UP WITH CHRIS HAYES
January 12, 2013
Guests: Alexis Goldstein, Neil Barofsky, Joe Weisenthal, Stephanie Kelton, Ayana Mathis, Michael Chabon, Victor LaValle, George Saunders, Heidi Moore, Dylan Glenn
CHRIS HAYES, MSNBC ANCHOR: Good morning from New York. I`m Chris
Hayes.
In his weekly address this morning, President Obama said American
troops in Afghanistan will shift to a support role by spring, and by the
end of next year, America`s war in Afghanistan will be over.
The flu is now reached epidemic levels according to the Centers for
Disease Control, although, it may be peaking in some parts of the country.
Right now, my story of the week, the magic coin. All right. Odds are
by now you`ve heard at least something about the trillion dollar coin idea
that thanks in part to up regulars, Joe Weisenthal and Josh Barro has
managed to catapult from the margins of the internet to the center of
beltway conversation.
The idea first proposed back in 2010 by a Georgia lawyer commenting on
a blog under the screen name, Beta Wolf, has now received endorsements from
Nobel laureate, Paul Krugman, former director of the U.S. mint, Philip
Diehl, and a number of members of Congress. On Wednesday, White House
spokesperson, Jay Carney, even fielded a question about the proposal from
our own Chuck Todd.
(BEGIN VIDEO CLIP)
CHUCK TODD, NBC NEWS: Follow up on debt ceiling. I know your
position hasn`t changed from the (Inaudible). Do you have a position on
this trillion dollar coin business?
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I would simply go back to
what I said. The option here is for Congress to do its job and pay its
bills. Bills that have already been racked up.
TODD: Will you totally rule it out?
CARNEY: You can speculate about a lot of things. But there is --
nothing needs to come to these kinds of, you know, speculative notions
about how to deal with a problem that is easily resolved by Congress doing
its job.
(END VIDEO CLIP)
HAYES: OK. Sure. But if Congress doesn`t do its job, here`s how the
coin would work. Republicans are once again threatening to hold the debt
ceiling hostage as they did in the summer of 2011. That is, they will not
vote to raise the limit of the amount the U.S. government can borrow,
unless, the White House and Democrats agree to some draconian spending
cuts.
Never mind, we`re already slated for European levels of austerity this
year. If no deal is reached, the U.S. has to start stiffing its creditors,
deciding how to prioritize payments which will almost certainly cause
markets to freak and interest rates to spike.
Enter the coin. It turns out, there is a subsection of the U.S. code
called dominations, specifications, and design of coins that includes the
following provision. The secretary may mint and issue platinum bullion
coins and proof platinum coins in accordance with such specification,
designs, varieties, quantities, denominations, and encryptions as a
secretary in the secretary`s discretion may prescribe from time to time.
The original intent of this legislation was to give the secretary of
the treasury some latitude to issue commemorative coins for collectors, but
the plain meaning of the statute is clear. The treasury can issue a
platinum coin in any denomination as the secretary of the treasury
designates.
The idea of Trillion dollar coin advocates is the president would
direct the treasury to mint a trillion dollar platinum coin and then
deposit it in the treasury bank account if the federal reserve and wala.
We now have a trillion more dollars in the bank and we don`t have to worry
about the debt ceiling. If this sounds surreal or ridiculous or magical to
you, you are not wrong.
It`s totally bizarre and unprecedented. Even if it`s illegal, as many
legal experts believe it to be, it seems to run against our expectations of
how our government does and should behave. It`s the kind of thing that
just isn`t done. But that, you see, is the entire point. Behavior of
individuals who`ve been (ph) in institution is constrained by the formal
rules, explicit prohibitions, and norms, implicit prohibitions that aren`t
spelled out but just aren`t done.
And what the modern Republican Party has excelled at, particularly, in
the era of Obama is exploiting the gap between these two. They`ve made a
habit of doing the thing that just isn`t done. Requiring a 60 vote
majority for nearly every simple procedural vote just wasn`t done, and
then, Republicans did it.
Refusing to confirm any candidate for an open position because you
object to the positions very existence just wasn`t done, but Senate
Republicans did precisely that with the newly created consumer finance
protection bureau which they continue to boycott.
And most clearly before the summer of June 2011, opposition parties
didn`t use the debt ceiling as a bargaining chip of which to extract ransom
and it certainly didn`t credibly threatened default as a means to gain
political leverage. The president has been extremely reticent to meet this
extraordinary degradation of previous norms with innovations of his own.
He is, at heart, an ardent institutionalist. But there is no way to
unilaterally maintain norms. Once they`re gone, they`re gone. And the
only way to produce a new set of healthy norms is to do some innovating of
your own. And you can tell, I think, the trillion coin idea spooks
Republicans precisely because it would be so out of character.
It would so gleefully and flagrantly violate their own expectations
about how Democrats play the game. The National Republican Congressional
Committee has gone ballistic on the idea, sending out press release after
press release, railing against the coin. NRCC chair, Greg Walden, spying a
political opportunity has rushed into the fray.
(BEGIN VIDEO CLIP)
VOICE OF GREG WALDEN, (R) OREGON CONGRESSMAN: The last thing we need
is for the treasury to just simply mint a new coin made out of platinum
that would weigh, by the way, Neil, 44 million pounds if it was tied to the
value of platinum like --
(LAUGHTER)
WALDEN: That would sink the Titanic.
(END VIDEO CLIP)
HAYES: The only problem here is that he completely misunderstands the
actual idea. Just as a $100 bill isn`t made of a hundred dollars worth of
cotton. A new trillion dollar coin wouldn`t be made of a trillion dollars
of platinum. Just a single small bit of platinum will do. That`s all.
It`s really just an invention.
Economist, John Kenneth Galbraith, once said the process by which
banks create money is so simple, but the mind is repelled. And the same
can be said of how our government creates money. The simple truth is it
creates money simply out of thin air. Someone at the Federal Reserve
punches in a number in a spread sheet and wala, more money.
And moments of profound crisis, it was precisely this kind of monetary
magic that helped the U.S. avoid catastrophe. Abraham Lincoln printed
greenbacks to fund the union as his opponents mocked him mercilessly for
doing so with this cartoon from the time depicting a machine spewing bill
shows. And FDR ditched the gold standard to get us out of the great
depression.
Both those ideas were, at the time, probably, about as ridiculous as a
trillion dollar coin. Well, there are rules that guide legal tender. At
base, what makes money valuable is simply social convention, a norm. We
all agree it`s valuable, so it`s valuable.
The genius of the trillion dollar isn`t just that it provides so much
needed leverage against a foe unencumbered by any sense of propriety, it
also illustrates the uncomfortable foundational reality of modern
capitalism. Money is nothing more than a shared illusion. It`s a kind of
magic. But is it good magic or bad magic? I want to ask my panel right
after this.
(COMMERCIAL BREAK)
HAYES: All right. Joining me today at the table are Heidi Moore,
economics and finance editor at "The Guarding" newspaper, Dylan Glenn,
former special assistant to President George W. Bush, now managing director
of Guggenheim Partners, Stephanie Kelton, associate professor of economics
of the University of Missouri-Kansas City and one of the earliest
proponents of the trillion dollar coin idea, also be found on Twitter under
the handle (ph), deficitowl.
And Joe Weisenthal, deputy editor of BusinessInsider.Com, also one of
the earliest, and I would say, most outspoken evangelists for the trillion
dollar coin started, I believe, the mint the coin hash tag.
JOE WEISENTHAL, BUSINESSINSIDER.COM: I promoted it.
HAYES: Promoted the mint the coin #. So, I just did this little
monologue about the coin. And when I got back to the table right before we
went to break, you said that gave me goose bumps, and you said it was
chilly.
(LAUGHTER)
HAYES: So, let me start with you. Let me start with the skeptics
here. Heidi, you wrote this piece basically being like you guys are --
this is a ridiculous idea and everyone is getting trolled.
HEIDI MOORE, GUARDIANNEWS.COM: Right, which is self-evident. We`re
not debating that this is a ridiculous idea. You said as much yourself
(ph). But I think, you know, kind of to take it to the base, it kind of
sounds like, OK, here`s the thing. Congress is not going to default.
Congress is not allowed to not pay its debts.
And so, when you say we are going to create an imaginary coin to face
your imaginary default, it`s like I`m going to take my nerf bat and ruin
your super soaker. Like, it is not -- this is not real, and the deficit is
real. We can be talking about education. We can be talking about programs
that are going to be cut and we`re not doing it.
HAYES: Wait, but the realness -- this -- let`s establish the realness
here first, right, because if they do go over -- if they don`t vote to
raise the debt ceiling like there will be consequences.
DYLAN GLENN, FMR. SPECIAL ASST. TO PRES. GEORGE W. BUSH: Absolutely.
HAYES: There`s no disagreement about that, right? I mean --
STEPHANIE KELTON, UNIV. OF MISSOURI-KANSAS CITY: Clearly.
HAYES: Yes.
WEISENTHAL: Yes. One of the arguments that Republicans and sort of
apologists for the House GOP frequently make is that well, you know, this
whole idea of a default and some --we`ve taken ten times more revenue every
day than we pay in interest payments which is not technically true, because
there are days when we don`t take in as much revenue as there are interest
payments in that day.
But beyond that, it`s still a discussion about whether we`re going to
pay past promises or not. Let`s just say we weren`t going to default on
the debt, itself, which would be catastrophic to the financial system.
We`re still a rich country debating, are we going to honor our promises
that we`ve already made, which is already preposterous.
So, it`s not this super soaker-nerf thing. It is a very real threat
of not paying our bills. And this is a very real solution of addressing --
HAYES: As someone who works in financial market, is it a real threat?
GLENN: You know, I think that it certainly not a threat that`s priced
into the market today.
HAYES: So, the market is pricing it in that this is a bluff?
GLENN: I think the market thinks it`s probably a silly conversation
in Washington.
HAYES: No. I`m not talking about the trillion dollar coin. I`m
talking about the Republican -- let`s forget the trillion dollar coin for a
second. I`m saying it`s in response to the idea that Republicans would
take us through a partial default.
GLENN: Let me be an apologist for the Congressional majority here.
