updated 8/4/2014 9:27:11 AM ET 2014-08-04T13:27:11

MELISSA HARRIS-PERRY
August 3, 2014

Guest: Peter Suderman, David Cay Johnston, Avik Roy, Michel Martin, Vivian
Nexon, Tunette Powell

MELISSA HARRIS-PERRY, MSNBC ANCHOR: This morning, my question, what do we
make of labor`s super-sized win?

Plus, Attorney General Eric Holder`s urgent call for change.

And the little pink house that is still standing.

But first, predatory lending at the car lot.

Good morning, I`m Melissa Harris-Perry.

The data are in, the results are clear, even if the reason is not. But
this much we now know to be true -- it`s better with a Democrat, the
economy, that is. So says two economists at Princeton University, Alan
Blinder and Mark Watson.

Now, these are two of the top economists in the country. And in July they
released a paper entitled "presidents and the U.S. economy: an economic
exploration." Now, maybe the title doesn`t scream 63-page summer beach
read material, but Nerdland rejoice because we have the highlights. Among
them, the U.S. economy has grown faster and scored higher on many other
macroeconomic metrics when the president of the United States is a Democrat
rather than a Republican.

The members tell the tale. From 1947 to 2012, the economy grew at an
average annual rate of 4.35 with a Democrat in the oval office and 2.54
with a Republican. And whereas we can get into deficit spending versus
supply side economics, stimulus versus austerity, and social safety net
versus wall street coddling, it turns out it may be just better to be
lucky, you know, than to be good, so says Blinder and Watson anyway.

The data minors over box.com explained the findings this way. Saying the
economists essentially find that roughly laugh of the difference in growth
rates can be chocked up to three or four factors. Democratic presidents
have historically been hurt less by oil shocks and have benefited more from
productivity booms, favorable international conditions, and possibly higher
consumer confidence.

But in politics, a win is a win. And on the economy this week, president
Obama wanted to make clear one thing, he is winning.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You know, in my first term,
if I had a press conference like this typically, everybody`d want to ask
about the economy. And how come jobs weren`t being created, how come the
housing market`s still bad. You know, why isn`t it working, and you know
what, what we did worked, and the economy`s better.

(END VIDEO CLIP)

HARRIS-PERRY: I just love second term President Obama. Come on, ask me
about the -- ask me about the good stuff. Better to the tune of 209,000
jobs created in July. Revised figure from June of 298,000 jobs created and
in fact, now six straight months of job creation greater than 200,000.

(BEGIN VIDEO CLIP)

OBAMA: We are now in a six- month streak with at least 200,000 new jobs
each month. That`s the first time that has happened since 1997. We`ve
recovered faster and come farther from the recession than almost any other
advanced country on earth.

(END VIDEO CLIP)

HARRIS-PERRY: But wait, there`s more. On Wednesday, the U.S. government
announced that for the second quarter of 2014, GDP growth rate was 4
percent, handily beating analysts` expectations.

Chrysler, that U.S. automaker saved by the Obama administration, this week
reported its best July since 2005 with sales rising by 20 percent. And
Warren Buffett`s Berkshire Hathaway, largely seen as a bellwether for the
overall economy, soared to new heights announcing Friday second-quarter
profit of 41 percent with net income of $6.4 billion. It is no wonder the
president was in kind of a victory lap mood.

(BEGIN VIDEO CLIP)

OBAMA: Companies are investing, consumers are spending, American
manufacturing, energy, technology, autos, all are booming.

(END VIDEO CLIP)

HARRIS-PERRY: All right. It`s a victory lap. But I`m going to need you
all to pump your brakes because there is always the potential that when
there`s a boom the next thing is a bust. And one word in particular is
making its way back into the headlines recently that must give us pause,
subprime. Those types of loans so prominent in housing ahead of the crash
in 2007 may be seeing a comeback. And this time they`re in the auto
market.

