telling you about the economy is the one that we use to guide
policy, this uncertainty story, this lack of demand, need to hire people.
Talk a little bit, Joe, about just the emotional experience of looking
for work and not being able to find it.
SANGATALDO: It`s pretty scary. I mean, I`ve worked helping other
people. And I always sat in the chair and said, I`m one paycheck away from
being unemployment myself when someone sits for counseling. And I`m there
now. And, it`s not as easy as I thought it would be. I`m out looking for
service industry jobs in Atlantic City along the boardwalk. Anything I can
My unemployment benefits were cut abruptly in the last extension. And
unemployment in New Jersey is 9.2 percent right now. It went up. I got a
call and radio ads from Governor Christie saying that he`s developed more
jobs now that in the last seven years, and I don`t know who he`s talking
about, you know?
Don`t raise the millionaires` tax. That`s the main message. But that
millionaire`s tax would probably pay for some of these programs.
HAYES: Right. Right.
SANGATALDO: So, it`s like throwing the workers out, you know, and
training out the window.
BERNSTEIN: Quick, quick policy point. It was back in February of
this year when the extended unemployment benefit program was actually
BERNSTEIN: -- in precisely the way you`re saying it, yet, the share
of long-term unemployed --
HAYES: We should say, who is pushing for that? That`s the Republican
Congress that has been extremely hostile to extensions of unemployment.
SANGATALDO: And if I was laid off first today, my first day of layoff
was today, I only get six months.
SANGATALDO: I have to have a job by the first of the year, because
there are no more long-term extensions after the first of the year. So,
it`s not easy to find job in six months. I mean, I`ve looked at the family
dollar stores and the friendly restaurants and convenience stores and the
diners, there`s nobody hiring.
PHILIS: I get phone calls everyday from agencies, are you hiring.
This past month, I was inundated with kids looking for summer jobs. I just
don`t have a job, you know, to offer them. I`d like to, because, you know,
the restaurant industry has provided the initial jobs for so many people --
HAYES: One of my first, serving animal fries at the Bronx Zoo at age
PHILIS: -- you know, making French fries at McDonald`s. And, you
know, it serves a big purpose. I just can`t help it.
HAYES: Yes. Summer youth unemployment is --
HAYES: There are no summer jobs, basically --
CARTER: But the thing is we really got to figure out ways to get
money in the hands of poor people, because the bottom line is like
consistently, what`s the unemployment rate in New York City right now?
Nine percent --
CARTER: In poorer communities in New York City, it`s double,
sometimes, triple that. And one thing we know about poor folks is,
unfortunately, we don`t save as much as everybody, that`s -- you know, you
get money into the economy that way. So, creating jobs, accessible jobs
for folks in areas where we need to have it done, that`s what`s important.
HAYES: I`m curious how, you know, places like the South Bronx, which
is just where you`re from where you`re living now and where you work, sort
of the same question that I asked John, which is, does it look any
I mean, in communities that are already have massively high
unemployment, a lot of people who are being cycled through the criminal
justice system and a lot of under investment generally, how different does
a period like this look than, you know, even the boom times?
CARTER: Well, it`s not just places like the South Bronx and the New
York City. I mean, it`s poor White working class communities all over the
country as well. And, you know, it doesn`t feel different because we`ve
been troubled for so long, but honestly, since I know, and I know this for
a fact because of what I went through creating job training programs and
placement system that literally turned people from tax burdens into
That`s where you see the community starting to change. They start to
talk. That`s where there`s hope and possibility in what they`re doing, and
it really does have a tendency to really breed the kind of hopefulness that
will keeps us out from thinking that, you know, all is lost.
BERNSTEIN: I mean, when I hear Majora -- and I hear this kind of
conversation, I just think there`s a ton of common sense about what we
ought to be doing.
CARTER: And it`s not being applied.
BERNSTEIN: And it`s not being applied. And one of the reasons it`s
not being applied because --
HAYES: Explain that, yes.
BERNSTEIN: OK. Everything we`re talking about actually costs some
BERNSTEIN: And we -- you know, we talk about Europe as going austere.
We`ve gone austere also, whether it`s at the federal, especially at the
state levels. All this budget cutting is antithetical to the kinds of
things we need to do right now. Now, they should be temporary. I`m not
saying we need to grow government. They should be temporary until the
economy is back on its feet. But we`re going in exactly the opposite
direction of all of this good common sense, I guess.
PHILIS: But the money that Washington spent, did it go in the right
direction to help?
BERNSTEIN: Well, I think it did. I mean, I think it did in the sense
that the recovery act, for example -- let me say something quickly about
the recovery act. The recovery act, $800 billion program created, you
know, saved as many as three million jobs, shaved a couple of points off
the unemployment rate.
At this point, it has almost no impact on the budget deficit or the
growth of the debt because it got into the system and got out of the
system. It`s those temporary spending measures that don`t hurt you in the
fiscal longer run. It`s the permanent stuff like the Bush tax cuts that
Joseph Sangataldo, former employment counselor who`s now unemployed,
Majora Carter, economic development consultant, and John Philis, small
business owner, check out, Lexington Candy Shop, right? That`s what`s
called this? If you`re on the upper east side of New York, -- guys, it was
really fantastic having you all. Thank you so much. We`ll be right back.
HAYES: Joining us at the table now is Jamila Bey, contributor to
"Washington Post" blog, "She, the People," reporter for "Voice of Russia
Radio." Karl Smith, back at the table, assistant professor of economics
and government at the University of North Carolina Chapel Hill and
contributor to the same blog, "Modeled Behavior," and Annie Lowrey,
economic policy reporter at "The New York Times" joining us for the first
time. It`s a great pleasure to have you here.
ANNIE LOWREY, NYTIMES.COM: Thanks for having me.
HAYES: So, I want to talk just about the politics of the jobs numbers
and the conversation that we`re having, and I think these -- you know,
obviously, this is a layup for Mitt Romney. Jobs numbers come out.
They`re, you know, worse than expectations or they`re not particularly
wonderful in terms of getting to full employment.
He, you know, gets in front of the microphone and blasts the
president. The president says -- the president`s story -- and, Jared, you
were there in the depths of the crisis is that, you know, things were going
really badly, and then, we`ve turned things around, and they`re not great
now but we`re headed in the right direction.
And there`s this great piece of tape, Americanbridge (ph) Super PAC
had found this tape from Mitt Romney in 2006 as governor talking about his
jobs record. Check it out.
FMR. GOV. MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: You guys are
bright enough to look at the numbers. I came in and the jobs numbers just
falls off like a cliff. I came in and they kept falling for 11 months, and
then, we turned around and we`re coming back. And that`s progress. And if
you`re going to suggest to me that somehow the day I got elected somehow
jobs would immediately turn around, that would be silly.
It takes a while to get things turned around. We were in a recession,
we were losing jobs, and we turned around. And since we turned around,
we`ve added 50,000 jobs. That`s progress.
(END VIDEO CLIP)
HAYES: That`s progress. So, that`s Mitt Romney sketching basically a
line graph of the job trajectory. So, we thought, what does that look like
if you match that up with the Obama jobs record? So, take a look. This is
Mitt Romney defending his jobs record in 2006, but we`ve overlaid the jobs
record of Barack Obama, and you`ll see how closely they align.
(BEGIN VIDEO CLIP)
ROMNEY: You guys are bright enough to look at the numbers. I came in
and the jobs had been just falling like off a cliff. And I came in and
they kept falling for 11 months, and then, we turned around and we`re
coming back. And that`s progress.