HAYES: Please.
WEISENTHAL: Fire here (ph)
GLENN: You know, I think the markets, governments around the globe
would like to see the United States government be responsible. And I think
that responsible thing is figuring out a way to not give an additional
credit card to a child that has already spent to its borrowing limits
without putting in place some sort of regime that changes habits.
HAYES: But Dylan, every time I hear this from someone --
GLENN: Yes.
HAYES: -- and particularly someone who does work in financial
markets, you have to give me a coherent account of why that is not being
priced in right now. Everyone will go around say that you have to have
long-term deficit reduction, and then treasuries are trading essentially
negative real interest rates.
GLENN: Yes, but at some point, the music stops.
HAYES: But why -- you have to give an account. You have to give a
comprehensive account of why the markets are systematically dysfunctional
and not pricing the proper risk of U.S. debt.
GLENN: First and foremost, I think markets are smart enough to know
that this is the fiat currency of the world and the reserve currency of the
world and so on and so forth.
Second of all, if, you know, if the policymakers in Washington, D.C.
aren`t grown up enough to come up with a scheme that enables us to meet our
current obligations which everybody around this table and everybody in the
country knows we will, but at the same time, be responsible in the future
on new obligation that`s we take on, you know, then there`s a problem.
HAYES: Talk about this responsibility and talk about the role that
fiat currency plays in this, because I think one of the reasons that this
idea of -- the trillion dollar coin idea is interesting and kind of
important is "A," it`s from a game theory perspective. You have two
people, you know, playing chicken.
It allows one side to make a kind of similar bluff that the other side
can. So, it sort of weirdly gives us equal leverage. But also, when you
think about creating money out of thin air, it gets to something very
profound about whether or not Dylan is right about we have to responsibly
pay off these debts.
KELTON: OK. Well, he`s not right.
(LAUGHTER)
KELTON: The reason he`s not right, look, we always -- and we don`t
pay off the debt. We will never pay off the debt. What the U.S.
government does is redeem treasuries. And there`s a difference. When you
and I go into debt, we pay by transferring liability of a third party.
When the U.S. government issues debt, it doesn`t transfer liabilities
of anybody else, it just issues its own currency to redeem the outstanding
debt because the U.S. government is the issuer of the currency can never
run out. The U.S. government can never run out of dollars. They come from
the United States government.
They don`t come from China. We`re not going broke. We`re not putting
our children into bankruptcy.
GLENN: No. We`re just putting the Federal Reserve balance sheet at
work which is fine. And -- so, we don`t even need a coin, actually,
because that`s where we are.
HAYES: This is a way -- by the way, I should just explain to people.
When you say, we`re putting (ph) the federal balance sheet to work, what
we`re doing is we`ve increased the money supply in different methodologies,
right, during the crisis called quantitative easing.
The trillion dollar coin idea and it`s fun because it`s got kind of
Austin Powers, Dr. Evil aspect to it is just basically a way of doing
sterilize -- what`s called sterilized quantitative easing through the back
door, right? It`s a way of kind of creating an accounting mechanism that
expands the monetary supply.
KELTON: Well, it would allow the United States to put the Federal
Reserve`s balance sheet to work for the rest of us for maybe for a change.
HAYES: Right.
KELTON: And so, when we talk about the trillion dollar coin, nobody
says who`s going to by the coin and where are they going to get the money
to do it? But this was your point in the opening, right? If the Federal
Reserve wants to buy -- if the Federal Reserve is required to take the
coin, they use the keyboard and they mark up the size of the treasury`s
account the same way the Federal Reserve pays for everything.
HAYES: OK --
GLENN: Yes?
KELTON: The Federal Reserve does not have a bank account in any other
bank. There`s only one way that they can spend and that`s by creating
money out of thin air by using the computer.
HAYES: OK. But now we`re in really in the weeds (ph) here which is
like, if I`m hearing you at home right now, I`m even hearing you at the
table, right? It`s like, if that can work, well then, let`s just make a
ten trillion dollar coin and zero out the deficit or the national debt and
then just like forget all this fiscal cliff stuff and all these grand
bargains.
Let`s just throw it in there, man. Ten? Why stop at ten? Twenty
trillion.
(LAUGHTER)
HAYES: -- $100 trillion that we draw until the next hundred years.
Why is that -- why can`t we do that?
KELTON: We can do that.
(LAUGHTER)
KELTON: Of course, we can do that.
MOORE: -- this isn`t numb (ph). There are rules.
(LAUGHTER)
MOORE: There have to be -- in order for our credibility, what the
credit of the U.S government does, what it has always done since its
creation by Alexander Hamilton is to create credibility for a country that
had none when it was born. And if we don`t treat our debt in a credible
way if, we don`t pay our interest on time, if we don`t pay our bills, we
lose the essence of what the entire government -- what all of our politics
are based on.
KELTON: You`re talking about paying the debt.
(CROSSTALK)
WEISENTHAL: Well, there are a few things. One of the things is, you
say that we should have a discussion about our long-term fiscal future, and
that`s a reasonable discussion to have and we can debate how we want to
allocate our resources. But it is illegitimate to have that discussion
around the debt ceiling.
There are other ways that the Republicans could establish leverage.
For example, not passing the continuing resolution and having a 1995-style
government shutdown, which would not be great and would hurt the economy,
but we would not be risking our full faith in credit. And so, when people
say, oh, we don`t want to have this, it`s specifically we don`t want to
have this conversation around the debt ceiling where there is this
potential for a catastrophic effect.
HAYES: All right. There are two ideas here I want to pursue. One is
-- one I want to ask you if you think the kind of -- I want to get back to
whether we think the Republicans are essentially bluffing, right, because
that`s sort of important part of this.
And then, I want to come back to this idea, because I think this is
important, and it is like -- it`s like John Kenneth Galbraith said, the
mind is repelled, right, by the idea that you can just like create $10
trillion out of air.
MOORE: This is our teachable moment.
HAYES: Yes. So, let`s talk about -- let`s teach on after the break.
(COMMERCIAL BREAK)
HAYES: All right. So, first, this political question. We`re talking
about the trillion dollar coin. Let me just stipulate, like, I understand
-- like I am aware this idea is bonkers, but sometimes, bonkers` ideas are
also substantively right. That`s true --
KELTON: And also, sometimes, they`re just bonkers.
(LAUGHTER)
HAYES: Also, but -- and I also recognize, I mean, if we know anything
about the nature of Obama presidency, it is an incredibly small
conservative respect for kind of institutional norms and a real --
particularly in these kinds of like procedural ways, just not real, like,
innovative or outside the line. So, I think the odds of the White House
actually ever doing this or threatening to do it are incredibly slim. I
just want to make sure that`s clear.
GLENN: Sure.
HAYES: But the reason this is really important is because, "A," we do
have this actual political battle that`s coming up, and "B," it gets to the
heart of what we are talking about when we talk about debt, when we talk
about the debt ceiling, we talk about the deficit, and everyone throws
these words around, right? This is like the subject of every conversation
on the beltway right now, deficit-debt.
And I -- my sense is, essentially, no one knows what those words mean,
like, what that thing is pointing to and what the implications of the
meaning of that are. So, before we get to that, Dylan --
GLENN: Yes.
HAYES: -- on the political question, do you think -- I mean, is the
idea that we should all be thinking is the Republicans are essentially
hinting that they`ll go, you know, cause a half shutdown but not really
mean it. Here`s John Boehner on the debt limit fight essentially seeming
to indicate maybe back off and hedge a little bit.
The debt now is one point of leverage, Boehner said, but he also
hedges noting he`s not the ultimate leverage. Republican stronger card
Boehner believes will be the automatic spending sequester trigger that
trims all discretionary programs, defense and domestic (ph). How do you
read this in terms of what they`re actually going to do? What their
behavior is?
GLENN: I read it as responsible lawmakers will not walk us over this
unprecedented silly, you know, exercise. However, it is a point of
leverage. And I think that, you know, you`ll probably see some sort of
deal that has a short-term increase in the debt limit, you know, three
months, six months and a conversation of what`s the appropriate amount of
spending cuts that goes along with that.
HAYES: The first part of -- I mean, the funny thing about that
statement, right, the responsible lawmakers part and is leverage is that
the second one has to negate the first one to be true, right? If everyone
believes the responsible lawmakers won`t do it, then the leverage
disappears --
(CROSSTALK)
WEISENTHAL: -- always really bugs me with this conversation. So,
it`s always like, oh, they`re not going to do it at the end. We`re not
going to default. We`re not going to hit the debt ceiling, whatever it is.
And there`s like -- in a point of leverage, and actually, they are talking
about exactly that --
(CROSSTALK)
GLENN: -- the three branches of government. So, this is an
appropriate conversation whether we like it or not and whether how it looks
around the world is not. I mean, this is -- there are duly elected members
of Congress that have the right and actually have the constitutional right
here, and they should be heard and how they work through this is part of
the process.
WEISENTHAL: -- rubber hits the road at some point, and you get to the
point where you could have a situation where Congress doesn`t approve it at
which point the executive branch would have to do something to save the
country.
HAYES: So now, here`s -- so, that`s the idea behind the leverage part
of this conversations, but, now to get to the substance of the trillion
dollar coin idea which is to say, OK, the Republicans don`t take us over
and there`s some deal cut or we swerve out of the way at the last moment,
but then, we had this crazy mint the coin idea that`s been planted in the
minds of American policymakers.
And so, we say, well, forget about the debt ceiling. Why don`t we
just like mint some coins? Like I was saying before I went to break, like,
if we can mint a trillion dollar coin, let`s mint a $10 trillion coin and
just get rid of all this deficit nonsense (ph) to begin with and you were
saying we can do that.
KELTON: Of course, we can. If we establish that treasury secretary
has the capacity to mint a trillion dollar coin and deposit it in this
account at the fed, then they can put a 10 or 100 or any other number. It
is at the discretion of the treasury secretary. So, of course, they could
do that.