A stunning investigation by "The New York Times" found that subprime auto
loans are on the rise and they`re exhibiting predatory tendencies.
According to "The New York Times" report, auto loans to people with
tarnished credit have risen more than 130 percent in the five years since
the immediate aftermath of the financial crisis with roughly one in four
new auto loans last year going to borrowers considered subprime.

"Times" investigation found that subprime auto loans can come with interest
rates that can exceed 23 percent. Loans were typically at least twice the
size of the value of the used cars purchased. And such loans can thrust
already vulnerable borrowers further into debt, even propelling some into
bankruptcy.

And what is driving the number of subprime loans? Well, according to the
report, some of the nation`s biggest banks and private equity firms are
feeding the growth in subprime auto loans by investing in lenders and money
available for the loans.

Like the mortgage crisis, many of the subprime loans are bundled and sold
as securities. Now, stay with me, because this part is where it gets
especially complicated but a whole special important to understand.

A new article by "the New Yorker Yorker`s" John Lancaster explains, how
about process work with mortgages? The bank that initially made the loan
no longer gets the revenue from its lending. Instead, that money it flows
to the people who bought the mortgage-backed securities and the institution
that lent the money no longer cares whether the borrower will be able to
pay it back. The basic premise as banking that you lend money only to
people who can repay it has been undermined.

So, if you`ve been asking why would a lender make a loan that can`t be paid
back, doesn`t that mean they lose the money? Well, the answer may be that
the lender bundled the loan and sold it so they get paid before it
defaults. What happened to the borrower, the person trying to buy the car
in this case, becomes pretty irrelevant. And these subprime loans are
becoming increasingly large as a slice of all U.S. auto loans.

This graph from "The New York Times" shows the level of auto loans since
2006. And you can see the dip during the housing crisis, the subsequent
growth with the number of loans in 2013 higher than in 2006.

That`s good for the economy except when you look at part of the bar that is
shaded darker. Those are subprime loans, and their number has been growing
in past years.

"The New York Times`" investigation found subprime auto lenders are
loosening credit standards and focusing on the riskiest borrowers.
Practices the paper says demonstrate that Wall Street is again taking on
very risky investments just six years after the financial crisis.

So that distinctive new car smell that the used car salesmen spray into
every new vehicle so that you can feel like you got a good deal, well, that
may actually be the foul odor of predatory lending.

Joining me now is David Cay Johnston, contributing editor at "Newsweek,"
and professor at Syracuse College of law and Avik Roy who is a senior
fellow at Manhattan Institute and opinion editor at "Forbes." It is so
nice to have you both here.

AVIK ROY, SENIOR FELLOW, MANHATTAN INSTITUTE: Thanks for having us.

HARRIS-PERRY: OK. So, if we are back in the land potentially of subprime,
let`s go back to the fight that occurred around the crash which is who is
at fault here, bad borrowers or bad lenders?

ROY: I`m say bad lenders. But I would say it goes back further. The
untold story here, the big untold story is the degree to which monetary
policy from the Federal Reserve, Ben Bernanke and Janet Yellen, have driven
the situation. So your "New Yorker" piece that you talk about says why is
Wells Fargo, say, able to package loans and sell them to other investors?
Why would these investors buy these loans knowing that they`re subprime?
The reason is that interest rates are so low, 0.25 percent by the fed, that
if inflation is two percent, as an investor, you`re losing money every year
by sitting on the cash.

HARRIS-PERRY: I feel like what you said to me, and maybe -- so, if I`m
being unfair, but I feel like what you said to me, these poor investors are
basically, you know, starved for profit. Of course they`ve got to make bad
loans in order to get their money back.

ROY: No. Not at all am I saying they are poor. But what I`m saying is
the economic incentives that they`ve been driven to have by the lending
environment, by the interest environment, is driving them to seek higher
risk loans, which is the catalyst of this whole process.

