March 9, 2014
Guests: Jeremy Richardson, Katrina Vanden Heuvel, Ian Bremmer, Elise
Jordan, Dorian Warren, Michael Goldfarb, Rafi Ron, David Cay Johnston, Mark
Takano, Laura Gottesdiener, 9th Wonder
ARI MELBER, MSNBC HOST: This morning, my question, is Wall Street finally
investing in distressed communities or risking another housing fail?
Plus, an important vote in the middle of the night in West Virginia.
And Harvard`s hip hop fellow comes, of course, to Nerdland.
But first, nearly two days later and the search for an airplane and answers
And good morning. I am Ari Melber in for Melissa Harris-Perry. It has
been nearly 48 hours since the last contact was made with Malaysia airlines
flight MH 370 seen here in a 2009 photo. It took off Friday from Kuala
Lumpur and was scheduled to land in Beijing at 6:30 a.m. Saturday. That`s
at 5:30 Friday afternoon here on the east coast. The U.S. is now joining
China and other countries in bolstering this search with the federal and
TSV sending a team of investigators to Asia to help. Now, we can report
that the U.S. Navy P-3 aircraft has arrived in the area by U.S. military
helicopter has launched. NBC News reports both are searching over the
last-known communication and radar positions of the flight. Malaysia
airlines held a press conference earlier today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The outcome so far, there`s no sign of the aircraft.
And although we have confirmed reports of some oil spills, but there`s not
been verified. And not been verified, not been confirmed by the
(END VIDEO CLIP)
MELBER: Some officials also think the plane may have tried to turn around
before disappearing, but 239 people on board. Now, Phillip Wood, an IBM
executive and 50-year-old father of two is one of the three American
passengers on that flight manifest. We now have a statement from his
family, which reads in part, Phillip Wood was a man of God, a man of honor
and integrity. We ask for your prayers, not only for ourselves, but for
all involved during this difficult time. As a family, we`re sticking
together through Christ to get through this.
And it is, of course, a terribly difficult time for all the families of the
passengers. Wood`s brother, Tom, also spoke to our NBC affiliate in
(BEGIN VIDEO CLIP)
TOM WOOD, MISSING PASSENGER`S BROTHER: Just shock, you know? This kind of
thing doesn`t happen, you know? Like, this shouldn`t be happening. This
shouldn`t happen to us.
He was excited to be moving Kuala Lumpur, so you know, he was telling me
how beautiful it was. He was my hero, my friend, and we were very close.
So it`s tough. It`s tough times.
(END VIDEO CLIP)
MELBER: And as investigators search for clues to what happened here to
this plane. There is a growing concern over the two passengers who
apparently boarded this flight using stolen passports. Interpol this
morning confirmed that the stolen documents were listed in its database,
but no checks on those stolen passports were made by any nation. European
authorities confirm the stolen European-issued document was registered to
Luigi Maraldi (ph) and the Austrian passport was under the name Christian
So, adding to the mystery of the missing plane is now this question, who
used those two passports to board the flight? Why were they on the plane?
One senior U.S. official said, quote "we`ve not determined a nexus to
terrorism yet, although it`s still very early, and that`s by no means
Joining us now is CNBC`s Sri Jegarajah in Kuala Lumpur. We have a little
bit of a tape delay on our satellite, so just tell us, what is the latest,
what do we know?
SRI JEGARAJAH, CNBC CORRESPONDENT: Well, the latest, Ari, is that a press
conference just wrapped up here about two hours ago, at the airport hotel
that you can see behind me. And unfortunately, it`s not really good news.
The director general of the civil aviation authority here in Malaysia have
said despite extensive search, they have yet to find any remnants of this
missing plane, of MH-370. And it`s almost 48 hours since this flight
disappeared off the radar. But you`ve got to remember, they are covering
an extensive spade of water here between the Malaysian peninsula and
Vietnam as well.
This is a huge, huge exercise, search and rescue operation, involving a
flotilla, if you will, of almost 40 naval vessels from at least seven
different countries. You mentioned the U.S. southern fleet, also
Australia, Singapore has assets in those waters as well. On top of that,
there`s an aerial search as well and 24 aircraft are involved. But as of
now, they have not found any debris. They have not found the missing
The only real tangible lead we have are two large oil slicks that are found
off southern Vietnam. Now, what we understand is that the authorities here
have got the oil, they`ve got the material oil, and they are running it
through the analysis, through the labs, and they are yet to determine and
verify whether this oil did come from the airliner in question, MH-370. At
this point, they are exploring all the possibilities. But the main message
here, the main priority here is to find this aircraft.
Ari, back to you now.
MELBER: Thank you, CNBC`s Sri Jegarajah in Kuala Lumpur. Appreciate that.
Now joining us from Washington is Raft Ron , president and CEO New Age
Security Solutions, a former security director at the Israel airport
authority. And we should mention a consultant to Boston`s Logan airport.
Thanks for joining us. Walk us through what, if anything, we should make
of the missing passports in this story.
RAFI RON, CEO, PRESIDENT, NEW AGE SECURITY SOLUTIONS: Well, one thing has
been established, and that is the fact that there are two passengers on
board the aircraft that we don`t know who they are. And they must have had
reason to conceal their identity, which is probably related to something
illegal that they were involved in. Whether this is terrorism or something
else, this is yet to be determined. But at this point in time, this is one
of the focal points of the investigation and until the investigators would
reach a conclusion about the identity of these two people and the -- and
will be able to make assumptions about their intentions, we will not be
able to clear that possibility off the table.
MELBER: Yes, I appreciate your note of caution there, Rafi. And another
big question that people have when they look at this situation is, all
right, we obviously know a lot more about the passengers on this manifest
because of this incident. How frequent, though, in your experience, doing
airport security consulting, how frequent would you find a flight with say,
one or two people who had false documentation?
RON: Well, I think that one of the areas that perhaps was less effectively
covered since we started implementing the most of the airport security
procedure is the issue of identification of passengers. And the reason for
that is that, for years, we have been identifying documents rather than
people. When somebody presented a passport, we were looking at the
passport and checking the passport, and there was very little that we knew
about the person. It has been only lately that biometric signatures like
fingerprinting or other biometric signatures, have been added to
identification documents, but at this point in time, most passports around
the world, including European and ours, do not include the biometric
MELBER: Yes. And Rafi, let me jump in and ask you one more question,
briefly. When you look at this type of situation, a plane that literally
vanishes and a few days out, people want answers, but the investigators
want to be careful. When, as we continue to follow this, when will we know
what happened, in your view?
RON: Well, I think the final answer will be when the aircraft will be
found, and we would have access to the information in the black box. As
long as we don`t have access to that, I think that we would not be able to
reach a conclusive decision.
All right. All right. Thank you very much, Rafi Ron in Washington.
Appreciate your views here and your expertise.
What we are going to do next is bring in a pretty awesome panel that I will
tell you about. We are going to stay on top of this story.
But also look at the latest developments in Ukraine and the masculinity
crisis that faces president Obama. If you`ve been following the news or
CPAC, you may have heard about that. So please, stay with us.
MELBER: Welcome back. This weekend, international leaders continued their
efforts to bring about a diplomatic solution to the tense situation in the
Crimea region of Ukraine. On Sunday, the Ukrainian prime minister said he
would travel the U.S. this week for high-level talks about the unfolding
Yesterday, for the fourth day in a row, secretary of state John Kerry spoke
directly with Russian foreign minister Sergey Lavrov about efforts to bring
Ukrainian and Russian officials together for those direct dialogues about
Crimea, I should say. Kerry warned that steps to annex the region to
Russia would close any remaining space for diplomacy.
Meanwhile, in a news conference yesterday, the Russian foreign minister
denied that Moscow has have direct involvement in Crimea and accused the
Ukrainian government of taking orders from extremists. President Obama
also spoke by phone Saturday with the leaders of six European countries,
Latvia, the United Kingdom, Lithuania, France, Estonia, and Italy. And
according to the White House, the leaders agreed on the need for Russia to
allow international observers in human rights monitors into Crimea. Such
observers have been repeatedly blocked for entering the region as Russian
troops have taken over several border posts.
The White House said that on the calls, the leaders rejected the planned
referendum in Crimea to leave Ukraine and they joined Russia in saying it
would be, quote, "a violation to join Russia would be a violation of
Ukraine`s constitution." Any decision about the future of the nation must
involve the central government in Kiev.
Joining us now for a report from Kiev and to tell us more about the
situation there is NBC News correspondent, Ian Williams.
Ian, tell us, how is this planned succession vote being perceived by the
Ukrainian government or the people there?
IAN WILLIAMS, NBC NEWS CORRESPONDENT: Well, there`s a lot of frustration
here, Ari, and a sense that this creeping annexation is going forward with
no apparent impact, no apparent influence on the Russians from the threats
of sanctions. And, of course, still no discussions within the Ukrainian
government and the Russians.