The question is, should they do that? What would be the ramifications
of doing that? There is absolutely no doubt in my mind that it could be
done. It appears to be, by all accounts, Harvard law professors, Yale law
professors and others --
(CROSSTALK)
HAYES: This is another data point -- the former mint director, Philip
Diehl, "The accounting treatment to coin is identical to treatment of all
other coins. The Mint strikes the coin, ships it to the Fed, books $1
trillion, and transfers $1 trillion to the treasury`s general fund where it
is available to finance government operations just like with proceeds of
bond sales or additional tax revenues."
There are no negative macroeconomic effects. This works just like an
additional tax revenue or borrowing under a clear debt limit.
KELTON: All it is are digital entries lock upon a spreadsheet.
That`s what that is. When the Federal Reserve credits the treasury`s bank
account, it`s just digital entries. Lock up. They can`t run away. They
can`t escape. They can`t go anywhere. They can`t chase any goods. They
can`t hyperinflate us. They can`t do all of these things that people are
terrified of thing.
HAYES: Here`s my question for you, what are the limits then? Because
I think the thing that -- in some ways, the moral subtext of the deficit
conversation is this debate about virtue, right? Virtue and kind of
licentiousness, right?
That we were -- that we run wild, right? That Moses went up to the
mountain and we went crazy with the golden calf and then he came back down
bringing the kind of Lord`s vengeance, right? And now, we`re going to like
-- now, we`re going to get good again. And that getting good, that virtue
is paying -- is reducing the deficit and paying the debt.
And you`re telling me, no, you can just be licentious all the time.
There are no limits on the behavior. We can spend as much as we want and
tax as little as we want.
KELTON: Of course. I didn`t say that at all. No. There are limits.
Of course, there are limits on how much you can spend. The limits are on
the real side of the economy, though, not on the financial side. And what
we`re so accustomed to hearing is we can`t afford it. We can`t afford it.
It`s always the financial side.
There aren`t enough numbers on the balance sheet. We can`t spend
because we don`t have the money. So, let`s take the hypothetical. I know
Heidi is going to fall out of her chair and I`ll say $100 trillion.
HAYES: OK.
KELTON: Take that hypothetical, OK?
HAYES: We mint a $100 trillion coin.
KELTON: Mint the $100 trillion and the fed credits the treasuries
account. What happens? Nothing. Absolutely nothing in the first
instance. The question is, what then would happen to those dollars if
Congress appropriated some spending, because the government can`t spend
unless Congress appropriates --
HAYES: Right.
KELTON: -- right? So, if Congress said, well, look, we have $2.2
trillion infrastructure disaster in this country. We`re going to
appropriate some funding to start repairing and rebuilding our nation`s
infrastructure, then those funds can begin to flow out.
HAYES: And then, they move into the real economy.
(CROSSTALK)
KELTON: -- as long as the real resources are there. We`ve got have
23 million Americans who want full time work in this country and can`t find
it. Many of them, unemployed --
GLENN: Let`s just mint a coin and put them to work. I mean --
HAYES: That`s what she`s saying.
(LAUGHTER)
HAYES: That`s exactly what she`s saying.
KELTON: Why on Earth would we allow 23 million Americans who want to
contribute, that we have useful things for them to do, we have unemployed
construction workers, unemployed manufacturing workers, they have exactly
the skill set that we need and --
GLENN: The only thing they need is this $22 trillion coin.
(CROSSTALK)
KELTON: The only thing they need is for Congress to give them
permission to do it.
GLENN: Sure.
MOORE: Well, the only way we could make --
(CROSSTALK)
MOORE: -- is if we started the museum exhibit and started --
(CROSSTALK)
HAYES: Talk about the constraints. I want you to make the argument.
The idea is that you say -- let`s play this through. You say, we put this
--
KELTON: This is a hypothetical, right?
HAYES: Now, in reality, my sense is financial markets would go
bananas, and I think part of the fear about the actual trillion dollar coin
is if it actually ever came to that, it would represent something to
international financial markets and treasury purchasers about the nature of
American governmental institutional dysfunction that would negatively
impact the price of treasuries.
GLENN: Right. I mean, first of all, forget the fact that government
spending crowds our private sector spending which is a whole different
conversation. The issue of our credibility in the world, we do become
Greece at some point. Germany doesn`t want to give Greece money because
they don`t think Greece can repay their debts.
And, United States government, if it becomes Greece in terms of its
ability to meet its -- or its willingness to print money, you know, then we
become a laughingstock of the world financial markets.
(CROSSTALK)
WEISENTHAL: So, you ask this question about constraint and what is
the actual constraint?
HAYES: Yes. Hold that thought and tell me what constraint is.
(CROSSTALK)
HAYES: That`s what I want to get to.
(LAUGHTER)
HAYES: I think we all agree with that. Let`s talk about that right
after this break.
(COMMERCIAL BREAK)
HAYES: We`re talking trillion dollar coin, of course. And, Joe, we
were talking about -- basically, we`ve gotten to this point where we`re
basically talking about what -- why does the government have to pay its
bills? That is the fundamental question, right? I mean, at the end of the
day, that`s the question is, why do they have to pay the bills?
Who do they pay them to? And what is the constraint on the
government`s ability, particularly, the U.S. government with the reserve
currency in the world, right? What is the constraint on our ability to
just print money? That I think really gets the heart of the question we`re
talking about.
WEISENTHAL: So, I think, you know, this week was the 100th birthday
of Richard Nixon. And, Richard Nixon was the president who finally
ultimately killed the gold standards.
HAYES: Right.
WEISENTHAL: But what hasn`t died is this gold standard mentality
where we think of money is something that will run out of, that money is
this commodity that we can use up if we don`t. So, that is a false
constraint to say they`re all going to run out, but there is a real
constraint. And so, let`s say -- let`s talk about $10 trillion coin. Now,
as Stephanie pointed out --
HAYES: You just cut her by 90 percent.
(LAUGHTER)
WEISENTHAL: Let me just -- so if we put that, obviously, as Stephanie
pointed out, if we put that into the bank account, there`d be no
hyperinflation because that money wouldn`t be going anywhere. Where you
would get a constraint is if then the government said, OK, now, let`s spend
$10 trillion on infrastructure projects, because then, you have a real
problem, because there are $10 trillion worth of real resources in the
economy.
So, you`ve been trying to push all this money into the real economy,
and then, you would get inflation.
HAYES: Right.
WEISENTHAL: And then, wages would surge. The price of commodities
would surge. And there is your constraint. You just found it. You hit
the point where you`re putting too much money into real resources and then
you get the push back against what government --
HAYES: OK. You also, Joe --
WEISENTHAL: It`s not about money running out. It`s about too few
good being in there to absorb that money.
HAYES: Let`s get back to something slightly more resembling reality,
which is let`s say we`re getting to a showdown and let`s say that the White
House does start to make noises about doing. And not -- again, it seems
incredibly unlikely -- let`s say they did or let`s say this time around
they don`t, but it`s another disastrous debt ceiling showdown and the next
time, you know and John Boehner gives them a month, right?
This is Grover Norquist`s idea. You know, that clip where he says,
basically, the leverage will have this. We`ll just extend debt ceilings
for a little bit, and if you`re good, right, you can come back for more.
OK. So, let`s say we get to a point where they say, you know what, this
has become a habit now. We can`t deal with this.
We`re going to seriously pursue this trillion dollar coin idea. I
mean, you work -- you write for a publication that people in financial
markets read. You look at financial -- the actual tangible (ph) people out
there in financial markets, aren`t they going to balk? Isn`t this going to
have an adverse effect in people`s judgment of the credit worthiness of the
government, broadly about our ability to kind of functionally pay our -- do
the things we need to do?
WEISENTHAL: I don`t think so. I mean look, we`re already having a
debate right now. And this is the point that we need to come back -- we`re
already having a debate at the highest levels about whether we`re going to
pay our bills or not. That is the debate we`re currently having.
MOORE: Can I actually debate that debate, because I don`t think we`re
having that debate? I think -- no, I think, Mitch McConnell has said that.
WEISENTHAL: The GOP leader in the Senate is debating with the
president about whether we`re going to pay our bills if there`s not an
extraction.
MOORE: He`s not debating it. This is a clearly an issue of political
leverage. This -- at no point, does this actually come down --
WEISENTHAL: That`s a debate.
MOORE: -- to the issue of Congress defaulting on its bills, which by
the way, constitutionally, it cannot do. And last time they threatened to
do it, the blame fell on Republicans disproportionately. These are people
who care so much about their jobs that they`re willing to hold even in a
political sense the U.S. economy hostage. What makes you think that
they`re going to be able to pull this off and keep their jobs?
It`s the only thing they`re worried about. Everyone knows that if a
Republican is seen as having threatened a default of the U.S. government,
they will be voted out of office if not, brought up before the U.S.
government.
HAYES: So, here`s, I think, an important point which this gets us to
which is that with this kind of threat on the table of we`re not going to
raise the debt ceiling, right, one way to respond to that politically, and
again, for kind of game theory sense is, well, you`re not going to raise
the debt ceiling, we`re going to mint a trillion dollar coin. What do you
think of that, right?
The other way to respond to it is -- the other way to respond to it is
the way you`re responding which is you`re bluffing, right? That`s clearly
not true. You clearly aren`t going to do that. So, let`s actually just
put all that aside. And I think there`s something to that. I think
there`s something to like not making more of the threat than it should
credibly. I`m going to give you the last word, Dylan.
GLENN: We have a spending problem in this country. Everybody around
this table and in the Congress -- in the country understand that`s, but
they don`t want to do anything about it.
(CROSSTALK)
HAYES: There`s no consensus on that.
GLENN: OK. Fair enough. I would argue very strongly we have a
spending problem in this country and there`s no political will to do
anything about it. The president voted six years ago against raising the
debt ceiling.
HAYES: Right.
GLENN: So, this is a little bit of a red herring and a little bit of
him being, you know, above the fray on this which is absolutely not true.
He was completely complicit in trying to use it as leverage back then and
has been a point of bringing people to the table.
HAYES: Yes. Let me make a point about that, because the norm has
been, as I was saying -- the norm is that that there`s a symbolic vote that
people in the minority party will cast.
GLENN: Generally, because they get a free ride.
HAYES: They get a free ride, but not credibly threatened that they
would take it over. I mean, I think there was something distinct and
different about the 2011 behavior of the Republican Congress in that
respect. But you`re totally right. Democrats all the time voted against
debt ceiling hikes because what they want to do is make the other party
walk the plank and own that vote.