DAVID CAY JOHNSTON, CONTRIBUTING EDITOR, NEWSWEEK: And Avik, that`s where
I would agree that you`re right about the effort to see higher loans. But
let`s remember. Car lending was exempt from the consumer protection acts.
And what we`re seeing here is the (INAUDIBLE), the junk bond guy who
destroyed all sorts of great companies and built a few good new ones. And
that is if you can borrow money at as little as a quarter percent,
typically more like three, and lend to people at 23 and 30, that is a very
good business to be in no matter what. And notice people are typically
being charged twice the actual value of the car.

I told about a woman this happened to in my book, "Free Lunch." And
interest rates are often much higher, and it`s now over 60 percent of used
cars are being financed with these kinds of loans. This screams for why we
need to actually have regulation.

HARRIS-PERRY: Right, because -- so I appreciate part of what you`re
saying, is OK, it is an incentive environment, right. And this is part of
your point about regulation. How do we change the incentives in the
environment when we create new regulations? So from my perspective,
raising interest rates, which would further harm buyers, particularly those
trying to get into a housing market where the, you know, each incremental
increase is substantially larger than on an auto loan would be so harmful
for buyers that it would be -- it would be bad for the economy even if it
would yield more for investors.

ROY: So I look at the exact opposite way.

HARRIS-PERRY: OK.

ROY: So when we have low interest rates, what we`re doing is encouraging
people to borrow money, perhaps more than they need to or more than their
means. But that that`s doing is driving up, as you said, in the mortgage
market, it demand for gigantic mortgages for mega houses, driving up demand
for housing supply. But the housing supplies prices, what does that do?
Housing prices are more expensive. It becomes more expensive to buy a home
and more expensive to rent a home.

HARRIS-PERRY: But that hasn`t been what`s happening in housing.

ROY: The housing market has been very strict.

JOHNSTON: But that`s because the housing market is also, as American
banker and others have shown, being manipulated. There`s a lot of
withholding on the market. And you know, in most cities like New York, you
can`t withhold apartments because it artificially inflates prices.

There`s a great deal of game playing going on because of the regulation.
It`s not like we don`t know how to regulate banks, right? You know, I
teach the law of the ancient world. We`ve been regulating banks and
banking for 4,000 years. It`s only somehow in the last 30 that we`ve
gotten an idea that, these people know, they know what they`re doing. We
don`t need to regulate them. Yes, we do.

ROY: I don`t think it`s than --

JOHNSTON: But not in a way that`s meaningful to protect the interest of
the vast minority of Americans. That`s the problem. You know, don`t have
the right regulation.

HARRIS-PERRY: Right. And the particular on the question of cars, it seems
to me that this question of consumer protection. In part because, you
know, I get the argument that might say, well, everyone needs a home to
live in, but not everybody needs a car. So if you can`t afford it, just
don`t buy one. But when we look at the realities of people being,
particularly of poor people being pushed further and farther away from
where jobs are and a public infrastructure that is simply insufficient for
moving workers to their jobs, I mean, don`t cars become almost as
necessity? And couldn`t we massively envelope in public infrastructure?

JOHNSTON: Well, you know, a lot of poor people in Washington, D.C. could
go to work on transit except metro doesn`t open 6:00 in the morning until
5:30, so office for (INAUDIBLE). But people who need to be to work at 5:30
or 6:00, they can`t. Now, these are government policies that we could
change and be more efficient.

But in this car loan business, you know, there`s enormous profit here. You
take a $10,000 car, you sell it to someone who doesn`t know the real value
because they`re not sophisticated for 20, you charge $23 percent interest.
And Wells Fargo, a Warren Buffett bank to this, a leader in this field,
they told the woman I wrote about, we`re going to take your house. She was
a homeowner. If you don`t pay all this money, we`re going to take your
house.

HARRIS-PERRY: In fact, hold on. We don`t have a lot of time. But I do
want to listen real quickly just so that we don`t miss this that there are
real people involved. I want to listen to Jonathan and Marceline
(INAUDIBLE) who purchased a car with a subprime loan who in "The New York
Times" were featured. I want to take a quick listen to them.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We had received a flyer in the mail talking about you
are approved for a loan.