(END VIDEO CLIP)
HAYES: That is the argument right there in 2006. That is the
argument of the presidency re-election in 2012, almost literally with the
same angle of incidences on the jobs.
BERNSTEIN: Yes. I mean, I think it`s a argument. It`s an amazing
clip. I`d like to pat the back of the person who found that. I will say
that, I will say that what really matters to people are less bar charts
and, you know, those kinds of backward-looking statistics and kind of how
they`re feeling right now.
BERNSTEIN: And the fact that the pace of job growth has clearly
downshifted, if you compare, say, the 75,000 jobs per month in the second
quarter to triple that, you know, about 225 in the first quarter of the
year. There`s been a slowing in the rate of job growth.
KARL SMITH, ECONOMICS PROF., UNC-CHAPEL HILL: OK. So, do you think
that people really care about what the statistics are at all? This is
something that I`ve wondered about when --
BERNSTEIN: I don`t think they care about the statistics, but I think
the statistics are emblematic of what`s going on in a lot of their lives.
LOWREY: But they do care about the statistics, right? I mean, at
least in term of the presidential race. There`s a lot of evidence that
people pay a lot of attention to these headlines. It`s very determinative
of how people vote.
LOWREY: So, it`s the things that get on the front page of, you know,
of "The New York Times" that they care about, right?
LOWREY: Just to mention a publication. They care about gas prices.
They`ve cared about unemployment. And I think that the other thing is it
is indicative of what people are feeling.
SMITH: So, we don`t know if it`s indicative of what people are
feelings. Like --
HAYES: Make that case.
SMITH: So, the payroll numbers are back, right? But the household
survey numbers are good. So, we have --
BERNSTEIN: They`re not that far off. If you actually match them off,
they`re about exactly the same, but go ahead.
SMITH: OK. So, we measure jobs at least two ways, a bunch of ways
but at least two ways. One is we ask businesses how many people are we
hiring. That`s the jobs numbers, establishment -- and the other thing is
we ask people do you have a job. And that`s the household survey. And so,
from that, we get two different measures of how many people have or how
BERNSTEIN: Do you think the economy and the job market is doing
better than, say, these numbers or the general mood?
SMITH: Yes. So, the household survey is soaring, right? It tanked
in 2011, and now, it`s rising at one of the fastest rate, I think. Over
the last 12 months, the average is 300,000 jobs created a month. And so,
it`s doing really, really well, and there`s reason to think that the
household survey is better at finding changing points.
HAYES: This is a fascinating idea. Just so the people are clear on
this. I mean, there`s been some arguments about whether the statistics
we`re using, and this actually has to do with seasonal adjustment which is
a whole other thing we can get into.
HAYES: Yes. Coming up for the whole hour, seasonal adjustment in
debt. No. But the idea that -- and I think there`s a really important
point. There`s how you feel about the economy based on how much money do I
have in my bank account? Do I have a job? Am I making my bills?
Then there`s, how do I feel about the economy in general job based on
what`s on the cover of "The New York Times?" And what`s on the cover "The
New York Times" is determined by these statistical measures. And those
statistical measures get into the bloodstream of the body politic. They
get into the mood of the country.
And what you`re saying which I think is a possible and plausible
argument is that there`s a dark mood from the headline numbers that may not
actually match people`s personal experience to the economy, and that`s
creating political effects because people are affected in the way they`re
thinking about the economy --
LOWREY: Even if you take the better numbers, the numbers aren`t that
good. I mean they`re not great one way or another.
JAMILA BEY, VOICE OF RUSSIA RADIO: They`re not good. And when you
look at what people are doing as far as going into retail establishments,
you know, consumer confidence is not progressing at the level that anyone
had hoped it would. Retail stores are not making their projections.
High-end retail stores are and very low-end dollar store kinds of
places are, but that middle of the road place where people come out and
spend money, people are not spending as much. People are not driving as
much. People are not traveling as much. Their behavior is matching this
dark mood that they`re feeling.
BERNSTEIN: It`s not just a behavior. It`s a broad range of economic
HAYES: I`m going to ask you to hold that thought. More on -- I like
Karl`s statistics thesis right after this.
HAYES: That bump-in is the stiffest competition that "Call Me Maybe"
has for song of the summer.
HAYES: Karl, you`re making argument that the economy is better than
it might appear. I want to come back to you and let you make that a little
SMITH: Yes. So, there are a bunch of reasons, but the biggest one
I`m talking about now is the main jobs number that we see on the front of
the page has a lot of problems with it. It has seasonal problems. It`s
slow to find turning points. And there`s lots of other data I look at that
and like better that says things may be accelerating fast. So, I was
talking to --
HAYES: You guys had an incredibly nerdy back-and-forth.
SMITH: The survey of unemployment from looks pretty good. If we ask,
you know, companies questions like how many cars are you assembling, if we
look at how many permits for new houses we`re ordering, all those things
that are accelerating. And so, those things form a strong core of the
economy, and those things are moving upward --
BERNSTEIN: So, the only thing I`ll say is the resolution of our
little nerdy discussion there during the break. We said, Karl is taking a
12-month average of some of these numbers, and when do you that, you miss
the most recent deceleration. I`m not saying he`s wrong, but I think that
he`s missing it.
LOWREY: Yes. And also, I think that if you`re going to make a
pessimistic case, there`s other data that has gotten really bad. So, some
of the things that were driving the recovery, exports and manufacturing,
those have both gotten a little bit weaker.
SMITH: Only exports. Manufacturing total has not --
HAYES: Many manufacturing.
LOWREY: This past week, the number came in awful.
SMITH: Yes, but that was mainly on export --
HAYES: Can I make this point though -- I just want to put in my own
personal hobbyhorse just for a moment, which is that --
SMITH: Climate challenge?
HAYES: No. It`s not climate change. We`ll get to that tomorrow.
(INAUDIBLE). It should be the planet`s hobby horse, actually, but we --
you know, the Republican Congress which will not do anything stimulative
between (INAUDIBLE) and that will continue, I think --
BERNSTEIN: Regardless of the data.
HAYES: Regardless of the data. The president has rose the American
jobs act, which I think would add about one million to two million jobs,
depending on the estimates. And you know, the Joe Sanglatandos of the
world could be working. Those are real numbers, real human beings with a
tremendous amount of emotional distress, anxiety, and a waste of their
human capital, sitting on the sidelines right now.
People that can work, not working, is a waste. It`s a huge waste.
The only other person who can change this situation in the short term is
Ben Bernanke. You and I, this is now -- we`re now on our hobbyhorse, Karl.
But when is Ben Bernanke going to get off the sidelines, because I think,
you know, there`s a question about how effective what he does can be. But,
do you think that we`re going to see some action from him in the wake of
SMITH: Probably a little bit more, but I don`t think there`s going to
be any serious action on the part of the fed in terms of like changing
their perspective and making jobs a major priority. Over the last six
months, I think they`ve essentially convinced us or convinced me that
putting America back on track and getting everybody a job is just not their
LOWREY: And one thing that Ben Bernanke has said a number of times is
that he thinks that there`s a need for more fiscal policy, right?
LOWREY: Yes, exactly. He`s actually come out and said, like, we can
do more monetarily if we need to.
LOWREY: But, you know, we think that there is a need for more fiscal
HAYES: But what`s so bizarre to me about where we are in this moment
is that everyone says, number one issue is jobs. Number one issue is jobs.
And the political system is just completely incapable of acting on the most
BERNSTEIN: Half of the political system believes the number one job
is getting rid of the president.
HAYES: Right. That`s right.
BERNSTEIN: They`re targeting a different variable there.