GLENN: Absolutely.
HAYES: I want to thank Heidi Moore from "The Guardian" newspaper and
Dylan Glenn from Guggenheim Partners. Really great. That was really fun.
The end of the Geithner era and what it means for the economy, next.
(COMMERCIAL BREAK)
HAYES: Got the former special investigator of the T.A.R.P. program
munching on the pastries here.
On Thursday, President Obama nominated Jack Lew, his current chief of
staff and a former direction of the office and manager in budget, service
treasury secretary in second term. In doing so, the president bid farewell
to one of the most important treasury secretaries in American history,
Timothy Geithner.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: With the wreckage of
our economy smoldering and unstable, I asked Tim to help put it back
together. And thanks in large part to his steady hand, our economy has
been growing again for past three years when the history books are written,
Tim Geithner is going to go down as one of our finest secretaries of the
treasury.
(APPLAUSE)
(END VIDEO CLIP)
HAYES: There is no doubt that Geithner`s legacy will loom large over
the Obama administration and the American economy for years to come.
Starting with his role as the head of the New York Federal Reserve,
Geithner was pivotal in engineering the financial rescue regime and all is
ugly glory.
He`s been a lightning rod for criticism, for his awful (ph) response
in the foreclosure crisis, and his apparent unwillingness to hold Wall
Street tightens accountable for the financial crash. Those choices
continue to have repercussions today for the financial system and millions
of workers, customers, and borrowers.
Geithner`s rescue of the failing insurance giant, AIG, was so
appreciated by that company, that AIG has been airing commercials, thanking
the American people for their generous assistance.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Our leading global insurance company is right here
in America.
UNIDENTIFIED FEMALE: We were paid every dollar America lent to us.
UNIDENTIFIED FEMALE: Everything plus a profit of more than $22
billion.
UNIDENTIFIED FEMALE: For the American people.
UNIDENTIFIED FEMALE: Thank you, America.
(END VIDEO CLIP)
HAYES: Not everyone at AIG, however, is so grateful. Just as the
current closes on Geithner`s term, the company`s former chairman, Hank
Greenberg, is suing the federal government for making the terms of the
bailout too restrictive. AIG, itself, briefly considered joining a lawsuit
this week before declining.
The suit and AIG`s resurgence four years after rescue engineered by
Geithner are a call for reminder that we are all living in Tim Geithner`s
America. And as he prepares to exit, the big question that hangs over the
entire legacy of the Obama administration is, is that a good thing?
Joining me now are Alexis Goldstein, the former vice president and
information technology at Merrill Lynch and Deutsche Bank, now an "Occupy
Wall Street" activist, and Neil Barofsky, author of "Bailout: An Inside
Account Of How Washington Abandoned Main Street While Rescuing The Wall
Street," and the former special inspector general in charge of overseeing
the troubled asset relief program. Great to you guys here.
NEIL BAROFSKY, FMR. SPECIAL INSPECTOR GEN. OF TARP: Thank you.
ALEXIS GOLDSTEIN, OCCUPY WALL STREET: Thank you.
HAYES: Geithner, one of the things I think is really interesting
about Geithner is that he -- you would not, if you were in the betting
markets at the beginning of Obama`s first term, you wouldn`t have said this
guy is going to be the guy who makes economic policy. This guy is going to
be influential.
This guy is going to go in the history books as one of -- I mean, as
one of America`s most influential and important for better or ill treasury
secretaries because he got a really bad start to his job. He stumbled
right out of the gate. He gave a few press conferences that were wildly
panned. He wasn`t personally close to Barack Obama.
And, yet, he has managed to have, I think, by all accounts, across the
spectrum, tremendous influence and as someone, Neil, who worked with him
and sat across tables with him, why -- how did he pull that off?
BAROFSKY: YOU know, I think he really has a sense of simpatico with
President Obama. And, I think they connected on a personal level, and he,
somehow, earned the president`s trust. But I think when you look at what
he`s done, it is a remarkable thing, because most of the policies that he
engineers or he did in response to financial crisis were failed policies.
And I think, you know, part of his legacy is going to be what we`re
going to have to deal with in the coming years as a result of those failed
policies. But in some way, it`s a mystery to me, because everything he
touched really didn`t go the right direction.
HAYES: You disagree strongly? You`re a big Geithner --
WEISENTHAL: Yes. I think Geithner has far exceeded the expectations
of a lot of people. At the time, you know, -- basically late 2008-2009 is
easily -- most easily understood as just a gigantic run on the bank. And
that got a lot of people throwing out all kinds of ideas like how we need
to hair cut the bond holders, and we need to do these big, you know --
address these big systemic issues about the economy.
And Geithner`s approach was, basically, no, we`re going to give the
banks a blank check. And I understand why that`s disturbing to people and
people feel that there, you know, there`s this moral hazard element, but
there are two things. One is, there was a huge loss of equity. So, people
did lose a lot of money.
And two, the U.S. has had an economic rebound that`s far exceeded both
other financial crisis in history and also what a lot of people thought at
the time, and a big part of that is that we didn`t just let the economic
system go kaput and we didn`t let insurance companies who owned bank bonds,
take a hair cut, and then, let those losses cascade.
HAYES: So, this is the argument you will get from treasury and you
will get from Geithner`s defenders is, look, you have to rate these folks
comparatively, right? We`re running a race with the other countries that
have gone through financial crisis, and we come out ahead. We`re going to
be close.
Our job numbers have turned around faster than other countries and
comparative points in the financial crisis. What do you guys think of that
argument?
GOLDSTEIN: But that`s always someone who doesn`t understand the way
the financial markets work. We do something like go into AIG when they
were giving them 100 cents on the dollar on the CBS protection that was
written on. By that, I mean the protection that was written against some
of these toxic mortgage assets that were --
HAYES: I`m taking that insurance. I`m a trader. I take out
insurance on a horrible, horrible --
GOLDSTEIN: Steaming pile of garbage.
HAYES: Yes. The steaming pile of garbage, and I take out an
insurance policy. When that steaming pile of garbage lights on fire, I go
in and the government pays me 100 cents on the dollar for the insurance
policy I took out on what I should have known was a piece of crap.
GOLDSTEIN: And they sold these to people like Goldman s who could
have taken a hit. And when you look at the news reports about this, the
term sheets which are just the legal document that actually outlines the
terms of the trade had a space for the amount of hair cut that was going to
be required.
HAYES: Hair cut is a technical term which is when you sort of
discount the amount. So, if I have a bond that`s 100 cents -- you know,
100 cents on the dollar, you pay the 80 cents on the dollar, 20 cents is
the hair cut, right? That`s the value that I`ve lost on that bond because
I`m taking --
GOLDSTEIN: And Goldman was doing quite well at the time of the
crisis, because they had bet so hard against a lot of these securities.
And so, you know, a partial hair cut on some of these things wouldn`t have
hurt them very much.
HAYES: But that`s the question, right? The kind of -- the Geithner -
- Geithnerism, Geithner philosophy, right, was like kind of no losses,
right? No losses particularly for bond holders. The equity is --
(CROSSTALK)
HAYES: Right.
WEISENTHAL: And you don`t end the bank run by saying, oh, you`re
going to take a loss and then they take a loss, wait, I`m really close to
them with the capital shortage (ph). Does that mean I`m going to take a
loss? OK, better still that way. Then the next person down the line
worries that they`re going to take a loss.
That`s why this hair cut is problematic, because as soon as you start
introducing these losses and everyone else down the chain worries that
they`re about to take a loss next.
(CROSSTALK)
GOLDSTEIN: -- where when you kidnap somebody and you give them
absolutely everything that the kidnappers asked for, so what`s going to
happen the next time it happens (ph) around? And the banks are 20 percent
larger than they used to be, because what else is the message? If you`re
going to give me everything I need, I`m going to get bigger so you rescue
me again.
HAYES: Right.
BAROFSKY: And also, I think looking at the recovery and crediting
Geithner and this free money to the banks as the reason why it hasn`t been
as horrific as it could otherwise, I think, is misplaced. I mean, I think
the reason why we`ve seen not as bad as a recession and recovery is more
attributable to the stimulus where actually money went out.
If it was this free money to the banking policy, that presumes the
banks once they got all of this money put it back into the economy.
Deployed it instead of hoarding it, which was the justification for TARP,
but because of this lack of conditions --
HAYES: Right. We know that didn`t happen.
BAROFSKY: -- it didn`t happen. So, the comparison, I think, of
anything is to Japan where -- as you wrote recently, Joe, that this was,
you know, a comparable thing. But look at the longer term. We had a lost
decade of growth in Japan. And that zombification (ph) of the banks, which
is what we did here, that`s part of Geithner --
HAYES: The irony, the iron, the irony, of course, is that Japan which
used to be the model for like how not to deal with financial crisis lost
decade because everyone else has screwed up so badly, now actually looks
pretty good. I want to get your reaction to Tim Geithner saying he`s not
too friendly to the banks and then we got to talk about housing, because
that`s really important, too, right after this.
(COMMERCIAL BREAK)
HAYES: I think if you can distill the criticism of Tim Geithner down
to one sentence is that he was too friendly with the banks, right, that he
was too close to the banks. That comes across in your portrayal in your
excellent book, Neil. Here he is responding to that charge to Charlie
Rose. Take a look.
(BEGIN VIDEO CLIP)
SECY. TIM GEITHNER, U.S. TREASURY DEPARTMENT: I find that deeply
offensive. You know, it`s the result of the urban myth, significantly. A
lot of people thought and wrote in publications of record that I spent my
life at Goldman Sachs rather than as a public servant which is what I`ve
done with my life.
People were deeply misled about the basic choices we face and the
alternatives we confront in that context. A lot of people including many
of my critics said we went out and gave and lost trillions of dollars of
the American taxpayers` money at that time deeply misleading, terribly
damaging to confidence, and the cost of that has been very damaging to the
president, and I think the image and the integrity of the basic effort.
(END VIDEO CLIP)
HAYES: So, Neil Barofsky, why are you trying to damage the basic
integrity of the basic effort?