UNIDENTIFIED FEMALE: All I would have to do is basically show up, pick
what car I wanted, and then be able to get a loan regardless of the fact if
I went bankrupt or not. I know that when you take out loans and you pay
off the loans on time, it does make you build your credit faster. I`d be
able to maybe buy a house one day. That`s what I was thinking.

(END VIDEO CLIP)

HARRIS-PERRY: So I just -- I wanted to hear from them as we go out. Both
of you, stick with me. We`ve got much more on the economy, on labor, on
real people, including also on Congressman Paul Ryan`s poverty plan this
morning.

But first, the latest on the American with Ebola being treated in the
United States and that update is next.

(COMMERCIAL BREAK)

HARRIS-PERRY: This morning, the treatment continues in a special isolation
room at Emory University hospital for the first of two American aid workers
infected with the Ebola virus. Yesterday, while this program was on, a
plane carrying Dr. Kent Brantly landed at Dobbins air reserve base near
Atlanta, Georgia. And from there, Dr. Brantly was quickly transported to
Emory University hospital. One of four facilities in the U.S. equipped to
handle the risks associated with treating and containing the deadly virus.

As this video shows, Dr. Brantly climbed out of the back of the ambulance
with some assistance. Then incredibly, walked himself in to the hospital.
He and his guide were covered head to toe in hooded bio-contaminant suits.
And the 33-year-old doctor is the first known Ebola patient to have ever
set foot in the United States or eastern the western hemisphere.

The other infected aid worker, missionary Nancy Wirtebol is expected to
arrive at the same facility for treatment within the next few days.

In western Africa, the situation continues to deteriorate with the deadly
virus now claiming the lives of at least 729 people and hundreds more still
infected.

After the break, labor had a big, big win this week.

(COMMERCIAL BREAK)

HARRIS-PERRY: The labor movement received a big boost Tuesday when the
National Labor Relations Board ruled that McDonald`s has a joint employer
of the worker at its franchise operations.

If the ruling holds, McDonald`s would be liable for labor and wage
violations, and this could make it easier for fast food workers to unionize
nationwide. This ruling comes after the NLRB invested charges that
franchisees and McDonald`s violated the rights of employees as a result of
employee participation in protests against the company.

The general counsel of the NLRB released the following statement about
their investigation. "The National Labor Relations Board Office of the
general counsel has had 181 cases involving McDonald`s filed since
November, 2012. Of those cases, 68 were found to have no merit, 64 cases
are currently pending investigation, and 43 cases have been found to have
merit."

McDonald`s was not happy with the decision and is determined it fight. In
an email to CNBC, the McDonald`s corporations had his say.

McDonald`s will contest this allegation in the appropriate forum.
McDonald`s also believe that this decision changes the rules for thousands
of small businesses and goes against decades of established law regarding
the franchise model in the United States.

Back at the table, David Cay Johnston, contributing editor at "Newsweek"
and professor at Syracuse University college of law and Avik Roy, senior
fellow at the Manhattan Institute and opinion editor at "Forbes." And now
joining us, Peter Suderman, senior editor at "Reason" magazine and
reason.com and the Michel Martin, a host at NPR who is current -- is part
of the identity and culture unit.

It is so nice to have you all here.

So David, is labor back with this ruling?

JOHNSTON: Well, this isn`t so much a ruling as an accusation under labor
laws. The technical term is charge, but that suggests criminal, and it`s
not. But this is very important. The laws we have on this were written in
the `30s for industrial corporations. We haven`t updated them for the
franchise model. McDonald`s exerts fantastic control over every
franchisee. And the suggestion that they are not deeply involved in every
aspect including the wages because of their influence over everything else
I think won`t stand up to scrutiny. But this is going to be fought for
years. And what we really need is to update our labor laws.

HARRIS-PERRY: So speaking of which, is McDonald`s right, though, that this
suddenly challenges the notion of the franchise model? Or is it really
just about this model that is a McDonald`s one that says, alright, you`re a
franchisee, but you have to use this kind of ketchup, these kinds of -- I
mean, there`s different ways to franchise, some of which have relatively
more flexibility versus less.