HAYES: Do you have any faith, Jamila, of any sort of break through or
is this like --
BEY: Oh, absolutely not at all. Not at all. Every issue but jobs is
on the table when we look at -- for example just what happened with
Attorney General Holder. When we look at -- if you go state by state by
state and look at what state legislatures are doing, it`s all about, well,
hey, women, we`re going to tell you what your doctor can do for you or not.
It has -- from every level, from Washington to the state houses in all
of our states, nobody is doing anything -- very few are doing anything
about our jobs, and I`m not at all confident that it would be politically
feasible for anyone to break ranks with their party and --
HAYES: Name the party, the Republican Party. And the big question
is, will they be held accountable? That`s been my question. Will the
Republicans in Congress be held accountable at -- in the voting booth in
November the way they`re hoping the president is.
More and more states are turning to an old-fashioned way of punishing
the jobless and working poor who can`t pay fines or court fees. Prison.
That`s right after this.
HAYES: Paul Kirkman (ph), if you`re watching, just you know, Karl and
Jared are having an excellent debate about where you feel about monetary
HAYES: All right. There`s a piece in "The New York Times" this week
that I think speaks directly to the inequality of accountability that we
have here in America. A society that is relentlessly punitive (ph) in the
bottom and remarkably forgiving on the top. Reporter, Ethan Bronner (ph),
detailed the growing the number of poor people who are going to jail,
because they can`t pay their debts.
The problem is that cities strapped for your cash are seeking new
revenues with so-called user fees not just in the criminal justice system
but traffic and license violations or not paying child support. And when
people cant pay, well, he writes Hills McGee (ph), with a monthly income of
$243 in veterans benefits was charged with public drunkenness, assessed
$270 by a court and put on probation through a private company.
The company added a $15 enrollment fee and a $39 in monthly fees.
That put his total for a year above $700 which Mr. McGee, 53, struggled to
meet before being jailed for failing to pay at all. Minor offenses can
lead to hundreds if not thousands of dollars in debt which can lead back to
jail if not failed.
Cities are charging people for everything from probation supervision
to the use of constitutionally guaranteed court appointed public
defendants. It`s either not to punish or deter criminal behavior but to
shore up budget gaps. When offenders can`t pay these fees, they get a
notice to show up in court, and if they don`t show up in court, warrant
goes out for their arrest.
The Supreme Court ruled in 1983 it`s unconstitutional to send people
to jail because they can`t pay their debts, but cities are getting away
with it because they`re using contempt of court to circumvent the spirit of
that prohibition. It seems to me that being poorer shapes the outcome
here, not culpability.
And I think it`s a great piece of reporting in your fine paper. You
have this confluence of events. I mean, we`re just talking about
joblessness. I mean, there are a lot of people who are out of a job and
don`t have much money, right? On hand, you have more people with fewer
dollars and fewer resources. At the same time, you have the austerity
pressure being pushed down on these governments that never want to raise
So, increasingly -- I remember covering this in Chicago when I was a
reporter there. All sorts of fees start to get added in because you can
increase fees and say and run for election saying I didn`t raise any taxes.
Meanwhile, speeding tickets are now $900 or something like that. So, you
have these fees being put.
And there`s actually a report issued by one of the groups that
represents people that work in the courts in the state level saying, the
courts are not a revenues source. They are not means of extracting revenue
from people. The courts are a fundamental part of our self-governance.
And it`s remarkable to look at people who are actually doing prison time
for not paying their debts.
BERNSTEIN: It`s Keynesian, really.
HAYES: It is Keynesian. In fact, I`m glad you said that. We have
this a little bit from the 1999 version of David Copperfield when
Copperfield visits Wilkins Micawber in the debtor`s prison. Check it out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think I expected to find Mr. Micawber clapped in
irons in some dreadful dungeon. The shabby reality of a debtor`s prison
was rather different. Though, no less than terrible in its own way,
(INAUDIBLE). Annual income, 20 pounds, annual expenditure, 19, 19, and six
will result in happiness.
Annual income, 20 pounds, annual expenditure, 20 pounds and nothing in
six. Result, misery.
(END VIDEO CLIP)
HAYES: I mean, you`re enforcing some kind of moral code. I mean,
that idea debtor`s prison which are founders rebelled against because they
found it to be totally odious. That, you know, that this was the way you
make people pay their debts and to have a situation in 2012 where you`re
extracting money from people that cannot pay and putting them in prison for
it strikes me as just completely offensive and odious to some of our core
BERNSTEIN: I mean, I totally agree with you, but I think the key
point here is that very strange things happen when you completely take tax
revenue off the table. You`ve got to get it from somewhere, and you know,
this is where the balloon gets pinched.
LOWREY: And I think there`s kind of like two points to be made about
this. The first is that, it`s really expensive to be poor in some cases.
This is just really a great example of the way and which the poor you are,
the more of these fees and you know, it becomes this self-perpetuating
The second thing is that for states it ends up being expensive, right,
if you put people in jail, it`s really expensive to keep them there. And
so you know, it doesn`t make a lot of sense when you look at the entire
ledger. And there`s been a lot of governors and other local officials who
basically said it`s really expensive.
Our prisons are really expensive. How can we reduce cost? And it
seems like this is going to be one of those places in which I wouldn`t be
surprised if people start peeling the fees back.
SMITH: Yes. I think more fundamentalist it`s just morally criminal,
right, to do this. You can say this isn`t practical in the long run. But,
putting people in jail because of their debts, they`re in jail, they can`t
work, they can`t make any money to pay their debt, and so, it just
perpetuates this cycle.
I mean, this is one of the horrors of the western world that we worked
hard to eliminate and bringing it back is -- I don`t even know what the
right words are. It`s appalling --
HAYES: Yes. It`s appalling, but it`s also I think part of -- it is
part of this general feeling that were -- that we really -- there`s this
kind of sense of when we have a discourse about people at the bottom of the
social hierarchy, it`s all about punitive measures and about
It`s about accountability. It`s about making sure people aren`t
cheating on their welfare checks and making sure they`re getting drug tests
with there. Want (ph) to get unemployment is accountability.
Accountability at the bottom is punitive, it`s punitive, it`s punitive.
BEY: But when they get a bogus bill, this ain`t my parking ticket and
the fees accrue, there`s nobody to fight for those people at the bottom,
and if they don`t show up, they get put in jail.
HAYES: We`ve got an attorney general who`s fighting back against
prisons joining us right after this.
HAYES: Good morning from New York. I`m Chris Hayes, here with MSNBC
contributor Jared Bernstein, former chief economist to Vice President
Biden; Jamila Bey from the Voice of Russia Radio: Karl Smith from the
Modeled Behavior Blog; and Annie Lowrey from "The New York Times."
And we were discussing the phenomenon which was reported on, although
has been happening before "The New York Times" article. But Ethan Bronner
wrote a great piece this week about people getting sent to prison for
failure to pay debts, and those debts in his article are specifically about
the fees that accrue when people are run through the court system,
sometimes for criminal infractions but often misdemeanor infractions,
public drunken violations -- like mentioned - traffic violations, license
People can rack up debts that are just insane, $3,000. And when they
can`t pay them, if they show up at in the court date, and find themselves
One of the aspects that I wanted to touch on is just -- the
municipalities have outsourced this to collection to private companies.
And this just gets to me, like one of my big frustrations with the
arguments of privatization. There`s an argument of privatization which
that has to do with the fact that thinks that markets do better than
governments, right? But a lot of what privatization ends up being, it`s
just granting a monopoly license.
KARL SMITH, MODELED BEHAVIOR BLOG: Privatization is just outsourcing.