BAROFSKY: That`s funny. That wasn`t in response to a question about
bailout at my book. And, you know, what Tim Geithner did there is what so
often happens with treasury, and I think part of the legacy of the
disinformation campaign is that we`re launched by treasury and this
horrible, horrible act of transparency which is erecting some straw men and
knocking them down.
Tim Geithner`s problem isn`t that people think that he worked at
Goldman Sachs, obviously, he never did. And, you know, even the idea of
trillions of dollars of losses, that was never actually made.
I mean his problem is that he ideologically, I think, coming from the
New York fed where he`s surrounding by bankers and bringing those people
with him and surrounding himself in Washington always thought what`s best
for the biggest banks was best for the country, and he ignored everyone
else.
GOLDSTEIN: It feels so distance. If you look at the top number of
people that he calls, there is an article last year in the FT, number one
is Larry Fink from BlackRock. Number two is Robert Rubin. And he appeared
typical Wall Street guy.
(CROSSTALK)
HAYES: Isn`t that true with every treasury secretary? I mean, who
are we kidding? Treasury secretary is basically like bros with banks --
GOLDSTEIN: Absolutely. And if you look at Jack Lew, for example, he
replaced Peter Orszag when he was at office of OMB, and then, Peter Orszag
goes to city, then he replaces Bill Daley for chief of staff. Bill Dales
is from JPMorgan, right?
HAYES: Right. So then why is Geithner getting so bad when basically
he`s just another one of the essentially like banking friendly class?
BAROFSKY: I think the key here --
GOLDSTEIN: Well, it is a larger problem.
BAROFSKY: It is a large problem. I think the key difference here is
that Congress directed the treasury secretary when it passed the TARP bill
and gave him his incredible authority to spend $700 billion to rescue the
banks. It wasn`t a blank check from Congress. They directed him to do
something about the foreclosure crisis.
HAYES: Right.
BAROFSKY: They promised that they were going to make sure the banks
lent this money, not for to just filling their equity holes (ph). So, that
gave him a bigger responsibility than others.
HAYES: I want to talk about housing, but Stephanie, I want to get
your thought on this idea of we got our money back, right? That is the
argument. That`s another argument they make is like, look, we thought we
were going to have losses. We got our money back, and that seems like a
good thing, and I wonder what your response to that is.
KELTON: Well, the idea that the taxpayer has been made whole, right,
and everybody is supposed to feel warm and fuzzy about that fact, but in
fact, Ben Bernanke was asked when we were going through this process, and
they said, what you are doing? It`s hundreds of billions of dollars.
Where is this coming from?
Is it taxpayer money? This is a question asked by Scott Pelley of Ben
Bernanke on "60 Minutes," and Bernanke`s response was it`s not taxpayer
money. When we want to lend banks, we just use --
HAYES: It`s a trillion dollar coin.
(LAUGHTER)
KELTON: Exactly. It`s out of thin air money. So, it was very
honest. It was very accurate answer. He said we aren`t involving. There
are no taxpayers and no grandchildren involved in this.
WEISENTHAL: However, there is one point. So -- although, it is true
that it wasn`t taxpayer -- whatever, the fact that we didn`t lose money on
TARP is a sign that we weren`t completely reckless about how we want to
vote.
HAYES: More on that, more on that and more on AIG and homeownership
which is the big one after this.
(COMMERCIAL BREAK)
HAYES: Hello from New York. I`m Chris Hayes here with Alexis
Goldstein of "Occupy Wall, Neil Barofsky, former special inspector general
in charge of overseeing the financial bailout, Stephanie Kelton, associate
professor of economics at the University of Missouri-Kansas City, and Joe
Weisenthal of BusinessInsider.com.
And in the wake of the news of Tim Geithner`s departure to be replaced with
the nominee Jack Lew at Treasury, we`re talking about the Geithner legacy.
And because I think when you look at the first term, he`s -- I think it`s
hard to argue anyone was a more influential cabinet member. I mean, you
know, the signature things that happened particularly in the midst of the
crisis have been shepherded and overseen by Tim Geithner, he lasted all
four years. Inside the account of administration say he was incredibly
successful -- we`re talking about -- incredibly influential.
We`re talking about his legacy. And one of the things we said right
before we went to break is this argument about the bailouts, right, and the
cost. The idea that, you know, people throw around the $700 billion figure
which is a huge eye-popping number and then the argument on the other side
that Tim Geithner will say, and people at the Treasury will say, and people
at the administration, taxpayers made money on the bailout, right? Or you
basically just said that.
And, Neil, you have an issue with that.
NEIL BAROFSKY, FORMER SPECIAL INSPECTOR GEN. OF TARP: Well, first of
all, you know, the fact that TARP is going to make money, Treasury`s own
projections is between $40 billion to $50 billion of losses, which by the
way, is still good news from the dollars and sense perspective because it`s
far less than we ever imagined it would be in 2008 and 2009. And that`s
one of the good news, smart pieces of good news.
But the problem with these types of calculation, they don`t calculate
the cost of the next financial crisis that has been made all but inevitable
by TARP and the way it was administered and what Geithner has done.
And the real cost of loss of faith in government that has been
generated by the nontransparent and remarkable unfair way that these
policies have been carried out. And there is a real cost to society.
You know, Alexis is from Occupy, which is just one of the many
expressions of anger and loss of faith that were generated by the way
Geithner ran his program.
HAYES: The real, kind of iconic version of this was AIG, right? I
think AIG was the centerpiece of this for a bunch of reasons. One, it was
the biggest amount of direct money paid into a failing firm.
Two, it was so reckless -- this little operation in London taking
insurance on anything.
And, three, it later had the bonus issue, right? Which is after we
bail it out, they got the bonuses. And here`s Ben Bernanke talking about
the AIG bailout and expressing frustration and populist anger that you
never really saw out of Tim Geithner.
Take a look.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Out of all the events and
all of the things we`ve done in the last 18 months, the single one that
makes me the angriest, that gives me the most angst is the intervention of
AIG. I slammed the phone more than a few times on discussing AIG.
It`s just absolutely -- I understand why the American people are
angry. It`s absolutely unfair that taxpayer dollars are going to prop up a
company that made these terrible bets that was operating out of the sight
of regulators.
(END VIDEO CLIP)
HAYES: And then here`s Timothy Geithner defending AIG in sort of
uber Geithner-iran terms. Take a look.
(BEGIN VIDEO CLIP)
SECY. TIM GEITHNER, U.S. TREASURY DEPARTMENT: Our judgment was that
the failure of AIG would have been catastrophic to the stability of the
financial system. It would have had the effect of undermining confidence
in the insurance system. It would create the prospect of much greater
failure across the financial system. You would have seen much more damage
the basic value of American savings.
You had the rivets were coming off the submarine, and in that
environment, to have the largest insurance company in the world that had
written savings protection contracts to thousands, hundreds of thousands of
American households and to a bunch of state and local governments, to have
that institution fail in that environment, our judgment would have been
catastrophic.
(END VIDEO CLIP)
HAYES: All right. Who`s right?
BAROFSKY: The dishonesty of that statement we saw in the testimony
from Congress. AIG was not saved to protect savings accounts. It was
saved so that AIG could make its payments that Alexis was described
earlier.
ALEXIS GOLDSTEIN, OCCUPY WALL STREET: Morgan Sachs, Morgan Stanley -
-
BAROFSKY: To the largest too-big-to-fail banks that has made these
insurance policies that made these reckless, counter-party bet risks on AIG
and the taxpayer was footing the bill.
And, you know, look, even Tim Geithner himself in some ways
acknowledge that was an unfair thing when he authorized his people to,
quote-unquote, "negotiate with the banks to try to have a discount, not 100
cents on the dollar buying securities at a time were worth less than half
that amount.
But it was such a half hearted, un -- you know, just terrible effort
that it didn`t go anywhere.
JOE WEISENTHAL, BUSINESSINSIDER.COM: You know, we were talking about
right before those clips, the loss of faith in society because of TARP.
But I would say that the real loss of faith in society, the risk is
economic collapse.
Here`s an example where Greece is a good analogy, where you had a
true economic collapse and basically, you know, no one`s ever come in to
help them in a real way. And it just gets worse and worse, and now, to the
point where we`re a neo-Nazi party is the third biggest party. Like there
are real consequences to letting everything fail.
GOLDSTEIN: I don`t think anyone --
(CROSSTALK)
GOLDSTEIN: We don`t give the banks everything they ask for, it`s
neo-Nazism. I don`t that is the choice here.
WEISENTHAL: There is like -- there is like -- when you want to talk
about loss of faith in society, what actually -- the real culprit here, it
was the collapse. It was the massive run on the banks. And we can see
what happens when that is taken with no --
(CROSSTALK)
BAROFSKY: That is a completely false choice, because it`s is one
thing to say we should have done nothing and let the banks fail. I mean, I
don`t think -- people do advocate that.
HAYES: There are some people who advocate that.
BAROFSKY: I mean, I don`t advocate that. I think that, you know,
the whole point of too-big-to-fail you is that you don`t have a choice.
They are too-big-to-fail.
The question is: what do you do next after you rescue them? Do you
make them bigger? Do you fight back against reforms that would limit their
potential to have more damage?
Or do you do what Tim Geithner did, which is fight against the
bipartisan efforts to break up the banks and prevent the next crisis?
GOLDSTEIN: And if you talk about the legacy of Boehner, this goes to
Rubin (ph) and deregulation. I mean, the reason AIG has written so many of
these protection contracts is because they weren`t treated like insurance.
Normally, when you have insurance, you have to keep something in the banks.
HAYES: This is sort of like insurance in someone else -- it`s on
your neighbor`s house. So, the other part of this is to me there are two
categories to think about this in terms of Geithner. There`s the kind of
wisdom and judgment and restraints that he might or might not have put on
the bailout part, right?
I mean, we had this policy. The stress test they came up with which
some people think is a brilliant way of threading the needle, conveying to
the markets that they`re confident in the institutions, they`re healthy
without having to go in and fix them. But that the confidence itself got
things back on their feet. So there is that aspect.