PETER SUDERMAN, SENIOR EDITOR, REASON MAGAZINE: I think it`s too soon to
know exactly what the implications of this are going to be. We don`t have
a huge amount of details from the NLRB on this yet. But I think it`s
potentially a big blow to the franchise model in the United States. And I
think that that is a real problem for small business owners and in
particular for minorities and immigrant because minorities and immigrant
actually own franchises at a much higher rate than they own other type of
businesses.

And so, this is a key pathway to entrepreneurship, to ownership, for
minorities and immigrants, and that`s -- if you take that away and you make
it harder for them to get franchises or the franchise model goes away
entirely, what you end up doing is putting more -- more power in the hands
of a big corporation in the hands of these corporate units rather than
these small business owners.

HARRIS-PERRY: So I appreciate the point here about the ways in which -- I
mean, for example, the McDonald`s black owners and franchisee associations
is one of the strongest kind of, you know, small business ownership around.
I actually do appreciate that as part of what`s important about
franchising.

But I guess, Michel, I`m surprised to think that paying a living wage would
necessarily mean a -- a corporatization -- the power among corporations
would be increasingly in just a few -- I mean, we`re talking about
McDonald`s here.

MICHEL MARTIN, NPR HOST: Did anybody else work at McDonald`s? Does
anybody else here work at McDonald`s?

HARRIS-PERRY: I was a domino`s driver.

MARTIN: I worked at McDonald`s in college.

UNIDENTIFIED MALE: I had family members who did.

MARTIN: I worked at McDonald`s in college. I closed and you got -- I just
let you how long ago this was, you got five cents an hour more depending on
how many skills that you acquired. So if you learned how to shake machine
then you would get five cents an hour. If you closed the store, you got
five cents an hour additional. I thought I would have some real-world
experience with this.

Both of are you right from my experience with working at McDonald`s. At
the company, you know, you`re taught how to do everything. And it is a lot
like the military. I mean, people say why are -- why is the military the
most successfully integrated institution in the society, it`s because they
don`t keep it a secret how you succeed. I mean, everything is laid out for
you to make it sort very clear.

But I also think your point is right. And I`d like to make a broader
point. The political right in this country is very uninterested in the
dignity of persons. Unfortunately, I mean, they`re very uninterested it
seems in the dignity of persons in this country, they`re interested in the
dignity of persons overseas, it seems, when they are people that they
relate to. But they`re not very interested in the dig nut of persons here,
which is why they`re indifferent to issues like racial profiling.

But it seems to me that the political left in this country is indifferent
to the desire of people to acquire wealth. And the fact of the matter is
before the recession took hold, the groups that had the fastest rate of
business formation were, Melissa, as you know, because it`s something you
reported on, minorities and minority women in particular.

HARRIS-PERRY: Right. In part because you were so far down that the
steepness of that curve --

MARTIN: It`s true. But the political left needs to understand that people
don`t just want to survive, they want to thrive. And they need to develop
a language of understanding about the acquisition wealth. So why is it that
people are so concerned about this kind of mega billionaires so their
influence over communication networks? Since there`s no counter-veil in
force. So it seems to me that the political left needs to get serious
about the fact that people want to acquire wealth. And a lot of people who
want to and need to acquire wealth are people who are newcomers to the
wealth. That`s what needs to be sorted out.

HARRIS-PERRY: OK. So part of what you did of remind us that within a
world, global community. And so, part of what I`m interested in is given
that McDonald`s is an international corporation that deals with different
kind of labor laws and practices, how does McDonald`s operate, for example,
in nations like Paris, France, God help me, my in-laws recently had
McDonald`s in Paris. It is horrifying. But yes, how do they manage it
where there are very different labor laws?