HAYES: Exactly, exactly. It`s not privatization. It`s just
outsourcing. It`s just saying -- it`s not like we`re going to have
different people competing to find the right market price for, you know,
extracting fees from --
JARED BERNSTEIN, MSNBC CONTRIBUTOR: It makes it look like you have
fewer public employees as well.
HAYES: But it`s also -- but it also means that you`re giving license
to private entities to essentially just extract rent, money from. You`re
giving license and incentive to take a government contract and then go out.
When we talk about privatization, that`s really often what it looks like.
It`s not saying let`s let the market figure out what the government is
doing now. It`s just saying let`s hire a private company that doesn`t have
the public interest, that doesn`t have the same levels of democratic
accountability and has a profit motive to extract as much as possible to do
this function that the government used to do.
SMITH: No. That`s completely right.
HAYES: Defend yourself.
SMITH: I don`t support that. I mean, I think that, you know, markets
are great and I love markets. But that sort of thing, one of the
fundamental reasons why things were made public is there was a monopoly
provider and that person would extract rents, right? So, if there was a
private police force, this is how most the world works for most of human
SMITH: They knew that that you had to pay whatever they asked because
they are the police force. So we say, no, we`re going to make that a
public institution and people elect the police officers.
HAYES: And yet this -- this is part of the austerity story, too,
though, right? Because part of the austerity story is getting fees rather
than taxes. And then the other thing, you see, having looked governments
all the time, is this kind of outsourcing as a way of changing what the
balance sheet looks like.
BERNSTEIN: You know what`s amazing to me is there`s this kind of a
Republican meme that`s been elevated over the last couple of years, which
is the government doesn`t create jobs, only the private sector creates
jobs. Well, then if you look at all those private sector jobs that
attached to the government in precisely the way we`re discussing, you`re
very quickly into the millions.
BERNSTEIN: So government does create jobs in the private sector,
often inefficiently as both of you have stressed.
HAYES: There`s another part of this story, which is there`s people
have accrued fees and debts going through the court system. And there`s a
constitutional problem with that, right? At certain point, you get to an
equal protection issue where there`s a case in 1993 that said you can`t
throw people in prison because they can`t pay money.
There are also private creditors using the court system to land people
in prison when they can`t pay their debts.
I want to bring in Illinois Attorney General Lisa Madigan, who just
recently got the state legislature to pass the Debtor`s Rights Act of 2012,
which is designed to protect people from being jailed over unpaid debts.
Good morning. It`s great to have you.
LISA MADIGAN, ILLINOIS ATTORNEY GENERAL: Good morning. Nice to be
with you all.
MADDOW: Can you tell me why -- where this came out from you that you
made a push on this? And also, I mean, clearly, you`re just -- you`re
pandering to the very powerful debtors consistency. So I wanted you to
defend your integrity.
MADIGAN: Well, I appreciate that opportunity. It`s something that I
think attorney generals should be doing.
But here`s how it came to us. We`re essentially started getting calls
from legal services organizations, so, the lawyers that are representing
low income, poor people. And we were hearing more and more stories over
the last year of poor people of being tossed into jail, essentially what I
looked at as debtor`s prison because they were unable to pay.
But when we really started delving into these stories we saw two
significant problems. Number one, most of the time, these debtors didn`t
even know either that a lawsuit had been filed or that they were to appear
in court for a hearing or if they did show up and there was some sort of
order entered for them to pay, they didn`t have any money.
I mean, literally all of their income what they have is what is
referred to as exempt income. So, veterans benefits, Social Security, SSI
payments, unemployment insurance --
HAYES: You legally cannot use -- just so we`re clear: you legally
cannot use Social Security or SSI or disability or veterans bills to pay
MADIGAN: People if they want, they can do that. But they`re not
under any legal obligation. Those funds are exempt.
MADIGAN: So, that`s how it came to us. We started doing a survey
across the state. We found at least a thirty of the counties in Illinois
and there are 102 of them, that people were routinely ending up in these
circumstances where essentially at the bottom of it, because they were
poor, they were landing in prison or jail.
And we set about to remedy that by looking at the rules and procedures
that take place in courts. We found that quite frankly, there were some
counties where it was completely different than other counties. And so,
you know, again, a real problem.
HAYES: Attorney General Madigan, Karl Smith here has a question for
SMITH: So, who`s pressing these charges? What types of companies are
MADIGAN: It`s -- well, for years you`ve heard of this. We had a lot
of hospitals. We contended with that situation here in Illinois, sometimes
in the last five or six years, where we really change the law about, you
know, before a hospital can turn your bill over to a debt collector,
there`s a process they have to go through.
But now, it`s not just the hospitals and medical bills, but we see it
with consumer installment loans. There`s a story about a woman who
purchase a vacuum cleaner ended up in jail for a series of time because she
didn`t make the payment on the vacuum cleaner bill because she didn`t have
a job anymore.
We see circumstances with people owe back rent, credit card debt,
SMITH: Credit cards?
MADIGAN: Credit card debt, it`s the unsecured debt that people have
that are landing them in prison.
HAYES: And the chain of events here goes that you owe money on
unsecured debts, there`s no home to foreclose on for instance, and then it
gets turned over too a collection agency and then the collection agency
begins to pursue that debt through the courts, right? That`s how this
MADIGAN: That`s right. Actually, let me walk you through it because
it`s interesting in some ways. So, initially, you know, once the debt
collector has, you know, this to collect, one of the things they can do if
they have decided there`s nothing else that works they can file a lawsuit.
So, a lawsuit gets filed.
When a lawsuit gets filed, you`re supposed to be personally served.
Someone is supposed to hand you the lawsuit. You`re supposed to sign that
you receive a copy of that. So you`re on notice.
Well, unfortunately, you had heard repeatedly instances where people
claimed that they got pulled over, there`s a warrant for their arrest.
They end up in jail. They claim they never knew there was a lawsuit.
I at first sate, how can that be? Well, then you learned and you
heard about all the stories that people were -- essentially, it`s what`s
referred to as "sewer service". So the processor, or the person who`s
supposed to hand you the lawsuit, instead of actually handing that to you,
they say sewer service because they allegedly throw it in a sewer or
garbage can or whatever, and then they forge on the affidavit that you
actually received it.
So in the first instance the person doesn`t know there was a lawsuit.
MADIGAN: Once the person doesn`t know there`s a lawsuit, there`s a
default judgment entered against you, so the amount that you. And the
amounts we`re seeing tend to be, you know, a couple of hundred to a couple
thousand dollars. The judgment is entered against you.
And then there`s a hearing that`s supposed to be held, citation to
discovery of assets. In other words, do you have money, how much money do
you have, let`s put in place a payment plan. Oftentimes, those notices for
those hearings are sent via regular mail. But they tend to get sent to
addresses that are no longer valid.
MADIGAN: I mean, it`s no different than when the debt collector is
trying to call you and they`ve got the wrong number.
HAYES: People move around a lot.
MADIGAN: Right. Particularly if they`re poor. So, you never get
notice of that. When you don`t show up for that hearing, in some counties
in Illinois, they`re automatically issuing, you know, what`s known as a
bench warrant, a body attachment. It amounts to an arrest warrant.
And so, the next thing you know, you`re driving down the street, you
tail light is broken, you run a stop sign, your muffler is too noisy, and
when the police officer pulls over, looks you up, there`s that arrest
MADIGAN: They arrest you. You end up in jail. And oftentimes, this
is really awful, the exact amount of your bail is what you owe the creditor
and that money just handed over. Yes.