But to me, the thing that really is galling about the Geithner isn`t
even the moral hazard on that side as much as it is to then turn around and
not do anything for homeowners, right? My feeling is, look, if the policy
bailouts for everyone, then I can live with that one. If the policy is the
banks get bailed out and the homeowners get bailed out and everyone gets
bailed out and we have a weird jubilee, after this financial crisis, that
seems to me something I can live with.
But, in fact, that`s not what the Treasury did, right?
Here`s Tim Geithner testifying against principal reductions. This
isn`t for banks. This is for homeowners, right, who have loans. This is
him testifying principal reductions as part of the HAMP program that
Treasury was administering.
(BEGIN VIDEO CLIP)
GEITHNER: This program was not designed, and this is a conscious
choice we made, not to start with deep principal reduction. We made that
choice because we thought it would be dramatically more expensive for the
American taxpayer, harder to justify, create much greater risk of
unfairness.
(END VIDEO CLIP)
GOLDSTEIN: This is sort of how their attitude has been throughout
this process. It`s this idea that corporations are always going to do
write. We`re going to write you a blank check. You know what you`re
doing. But there`s this implicit assumption that if we as an individual or
the 99 percent want something from the government, we are going to abuse
it.
And you need to build into every single program this idea that we are
going to abuse it to the largest extent possible when really it`s the banks
that are true recidivists in that sense. There is just this idea that --
HAYES: Yes. This sort of inequality of accountability in terms of
the terms by which this -- the government`s largest, right, or forbearance
is extended to people.
BAROFSKY: And I think the other thing here is this really wasn`t
supposed to be Tim Geithner`s choice.
HAYES: Very good point.
BAROFSKY: I mean, Congress required foreclosure mitigation as a
condition for giving the authorization of the bailout. And he -- it`s not
that he made a decision against this, he betrayed the statutory requirement
of Congress to do an effective foreclosure program.
HAYES: And you point this out in your book and I think it`s
important for people to remember. Remember, there are two TARP votes, the
first one failed. The second one passed.
And what happened in between exactly was a lot of progressive
Democrats who voted against the first time came onboard the second time.
Part of the reason they came onboard is calls from candidate soon-to-be-
president, Barack Obama, and promises of it is going to be a bailout for
everybody, kind of. I mean, bailout is such a negative term, but
essentially a rescue for everyone, right?
Home owners are going to get dealt into this deal and there was $50
billion appropriated through TARP, through a program called HAMP, less than
10 -- this is really just a remarkable number. Less than 10 percent of
Troubled Asset Relief Program funding for housing support programs has been
spent, less than 10 percent -- $45.6 billion originally allocated for the
program, $4.5 billion. There`s $40 billion sitting in a bank account that
Congress already appropriated for the purpose of helping homeowners that`s
just sitting in the bank.
GOLDSTEIN: And remember that attorney general mortgage settlement
that the administration lauded, oh, $25 billion for homeowners? This is
more money than that sitting there doing nothing.
HAYES: As a defender of Geithner and as I think the most persuasive
proponent of the bailouts for all policy, what do you make of the housing
part of this?
WEISENTHAL: I would like to have seen more done on housing. I
would.
I`m not -- you know, I`m not as knowledgeable about why there is
money that is left unspent. Maybe they have a line. I`m not sure what it
s I would like to see more have done on all kinds of stimulus that was not
just directed through the banks.
HAYES: And to end this on a forward-looking note, I mean, that money
is still. Homeowners are still underwater. We can still make housing
policy better, right? I mean --
GOLDSTEIN: We have until the end of this year. I believe it goes
back to the Treasury.
BAROFSKY: This is me holding my breath. I suggest you not do the
same.
HAYES: Right.
BAROFSKY: This was choice. That`s the important thing. These are a
series of choices that were made not to use this money to help homeowners.
That`s not going to change.
HAYES: I want to thank my guests, Alexis Goldstein, from Occupy Wall
Street, Neil Barofsky, former special inspector general in charge of
oversight of TARP, Stephanie Kelton, associate professor of economics at
the University of Missouri, Kansas, and Joe Weisenthal from
BusinessInsider.com. That was awesome. Thank you so much.
Obama`s second inaugural address is coming up, along with State of
the Union. Four novelists join me to talk about the words that come out of
the president`s mouth right after this.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We worship an awesome
God in the blue states and we don`t like federal agents poking around in
our libraries in the red states.
We coach Little League in the blue states and, yes, we`ve got some
gay friends in the red states.
There are patriots who oppose the war in Iraq and there are patriots
who supported the war in Iraq.
We are one people, all of us pledging allegiance to the stars and
stripes, all of us defending the United States of America.
(END VIDEO CLIP)
HAYES: With that keynote speech delivered on July 27th, 2004, then-
U.S. Senate candidate from Illinois, Barack Obama, announced his arrival as
the most exciting young political persona in American life.
He was a stranger that came to town and life would never be the same.
Perhaps more than any other political figure in recent memory, Barack Obama
has used speeches and big rhetorical set pieces to define his character,
tell his story and propel actual political events. The convention speech
comes to mind as does his incredible Philadelphia speech on race.
In the next few weeks, President Obama will deliver two huge
speeches, inauguration speech and State of the Union Address. In these
speeches, Barack Obama will tell a story about the country -- stories about
voters and continue to tell the story of Barack Obama, a story not about
him as a human being but him as a character that he and the people around
him have consciously constructed.
And if that sounds overly cynical, no one is more aware of the
distance between the man Barack Obama and the public image of same than the
president himself. Earlier this year, he told Michael Lewis of "Vanity
Fair," "One of the things you realize fairly quickly in this job is that
there a character out there people see out there called Barack Obama.
That`s not you. Whether it`s good or bad, it is not you. I learned that
on the campaign."
Given Barack Obama`s remarkable gift in story telling and the
impending second act of the drama of his presidency, we thought it is
enlightening to invite some genuine experts in storytelling to give their
thoughts and the narrative President Obama is creating.
Joining me are: Ayana Mathis, who`s novel, "The Twelve Tribes of
Hattie", which was just selected for Oprah`s Book Club 2.0; George
Saunders, author of a new collection of short stories "The Tenth of
December," and a professor of creative writing at Syracuse University;
Victor LaValle, author of "The Devil in Silver", and assistant professor
and acting fiction director at Columbia University School of the Art; and
Pulitzer Prize-winning author Michael Chabon, who`s new book is called
"Telegraph Avenue."
It`s great to you have here.
AYANA MATHIS, AUTHOR, "THE TWELVE TRIBES OF HATTIE": Good to be
here.
(CROSSTALK)
HAYES: Michael, about a third of the way in your book, Barack Obama
actually shows up as a character.
MICHAEL CHABON, AUTHOR, "TELEGRAPH AVENUE": Yes. Right.
HAYES: So, I want to start off with you about how you thought about
writing the character of Barack Obama, because you were doing something
similar to, I think, what Barack Obama and his speechwriters have to do.
CHABON: Well, I mean, what I got from that quote that you ran from
the Lewis article is that it`s -- there is an attempt, I think, on the part
of both Barack Obama and his speechwriters and the people who are in charge
of the way he is presented in the media to create a narrative and to create
a character. But that`s not actually the character Barack Obama that I
think Barack Obama was talking about in that quote.
The narrative to me is written by some much larger collective entity
that incorporates both, you know, right-wing commentary and left wing
commentary and the way he is perceived by ordinary people, the things that
other people write about him, and say about him and the way in which he is
depicted are just as important to creating that character of Barack Obama
as whatever he may say or do about himself.
And so, for me, I felt that I was entitled to incorporate that
character Barack Obama as I understood him very much in the way that in fan
fiction --
(LAUGHTER)
CHABON: You have a crossover appearance from where we`ll say,
Captain Kirk will appear.
HAYES: He shows up in page 300 of your book.
CHABON: Exactly, exactly. Several times.
And, you know -- I mean, in a way it is a little bit like a kind of
fan fiction in the sense that it is this vast collective story telling
enterprise.
HAYES: And I think it`s a really good point, because I think we all
write our own Barack Obama fan fiction, to a certain level, right? Like we
all are creating -- there is something about him as a figure that is both,
you know, there is more words written about him than any political figure
probably since Lincoln I would even guess, I mean, maybe FDR, right?
Particularly in terms of ratio time spent on earth or in office to those
words.
And yet at the same time they`re seeing something always mysterious
about him, even though we know so much about him.
MATHIS: Yes, absolutely. He is -0 it`s really this question of kind
of creating a narrative of yourself. I think it is. I think you`re right.
It`s a sort of combination of public perception and all these things and
also his own perception of himself.
And it`s very interesting, too, I think, I was sort of thinking about
him and kind of contrasting him with Bush, second Bush. And the ways in
which Barack Obama`s narrative about himself is so much more sort of
believable to a certain kind of way. I think sort of George Bush kind of
wanted us to sort of see him as this deeply sort of authoritative figure.
You know, we`ll not negotiate with terrorists.
We`ll not -- you know all these things. I always felt there is a
strange gap. I didn`t quite completely believe him, you know, like he was
sort of saying these words. I didn`t actually believe what he wanted me to
think about the character he was creating of himself.
And with Barack Obama, I have kind of completely believed him. I`m
sure we`ll talk about the way there`s are chinks in the armor, as it were.
But I very much believed his creation of himself.
HAYES: And that believability is fascinating, right? Because --
George, if you read his story a draft of which and I read it back and forth
with your editor on "Slate" that was really fascinating. You read a story
and he says at the end, he says, I don`t believe this moment, right?
The question -- the next question is, is that the author`s problem or
the reader`s problem?
GEORGE SAUNDERS, "THE TENTH OF DECEMBER": It`s the author`s problem.
MATHIS: Yes, like we all agree.
SAUNDERS: It`s interesting. For me, that whole writing thing is
about revision. So what happens in revision? In my experience, you go
closer and closer to the difficult truths that you couldn`t just blurt out.
It took 15 drafts to get to this "Oh, God there is another side to this
character."
So that might, to me, one of the interesting things about public
discourse is it`s very short and it`s usually pretty much made to order.
It`s quick.
HAYES: Right.
SAUNDERS: What we do, you got time, lot of revisions and my thing is
you always kind of sink down into a quieter more truthful place where the
fundamental emotion is increased empathy by way of detail.