Now, today is a big day here in Ukraine. Behind me in the square there are
thousands that have gathered to mark the 200th anniversary of the birth
(INAUDIBLE) who is a big cultural figure here. But underlying the somber
mood here is a lot of anger about events in Crimea. We`ve seen protesters
on the square, demanding that Putin gets out, that he gets his hands off
There was a similar protest today down in Simferopol, the capital of
Crimea, where several hundred Ukrainians gathered under a statue of
(INAUDIBLE), demanding unity. But several hundred Russians assembled in a
nearby square, Lennon square under a statue of Lennon, singing patriotic
Russian songs. And there were minor clashes on the fringes of that, with
Russians chasing down a number of Ukrainian supporters and some beatings,
one with a whip. So fairly ugly scenes there. And increasing tension as
we run up to this referendum, which has been called illegal and
unconstitutional, not only by the Ukrainian government, but also by the
MELBER: Yes. And Ian, you look at that referendum, which will be a week
from today. You look at the world`s eyes on Ukraine. Do you feel from
being there and talking to folks that they see this and realize how much
attention there is, what kind of almost cold war dynamics there are over
this dispute, or are folks just obviously more focused on their day-to-day
WILLIAMS: I think people here are very worried, Ari. And they do realize
that the tension of the world is on Ukraine. The president here, who we
interviewed just two or three days ago said he was confident the world
would not desert his country. And there`s a real feeling and a real hope
that pressure from the west, from the Europeans, from Washington, can have
some impact on Russia, on president Putin. But the reality on the ground
down there, with more and more troops moving in, it seems, a convoy of
unmarked vehicles arriving in Crimea yesterday, the belligerence, more
border posts being taken control of, still a refusal to let in
international security monitors.
The sense with the referendum coming that Putin is in a real hurry to annex
Crimea as quickly as he can, or maybe establish a fact on the ground down
there before the west can effectively push back. Also, a feeling here that
irrespective of what happens in Crimea, they need really to stabilize the
situation in the Russian speaking eastern Ukraine, Ari.
MELBER: All right. NBC News correspondent Ian Williams in Kiev, Ukraine.
Thank you for joining us.
We are going to turn now to our foreign policy panel here at the table, Ian
Bremmer, president of the Eurasia group, Elise Jordan, contributor for "the
Daily Beast" now and formerly a speechwriter for Condoleezza Rice and
director of communications for the NSC, and Katrina Vanden Heuvel, editor
and publisher of "the Nation" magazine and my boss from "the Nation"
magazine. And of course, professor Dorian Warren, an MHP friend and a
professor at the department of political science at the school of
international public affairs at Columbia University.
Welcome to you all.
Dorian, when you look at this countdown to the referendum next week, no
agreement from the main players here between Russia and what we might call
the west on the legitimacy of this looming vote.
DORIAN WARREN, PROFESSOR, COLUMBIA UNIVERSITY: And I don`t think there
will be by the time we get to next Sunday. I think there are so many
options that are limited at this point, not only for the U.S., but also for
countries in the EU, that it`s unclear what could possibly be done to stop
this process in the immediate future, in terms of the referendum, as well
as, look, Crimea`s probably going to be annexed to Russia. And so, we have
to think about what are all the tools in the tool box to prevent this, or
at least to try to isolate Russia. And they are actually weak tools that
MELBER: Yes. And Katrina, you`ve studied and written about Russia for a
long time and spent time with leaders from various eras. What are we
learning about this phase of the Putin era?
KATRINA VANDEN HEUVEL, EDITOR, PUBLISHER, THE NATION magazine: Well, I
think what -- first of all, Ukraine is so deeply divided, your
correspondent is standing in Kiev and this situation deserves more common
sense, more history, more realism.
I think the history, which is important is go back 20 years or so promises
broke into Russian about the NATO expansion. James Baker, then secretary
of state, George H. W. Bush promised then Soviet Leader Mikhail Gorbachev
that after the collapse of the Berlin Wall, NATO would not expand one inch
eastward. We now see seven or eight Warsaw-packed countries, three former
soviet countries in NATO.
The more recent history, and this is contested, but in November, there
didn`t need to be an either/or for Ukraine between the European association
agreement and the Russian customs union. What was on the table was the EU
offering $160 million for five years over five years.
Ukraine is bankrupt. This is a sober reality. And it`s going to require a
negotiated settlement to provide for the territorial integrity of Ukraine,
for fair and free elections, fair and free because Russia, and I`m, you
know, Russia does not consider the Kiev government legitimate. Fair and
free elections, a promise not to expand NATO into Ukraine, and an agreement
that Ukraine can be part of both EU and the Russian customs union.
I mean, the scope and scale of what confronts this country, if it`s going
to be a democratically viable, economically viable country, requires that
we stop this talk of cold war. No Americans, by the way, have desire or
reason to go to war with Russian over Ukraine. No European does. So let`s
stop the bluster, let`s work towards a negotiated settlement. And Putin, I
guarantee you, you may know more about this, but the back channels are
being worked like crazy, Angela Merkel is critical. And I think you could
see some steps forward if there is common sense.
MELBER: And Katrina`s raising such an important point here which is if we
take this conflict seriously and not just look at it as everything Russia`s
doing is awful and terrible because we don`t like their leader or
something, the point about NATO is, there is a legitimate argument on that
side that NATO was originally designed to be something defense and then
they feel it has become offensive.
IAN BREMMER, PRESIDENT, THE EURASIA GROUP: Sure. Look, everything we`ve
done so far from this administration and from the U.S. media has been,
Russia is awful and their behaviors are unjustified.
I agree with Katrina`s history, but there`s a more recent history as well,
which is the European foreign ministers, the Germans, the poles, went to
Kiev, they pushed really hard and they got a deal signed with the
president, Yanukovych, and the opposition, right? The Russians didn`t like
that deal. Looked and didn`t sign it. But the fact and neither the
president or the opposition likes. And usually you work really hard for a
day and end up with a deal that nobody likes and everybody signs it.
Usually it is a sign that it`s a pretty good deal to compromise. The fact
is that deal was breached within a day. And the Russians therefore see
Now look, I don`t like the Russian position on this. Putin fostered
bloodshed to get a couple billion dollars during the Olympics. He told
Yanukovych, you crack some heads. Bloods on his hands. But from a legal
perspective, Putin actually has an argument here.
My problem with the Obama policy is it`s predicated on two things that are
false. Number one, that we can effectively isolate the Russians. We
can`t. Our businesses won`t support it and our allies in Europe don`t want
to. I mean, not even to kick them out of the G-8. The Germans have said
no to that. Do you think they are going to support sanctions? They won`t.
Number two, it`s predicated on the notion that we can push the Russians
officials hard that there is a chance, a tiny chance but they won`t proceed
with this referendum in Crimea. That`s false. They`re going to do.
MELBER: And Elise, to Ian`s point, the energy markets won`t really deal
with this level of isolation that we`re threatening either.
ELISE JORDAN, CONTRIBUTOR, THE DAILY BEAST: I don`t think so, but I also
think we could crack down on the oligarchs and the cash flow. And I think
that a lot that is within the UK and that would if you put pressure on the
oligarch`s wallets, then, that ton of pressure on Putin. And I think that
is really the most viable tool we have right now.
HEUVEL: But Elise, it`s interesting that the government in Kiev in the
last week has appointed Ukrainian oligarchs to be governs of regions, which
is a violation of the very protests the brave, courageous people at
(INAUDIBLE) square. Were saying, we want an end to corruption, whether
it`s Yanukovych or the oligarchs.
JORDAN: Exactly. And that`s the problem, too. They have to have some
kind of reconciliation within their own government and we aren`t seeing
that right now in what the opposition has pushed forward.
MELBER: Let me pick up on that, because we`re going to go to a break. And
when we get back from the break, we are going to have a shirtless picture
of Putin, which I know something is something we wanted to get to.
So stay with us. When we come back, the message we are hearing from some
Republicans about President Obama`s response to Ukraine crisis has a not so
subtle ring to it.
But first, we do also have an update on the program yesterday that we were
reporting a segment about CPAC, in the conference taking place in
Washington. Last night, the results did come in on their famous straw
Kentucky Senator Rand Paul was the bigger winner. He came in with 31
percent of the 2,459 votes, 20 points ahead of his closest rival, Texas
senator Ted Cruz. It was the second win in a row for Senator Paul, whose
father Ron Paul, you may remember, who won the poll as well.
When we come back, what those folks are saying about the Obama foreign
MELBER: As we make sense of the escalating tensions in Ukraine, a major
theme has emerged in our domestic political response here at home.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Every time the president goes on
national television and threatens Putin or anyone like Putin, everybody`s
eyes roll, including mine. We have a weak and indecisive president.
RUDY GIULIANI (R), FORMER NEW YORK CITY MAYOR: Putin decides what he wants
to do and he does it in half a day. That`s what you call a leader.
President Obama, he`s got to think about it, he`s got to go over it again,
he`s got to talk to more people about it.
UNIDENTIFIED MALE: I know the only time Vladimir Putin shivers is when he
has shirt off in a cold Russian winter. That he`s not the least bit
worried about what we think of him or what that we may pretend we`re going
to do about it.