HAYES: Wow. Attorney General Madigan, Jamila Bey here has a question
for you. And I want to talk about some of the politics of this if you`ll
stick around for one more block. Is that cool?
HAYES: Sounds good. We`ll be back in a sec.
HAYES: We have Illinois Attorney General Lisa Madigan, who has
proposed some legislation around people being imprisoned for unpaid debts,
which is something that sounds positively Keynesian but it`s actually
happening in the United States of America.
Attorney General, Jamila Bey has a question for you.
JAMILA BEY, VOICE OF RUSSIA RADIO: OK. Thank you for being with us
BEY: I`m wondering if you`re tracking in your state unfair debt
practices against these agencies that are going after your -- you know,
your constituents there. That`s part one of the question. Part two is,
can you look at any cases where family courts have had to be involved
because perhaps a single parent has gotten incarcerated because of a debt
and the state has to take custody of the children, child involved?
MADIGAN: Both great questions. The answer is yes. And in fact, this
isn`t a surprise. Because of the collapse in the economy and the high
unemployment rates, we`ve really seen an enormous explosion in what we
refer to as debt-related consumer fraud complaints over the last four
And in fact, the debt-related fraud complaints are the number one
category of consumer complaints that we receive at this point. And we`re
getting about 25,000 consumer fraud complaints a year.
The actual number of complaints against debt collection agencies is
right around 1,200 a year, and we have filed several lawsuits against very
aggressive debt collectors that even are doing things that are illegal,
that are short of what we`ve been talking about in terms folks landing in
so-called debtor`s prison.
So, we`ve been doing a lot. We also have a Department of Professional
Financial Regulation that`s also been doing a lot of work. So, yes, we`re
look into this.
And as well we`re starting to look into it because right around the
time we`re moving our legislation, we started you know, seeing the stories
as well, and getting some pushback of municipalities about the possibility
of changing the rules and making them, you know, stricter and also uniform
across the state.
So, we`re starting to also look into, you know, are we seeing the
abuses that you were talking about earlier where you`ve got the
municipalities, you got the counties who are increasing fees and are
throwing, you know, essentially people into jail just for being poor.
On the second side of it, sure, you know, the enormous expense this
can be, you know, to government, which kind of makes it insane that you now
have private companies that are using government, using law enforcement,
using our courts, using, you know, the jail to extract money for the
private company. And, so, sure, there`s an enormous expense and yes.
HAYES: Let me just -- in fact, Brennan Center did some -- issued a
great report in 2010 and the ACLU. And the Brennan Center found one,
analysis of one North Carolina county`s collection efforts found that
government in 2009 arrested 564 individuals and jailed 246 for failing to
pay the debt. The amount it ultimately collected from the group was less
than what it spent on their incarcerations.
So, it doesn`t also seem like a particularly efficient --
BERNSTEIN: I was wondering about that, like what`s the economic model
here -- locking up poor people to pay debts?
Attorney General, here`s my question for you, the political context.
I mean, you`re a politician. You`re a statewide-elected. You`re a very
popular politician in Illinois.
It seems like when we`re talking about the fees that are attached to
the criminal justice system, now, getting back to this issue that you just
mentioned, that were the focus on the "New York Times" article, that part
of that does come from this kind of tax -- inability for anyone ever to say
the word "taxes", to raise taxes for any kind, and then, so what you do get
is you get this squeezing of the balloon. And so, you`ve got to get
revenue from somewhere so you end up with these things.
Does that come (ph) to you as what the politics of this are driving
MADIGAN: It wouldn`t surprise me, right? So, when there are federal
cuts, state cuts, you have municipalities, you`ve got counties that are
obviously looking for increased revenue. But what I will say is that one
of the things that we do out of the Illinois attorney general`s office, we
also provide a lot of funding for crime victim services.
Crime victim services comes from the money that, you know, the
defendants and ultimately those who are convicted of crimes, they have to
pay some certain fees, certain fines. And what I can tell you is over the
past several years we have seen a significant, millions of dollar decrease
in the amount of money that`s being brought in.
MADIGAN: And so, what I can tell you at least in Illinois on a
statewide level, we`re not bringing in as much from victims -- or not from
victims but for victims of crimes than it used to. And so, it`s been more
difficult as folks are unemployed and they don`t have resources.
MADIGAN: We`re not bringing in the kind of money we used to.
HAYES: Lisa Madigan, Illinois attorney general --
MADIGAN: Obviously, that`s --
HAYES: Sorry, I didn`t mean to cut you off. It has been a great
MADIGAN: No, no, no.
HAYES: Go ahead.
MADIGAN: Well, what I was going to say is obviously that`s not the
case around the rest of the country, because as "The New York Times"
article pointed out and others have, certain areas are increasing their
fees to really just extract blood from a turnip.
HAYES: Illinois Attorney General Lisa Madigan, it`s a great pleasure
to have you on this morning. We would love to have you back. If you`re
ever in New York City, you`re very much welcome at this table. Thanks so
MADIGAN: Thank you.
HAYES: A big Mitt Romney fundraiser steps aside after his bank is
caught for rigging interest rates for credit cards and more. That`s up
HAYES: Don`t try to resist, America. You know this is the jam of the
summer. You know, when it comes on the barbecue, everybody is stomping.
BERNSTEIN: I feel like I`m not supposed to like this song, you know?
But I do.
HAYES: Everybody like this song.
BEY: Where have you been? I`m sorry.
HAYES: It is pure pop confection.
BERNSTEIN: It`s nice classical --
HAYES: It`s got a nice string arrangement.
BERNSTEIN: It`s like Mozart.
HAYES: Carly Rae Jepson, "Call Me Maybe."
OK. On to serious news, one of Mitt Romney`s top funders this week
dropped out of an upcoming high dollar fundraiser after being caught up in
a massive global banking scandal. On Tuesday, Barclays CEO Robert Diamond
pulled out of the Romney fundraiser after his bank was found to have
fraudulently rigged a key lending rate that underpins hundreds of trillions
of U.S. dollars worth of consumer loans across the world, everything from
mortgages to student loans to credit cards. On the same day he dropped out
the Romney fundraiser, Diamond resigned as the chief executive of Barclays
amid a massive public outcry over the rate rigging scandal in Britain.
(BEGIN VIDEO CLIP)
BOB DIAMOND, FMR. BARCLAYS CEO: That behavior was reprehensible, it`s
wrong. I`m sorry, I`m disappointed, and I`m also angry.
(END VIDEO CLIP)
HAYES: According to regulators in the U.S. and Britain, from 2005 to
2007, and then again during the 2008 financial crisis, traders at Barclays
gained the worldwide financial system by fraudulently manipulating a key
global lending rate known as LIBOR, the London Interbank Offered Rate. The
rate has an opaque name but its function is simple. It`s the interest rate
bangs charge to lend money to each other.
It`s also the rate that banks across the world use to determine how
much interest you should pay on things like credit card bills, mortgages
and student loans. We`re talking about a potentially massive number of
loans owned by every day consumers that may have been affected by the rate
In the state of Ohio, for example, as much as 60 percent of prime rate
adjustable rate mortgages and nearly all of subprime adjustable rate
mortgages are tied to this rate according to the Cleveland Fed.
Here`s British Prime Minister David Cameron talking about the scope of
the scandal on Wednesday.
(BEGIN VIDEO CLIP)
DAVID CAMEROIN, UK PRIME MINISTER: It is outrageous frankly that
homeowners may have paid higher mortgage rates and smaller businesses may
have paid high interest rates because of spivvy and probably illegal
(END VIDEO CLIP)
HAYES: This has been getting tremendous coverage in England. It`s
been getting tremendous coverage in the financial press and the elite
financial press. I mean, I think "The Economists" this week has a
bankster`s cover. It has provoked a lot of outrage. I think it hasn`t
been sufficiently covered here.