Now I don`t know how that fits in with political speech. But often
when I see someone, a politician I admire, I feel like just say it. You
know, I know you know it. Don`t be afraid. We`ll get it.
I think at times when the president has knocked it out of the park is
when you see that gap between the creation and the man vanished. It`s not
story telling as much as just truth.
HAYES: Authenticity.
SAUNDERS: Truth expressed efficiently. And who can resist that?
HAYES: But there`s this question I think of authenticity, right?
Because in some ways, like what is so difficult about being a politician,
I`ve seen this from covering politicians is precisely that you are trying
to artificially project an authentic self, right? I mean, if you are
authentic, you show things about yourself that are not awesome.
MATHIS: Exactly.
HAYES: And you can`t do that.
(CROSSTALK)
HAYES: Victor, like that is the process.
VICTOR LAVALLE, AUTHOR, "THE DEVIL IN SILVER": If you think back to
the DNC speech in 2004, I watched it again last night since we were coming
on --
HAYES: You just watch it every night.
(CROSSTALK)
LAVALLE: No, but the first thing he does after he makes the
necessary thanks to this person or that person is he starts with the story
of his grandparents --
HAYES: Yes.
LAVALLE: -- on either side.
One thing that I felt like I didn`t even remember when I watched it
again I saw, he basically says on my father`s side and on my mother`s side,
I come from very hard-working people like you. And it made me think the
story that Barack Obama has probably had been telling and had to be telling
since he was a kid was I`m like you. You know?
HAYES: You know, we have a great clip of a very similar moment in
the Philadelphia race speech. I want to talk about that because,
obviously, the story of Barack Obama is largely, the subtext is a story
about race and the story about American racial history and also a story
about being able to speak in and hear in different voices which I think is
what makes him distinct in other ways as a politician.
I want to take a look at that clip right after this break.
(COMMERCIAL BREAK)
HAYES: I think one of the things that makes the character Barack
Obama in American political imagination so powerful is that he seems to
almost be like a Tyracius (ph) figure with race, right, like he has
inhabited both worlds and now, he has the gift of prophecy because he`s
been in both worlds and he really channels that.
And this is an example of him doing that at his most effective which
is the remarkable speech he gave after the Jeremiah Wright thing blew up in
the campaign trail. And this is also the real moment where a speech
actually saved a politician`s bacon. Like they were in trouble and they
had to make a really good speech and they made a good enough speech that
they were no longer in trouble.
This is a small section, take a look.
(BEGIN VIDEO CLIP)
OBAMA: Like other predominantly black churches across the country,
Trinity embodies the black community in its entirety. The church contains
in full the kindness and cruelty, the fierce intelligence and the shocking
ignorance. The struggles and successes, the love and, yes, the bitterness
and biases that make up the black experience in America.
And this helps explain, perhaps, my relationship with Reverend
Wright. As imperfect as he may be, he has been like family to me. I can
no more disown him than I can disown the black community.
I can no more disown him than I can disown my white grandmother, a
woman who helped raise me, a woman who sacrificed again and again for me, a
woman who loves me as much as she loves anything in this world. But a
woman who once confessed her fear of black men who pass her by on the
street. And who on more than one occasion uttered racial or ethnic
stereotypes that made me cringe.
(END VIDEO CLIP)
HAYES: One of the things I think Barack Obama does well is he can
speak in different -- different languages, different registers and
particularly through different racial prisms. And I think as someone who
is sometimes tried my hand at fiction or written plays or something, that
there`s an uncomfortability that we have with. That I`m saying, speaking
as a white man right which is like, oh, I`m going to write dialogue in the
voice of this black woman. Is this going to be overly mannered or is this
going to be stereotypical?
And I wonder what your thinking is about that, Ayana, you know,
having to write characters across different racial divides like channeling
those voices and how well he is able to do it specifically.
MATHIS: He`s able to do it, I think, incredibly well because of --
and sort of point in history and kind of who he is right now, I have a lot
of friends who are biracial. And we sort of got to this very interesting
place in our history where people are coming of age, who are very much
drawing on two completely different kinds of experiences. And we`re also
so far post-civil rights that we`ve gotten to this moment where those
people are not necessarily living as pariahs anymore. They`re not
necessarily separated out. I think the idea of you identity and who they
are is deeply complex and continuous to be so deeply complex in this
country.
But certainly I think biracial people are separated out and they were
much more stigmatized. And we`ve gotten to this point where they are not.
But that they are still kind of one foot in one world and one foot in the
other world.
And one of the kind of amazing things about Barack Obama is how well
and how much he speaks to that and how much he sort of inhabits that role.
LAVALLE: You know, along these lines, too, with my writing students
a lot of time, they try something like this. They`ll try people from --
forget race they`re not from the South, they write a southerner. Their
idea of whatever that is.
And my writing advice to them all the time is, like this is a
terrible Southerner. You need to get to know some Southerners.
(LAUGHTER)
LAVALLE: Very different idea.
HAYES: Is that only solution? I think about this. Is that only
solution to channeling voice? Is it possible to create a convincing
Southerner or a convincing African-American woman from the `50s if you`re a
white 28-year-old living in Greenpoint?
SAUNDERS: It`s not -- he is channeling character. But what he`s
really doing is he`s saying to the listener I trust you deeply. I`m going
to go -- I`ll be as honest as I can. I`ll tell you the weirdest marginal
truths, and because you`re as smart as I am, you`re going to lean forward.
And I think, for me, in fiction, that`s a really important principle
to sort of assume the best of your reader, don`t puppeteer, don`t contest
(ph). So, just do affect, to just do regional voice is a kind of a form of
trying to evade the real stuff, whereas what he is doing there is saying,
all right, I know you, dear reader, are just as smart and compassionate as
I am. I dare you.
CHABON: I think that speech to me is the single most important and
most amazing speech that I`ve seen in my entire life because of it.
Because it was the only time I`ve ever watched audition saying things that
I never would have expected a politician to say in the way I never would
expected them to say.
HAYES: And that I totally get. It was like the things you might
imagine him saying to a therapist. Serious. To his wife. And --
CHABON: Or like George does to people whom he trusts.
HAYES: Right, right. I thought you were sharing a special thing
about George.
(LAUGHTER)
(CROSSTALK)
HAYES: That gets to this question of back to the construction of
artifice. I want to explore this because I`ve watched this depressing
thing happen with politician who I really liked in the beginning because
they were authentic and then they got less authentic and they also became
more successful politically.
And so, I want to ask your thoughts about, like, artifice this can
work, right, like you`re giving a very elevated hopeful version of this,
which is like trust and authenticity are the voice and register that both
work from a poetic standpoint and also work for a political standpoint, but
it also seems to me that there`s like a real divergence in politics. It`s
right after this.
(COMMERCIAL BREAK)
HAYES: So I left the question before the break that the fact it does
seem to me that a lot of politics is about artifice and not about like,
just very elevated notion of like trust and intimacy. You know, I have
seen politicians, like I said, I`ve seen politician who`s go through the
process of getting consultants that get them away from authenticity,
because part of authenticity is weakness and vulnerability. And weakness
and vulnerability are an extremely dangerous thing to play with if you`re a
politician.
CHABON: Well, I mean, it`s tricky, because authenticity might only
really make sense if you put it in quotation marks. When we go through our
every day lives, there`s always a certain amount of performance involved in
-- you were talking about that Obama is such a master of sort of switching
registers or seeming comfortable going back and forth between styles and
fiction. We all do that all the time, you know, if we`re talking to people
in position of authority or if we`re talking to children, you know, we
change the way we speak. By doing that, we change the person that we are
to a certain degree.
So, you know, it`s -- when you say a politician Obama or even I think
George Bush the second one had these moments where he seemed incredibly
authentic, where he would come across as a real person who was just out
there chopping the brush away on his ranch in Crawford.
HAYES: That`s like the high point.
(CROSSTALK)
HAYES: That`s true.
CHABON: That appealed to a lot of people. You know, there is always
a performance aspect in every interaction that you`re having with other
people that the part I think is what happens in a speech like that
Philadelphia speech is where you feel like it`s something got worn away and
you`re actually seeing through to some true thing that we were talking
about.
SAUNDERS: The one thing that I`m struck by in reading different
speeches by all politicians is as an OCD self editor is how often really
cliches will show up, you know? Trope.
And to me that is something I think if you just took even a mediocre
speech, trimmed out the tropes, the comforting words, you know, then, you
know, suddenly the thing, there are not enough words. You have to
substitute in. Maybe those are more truthful.
But just like in Orwell`s politics in language, certain tropes of
language are absolute markers for insincerity and for sort of an agenda.
HAYES: The word frankly, for instance, which is my favorite.
UNIDENTIFIED MALE: Honestly.
SAUNDERS: Yes.
The sort of familiar catch phrases you almost don`t even read in a
speech anymore. But I think what you notice in that clip is there was
nothing. There was literally not a single one of those that was an
originality of an expression and incredible that I got little Goosebumps
the quickness with which a certain rhetorical trope came home. At the end
of it, you went, wow, that was perfect. That was fast.
You know, that is something -- that`s hard to talk about, I suppose.
But language is power. And, you know, in that, you can really see it.
LAVALLE: He said that obviously he gave that speech after the
Reverend Wright stuff blew up. One of the things that is missing is
someone`s butt is in the fire.
HAYES: That`s what it is, like maybe if you had to give a speech
like your life depended on it.
LAVALLE: To save your career.
HAYES: To save your career.
SAUNDERS: Sandra Day O`Connor would have been a good woman of
there`s somebody to show (ph) everyday --
CHABON: I think in a way that caused a problem. At least for me
watching Obama is that that speech set the bar so high.
HAYES: So true.
CHABON: Every subsequent speech, even --
(CROSSTALK)
CHABON: You don`t -- none of them, you know, partly because of the
extreme circumstances that he found himself in when he made that speech.
But you keep waiting for, I think, you know, especially in the run-up to
the last election, you would hear people talking about why doesn`t he tell
this story and why isn`t he communicating? You know --
HAYES: This has become a cliche. This has become a trope, right?