SARAH PALIN (R), FORMER ALASKA GOVERNOR: Look it, people are looking at
Putin as one that wrestles bears and drills for oil. They look at our
president as one who wears mom jeans and equivocates and bloviates.
(END VIDEO CLIP)
MELBER: Yes, the manly, strong-willed, decisive Putin versus the wimpy,
whiney, President Obama. According to these ideas, Putin evinces strength,
he wrestles bears, he goes shirtless in the winter, he makes decisions
without even thinking and he invades Crimea, of course. He`s the master
architect (ph), a bearable hunky, shirtless man on the cover of a romance
novel like this one that MHP team here we made for you and you are welcome.
But the president is famous cautious, weak, swishy washy, a maculated (ph)
by Putin, the president is reduced to some sort of stereotype view of a
Now, this use of stale gender roles is an epic fail. But it also has real
consequences. Perhaps more than any other debate we have, foreign policy
turns on frameworks, on paradigms. In the cold war, it was the domino
theory, the idea that if one country became communist, more would follow.
After 9/11, it was Bush`s framework that countries were either with us or
against us. And today, we have to ask, should we accept a framework of
personality that our geo strategic interests should turn on whether our
leader projects a tough and intimidating personality.
Let me ask the panel. Let me ask you Katrina.
HEUVEL: Well, first of all, I think the toughest and the hardheaded, by
the way, hardheaded mean is no new ideas can come into your head, have lead
us into unnecessary wars, have led us into military adventures that have
looted the treasure and lives of our country.
Putin, I mean, you know, the right, it`s interesting, doesn`t know whether
to bash Putin or bash Obama, which one to hate more. They get all
confused. There you see Giuliani`s man crush on Putin, you see Sarah Palin
I think the more serious question here, any might, is to step back a little
bit. And was it masculinity or weakness that led the two leaders, Putin
and Obama, to extricate this country from military action in Syria, which
was a very wise thing to do, and on behalf of everybody, and was strong
leadership. The danger is, our leadership is too often defined by
militarism, by military means. When the challenges of our time from
extreme inequality and extreme poverty change to, you know, economic
instability demand not militarism and not a guy strutting around in the
forest with his shirt off, but sober, tough diplomacy.
JORDAN: Well, first of all, I would just like to question why we are
dignifying Sarah Palin`s comments, when she`s not proven exactly to be a
huge Russia expert.
UNIDENTIFIED MALE: She can see Russia from Alaska.
JORDAN: We`re highlighting some of the more base elements of commentary on
Putin. And so, I think it`s a little bit comical.
MELBER: It is comical, which is part of why we`re talking about it, but it
is also everywhere. And let me pick up your pushback and then go back to
you for a response.
Michael Crowley is at "Time" magazine. He is the chief foreign affairs
magazine for "Time" magazine. Let me put up on the screen what he put on
twitter that went viral, got picked up by FOX News and by a lot of other
places. He put up a tweet, I think we have it, with a photo of Barack
Obama riding a bicycle and Putin on the horse, the famous picture. And he
says, as a journalist, he says, not a character judgment, but this does
kind of capture the moment. And there`s been a lot of that discussion in
the press, because we put this up, we reached out to Michael. And he said,
well, the tweet illustrates the White House`s line that this is a 21st
century view versus a 19th century one. Obama believes in following
orderly rules, acting with prudence and caution. Putin`s world view is
brutish. But a lot of the media has looked at this as saying, basically,
JORDAN: Well, Putin, when he makes a threat, he follows up on it. And I
think the pride. I do think that Obama`s Syria policy of setting a red
line and not following up on the red line has been really disastrous. And
I think that you make a threat, you have to -- and he needs to be more
careful with his rhetoric. Which I think this go-around, he is being more
careful and he is trying not to make threats that he isn`t going to follow
But I do find the state department`s posture throughout all of this very
interesting. That ten facts, ten corrections about, you know, what Russia
has said about this crisis, that is the most aggressive -- aggressively
political document I think I`ve ever seen out of a state department press
MELBER: Yes. We`re putting that up on the screen. It did get our
attention and a lot of people`s attention. Some folks thought it was a
misfire. Let me get your response.
WARREN: You know, what`s frustrating about this conversation is the
fundamental contradiction about President Obama on the right. On the one
hand with domestic policy, he`s a dictator, he`s all-powerful, it`s part of
a big conspiracy, nobody can stop him. He`s taken over the government.
But then on foreign policy, all of a sudden, he is the weakest person in
the world. He`s not manly enough. They can`t have it both ways.
MELBER: Well, let me push back on that to Ian and then Elise, I see you
want to get in.
LBJ had a big, warm, bleeding heart at home. Civil rights act, voting
rights act, the great society. I love LBJ as a domestic American
president. And I think he was, if you want to use this weird frame, he was
a softy and he was a militant invading guy on foreign policy. You can have
two world views, Ian. I mean, speak to Elise`s point that the president
made a mistake on Syria that`s haunting him now. Is that valid?
BREMMER: Yes, of course it is. I mean, look. I don`t think this is about
bomb being feminine. I mean, this is about Obama talking strong and
blustering, and then not following through. That`s typical guy behavior,
from my perspective. But the fact is, look, as Syria, you push really
hard, you set a red line, you then backed off a red line, you asked
Congress for a vote, and at the last minute, you went to Russia and he took
chemical weapons that probably won`t get implemented. The 2.5 million
refugees, 150 Syrians dead. They don`t care if they`re killed by chemical
weapons or by --
MELBER: So let me get -- when we come back. When we come back, let me get
Katrina and Elise`s response to that. We have to take this break.
Also, we have Liam Neeson from "Saturday Night Live" weighing in.
MELBER: Welcome back.
Now, we`ve been talking about the issue of perception and manliness when it
comes to President Obama and Putin. Now, I just want to show this panel,
we`ve been going pretty hot here, a clip from last night`s "Saturday Night
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Vladimir, watch closely. We`re going to speak to you
now a language you can understand.
UNIDENTIFIED MALE: Obama!
UNIDENTIFIED MALE: You know, you got to --
UNIDENTIFIED MALE: You got --
(END VIDEO CLIP)
MELBER: You know, you got to take your shirt off if you want to be taken
seriously -- Katrina.
HEUVEL: You know, Ari, someone who`s studied Russian history, Putin comes,
he was appointed by Yeltsin. His first act, by the way, was to give
Yeltsin and his family immunity. But Yeltsin was a Doddering drunk. So
Putin had to come in and show the country there was someone in charge.
Now, the fact he needs to do it with his shirt off and all that, he is a
judo athlete. He also doesn`t want to look like we need (INAUDIBLE).
Two points, we were talking about Syria. I think the ability to avert
military strikes, and I don`t know why you don`t think weapons of mass
destruction and chemical weapons won`t be destroyed per diplomacy, as
according to war, was critical. We also need Russia moving forward, for
better or worse, to manage Syria, to negotiate with Iran, which is
critical, to deal with terrorism, to manage China.
The last point we were talking about is LBJ, OK. LBJ, to me, this is a
measure of the -- how weak toughness is in our country. That is, he didn`t
want to escalate in Vietnam. He didn`t want to be perceived as soft on
communism. So this ability to define wisdom, alternatives, as soft, led
the toughest man in congressional history to escalate a war that was
unnecessary and killed --
JORDAN: But I would also argue that Obama didn`t want to escalate in
Afghanistan, but he did, and then he didn`t back the policy, which is why,
ultimately, it was a failure. You deploy a ton of troops and then you
aren`t behind the follows that you, throughout your campaign, have said is
your number one foreign policy.
MELBER: But let`s pick up on your point as well about Syria. Because
that`s where a lot of the Republican criticism has been. You were saying,
and Ian was echoing, that this somehow was a predicate for Putin`s actions
JORDAN: Well, I think it was the loose talk. I think that Obama made a
threat he did not intend to follow up on, and it became just this, everyone
around the world was watching that threat. I think in the U.S.,
domestically, it hasn`t been as big of a deal. But I think outside the
U.S. with our allies, they were listening, and they saw that Obama would
use empty rhetoric.
BREMMER: Let`s get back to Ukraine for a second. The fact is that Putin,
his most important national security interest outside his country, nothing
else is even close, is Ukraine, right? It`s the only warm water port.
It`s considered part of Russia by pretty much every Russian, for 300 years.
And whether or not we greet with that is really not the issue.
The fact is, we just don`t care as much. It`s not even close. And the
ability of the Americans to say, if you don`t behave the way you want,
we`ll isolate you. That`s the kind of language we use against Cuba,
countries without friends with economies that don`t matter. You don`t use
that language against Russia when you can`t follow through.