And I just want to take a second to communicate to people because
there`s a dollar figure to what this may mean and people actually seeing it
in their subprime mortgages being higher or lower. But there`s even more
basic issue here which is: can`t the foundation of a financial system, the
foundation of a market economy, the foundation of capitalism is some basic
level of trust? You have to trust the person on the other side.
And we have this trust all the time. When you drive up to gas station
anywhere in this country and you drive up and you fill your tank. You
trust that meter is not ripping you off.
And this is like finding out some big company in every gas station
across the country had systematically been rigging those meters and
everything you thought you knew was wrong, or let me try this other
metaphor -- brainstorming a few -- it would be like if someone managed to
collude to change what the actual measurements of a foot was to make it
slice slightly smaller so that they were actually selling more, right?
It`s like -- it`s changing a fundamental measurement of how we deal with
BERNSTEIN: Look, there are deep incentives to game systems throughout
the economy. And one of the reasons why this LIBOR scandal is so offensive
and just, you know, incredibly -- makes me so angry is that this was
something that regulators, which we have to have in a situation like this,
you can`t have this kind of system without having the sort of oversight or
we`ll have precisely the types of problems you mentioned, where not only
sleeping at the switch, but there`s some hinting that may have been some
The system doesn`t work unless there`s oversight. I don`t know how
many times we`re going to have to learn that. If you listen to the current
campaign, you`ve got people saying, no, we don`t need Dodd/Frank. We don`t
need, you know, financial oversight. This should remind us that this is
SMITH: I don`t think -- I think the perspective is nuts. So, people
are saying -- you`re saying the gas station was systematically cheating
you. That`s not what really happened. It`s like the meter wasn`t working
regularly. It was flipping up and down and sometimes it was --
BEY: Do you genuinely believe that? Do you genuinely believe that?
BERNSTEIN: Are you saying that it was just like happening by mistake?
SMITH: I don`t know if it happened by mistake, but it was happening
without any intention of charging people with mortgage as higher --
BEY: They don`t care about the little person they put out of their
home, but they do care about the profit motive that incentivizes them to
lie and collude with one another --
BERNSTEIN: So, you`re saying that --
SMITH: -- the lie did not make it any more likely for people on
average to get put out of their homes.
BERNSTEIN: Do you feel OK about that?
SMITH: Sometimes the LIBOR was low. Sometimes the LIBOR was high.
HAYES: I want to be clear. They moved it in both directions. They
moved it in both directions because there`s two parts.
Let me explain how this scandal works, OK? You`re Barclays. You`ve
got this little office that every day submits this piece of paper to an
office that is compiling -- it`s actually "Thomson Reuters" -- it`s
compiling what the LIBOR is for the day. You`re saying, we think we can
borrow it at around 3 percent. I mean, you just literally it`s like you
write on a number.
You`ve got a call from your trading desk that says, listen, dude, I
made a bet that LIBOR was going to go down, and it -- if it doesn`t go down
I am screwed. Any chance you can shave a little off your submission of it?
These are actually e-mails from the LIBOR submitters of Barclays responding
to request by their swap traders to rig rates.
"For you, anything." "Always happy to help." "Done for you, big
BEY: Done for you, big boy? Come on.
HAYES: Here`s a U.K. report on external trader, another bank. This
is someone at another bank -- at another bank -- asking the Barclays LIBOR
submitter to lower the rate. The external rate trader stated in an email
to Trader G at Barclays, "If it comes in unchanged, I`m a dead man,"
meaning he made a bet on where the rate was going to go. If it didn`t
change, he was a dead an.
Trader G responded that he would, quote, "have a chat".
Barclays` submission on that day for three months U.S. dollar LIBOR
was half a basis point lower -- that`s a lot -- than the day before, rather
than being unchanged. The external trader thanks Trader G for Barclays`
LIBOR submission later that day, quote, "Dude, I owe you big time!" Come
over one day after work and I`m opening a bottle of Bollinger.
ANNIE LOWREY, NYTIMES.COM: The one thing that I think is going to be
interesting from this is that I think that the civil suits coming out of
this are going to be probably pretty massive.
And all it`s going to take is for people to be able to trade it to the
day that they were manipulating. Like at some point somebody`s on the
other side of that.
SMITH: I mean, somebody puts down the civil suit. I mean, that`s
kind of crazy because no one is going to be paying Barclays any money for
the days that Barclays made their mortgage cheaper or the days that they
made more money on their C.D. because of what Barclays did. Everybody`s
going to be asking when they lost money but they did it in both directions,
BEY: You`re missing the point. You`re missing the point. This is
not about whether or not people made money some days, lot money some days,
that`s a wash. That`s the game we played.
BERNSTEIN: I think Jamila is right. This is the issue of the system
is broken, dude, they`re broken, dude. They are colluding, dude. There`s
nobody to hold them accountable. There`s nobody to punish them for the
very real consequences that came out of this.
BERNSTEIN: Karl, you don`t think it`s OK that they rigged rates,
right? Even if they were doing it unsystematically, that`s not OK with
you. I hope.
SMITH: I am not in any way shocked that LIBOR was rigged by like five
BERNSTEIN: I`m not asking if you were shocked. Do you think this is
emblematic of a system that`s OK, that`s functioning in a way that`s
commensurate with a good transparent economy?
SMITH: I don`t think there`s a major problem with it.
BERNSTEIN: That`s strange.
SMITH: I don`t have a problem with it.
SMITH: OK, LIBOR, they ask you and you tell them. And there are no
trades. And they just say, right? So, you have the figure out time,
especially as, you know, the sort of like old boys club in London broke
down. People are going to do this, that they were going to behavior this
way because they don`t have the same trust level they used to have.
And from the `90s, everybody thought that things like this were
happening, right? And LIBOR became more, and more popular and more and
more used not because somebody thought, that, oh, well, what I really care
about is what Barclays borrowing money (INAUDIBLE) because it worked.
LOWREY: I think that the information asymmetry that you`re getting to
is very, very interesting, right? Everybody in the financial markets knew
that people were putting like the wrong LIBOR rates, right, that they were
somehow colluding to do this, you know? But nobody on the street knew
that, right? Your average person doesn`t know that, and so you`re
operating less information that people don`t know.
SMITH: One point, one point.
HAYES: Hold it there, you`re going to make your point. You`re going
to make your point. I`m so happy that you`re defending Barclays. This is
More after this.
HAYES: All right. We`re in the midst of a discussion on the LIBOR
BERNSTEIN: So, let me add a key point here. It`s not quite the case.
First of all, I think even your point that they were sometimes rigging it
up, rigging it down, like who cares? I`m way against that idea based on
But at a critical point when Barclays and others wanted to make
themselves look healthier than they were, they rigged the rates
systematically down. This was at a time when the banks were holding a lot
more toxic assets than they wanted people to know about, but contributed to
a massive great recession that we all --
HAYES: Let me make this so people are clear. There`s actually -- I
should be feeling the love you do. Barclays cooperated with the two-year
investigation that happened both in the U.S. and England. In some sense
they`re saying, hey, look, we`re getting our spot blown because we
cooperated with you guys, but there are other banks in the LIBOR were doing
the same thing.
And, in fact, now, there`s investigation probably opening up to other
LIBOR participants, UBS being one of them. I think Deutsche Bank is part
of LIBOR as well.