ROY: This is a great point. So, if you go to a Subway or McDonald`s in
Europe, you will find that it cost twice as much, three times much, because
the labor laws are much more have been regulated the way to so much more
heavenly mandated. And we talk about the concerns about the small
businesses owners, the small businesses owners, the dignity of people.
What about the people who work there?

Well, the unemployment rate in this country is three times higher. It is
9.8 percent for people who haven`t finished high school compared to 3.1
percent for people with a college degree. And these jobs are a gateway for
those individuals. And so, if you shut down these franchises, because that
is going to happen, a lot of franchises will close. Not only -- they
absolutely will.

JOHNSTON: No, they won`t.

(CROSSTALK)

HARRIS-PERRY: I want to take a break but I want to come back on exactly
this. I want to ask this question when we come back, does -- if this were
to move forward and you had unionization of fast food workers, would in
fact franchises begin close, and what would the impact be, when we come
back.

(COMMERCIAL BREAK)

HARRIS-PERRY: And we are back in trying to figure out if my in-laws are
going to freak out because all of the McDonald`s will close.

So let`s say, go ahead and have this fight. So let`s say -- let`s go all
the way out with NLRB. Let`s say that there is a ruling, let`s say that we
end up at fast food workers able to unionize, and let`s say they push for a
$15 wage. How many McDonald`s franchises are closing, and why do you say
that`s unlikely to happen?

ROY: So first of all, I don`t think it will be upheld in the courts
because we do have 32 years of presence, both in the judicial system and in
NLRB`s owned rulings in the past, in the 1980s that suggest the franchise
model does work. These franchisees, they do actually hire and fire people.
They actually determine what the wage is, McDonald`s headquarters and --

HARRIS-PERRY: Sure. But I`m asking for the thought experiment.

(CROSSTALK)

ROY: So basically what all the evidence shows is that when you increase
wage, you mandate increased wages, you have unionization, what happens?
Two things happen. One, the costs of the goods and services provided goes
up, so that is one of mean which costs factor down. The other thing is you
actually hire less people, you have less franchise. The combination of
cost increases and less --

HARRIS-PERRY: There`s actually great deal of research showing quite the
opposite, David. That when wages go up, these are stimulative for --

JOHNSTON: That`s right. There`s a study of matched counties. This state
this state border each other, higher wage, no higher wage. Guess what?
There`s throw damage we can find empirically whatsoever. Prices adjust.
Nobody`s going from $7.25 an hour to $15 an hour overnight. You are going
to do that in state, just prices will adjust to that.

UNIDENTIFIED MALE: Adjust means it will go higher.

JOHNSTON: That`s right.

UNIDENTIFIED MALE: The cost of shopping --

JOHNSTON: You`re not going to be paying $14 for a hamburger at McDonald`s.
You are going to pay a marginally increased amount of money. Workers will
have more money. They will demand fewer government services. They will be
able to build better lives. And you know, the question is, well, if we
don`t believe in having a minimum wage for standards, we have standards for
airplane safety and for traffic car -- for car safety and food safety, but
not wages?

HARRIS-PERRY: And isn`t this true that for those who want smaller
government, the point that David`s making, that in fact, people who are
working at McDonald`s, at Walmart, at a variety of these low wage jobs
especially on tip minimum are in circumstances where they are making use of
SNAP of section 8, a various government programs because they simply cannot
fill. So, isn`t it much better to earn it as wages?

SUDERMAN: All else being equal, yes. It is better to earn as wages. But
I would say about higher prices, specifically with McDonald`s is that if
you listen to what they have been telling their investors and the
conversation that corporate has been having with investors over the last
couple of years, they have been struggling to move their customer base off
the dollar menu, off the dollar menu. That means people cannot afford to
pay more than just a couple of dollars for food. And so, so very marginal
--

HARRIS-PERRY: But that`s because of minimum wage. I mean, aren`t these
things -- if you -- I mean, this -- I life that you said that, right?
Because if in fact you are a fast food restaurant for people who make
minimum wage, then an increase in the minimum wage actually means the sale
of your more expensive partnership, $3 products instead of your $1
products, that is precisely why it is stimulative to have a higher minimum
wage.