MELBER: Since this is our simplistic analogy day on MHP, for whatever
reason, maybe because I`m a bad guest host, the analogy you`re making is
important, right, which is it`s not about how tough are you, as a neutral
kind of general frame, it`s about, what is the interest at stake. And
whether you can walk away from a dispute in a bar about over who put a
drink down that no one cares about is different from whether someone comes
in your backyard or in your house or at your family, is that what you`re
BREMMER: Yes. And I`m surprised that Obama, he`s had some off-ramps to
de-escalate here and he hasn`t taken them. And so, you know, --
BREMMER: We are going to have to put policies in, we don`t want to
WARREN: I think there are two things here. One, the argument about Syria
and the world paying attention to President Obama, let`s see the evidence
that somehow Putin used that in his calculations in here. We don`t have
any evidence of that. But more important, I think we are not understanding
the risks that Putin himself is taking. This is a risky strategy because
there are other regions in Russia that actually want to succeed from
Russia. And if he`s setting a precedent here with Crimea, then he opens
himself up to some other internal domestic problems in Russia.
MELBER: We`ll go to Elise then Katrina.
JORDAN: I think it`s a bit naive, though, to think that Putin doesn`t have
expansionist vision here. I mean, he certainly has shown --
HEUVEL: Yes. So, like, when is he going to stop? When does it stop?
WARREN: I`m saying, they shouldn`t make him out to be some mastermind, you
know, with all this bravado that`s figured all this out.
UNIDENTIFIED MALE: He has political risk.
WARREN: I think we should talk about what his political risks are in
taking this action.
HEUVEL: No one is condoning Putin`s actions, but in order to have an
astute foreign policy, which is in our national security interest, you need
to understand Russia`s motivations. There is no question that Ukraine is
criminal. They see national security interest and certainly, the eastern
and southern part of Ukraine.
The other thing that is often ignored is Putin is an authoritarian leader,
no versus Democrat. But he is not a full autocrat. He has people, his war
party right now, Akin to McCain and Graham and our country, foreign
ministers, others are calling for the Russian military to be increased.
He`s not the most nationalist. He is also, and I think we haven`t talked
about this. If we`re really going to talk about tough men, I know people
are dismissing it, because they see it as Russian propaganda, but you
currently have in the Kiev government, leaders of a party, which the
European parliament a year ago condemned as racist, anti-Semitic, and
Zionist. These are ultra nationalist who are (INAUDIBLE). You may have
without negotiated settlement and an inclusive election in May which is
supposed to be scheduled the first neo Nazi government.
MELBER: Leave it to Katrina Vanden Heuvel to bring up the Lindsey Grahams
and John McCains of Russia. We`re out of time on the foreign policy
segment. Ian, I wanted to get in. I will meet on twitter if you want to
talk more about it today.
I want to thank you and Katrina Vanden Heuvel for being here and bringing
some of your expertise to an important issue, masculinity or not. Dorian
and Elise are sticking around.
We`re also going to have in the broadcast today some more politics.
But first, up next, an update on the Malaysian airliner that has gone
missing, when we come back.
MELBER: If you are just joining us, we are still following the latest on
the investigation into the disappearance of that Malaysian airlines jet,
which was carrying 239 people including three Americans. Investigators are
widening the search to cover a larger area in the waters around Malaysia
and off the coast of Vietnam. Malaysia`s air force chief says radar
indicates now that the plane tried to turn back before it vanished on its
way from Kuala Lumpur to Beijing. That was, of course, nearly 48 hours
ago. Authorities are also checking surveillance video of two passengers
after discovering they boarded the flight using stolen passports.
Interpol this morning confirmed that the stolen passports were in its
database and that no nation inquired about those passports. The U.S. also
sending a team of experts, including members of the national transportation
safety board to help with this important investigation. A naval destroyer,
the "USS Pinckney" was deployed to the southern coast of Vietnam. And
helicopters from the ship are now being used in the search. The navy is
also deployed a patrol and surveillance plane to search the mill radar
position of the missing aircraft. We will continue to update this story
throughout the show as merited.
And when we come back, a community taking safety into their own hands.
MELBER: Welcome back.
And now to some big news you have to West Virginia. The state`s
legislature just passed Senate bill 373, right after 10:00 p.m., just last
night, with less than two hours left in their 2014 legislative session.
Why does this matter? Well, it provides protections to water resources and
regulations for chemical storage tanks, a step in the right direction after
the January 9th chemical spill. Now, the announcement on January 24th that
it a previously undisclosed chemical mixture had also leaked into the river
in Charleston, West Virginia. And teachers and students being sent home
sick from vapors thought to be related to the chemical spill. And schools
have been close early. A lot of problems there.
And before the bill`s passage, some enterprising West Virginians stopped
waiting altogether and tried to make the water safer by taking matter into
their own hands, collecting rainwater as an alternative. A rain club was
even founded and a local charity distributed free bottled water. Will this
new bill help to change all their minds?
Well, I`m joined by Jeremy Richardson. He is a senior energy analyst from
the Climate and Energy program with the union of concerned scientists.
He`s also from West Virginia and joining us from Washington.
Welcome to you. A big story here. How strong is this brand-new bill, this
water storage bill that passed, and why should people care about it.
JEREMY RICHARDSON, SENIOR ENERGY ANALYST, CLIMATE AND ENERGY PROGRAM: Good
morning, Ari. Thanks for having me. I really appreciate it. It is
definitely a great step in the right direction, for West Virginia. What
the bill does, two important things. It establishes regulations that make
it so we have to inspect the tanks, the aboveground storage tanks, like the
one that leaked on January 9th. And it also, it instructs utilities to
work with communities to plan to write contingency plans, to that we are
prepared in the event of another emergency.
MELBER: Yes. Let me play some new sound from the governor, talking about
this, and some of these so-called upstream issues. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It`s the most debatable bill we`ve had all session,
going through five committees. Once again, it gives us the tools we need
to go in and inspect, to know what`s in these tanks that`s all around the
state. And hopefully, will help us never to have another spill the way we
did before. Basically, by having this information on what`s upstream from
the water tank, we will put the water companies on notice.
(END VIDEO CLIP)
MELBER: And that`s the question, right? Wherever we find out about these
incidents, people say, how does this happen, how can this happen, and will
the companies be held accountable? Does this bill do that?
RICHARDSON: Well, that`s absolutely right. It`s really kind of
astounding, if you think about it that these regulations didn`t already
exist. I think if you ask the average guy on the street, you know, do you
think the government is inspecting these chemical tanks? I mean, we`re
talking, the Canal valley is called chemical valley for a reason, right?
And so, I think you`re absolutely right. It`s about making sure that
industries are held accountable. And you know, we are not done. It`s
important to recognize, we`re not done now that we`ve passed this bill and
the governor is presumably going to sign it. We have to make sure that the
department of environmental protection, which is now, you know, charged
with writing these rules and then enforcing the rules that they write, we
have to hold their feet to the fire and make sure they do a good job and
make sure this doesn`t happen again.
MELBER: And as you know, this is not just a West Virginia issue, although
a lot of the nation`s eyes were on West Virginia. If you look across the
country, you have 37 states that are net importers of coal. We`re putting
that up on the screen for our viewers there from 2012, 37 states. Walk us
through the larger national context here.
RICHARDSON: Right. The larger national context is the idea that coal-
fired electricity is not cheap. You pay lower electricity rates, but the
use of coal for electricity causes a number of damages and has a lot of
inherent risks with it. And look, I come from a third generation coal
mining family, OK?
MELBER: Yes, you look like a coal miner, buddy. That`s the first thing I
thought, like, I`m seeing Zoolander.
RICHARDSON: But I think it`s really important to recognize, you know, that
coal has kept the lights on in our country for the last hundred years. I
mean, it`s important to recognize that and own that. But at the same time,
coal, in my mind, has really become the 21st century version of the horse
drawn carriage, right? It`s not that we`re trying to get rid of it or
that, you know, there`s some war on coal, it`s about the fact that
something better has come along. And that something better has been the
availability of cheap natural gas. And it`s, you know, if you look at the
electricity system over the last few years, what we`re seeing is a huge
increase in the amount of renewable energy that`s on the grid.
And so, what a place like West Virginia needs to do is to think about, you
know, how do we move into the future? How do we diversify our economy, so
that we haven`t put all of our regulars in one basket. And we`re just
depending on one industry or one or two industries, you know, for all of
our economic activity. I think if you asked the average person on the
street, they would say, yes, that makes sense. Why would we just bet
everything on one thing?
MELBER: Yes. And that goes to the policy piece of this. I mean, I was
talking to some of our team here, the MHP team here, and the view as well,
again, you rush to these incidents when they happen, right? And they tug
at your heartstrings and you wonder, what kind of country are we living in,
when we still have these kinds of problems, but a lot of it goes to policy
and what are the regulations are going to be. As you say, is this
industries and energy transition.
Jeremy Richardson, coal miner family, coming to us from Washington, thanks
for your time.
RICHARDSON: Thanks, Ari. Appreciate it.
MELBER: Yes, the latest on the disappearance of the Malaysian airlines
flight is something we`re also keeping an eye on today. And we will have
more on that.
Plus, a new trend raising some concern among housing advocates. Could a
Wall Street bet on your landlord or your neighborhood be bad or good for
More Nerdland at top of the hour.