Like he needs to martial the story telling abilities. There becomes this
kind of very knee-jerk frustration with Barack Obama because he`s not
telling the right sorry.
Junot Diaz talking about the storyteller in chief a year into Barack
Obama`s, Junot Diaz, of course, an incredible storyteller himself. "A
president can have all the vision of the world being extraordinary orator
and super politician, have courage and foresight, and willingness to make
painful choices, have a bold, progressive plan for his nation. But none of
these things will not matter a wit if the president cannot couch his
vision, his policies, his courage, his will, his plan in the idiom of
story."
And I think that`s true. But I also think there is a tendency,
particularly people would work with words like writers and journalists to
overestimate the power of that a little bit and to get, to bang on about
how Barack Obama isn`t marshalling that.
CHABON: And I think it also misplaces the agency a lot, because he`s
not really in control. He is not in control of the story. Whoever is
telling -- like I said at the beginning, I think it`s this collective
storytelling. He is just one author.
HAYES: I want to talk about empathy which is something you mentioned
and moral imagination. I think part of the project of a political leader
is to try to expand that. I think that is part of the project of a writer
as well.
We`ll talk about this after the break.
(COMMERCIAL BREAK)
HAYES: I want to play part of this speech from Barack Obama after
the Gabby Giffords shooting, which was also really I think remarkable
speech and he talks about expanding our moral imagination, which is about
as interesting turn. Take a look.
(BEGIN VIDEO CLIP)
OBAMA: Let`s use this occasion to expand our moral imaginations, to
listen to each other more carefully, to sharpen our instincts for empathy
and remind ourselves of all the ways that our hopes and dreams are bound
together.
(APPLAUSE)
After all --
(APPLAUSE)
After all, that`s what most of us do when we lose somebody in our
family, especially if the loss is unexpected. We`re shaken out of our
routines. We`re forced to look inward.
All of us, we should do everything we can do to make sure this
country lives up to our children`s expectations!
(APPLAUSE)
(END VIDEO CLIP)
HAYES: To me, that was a real quintessential Barack Obama moment for
two reasons, one is this kind of idea of empathy. This idea of moral
imagination, it`s the theme of red states and blue states, it`s a team of
like reaching people across artificial distinction and at the same time,
it`s also people who were frustrated because he didn`t talk about gun
control. It`s not picking a fight, because that`s not -- that is not his
meatier (ph), his taking fights. It is getting through.
What all of you do in some ways, right, is try to get people out of
their own heads and into the heads of other people, right? Is that how you
see yourselves, the project you`re engaged in as a writer?
SAUNDERS: Go ahead.
MATHIS: I think that`s absolutely the case. You sort of go deeper
and deeper from my method anyway inside the sort of spirit and psyche of
the character in order to make them more and more real.
And one of the things that I think is really interesting about Barack
Obama that sort of just the point that you just made, that he didn`t pick a
fight. He didn`t go on about gun control is that his stance seems to me
often sort of reminds me of Martin Luther King`s stance which is we`re all
impoverished by this series of events, and there`s case by Gabby Giffords,
and all this sort of gun stuff, in the race speech as well. We`re also as
a nation all of us are deeply impoverished by this sort of horrible state
in which we find ourselves.
So it is not -- it`s an interesting sort of technique and interesting
way to sort of garner empathy among the people that are listening to you
because it doesn`t point fingers. It doesn`t say you`re wrong or right.
It says look here. All of us are together. And we are all worse off
because of x, y or z, which I think is an incredible technique both used in
fiction very often and also certainly used by President Obama.
CHABON: Certainly, I would say also, specifically people who
actually read fiction, picking up a book that is a creation is essentially
saying I want to explore your life, another life.
HAYES: It`s choosing to exercise that emphatic muscle.
CHABON: Exactly. The people drawn to fiction anyway are people who
are essentially asking the reader, do a good enough job to help me become
invested in someone else so I can see our common humanity, our common pain,
our common everything and come out of here with a sense that I`m not the
only one feeling this loneliness, sadness, and I`m also someone who needs
love and hope, all those things.
And that`s part of the pact, I think, of writing fiction versus
nonfiction or anything else. You know, you hope that you fulfill that
pact.
HAYES: That`s really incredibly put.
So what do we know now that we didn`t know last week? My answers
after this.
(COMMERCIAL BREAK)
HAYES: All right. So what do we know now that we didn`t know last
week?
We now know more about why Junior Seau, the great NFL linebacker,
committed suicide in May in his San Diego home at the age of 43. And we
knew at the time Seau chose the highly unconventional method of shooting
himself in the chest, thereby preserving his brain for scientific study.
We know that Bears safety Dave Duerson committed suicide the same way in
2011, hoping to preserve his brain for scientific study, and we know that
scientists later found Duerson was suffering from chronic traumatic
encephalopathy or CTE, a degenerative brain disease.
Seau`s family donating his brain to the National Institutes for
Health, and after a study, we now know that Seau was also suffering from
CTE. We know the symptoms of CTE include mood swings, irritability,
depression and sometimes suicidal ideation.
We know a growing body of scientific evidence shows that the routine
brain trauma that naturally comes from playing football greatly increases
the permanent brain and neurological damage. We know that 2,000 former
players have joined a class action suit against the NFL for the damage they
have suffered. We know that the football field is one of the most
dangerous workplaces in America, and the more we know about the risk that
playing football entails, the harder it is to be complicit in the damage
it`s causing.
We now know that global warming has created such extreme weather in
Australia, the country`s bureau of meteorology has added two new colors to
the country`s weather maps, an incandescent purple and magenta, so the maps
can faithfully represent temperatures like 125 degrees Fahrenheit recently
hit in the current heat wave down under. We know that Australia is by no
means alone in its experience of record heat.
We know officially that 2012 was the hottest year ever recorded in
the continental U.S. and we know it broke the previously record of 1998 by
a full degree Fahrenheit. We know this is the beginning of climate change
and we know that the heat maps are likely going to add new colors as well.
And even in the hottest year on record with arctic melting, and the
unprecedented wildfires and the second most expensive hurricane in the
history, broadcast news outlets continued to ignore climate change. A
study by Media Matters found that on the Sunday talk shows on the four
broadcast networks, ABC, CBS, FOX and NBC, climate change coverage
continued its decline, with fewer than eight minutes total discussion last
year, none of it science-driven, 89 represent as political discussion, and
none of that discussion included a single Democratic politician air time to
discuss climate change.
We know as climate change becomes increasingly noticeable, news
consumers are going to be asking questions and outlets that can`t provide
answers will be left behind.
I want to find out what my guests know now that they didn`t know when
the week began.
Ayana?
MATHIS: Well, this is very different from what you know now.
HAYES: That`s the point.
MATHIS: I learned this week that it is incredible and remarkable how
two different writers in two different spaces and times can come across the
same image to express their wonder at the material world. Point in case,
there is a poem by an incredible poet named (INAUDIBLE) who died in a
Stalin camp in 1937 who used the image of a blossoming pear tree as a
central image in a poem about the sort of wonder and mystery of the world,
and in that very same year, across the world, Zora Neale Hurston in 1937
also used that same image in much the similar way in "Their Eyes Were
Watching God." Astounding.
HAYES: I remember "Their Eyes Were Watching God."
George Saunders?
SAUNDERS: Well, I have been traveling and I have not learned much at
all, but I read a book I love and it is called "The Stench of Honolulu" by
Jack Handy, and what I learned is that it reminded me of the power of pure
humor, silly humor and a stylistic coupe. It`s so silly, it refuses to sit
still and it`s just reminding me that, you know, what we do in delight is
actually a really important thing. So, I just think it`s a terrific book.
HAYES: "The Stench of Honolulu."
SAUNDERS: "The Stench of Honolulu."
HAYES: Victor LaValle?
LAVALLE: This week actually, I know that you shouldn`t buy bootleg
DVDs from the Chinese ladies who come into my coffee shop, because they are
awful.
HAYES: Are they in the back of the movie theater?
LAVALLE: You see the heads coming up and down and it is 3D movie,
but you don`t have glasses. It`s bad news.
HAYES: Michael Chabon?
CHABON: I know now that there is this gigantic object out in space
that astronomers announced this week that they have found what is now the
largest known structure in the universe. It is made up of 73 quasars that
are clustered together way, way out there in deep space. It is so huge, if
you were traveling at the speed of light, it would take you six billion
years to get across it.
And it is so huge that it actually violates laws of physics as we
understand them. There ought not to be something that is that huge. It
should be impossible for something that huge to exist.
So I mean, for me -- the Isaac Asimov fan of me, you know, that
raises the question, what is it doing there? And maybe it is some kind of
maker`s mark.
HAYES: Will you all go around and say the book that you have out
right now, because if people are watching this, you know, books, people
are, funds are tight and the books are a great investment. And people
should buy books. And I would love for our audience to purchase your book.
So, give me the name of your book as we go around the table.
MATHIS: It`s called "The Twelve Tribes of Hattie."
SAUNDERS: "The Tenth of December."
LAVALLE: "The Devil in Silver."
CHABON: "Telegraph Avenue."
HAYES: "Telegraph Avenue."
My thanks to -- I`m going to repeat this so you all get them. My
thanks to Ayana Mathis, author of "The Twelve Tribes of Hattie," George
Saunders, author of "The Tenth of December," Richard LaValle, author of
"The Devil in Silver", and Michael Chabon, author of "Telegraph Avenue".
You can find those where books are sold, you can go to Indy Bound or,
of course, Amazon or Barnes & Nobles, or anywhere else, in your local
community bookstore as well. Thanks for getting UP.
Thank you for joining us today for UP. Join us tomorrow, Sunday
morning at 8:00 and we`ll discuss why there`s accountability performance
enhancing drugs but not for torture.
Coming up next is "MELISSA HARRIS-PERRY." On today`s "MHP," is the
president of the United States really the most powerful man of the world?
Executive orders and command over the military give the U.S. president
enormous powers. But what are the limitations and how can President Obama
bypass Congress to initiate his agenda? That and a deep dive on the real
Chris Christie. That`s "MELISSA HARRIS-PERRY" coming up next.
We`ll see you right here tomorrow at 8:00. Thanks for getting UP.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
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