That`s one thing to keep in mind here, that there`s other shoes to
drop. And Barclays actually says, we were only doing this because everyone
else was and we didn`t want to be left holding the bank since we`re the one
that`s the biggest credit risk because we`re actually something actual
The ways in which the rate was manipulated by people submitting the
rates to benefit these individual traders who made bets in either direction
like the e-mails I just read, then there was in 2008 the fact that LIBOR is
an indicator of the general health of the banking sector, right? It`s like
a credit score for banks.
BERNSTEIN: This is my point.
HAYES: It`s like a credit score banks, say you`re risky, you`re not
HAYES: And I remember when we were all watching LIBOR day by day at
that point, because it was kind of like a thermometer on the fever on the
BERNSTEIN: I mean, at the White House, I can tell you, people were
saying we shouldn`t target the Fed rate. We should credit the LIBOR.
That`s an incredible thing to think about when the thing (ph) was being
HAYES: And there`s an allegation here that actually they were
systematically submitting lower bids than the actual cost to borrow to make
themselves look healthier than they should have been. And an allegation --
which has been denied -- that this was being done with both the prompting
or at least the kind of nudge, nudge acquiescence of the chief regulator,
the governor of the Bank of England, who is essentially their Ben Bernanke.
SMITH: I think that`s probably true. I mean, one, just because of
the nature of Barclays and it`s likely. And, two, because it`s highly
probable that the Bank of England would do that.
And what I told Chris on the break is that if I would set the banking
and I was in that situation and I saw Barclays coming (ph) rates, I would
call them and tell them to lie, and I would do this because if they do not
do this --
HAYES: If you get nominated to be a Fed board governor, they`re going
to play this in a committee hearing.
SMITH: And that would be a better world because when in that middle
of the crisis, we were worried about banks going under, we were worried
about millions losing their jobs. Much worse, actually lives of actual
people being destroyed, and to say we can`t do that because one guy can`t
hand another guy a number that says point 2 lower -- no, no.
I mean, if I had the power, I would demand you do it. I would shoot
you if you didn`t do that. There are people`s lives at stake --
HAYES: We`re on television. You wouldn`t literally shoot people
that didn`t do that.
SMITH: I most certainly would.
SMITH: People`s lives -- that`s the thing. People get caught up and
like, oh, this is the rules and regulation -- people actually -- lives were
actually ruined in the financial crisis, people who had nothing to do with
this. Innocent people --
BEINSTERN: I`m not sure what your point is.
HAYES: You`re going to make it worse.
SMITH: Worse because of this? No, we`re not going to make it worse.
HAYES: You`re making the argument they did the right thing.
SMITH: They did the right thing.
HAYES: And you shouldn`t kill people.
HAYES: That`s another discussion.
LOWREY: But basically what you`re saying is that it was good for them
to manipulate LIBOR to get this sort of market that they wanted to make
borrowing a certain price.
LOWREY: As opposed to changing conditions that would result in the
LIBOR being lower, which is what they were trying to do with everything
that they did just short of the banking sector.
It seems like you`re missing like an intermediate piece --
LOWREY: In which you actually make the bank healthier.
SMITH: But you are the Bank of England, right? There`s no one you`re
going to appeal to.
LOWREY: You don`t need to do it.
HAYES: Let me -- let me play Mervyn King, who is the Bank of England
governor, their Ben Bernanke --
SMITH: Who`s been saying smart things about this.
HAYES: -- addressing this.
(BEGIN VIDEO CLIP)
MERVYN KING, BANK OF ENGLAND: That goes to both the question of
culture in the banking industry and to the structure of the banking
industry. From excessive levels of compensation to shoddy treatment of
customers to a deceitful manipulation of one of the most important interest
rates. And now this morning, the news of yet another pension, yet another
mis-selling scandal -- we can see we need a real change in the culture of
(END VIDEO CLIP)
HAYES: This to me actual is the key point. I want to talk about the
culture of the industry because I think you`re making an argument of what
the actual macroeconomic effects of this were. And to me, the story here
is what this says about the culture of the industry and what crisis it will
produce in the future, even if this actually, the macro economic effects of
it, were not massive.
But I want to talk about the culture of industry, because, to me, this
is the chapter in the bank I just wrote about what a kind of culture that
gets corrupted and devolves looks like. It looks like a lot of these e-
mails, right after this.
HAYES: All right. Heated LIBOR discussions -- lots of heated LIBOR
discussions happening all across America this weekend.
But here`s the thing: Mervyn King who`s the head of the Central Bank
of England talked about the culture of the industry. And, you know, to me
what`s so key when you look at those e-mails, they remind me of the emails
from Goldman Sachs trader for (INAUDIBLE) in creating these advocacy
securities which were financial IEDs that were designed to blow up. And,
you know, you sold them to your counterpart. You sold them to your client.
You bet against it. And then you make a lot of money off them.
They remind me of Enron e-mails that we saw and Enron recordings about
manipulating system. They remind me of conversations that were later
reported about steroids in baseball. They remind me of all of the
different environments in which you begin -- you have huge rewards, right,
these traders that are making these swap deals, that are going to make a
lot of money in bonuses, and these big rewards. And the norms inside the
institution begin to degrade in the face of that.
And the reason that is so appropriate isn`t just because of moral
opprobrium. It isn`t just because I think it`s bad and wrong, although I
think it`s bad and wrong -- is that those are the conditions that produce
structural systemic crisis that then do things like destroy $8 trillion of
wealth and put a lot of people out of work and gave us 8 percent
There`s a direct correlation. And that`s why it`s like, OK, this
time, this didn`t cost a massive a global financial problem. So, the next
time, if this is -- if this is the culture of the institution --
BERNSTEIN: Somebody said a minute ago, well, but the results weren`t
massive. They were massive. I mean, this is the kind of stuff and LIBOR
was part of it, that went on that led to the massive housing bubble and the
meltdown. I think you`re right. I think you can draw a direct link from
people who write those kinds of e-mails and a high poverty rate. I mean, I
think they`re directly linked through a financial market intermediary
transmission system that really helped to bring this economy down.
LOWREY: I think what`s been interesting in the last couple of months
is if you look for banking institutions that came relatively unscathed out
of the financial crisis, two of them were JPMorgan and Barclays. And Jamie
Dimon and Bob Diamond were two kind of --
HAYES: And Bob Diamond is a figure prominently (INAUDIBLE) as one of
those people who knew what he was doing.
LOWREY: Yes. And now, both of the firms have been dragged into the
mud by the scandal.
SMITH: I don`t think we`re going to have enough time to get into like
whether or not this was key in the crisis and stuff. But the thing -- a
point that I definitely want to make to you, Chris, is that I think the
problem is like the sort of concept of meritocracy, right?
HAYES: Music to my ears.
SMITH: Because what it tells people is that you are in charge of
these institutions and that you`re making this money, you`re doing these
things, because you`re good and you are the best and people at the bottom
SMITH: But this is actually opposed to privilege because if you said
that you are here and it is a privilege and you have a social
responsibility to take care of people, that creates a different society,
right? It is those meritocratic values that caused people to be
indifferent to the plight of the poor.
HAYES: And to have this competitive and cutthroat norms that are the
ones that we see -- that are everywhere on Wall Street.,
BEY: I think that`s a lofty ideal. I don`t think that --
SMITH: But things have gotten worse.
HAYES: But I also think --
BEY: To say, well, you`re here because you have this obligation to
help those lesser than you, that`s a really great thing. A lot of people
hear that on their Sabbath when they go to whatever service they choose to
It hasn`t produced any different results. You need regulation. You
need teeth and laws to say, OK, if we catch you, we`re going put you away.