MELBER: Welcome back. I`m Ari Melber, in for Melissa Harris-Perry.
We have a lot of politics this hour, but we begin with the biggest breaking
news story in the world right now. A Malaysia Airline 777 jumbo jet
carrying 239 people that vanished over the South China Sea on Friday
afternoon is still missing today. It even has a multi-national search
going for the plane. That resumed this morning on what we have suggesting
is a possibility that the plane may have turned back from its original
route before it disappeared.
It`s been almost two full days since the flight from Kuala Lumpur first
lost contact with air traffic control in Beijing, as you can see there,
where it had been scheduled to land Friday evening at 3:30 p.m. There are
still many questions that remain unanswered, but here is what we know for
certain at this point.
The flight was carrying 12 crew members and 227 passengers from 14 nations,
including three U.S. citizens, confirmed now to have been on board. That
includes a 2-year-old and a 4-year-old, according to the passenger
Today, we also know that among those Americans was 50-year-old Texan,
Phillip Wood, a father of two and an executive at IBM. He just visited his
family last week in his hometown of Keller, Texas. And yesterday, his
brother, Tom Wood, talked about his family`s reaction to this news.
(BEGIN VIDEO CLIP)
TOM WOOD, MISSING PASSENGER`S BROTHER: Just shock, you know? This kind of
thing doesn`t happen, you know? This is like, this shouldn`t be happening.
This shouldn`t happen to us. He was excited to be moving to Kuala Lumpur,
he was talking about how beautiful it was.
He was my hero, my friend, and we were very close. So it`s tough. It`s
(END VIDEO CLIP)
MELBER: Meanwhile, an international search and rescue mission continues.
It got underway yesterday, after the plane was reported missing. Planes,
boats, and helicopters were dispatched from at least six countries,
including the U.S., which diverted a Navy U.S. destroyer, USS Pinckney, to
the plane`s location. We also sent an AP3 plane surveillance that was in
Japan to assist with this search. Now, the U.S. has also now dispatched
now FBI agents and a team of investigators from the National Transportation
Safety Board to Asia to assist.
The search team has found no evidence of plane wrecking an at this point,
but Saturday morning, we did get the first indication the flight may have
crashed when Vietnamese air force planes noticed these spotted oil slicks
you can see there in the waters between Malaysia and Vietnam.
Distraught family members have been notified by airlines of the plane`s
disappearance. And of course these families, and many around the world,
continue to await news of the status of these individuals. Malaysia
Airlines has dispatched a team of caregivers to Beijing, providing a kind
of emotional support and update to the families, who according to a
Malaysia Airlines families, are among the foremost priorities of the
(BEGIN VIDEO CLIP)
HUGH DUNLEAVY, MALAYSIA AIRLINES: We have communicated to the family
members that after more than 30 hours without any contact with the
aircraft, we believe, that the family members should prepare themselves for
the worst. And the primary focus is really, how do we take care of these
people who are grieving. That is the focus.
(END VIDEO CLIP)
MELBER: And again, as we`ve been reporting, the discovery that two
passengers on this flight were using stolen passports, it raises
suspicions, of course, of U.S. and foreign intelligence officials.
Interpol confirmed today one Austrian and one Italian passport, both
previously recorded in the theft database, were used by passengers to board
this plane. Malaysian officials said that a total of four names on the
passenger list are now under investigation and that they would be giving a
close look to the entire passenger manifest.
U.S. authorities, meanwhile, are careful to note there are many reasons,
including nonviolent crimes, like drug smuggling or violent crimes like
human trafficking that passports could be stolen and used that would not
involve an incident or terrorism that would affect the entire plane.
Now, a senior U.S. official told NBC News, quote, "We have not determined a
nexus to terrorism yet, although it`s still very early, and that is by no
means definitive," end quote.
So, we turn now to a guest we have standing by in Washington. You saw him
here on the MHP Show around this time yesterday.
Joining us again, Michael Goldfarb, a former FAA chief of staff, president
of MGA Aviation Consulting.
Thanks again for joining us on this --
MICHAEL GOLDFARB, FORMER FAA CHIEF OF STAFF: My pleasure, Ari.
MELBER: Absolutely -- on this story, an important story and a concerning
Let`s start with the fact it`s been almost 24 hours since we last spoke.
What do we know now that we didn`t know yesterday?
GOLDFARB: Well, to provide some context for the stolen passports, quite
frankly, it`s because we have no evidence of the physical breakup of the
aircraft, we have no evidence of a catastrophic failure, that most aviation
safety people, when they hear about the passports, probably overly fixate
We know -- we know we have an aviation security problem, but as it was said
with safety officials, we don`t know, in fact, that these passports that
were stolen, millions are stolen every year, in fact, had anything to do
with this crash. I mean, it`s interesting to note that you can get strip
searched at an airport, and yet a passport isn`t verified through Interpol.
So, let`s put all of that aside, not to get ahead of the facts. But here`s
what`s most baffling. A high-performing, safe, capable airline, airplane,
run by a well-maintained airline, disappears at 35,000 feet. So, we have
some theories about that.
The Boeing aircraft had some safety, minor issues. Last year, FAA fined
them $2.7 million for faulty fasteners, a quality control problem. They
As has been reported by Tom Costello and others, they had a wing tip
damage, Boeing fixed it, taken care of. They had some frozen fuel lines of
a Rolls Royce engine, taken care of.
So, the aircraft itself is structurally sound. It`s highly unlikely that a
plane with that -- it`s like an iPhone in the sky. It`s beeping, it`s
pinging, there`s texts, there`s data, there`s voice, there`s satellite.
It`s highly unlikely that all those communication systems would
simultaneously go out, without something catastrophic happening within
seconds that would disable that aircraft.
Number two is that we don`t know where, in fact, the plane and the debris
field is. This is eerily similar, Ari, to the 1996 TWI-800, when the FBI
joined the NTSB and -- I mean, to be politically correct, there`s creative
tension between the bureau and the NTSB. The NTSB wants to put things
together to find out why a plane crashed, and the bureau wants to find out
who did it and tear things apart. It`s hard for those agencies to work
So, we have quite a mess, an international incident, and we don`t have a
MELBER: Yes. I mean, you put it that way, and it`s blunt but it`s true.
The investigators obviously working on all these leads in a situation
that`s on the one hand fast moving with some of the updates we`ve been
getting. On the other hand, still mystifying.
Michael Goldfarb, thank you for putting it in context for us, joining us
Now, we`re going to turn to another guest, Rafi Ron, president and CEO of
New Age Security Solutions and a former security director at the Israel
Airport Authority and a consultant to Boston`s Logan Airport.
Good to see you again, sir.
I do want to start with the passports. Michael said, you know, we can put
it to the side. Another thing we can do, as I`ve discussed with you, so to
put it in context.
For folks watching at home trying to understand, how unusual is it that
someone would be on a plane with this kind of documentation?
RAFI RON, NEW AGE SECURITY SOLUTIONS: Well, we all hope that it is
unusual, but I`m afraid that reality is different and I think that the
measures that we have been using in order to verify the identity of the
people on board, has been limited to checking documents rather than
checking the person himself. In other terms, using any kind of biometric
So, we are limited in that respect, but in this specific case, I think
there`s another failure, which is substantial, which we should pay a lot of
attention to. And that is the fact that those two names have appeared on
the list of stolen passports. And that list is available to the airlines
before they allow people on board.
So, obviously, if -- and I want to emphasize if -- because right now
there`s no -- yet any indication, but if we can end up with the conclusion
that this has to do with -- that these two people had something to do with
the destruction of the aircraft, then I think that there would be a very
serious lesson to be learned.
MELBER: Right, and a big if. But, definitely something that goes to the
security screenings. Speak to what Michael mentioned, giving your
experience in Boston and Israel, about what happens when we are tracking
these aircraft, as we do with multiple delivery redundancy, and yet the
entire communication system disappears relatively instantaneously.
RON: Well, that`s a real puzzle. I can tell you that I was a witness -- I
witnessed a similar incident years ago, when an airliner, a Russian
airliner was shot by mistake over the Black Sea and the beginning of the
scenario was very much the same. Suddenly, the aircraft disappeared, as a
result of being hit by a military missile, by mistake, as they emphasized.
And it took some intelligence from various sources to realize exactly what
happened to it.
But the first hours, when you have no information whatsoever, except for
the fact that the aircraft has disappeared from the screens, actually send
you into an investigating everything that is relevant to that flight,
trying to find some kind of a hint to what has happened.
MELBER: Yes. And that`s what people are doing now, is sifting through all
the hints and all the leads.
Rafi Ron in Washington, thank for sharing your expertise and reporting with
us again today. Appreciate it.
RON: Thank you.
MELBER: I`m going to now welcome back to the table, Elise Jordan,
contributor to "The Daily Beast", a former speechwriter for Condoleezza
Rice, as well as director of communications for the NSC. Possibly
relevant, possibly not, depending on where this investigation goes.
As well as David Cay Johnston, Pulitzer Prize-winning author, among other
things, if you don`t mind being introduced that way.