ROY: Here the crux of the problem. We`re talking nonstop about wages.
We`re not talking about the cost of living. And that`s the other part of
the equation. You can actually do thing to make it less expensive to buy
food, less expensive to buy clothes, less expensive to put a roof over your
head. And all those things are going up, all those costs are going up
because of government policies.

HARRIS-PERRY: You`re acting like there`s no --

ROY: But to reduce the cost of living --

HARRIS-PERRY: No, but the easier solution is to reduce the amount of
profit being earned at these uber rate by this very --

JOHNSTON: So I don`t want to lower profit if (INAUDIBLE). They shouldn`t
earn it by having lower wages --

HARRIS-PERRY: OK, I got you. Yes. I`m just saying there`s a cushion that
exists. We`re behaving as though there`s a fixed pie, right? But the fact
is there`s already a cushion that exists because of these enormous --

JOHNSTON: There are fast fad operators who pay a lot higher wages and do
just fine.

MARTIN: Let me bring up something about Paul Ryan`s budget proposal. And
part of his argument is to increase the earned income tax credit and to
extend to people, to other groups of people. That`s another way to address
the same problem because I mean, I know he wouldn`t like this term, but
socializes the cost of elevating people`s wages by distributing the cost of
elevating people`s wages across the labor pool, that system.

And so, that is -- those are the only policy choices out there is either
the minimum wage and keeping people at the low wages. You can do that.

HARRIS-PERRY: And Michel Martin just brought us where exactly we are going
after the break which is to Congressman Paul Ryan`s plan and the ways in
which empirically it is socialist? No. But it is very interesting when we
come back.

(COMMERCIAL BREAK)

HARRIS-PERRY: Congressman Paul Ryan is touting his recently released anti-
poverty proposal that he thinks will help alleviate poverty in America.
The proposal has an ambitious title, "expanding opportunity in America."
And it would consolidate funding or what Ryan termed streamlined support
for 11 federal programs including the supplemental nutrition assistance
program or SNAP, temporary aid for families -- for needy family, section 8
rental assistance, and the childcare development fund.

The core part of Ryan`s plan is something called the opportunity grant.
States that opt in receive a single block of aid that they can determine
how to use to tackle poverty. But Congressman Ryan insists it`s not a
traditional block grant which gives all the money to the states to oversee
and use at their discretion.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), HOUSE BUDGET COMMITTEE CHAIRMAN: The biggest policy
is what we call the opportunity grant. The opportunity grant gives states
the ability to conduct innovative reforms and ways to getting people from
welfare to work. It consolidates up to 11 programs into a single funding
stream. It`s not just a loose string block grant. The states have to do a
few things.

(END VIDEO CLIP)

HARRIS-PERRY: Now, block grants are nothing new. They`ve been around
since the 1960s. Back in 1996, Congress and then president Bill Clinton
changed the aid to families with dependent children, AFDC, in to block
grants instead of keeping it a federal-state partnership, it was made
special the current temporary assistance for needy families program and was
given to states as the block grant. And while block grants may offer a
certain level of flexibility for state, there`s also the understandable
concern on how to ensure accountability for spending and outcomes.

So this proposal, let`s just start with the likelihood that it ever become
law. You were saying about NLRB, any sense about whether or not this
actually becomes the things that governs how social welfares and the safety
net is addressed?

SUDERMAN: Ryan`s plan is framed as a discussion draft. There`s no budget
numbers. And it`s an attempt to get away from discussion about budget
numbers and reframe the conversation, especially on the right about how to
reform poverty programs and government aid programs.

And I don`t think that this draft in -- or something that looks exactly
like this is ever going to become law. But what we have seen with Paul
Ryan is that he`s a policy entrepreneur. On the right, he is somebody who
can take the Republican Party and move the party. He did this with
Medicare. He`s done this with his other budget plans. And so, this is, I
think, an interesting effort to --not just to reframe the conversation
overall, but also to move his own party from thinking about how can we cut
spending on everything to how can we make our spending better. How can we
serve people better? How can we serve better?