You`re going to lose (INAUDIBLE) and you can`t do it again.
HAYES: I think you and I disagree on this. I think you need
accountability. I mean --
SMITH: -- for things that go bad.
BEY: Things went bad.
LOWREY: Yes, things went bad.
HAYES: Annie --
SMITH: But not because of this.
LOWREY: You know, the other thing is I think that it`s clear within
these firms what the incentives are. In some cases, Barclays just doing
this because they would make some money from it seems, right?
HAYES: What`s so crazy, even unclear if they netted money in the
aggregate because they were just hanging these individual trigger requests
which shows just how degraded the normal --
HAYES: So, what do we know now that we didn`t know last week? My
answers after this.
HAYES: In just a moment, what we know now that we didn`t know last
week. But, first, a quick personal update. My book "Twilight of the
Elites" is on sale now at online retailers and your local bookstore.
This Monday, July 9, I`ll be appearing at an event at Seattle town
hall with the Luke Burbank to discuss the book. On Wednesday, July 11th,
I`ll be at the Commonwealth Club in San Francisco. It`s been great seeing
all of you around the country in Boston and L.A. and most of the events are
If you want to come, check out "The Twilight of the Elites" Facebook
page, or our Web site at Up.MSNBC.com for more details and information.
So, what do we know now we didn`t know last week? Now, we know what
happens when you elect actual socialists. They tax the wealthy and big
corporations. That`s what happened in France for the socialist government
helmed by newly elected President Francois Hollande, has unveiled a new
supplementary budget intended to hit the nation`s deficit target and make
up most of the money by increasing taxes on the rich and large
We know that in the U.S., total taxes as a percentage of GDP are the
lowest they`ve been in 50 years and the top marginal rate is the lowest
it`s been in nearly 20 years. After World War II, corporate tax revenues
represented 40 percent of total federal revenue. Today, they are less than
We know, in other words, that no matter what his most unhinged critics
say, Barack Obama is most certainly no socialist.
And speaking of France, readers of the "National Review" now know
something that just isn`t true. Readers of the magazine blog "The Corner"
encountered a brief post on June 30th from contributor Andrew McCarthy that
read, "Final jeopardy, category is Obama. The answer is fund-raising in
Paris." And then the question: how will Obama be spending American
independence day this week?
It turns out the mainstream media managed to locate the president on
July 14th at a residential building in Washington, D.C, located at 1600
Pennsylvania Avenue, to which he reported photographers to attend a
swearing in ceremony for members of the armed forces who are becoming
We know that McCarthy later conceded on Twitter what he wrote was
untrue. We also know that there`s literally an entire media universe in
which jokes like this one circulate and soon become folk tales and then
turn into facts.
We know that Andrew McCarthy once speculated that Bill Ayers ghost
wrote Barack Obama`s memoirs. And we know that jerking around it readers
with wrong information seems to be the business model of a lot of
We now efforts to curtail the voting rights can in fact be beaten back
even in states governed by Republicans. This week in Michigan, Republican
Governor Rick Snyder, who is aggressive and at times anti-Democratic
governing agenda, has been well chronicled by Rachel Maddow on her show --
surprised his fellow Republicans when he vetoed three bills they passed
making it harder to vote, including one that would have required a photo ID
for absentee voting. Another that would have restricted voter registration
We know the news was not so good in Pennsylvania where a new analysis
of state`s voters revealed that the voter ID law signed by Republican
Governor Tom Corbett could disenfranchise as many as 700,000 citizens in
that state or nearly 10 percent of all voters.
We know that attempting to win elections by making it harder to make
people to vote is the most profane and craven kind of politics. And we
know there`s one party the Republicans and only one party that has been
pursuing this as a central strategy. We know it says something about that
party when it`s apparently afraid of too many people voting.
And finally, we know that "Seventeen" magazine will no longer be
photoshopping the women in its pages, thanks to petition from eight grader
Julia Bloom who have grown weary of sharing her friend in ballet class
complain about being fat. As much has been my complain about kids growing
up too soon, we know there`s a lot to be said for media-savvy eighth
I want to find out what my guests now know didn`t know at the
beginning of the week.
I will begin with you Jared Bernstein.
BERNSTEIN: Well, what I think learned this week unfortunately was
just how dysfunctionally anathema the word tax is in the city I live, in
Washington, D.C. This comes off the Supreme Court decision about the
Affordable Care Act. They call it a penalty tax to hit 1 percent of the
population. And yet everyone is bending themselves into a pretzel, not
even to say the word tax.
HAYES: Those three words.
BEY: I learned this week that First Focus, a nonpartisan group that
looks at the economy of children, thinks that the U.S. needs to do a better
job of giving children more money, taking again, taxes -- using taxes to
fund education, health care.
Our kids are not doing well. Our kids` health has declined over the
past 10 years and not all hope is lost but it`s looking pretty bleak. We
need to help our little ones.
HAYES: Yes, there`s going to be a huge echo-effect from the recession
and austerity and what it does longer term. Even when we talk about short-
term and long term a lot in the budget discussion, we don`t talk about the
short-term/long-term in the effects. Short-term bad economic periods have
SMITH: So, I learned that while the European Central Bank is still
the most destructive institution in the world, slightly less destructive
and decided for the first time in years to lower interest rates and do a
little to help the European economy.
HAYES: Karl Smith, you have been one of the group of economists who
have been talking about just the total failing of the central banks,
particularly the ECB which is --
SMITH: The ECB is the worst institution in the world.
HAYES: The worst institution in the world. Also, frustration with
Ben Bernanke not doing more. We talked about -- we had you on the show for
a riveting, I thought, monetary policy debate and will have you back.
But people need to keep thinking about those players in this economy
as well, because it is not just --
SMITH: Not just the president and Congress, they are actually more
HAYES: The central banks, and they are -- we have democracies and
they should be institutions that are -- that had some democratic
LOWREY: So, next battle for the Affordable Care Act is the Medicaid
expansion per state. So, one thing that I learned this week is that a
study by the Urban Institute showed that some states might actually save
money by spending Medicaid because it will reduce cost from some other
programs and because federal government is kicking in so much money.
HAYES: Yes, we`ve already seen -- I think we are now up to seven
governors, if I`m mistaken. We have the data in for tomorrow`s show.
We`re going to talk about -- seven Republican governors are saying they are
not going to take it, even though it`s 100 percent paid for the first two
These are also states with a short vote. And, of course, there`s a
connection in many respects. The political culture in those states and
whether folks are getting the care they need at the bottom.
My thanks to MSNBC contributor Jared Bernstein, Jamila Bey from Voice
of Russia Radio, Karl Smith from Modeled Behavior, and Annie Lowrey from
"The New York Times".
Thanks for getting up. That was a lot of fun.
Thank you for joining us today for UP. Join us tomorrow, Sunday at
8:00. We`ll have Salon.com`s Joan Walsh. Plus, the triumphant return of
Thomas Mann and Norm Ornstein.
Coming up next is "MELISSA HARRIS-PERRY". On today`s MHP, Mitt Romney
promises he`ll be better at job creation than President Obama Coming up.
Melissa will tease out what`s reality and what are just empty promises.
And why a season of talking transvaginal probes and conception and
fertilization and aspirin as birth control mean it is time to bring
pornography into the national conversation. Melissa will talk about sex
and porn and shows you it`s very feminist to do so. How is that for a
That`s "MELISSA HARRIS-PERRY" coming up.
We will see you right here tomorrow at 8:00. Thanks, as always, for
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