DAVID CAY JOHNSTON, AUTHOR: Fine with me.
MELBER: The reason why I mentioned that, Elise, is this could be a
homeland security situation. This could be an NTSB technical malfunction.
From your experience on the NSC, just briefly, how do they keep track of
something like this when it is such a question mark?
JORDAN: I think it would definitely be a high alert in the situation room.
And during the Bush administration, it would have been the Homeland
Security Council, headed by Fran Townsend. I`m not sure how exactly the
Obama administration, I believe that`s under the auspices of the NSC, which
is now the NSS. So it would be monitored by the NSS.
MELBER: But they basically are waiting for intelligence to find out, was
this a malfunction or something we should be concerned about?
JORDAN: I think it`s still such an evolving situation. I don`t think
anyone really knows anything at all.
JOHNSTON: Well, one would hope they`re using all that electronic intercept
capacity to find out everything they possibly can and it would be something
useful. One of the significant things about this crash -- and we`re
assuming the plane has crashed, this incident, is you`re not -- there`s not
a lot of debris -- no debris has been found on the surface of the sea.
Normally when a plane comes down, you find debris. Even the Air France
flight that went down not Atlantic a couple of years ago, there was a whole
bunch of floating debris.
Why are we not finding floating debris and what does that tell us?
MELBER: Yes, and you talk about this from the view of the assumptions
made. We`ve got family members, as we`ve been reporting, who are speaking
in terms of grieving, but you have Interpol and some of the intelligence
agencies treating this as essentially kind of like an unknown event at this
JOHNSTON: Well, it may not -- it could be not a political act, but a
criminal act. In 1955, United Airlines DC-6 was blown up over Colorado by
a man who wanted to collect the life insurance policy on his mother. He
was eventually executed after trial.
So you can have severe criminal acts, you can have, something went wrong
with the operation of the airplane.
JOHNSTON: The most dangerous times, though, for an airplane are on landing
and takeoff. And not midair flight --
MELBER: And that`s something the experts have emphasized, the nature of
this incident and just disappearing off the map.
I want to thank Elise Jordan for a bunch of interesting thoughts today on
more than one topic.
And staying with us is David.
What we`re going to do now is talk a little bit more in our next segment
about a housing crisis that is a very important issue, according to some
advocates. And yet we also have reporting, new reporting from Blackstone,
a company in this space, saying they`re actually trying to help distressed
communities. It`s an interesting debate.
We will also keep you updated with the latest on this missing plane story
as events warrant. Stay with us.
MELBER: It turns out 2013 was a good year for the housing recovery.
National home prices rose nearly 12 percent from January 2013 to January
2014. That`s the strongest gain since 2006.
There were more than 5 million existing home sales. That`s the highest
number since 2006. The February jobs report, as you may have heard, showed
that another 15,000 jobs added in construction, despite all that rough
winter weather and foreclosure filings were the lowest since, again, that
magic year of 2006. That`s down more than 50 percent since their record
high in 2010, when they were about 2.9 million foreclosure filings.
Together, all these numbers for 2013 seem to spell good news. Good enough
news, in fact, that investors are following that old advice of buy low,
betting that existing pool of foreclosed homes at depressed market prices -
- well, might help them sell high. They`re putting money on that bet.
Those aren`t my words. I should mention. They are straight from the mouth
of the private equity firm spearheading this financial innovation.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think at heart, we`re making a bet on America with
this investment strategy. We`re betting that housing prices are going to
begin to recover.
(END VIDEO CLIP)
MELBER: There`s that recovery they`re talking about. Now, Wall Street is
using some pretty complex financial systems, which are hard for some people
to understand, a lot of basic investors, and they`re looking to turn a
profit into making what we think is an untested bet on our housing market.
And as we have all learned, that can be something we should keep an eye on.
In fact, even economists at the Federal Reserve have said, quote, "It will
be important to monitor developments in these markets for signs of the
potential to destabilize financial markets."
That`s a big warning. Now, stay with us. We`re going to have this story,
MELBER: Welcome back.
Who was in charge of single family rental homes in your neighborhood? The
answer is usually local investors. But that is changing.
Wall Street`s now moving into the rental market for single family homes.
In cities like Atlanta, phoenix, and Las Vegas, and that`s because some
firms have created a new investment product that`s based on those kind of
The shift is part of an effort by Blackstone Group, a multi-billion dollar
investment firm, which now owns more than of these homes than any other
company. Blackstone is using Invitation Homes to purchase 43,000 homes,
rent them out, and cut up and distribute the profits as part of their new
financial product. In finance, they call that securitization. And it
enables investors to receive funds from different rental units.
Now, here`s how Blackstone put it in a 2012 press release.
The program removes distressed inventory from the market, which has been
suppressing national home prices, creating jobs and providing high-quality,
affordable housing for families. Blackstone says that by enabling more
investors to buy a piece of this market, new capital actually goes to
communities that need it most, as sort of a win-win. And other companies
are following suit.
But here`s the thing. Given the track record of Wall Street in our housing
market, are these efforts right? Well, they`re drawing scrutiny. Fed
Chair Janet Yellen said during her November confirmation hearing, this
market should be watched very carefully. She also said the interest in
low-cost homes is a logical response of the market.
Meanwhile, 75 housing and consumer groups sent a new letter, warning, we
may be headed towards the creation of another housing bubble. And a new
article in "Mother Jones" magazine questions, what happens if this security
And then, there`s this exhaustive report from the Center for American
Progress, the progressive policy shop, suggesting that Blackstone`s
approach could hurt renters and potentially destabilize communities if
these financial products, these bonds, sour.
Now, we asked Invitation Homes about all of this. They responded with a
statement to MSNBC, saying in part, quote, "We`re committed to building a
national long-term network that caters to the portion of the market that
will always need or prefer to rent. Our investments have played a small
but positive role in stabilizing housing markets. Economists have said
that institutional investors` collective purchases of 200,000 home out of
the more than 5,000 sold last year has had a negligible impact on rental
rates," end quote.
And for this reporting, we also spoke with Blackstone right here in New
York and invited their staff to appear on this segment. They declined, but
they emphasized that Blackstone securities, based on these rental homes,
are a tiny part of the housing market, currently. They are only present in
14 markets, they say. More than 70 percent of their renters renew, and
their purchase of foreclosed homes lead to new tenants and better
Blackstone also disputed and this is interesting -- they disputed reports
that their security depends on rental income.
They told us, quote, "There`s no such thing as a rental bond. Center for
American Progress and others have mischaracterized this securitization as
that of a rental income from the homes. That`s incorrect. This is a
securitization of assets themselves, in this case, about 350,000 homes.
The same process is currently used to finance assets of all types."
All right. But one congressman is pushing back saying. Congressman Mark
Takano says, quote, "It just reminds me of the too big to fail schemes of
the subprime mortgage crisis." He`s now calling for investigative hearings
and joins us today.
If we`ve learned anything from the last housing crisis, it`s to ask
questions early and loudly before some of these confusing financial
products spread and create bubbles we may not be able to afford to pop.
Now, with us to discuss all of this is Josh Barro, a national correspondent
for "The New York Times", with the history working in some of these related
markets and an MSNBC contributor, David Cay Johnston, contributing editor
at "Newsweek," professor of law at Syracuse University, Laura Gottesdiener,
a journalist who`s been covering this story for "Mother Jones", Dorian
Warren is also back with us -- she`s the author, I should mention, of the
book, "A Dream Foreclosed."
I want to go directly to you, Congressman. You represented California`s
41st district. You said this is an issue for your constituents. You`ve
heard our reporting today, Congressmen, on the issue and the responses from
Tell us what`s important here in your mind.
REP. MARK TAKANO (D), CALIFORNIA: Well, what`s important is that we get
ahead of the curve this time. You know, with the subprime mortgage crises
and the mortgage-backed securities, we just weren`t fully understanding of
what risks they pose for the economy. And I`m not calling for a ban for
this new instrument. And let`s -- I want to emphasize, it is a new
security that Blackstone has developed.
I represent a represent a part of the country that was very hard hit.
We`ve seen one out of every 10 homes foreclosed upon in my county of
Riverside, California. And we`ve suffered greatly.
I just think that it behooves us to understand these securities and to
understand what risks they might pose to the economy and, you know, more
importantly, what it means to the areas of the country like mine.
MELBER: Yes. And that makes a lot of sense, which is why I wanted to talk
to you. I want to get your sense directly. What Blackstone and Invitation
Homes are saying here is that basically, people like you, sir, not
specifically you, but people who have been critical in raising these
questions, have had it backwards, that they`re actually bringing new
capital into these communities.
Are they wrong?
TAKANO: Well, they`re not wrong. We`ve seen a run-up in prices, 20
percent in one year. So, not everything is bad. I mean, I can`t say that
they`re entirely bad, and I`m not calling for an outright ban. I`m
calling, simply, for hearings. I`m calling for regulatory agencies to do
more due diligence.
Look, Standard & Poor`s and Fitch are rating agencies that gave blessings
to these mortgage backed securities. This time around, they`re withholding
the full blessings on these securities and as well, you`ve also mentioned
the Fed had its concerns as well.
So, I think at the very least, we need to do more due diligence and it`s
more than just a congressional staff needs to look into these securities.
We need other agencies and the financial services need to look at them as
MELBER: Yes. I mean, Congressman, you raised such an important point
there. Folks may remember, the ratings agencies basically said that some
of the most toxic, dangerous investments last time around were almost
perfect, the highest rating they can get. And they were far from perfect.
So I mean, I think you raise a cautionary point there. I want to keep you
here, but broaden out to our panel.
Laura, you`ve written about this a lot. What do you make of it?
LAURA GOTTESDIENER, FREELANCE JOURNALIST: I think it`s important to say,
you know, we`re seeing an incredible amount of reporting on the housing
recovery. Who is this housing recovery for? Who`s benefiting from this
recovery? Who`s benefiting, who`s making money off of the rising home
I think it`s important to say, you know, we`re seeing Wall Street
consolidating an incredible number of houses, 200,000 single family rental
homes and counting, across the country. That doesn`t sound like a regular
housing recovery to me. That doesn`t sound like a housing recovery that`s
going to benefit ordinary Americans.
MELBER: What`s it sound like?
GOTTESDIENER: It sounds like a Wall Street housing recovery. It sounds
like they`re consolidating greater grip over our everyday lives, and not
just buying these houses or renting them back to the very same families
that were just foreclosed on, but creating a new security asset class that
is going to become, you know, economists are estimating, a $1 trillion
market in the next six years.
JOSH BARRO, MSNBC CONTRIBUTOR: I mean, I think this is something that
needs to be watched, but I actually think it`s a pretty hopeful thing. The
way these homes are being owned and financed looks to me very similar to
the way that apartment buildings across the country have been owned and
financed for decades. And that`s a system that works pretty well.
One problem we had in the U.S. that led to the housing bubble was that if
you want to live in a single family home, in most cases, you have to buy
it. The rental market is not deep. It`s a difficult challenge to own and
manage these properties as rentals.
So, to the extent that we can have a deep, institutional market in single
family home rentals that will allow people to not take all the money they
have in the world and put it in a highly leveraged real estate investment
in a home that might go bad. Instead, Blackstone will take on that
investment and take on the investment risk.
WARREN: I think we should learn the lessons of recent history here.
History doesn`t repeat itself, but it does rhyme sometimes. This raises
And so, one question we have to ask is in what communities are we seeing
this? Because if they`re in communities of color, that should be the first
red flag. We saw this in the 1990s with the creation and expansion of
subprime lending into minority communities that have been racially
discriminated against, redlined for decades, by state policy and
discrimination by lenders.
Then, all of a sudden, it`s almost like, reverse redlining, 900 percent.
That was the increase in subprime loans in the 1990s.
So, we knew this was a problem in minority communities before we even
crossed the threshold to the 21st century that led to the burst of the
MELBER: So, an important point and context in markets that we know that
have been found to have aggregate discrimination. Congressman, I want to
bring you back in on that point, that concern, and also the idea that`s
been raised by Center for American Progress, among other experts, and
rebutted by Blackstone, the argument that this could lead to people being
forcibly removed from their rental properties.
Do you think that`s a possibility here?
TAKANO: Well, that`s a -- there`s a consumer protection issue. You know,
Blackstone and other large investors have very little track record or
experience in managing properties this extensively, 40,000 homes across the
These single family homes were not built or designed to be renter occupied,
they were designed to be occupied by individual homeowners. And people in
these neighborhoods have expressed concerns to me, in my own district,
about what`s going to happen to the neighborhoods, how the character of
them is going to change, how well these properties are going to be
And indeed, the risk for the ratings agencies is just how local governments
might respond. They may impose rent control, they may impose all sorts of
other -- there are a lot of uncertainties they impose for the investors who
buy these bonds.
So, you know, the risks of being a landlord are being spread across to many
investors without a lot of skin in the game by, you know, these investment
groups like Blackstone.
JOHNSTON: Well, congressman is exactly right. I`ve been a landlord.
There`s a reason it`s a mom and pop business in housing as opposed to Josh
mentioned managing big apartment projects. Maintaining these properties is
not easy. And one of the things we`re likely to see is deterioration in
the quality of the stock of real estate.
And Blackstone has essentially no skin in this game. They are borrowing
the money to acquiring these buildings. That statement they put out that
you read that I`m sure to a lot of people was gobbledygook, simply means --
well, it`s not the rental income that secures the property, it`s a mortgage
on the property itself.
If the mortgages aren`t paid because there`s no rental income, then the
property will be foreclosed on again.
BARRO: But that`s not right. Blackstone has the equity in these things.
It`s different from the situation we had during the housing --
JOHNSTON: Blackstone says in its 10k, we own no one real estate --
BARRO: But Blackstone funds --
MELBER: Let me pick up that point. That is a dispute for a good reason.
I want to go to that when we come back.
The housing crisis across the color line, why some neighborhoods are still
feeling the impact. That`s next, plus the response.
MELBER: Welcome back.
The effects of the subprime mortgage crisis were felt deeply not only
because of the extent of the financial impact, which was big, but also
because of the direct impact that it had on so many people`s lives, the
loss of their homes, home ownership has long, of course, been hailed as the
staple of the American dream and we`ve been reminded of how housing is also
a civil rights issue, so many times, especially in these past few years.
Black homeowners, for example, were three times as likely to get the
highest rated mortgages, which helped lead to the housing bubble, and they
lost more home equity when it burst.
The Justice Department under President Obama has been actively bringing
forward cases of discriminatory lending practices, discrimination in
rentals and sales that disproportionately impact African-American and
Housing isn`t just any market. It is, in many ways, the market. It`s
where people live and their ability to access housing has been critical to
their ties to their community and their entire lives, obviously.
We go back to our panel here.
And, Dorian, I want to start with you on this point.
When we talk about corrections, Apple overstates something and the stock is
corrected and the stock moves up and down, and investors lose or gain
money, we as a society have generally said, we`re more comfortable with
that and that fluctuation, buyer beware, than a correction in a housing
market, which means you lose your home because of a macroeconomic factor
you had nothing to do with.
WARREN: And as you pointed out, the racial disparities are stark, because
home ownership is the primary source of wealth for most people, and because
blacks and Latinos were targeted more than white families for these
subprime loans. It means when the bubble burst, they lost much more of
their wealth than did whites and, by the way, that added to the already
So I think what we`re seeing and what we should be worried about something
very similar to Blackstone, when Wells Fargo settles with the U.S.
government for $175 million for its subprime practices and markets that
settlement back to black and Latino families in the very communities that
have the highest rates of foreclosure as if it`s a good corporate citizen,
that should worry us, because they`re engaging in exact same process and
it`s not a market correction.
MELBER: Right. And the link we`re talking about and the reason we did
play so much sound and quotes from Blackstone is a link here that we don`t
know where it leads yet. That is debated, David. And yet the leverage and
the complexity, if it`s hard to follow this segment, right, for some folks,
although they`re interested, it`s also hard to follow these documents and
understand just what`s in the security, and that could be bad for us,
JOHNSTON: Well, here`s the simple things we do know. The bottom is down
since 2009, which means housing prices can`t be rising. People can`t
afford more housing. We know that Blackstone and others are trying to once
again weaken the standards for underwriting. Who benefits from that?
People who make the money off fees connected to housing. This is not good
for the housing market.
So, I think we ought to be very skeptical about --
MELBER: And yet, Josh, go ahead.
BARRO: But this is a reason to be glad to have a deeper rental market,
because owning a home is fundamentally an investment.
BARRO: Yes, but it`s -- no, it`s an investment in real estate. And if you
owe have and have a mortgage on it with a low interest, it`s a speculative
investment. And Obama at the same time that it`s been pushing back on
banks for the bad practices in the last housing has been pushing them to
weaken credit standards and to offer higher leverage mortgages, because
they too want to push people into home ownership and prop up housing
This I see as an alternative model in which people can live in homes
without owning them and without taking on that investment risk.
So, if we don`t want families to be in this position where they are the
ones left holding the bag when housing prices fall, we have figure out who
else is going to own the home and take on that risk.
MELBER: And so, let me bring back Congressman Takano.
I mean, what Josh Barro is talking about there is an argument that the
industry makes, that you get people in single family homes who otherwise
wouldn`t be in them.
TAKANO: Well, look, we`ve seen a run-up in just a single year of 20
percent in prices. We have a dual problem here. Rents are rising because
of the lack of inventory and also housing prices. Middle class families,
aspiring homeowners, simply can`t compete against that kind of price
appreciation and the cash buyers, the power of them.
Look, my neighborhoods, my mayors, my cities would want people with a stake
in the communities in the homes. We need homeowners. You know, they just
simply make much, much better, you know, bet for the community.
So, I`m concerned about that. And I`m concerned about that we should be
doing more to help the middle class get into these homes.
MELBER: Congressman, I appreciate that and I know you`re working on this
issue and I think if you do get those hearings, Melissa Harris-Perry would
probably love to get an update from you. Appreciate your time today from
TAKANO: Thank you.
MELBER: All right. I`m asking everyone else to stay here and stick
around. And Laura`s going to give us a peek at alternatives to this
approach when we come back.
MELBER: We are back, talking about the housing market. I want to go right
to you, Laura, because we were discussing this in the last segment.
And you said, look, there`s an important debate here. We`ve talked about
some of it, but there also are alternatives that could be better for
GOTTESDIENER: Yes, I think it`s important to understand, this is part of a
cycle in which we are assuming that, you know, finance capital got us into
this mess and finance capital can get us out of this mess.
And it`s important to say, there are alternatives to the land grab that
Blackstone and other private equity firms are currently executing. And
what that looks like is redefining what security in the housing market
So, we need to start saying, what would it look like for our neighborhoods
to be more secure? Does that look like Blackstone partnering with JPMorgan
Chase and Wells Fargo to issue a rental-backed security? Or does that look
like moving towards a system where the community has more control over
land? And we`re not going to get there without fighting for it, but there
are structures like community land trusts that if we organize, if we
protest and if we fight back, we can say, we want our neighborhoods to be
MELBER: Can the federal government make that happen and get communities in
more of an ownership model?
GOTTESDIENER: The federal government can certainly help support
communities that are fighting on the ground to take more -- to make their
communities more secure. They can make financing for community land trusts
and other structures that allow for community control of land to be more
But it`s important to say, we`re talking about moving towards a model in
which land does not have a speculative value. And to move towards that, we
MELBER: What does that mean?
GOTTESDIENER: A community land trust works by dividing the house on top of
the land from the land. So a home, somebody would live in it like a
regular home ownership model. But the land underneath can actually not be
bought and sold and it cannot -- it does not any longer have a speculative
value, because it is controlled by the entire community.
MELBER: Which you`re saying, as a practical matter, when we talk about
Wall Street coming in, you`re saying under that model, there`d be less
destabilization of the community?
GOTTESDIENER: Absolutely. It`s a way that, you know, and maybe Dorian can
speak to this more, but a way that communities of color and all communities
can stop this process of displacement, that isn`t just about the
foreclosure crisis, the eviction crisis. It`s also about gentrification of
our city. It`s also about the way that Wall Street is making an incredible
amount of money by pushing millions of Americans out of their homes by
MELBER: Dorian, I don`t know if they call this the Spike Lee plan in
Congress, but do you want to make some connections here for us?
WARREN: Well, the only thing else I`ll add to what Laura said, there is
tremendous organizing happening across communities of color and in big
cities, precisely pursuing these alternatives, community land trusts, other
models of ownership that protects communities instead of setting them up to
MELBER: I think that is so well put. I`m really glad you guys have been
reporting on this, all of you working on it. As we mentioned, we invited
Blackstone to appear and that`s an open invitation, somewhere on MSNBC, if
they want to do follow-up and really appreciate it. This is an important
In New York, my thanks to Josh Barro, David Cay Johnston, Laura
Gottesdiener, and Dorian Warren.
Still to come this morning, Grammy Award winner, Ninth Wonder, also known
as Harvard`s hip hop fellow. That is next.
MELBER: So what happens when you give a producer a fellowship to teach at
Harvard University for a year? The result? Well, some lucky students who
were enriched with learning about the history of hip-hop and music sampling
from a living legend, Ninth Wonder, and a feature length documentary called
"The Hip-Hop Fellow", chronicling this historic moment when the recognition
and integration of hip-hop is pretty much fully accepted as a viable
discipline within the academy.
(BEGIN VIDEO CLIP)
9TH WONDER, HIP-HOP PRODUCER: I would get to Harvard at night, stay at a
bed and breakfast. Get up the next morning to teach class at 10:00,
colloquiums at 12:00, back to the archives, and right afterwards, neither I
would jump on a plane and come back or I would stay. That was the majority
of all the year. Just that whole thing, to say I`m leaving one Duke class
and getting on the plane and going to my Harvard classes is unbelievable
for me to say.
(END VIDEO CLIP)
MELBER: From lecturing to completing a research project, it is a thrill to
welcome to the program, Patrick Douthit, also known as Ninth Wonder.
Good morning, sir.
9TH WONDER: Good morning. How are you, sir?
MELBER: I`m doing good. I`m excited to have you here.
We saw in that clip, you teaching at Duke University as well, at the same
time as the Harvard fellowship. What was your biggest challenge here with
9TH WONDER: I think the biggest challenge was my schedule. Just to be
able to, like I said, teach at Duke in the afternoon, sometimes catching
the last flight out of the Raleigh, going up to Boston, then the next
morning teach a class, do the colloquium, does a faculty lunch afterwards,
and then get back on the plane or I would stay and do more research. So,
that was probably the biggest challenge. I had to discipline myself to
make sure I stayed on task with that.
MELBER: And this film looks at that. I want to give people a look at who
you are and what you were up to. We have a nice clip from it. Take a
(BEGIN VIDEO CLIP)
9TH WONDER: The props, I`ve got -- I have that tape. And he said, no,
it`s not who got the props. I was like, it is who got the props. I`m
about to tell you who`s my favorite group. He said, no, man, my dad gave
it to me.
It`s Ronnie Laws, the saxophone is jazz funk. The song was called "Tidal
Wave" by (INAUDIBLE) in 1975, actually the year I was born.
This is what started my worm hole. This is what`s starting me to dig for
records. This is what made me want to know what`s going on in the
background. Why did they take that song to make this song? What was it
about that and that particular part to make them take that part?
This is the worm hole that let me here. But it was a very crushing,
crushing feeling to find out that the things I was listening to and fell in
love with came from the `70s. It`s kind of a point when you realize your
generation of music sucks.
(END VIDEO CLIP)
BERMAN: I love that moment there, and you`re sharing with people -- you`re
teaching, but also explaining house music has taught you, you thought about
when you were young being a teacher. Speak about the interplay because
there`s some arts that we might enjoy, but music is clearly something a lot
of people learn from.
9TH WONDER: Music is really the university language, you know, along with
the math. I mean, if you think about it, you know, your ABCs and "Twinkle
Twinkle Little Sstar" even when you learn a phone number, you learn it by
So, music is really what joins us all, you know, like I said, other than
math. My mom is an educator. She`s been an educator for 41 years. That`s
kind of where I got it from. It extended to me being a band geek in middle
school and high school.
You know, I played sports, but I always loved music, even when I was a
history major, I turned it over to being a music producer and became a
teacher anyway. Everything came around.
MELBER: Yes, it all comes together. The order piece, of course, is
putting this archive at Harvard, this hip-hop archive. Speak to us about
something that runs through the film and your work here, which is the
shifting position of -- to use a fancy word, hip-hop in the canon, or in
9TH WONDER: Right.
MELBER: The academy has a tremendous amount of influence. We talk about
that when we think about types of individuals who have been written out of
history or literature, the shift to African-American women`s studies
programs. Hip-hop I would argue at one point was isolated that way, but no
9TH WONDER: Exactly. We`re in a situation where hip-hop is not in a lot
of books at this particular point. We`re writing the history as we go
along, like my big brother says, this is still a young culture. As a
matter of fact, we`re writing history, because today is -- we celebrate the
death of Notorious BIG, Christopher Wallace, on March 9th, 1997. So,
that`s a part of history.
We really need to talk about because he was a poet, he was an emcee, and
was a shape in our culture. So, that`s what it is. It`s about making it
relevant and putting it in the proper space it needs to be in, even at
MELBER: And let me ask you that. That`s something I`ve always wondered
about. If you really like rap and you listen to lyrics, they get in your
head. If you read about it, if you read Jay-Z`s "Decoded" or you`re going
rap genius, every line has 10 more lines of analysis, right? Which is not
unlike Shakespeare or any literature where there`s so much meaning in the
Why do you think there`s been a divide in the culture where mainstream
culture has not understood that, this is just noise, this just simple
9TH WONDER: Right. I think with hip-hop is attached to the community. I
mean, even we talk about the 1960s and 1970s when hip-hop came from soul.
Hip hop still connected to the community as far as the metaphors and
similes that`s used. I mean, hip-hop is a very deep interlaid, inter --
you know, just a very deep culture as far as the lyrics are concerned.
Just because the emcee says one thing, you really have you have to look at
the things that actually saying but not looking at it from the surface.
And that`s the thing about the lyrics. They can be studied on down the
road. I mean, even they thought Shakespeare was vulgar in his time, right?
MELBER: You`re right.
9TH WONDER: In the 1600s, but it was a vulgar situation. But we study him
MELBER: And 9th wonder, I sad to say we`re out of time. Otherwise I would
spend a lot more time with you. Thank you very much.
9TH WONDER: Thank you.
MELBER: All right. That is our show for today. Thank you at home for
Nerdland will be back next Saturday at 10:00 a.m. Eastern.
"WEEKENDS WITH ALEX WITT" is up next. Stay tuned.
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