HARRIS-PERRY: So, I actually really get the devolution from the federal
government to the state government as making sense within the context of
what I think of as American conservatism. What I don`t get is the part of
the plane where he sort of imagines these individually tailored life plans.
By life coach, I`m presuming these social worker, right, someone who is
going to make this contract within the average person and they are going to
have benchmarks, and they are going to have to determine sort of, you know,
when they meet these goals. That, David, sounds like a huge government
program. I mean, maybe that`s where the jobs will come from. They will
hire poor people to be their own life coaches? I`m not sure.

JOHNSTON: Talk about infringing on your individual liberty here and the
underlying notion. I mean, I`m having a terrible time just reconciling
Paul Ryan`s budget plan over here and this effort to refrain. But the one
thing that occurs to me is block grants, I read about a block grant once
that was to help poor people. It built a Hyatt hotel. That`s what`s going
to happen if we have this freedom to innovate. It`s going to be distorted.
And so, this is -- he also is proposing --

HARRIS-PERRY: We`ve seen it happen with the ACA. I mean, it becomes so --
disport sudden one word, the other word is politicized, right? That the
question of the choices that are made are not may fundamentally based on
some sort of dispassionate policy analysis, right? They`re made by people
who are elected officials who are --

MARTIN: Right. But politics is the means by which government happens. So
that`s --

HARRIS-PERRY: Or stops happening.

MARTIN: But I would also like to say that why can`t we just talk about the
ideas for a minute? Because part of the thing that I think most people
decry about, you know, politics is today is it seems very small and that
there are no ideas and that we will of everybody`s kind of looking toward
the next election. It is like looking toward the next quarterly profits.

So today`s crazy idea becomes tomorrow`s policy like electric cars or
alternative fuels. So it seems to me it behooves people who have very
disappointed with the state of the politics who today people do offer ideas
to at least consider those ideas, seriously. And one of the things that I
found -- I mean, I agree with you about block grants. This is like -- I
remember when I started covering, you know, politics like block grants. It
was like the first thing that I covered. So this is old school
Reaganomics. But it is not that.

But the idea of reducing the paperwork burden on individuals is something
that I think is important to consider. Because I think the political right
is very -- you know, is very obsessed with reducing the paperwork burden on
businesses. But seems to be uninterested in the paperwork burden on
individuals --

HARRIS-PERRY: The burden on poor people, though --

MARTIN: But the idea is one that has to be addressed because nobody talks
about it. I mean, the idea that people want you to get fingerprinted and
want you to take a urine test to get food stamps, I mean, when middle-class
people are out of food or -- they run in to a difficult -- their neighbors
bring them food. That`s what happens.

I mean, middle class people that once they need, they get short at the end
of the month. They access a personal credit line or something like that,
or you have no money. And so, the idea of reducing the paperwork burden on
individuals is important to even to consider.

HARRIS-PERRY: But what the proposal does, I just want to be clear, though,
what the proposal does is aim to set up a set of standards by which poor
people will be held accountable to a set of things. And, in fact, middle-
class people are not. So, it is both true that there`s a safety net that
exist for the middle class in friendship networks and work relationships
that don`t exist for poor people. But it is also true that middle class
people are not -- in order to take your mortgage interest deduction, you
don`t have to prove that your kid graduated from high school, right? Like
your kid can be failing in school and you still get your mortgage interest
deduction which is a huge transfer to the middle class.

MARTIN: When you pointed out the ACA, I mean, this is also the same
political movement that didn`t want to allow doctor to discuss people`s
end-of-life plans with them. So, there`s that sort piece of it. So, I
credit your point on this. But the idea of allowing people the
opportunity, you know, to get access to these things in a more efficient
way is something that needs to be considered because nobody ever talks
about process. People talk about the big ideas. They don`t talk to so
much --

JOHNSTON: So Michel, why don`t we talk about the Nixon`s idea and hand
poor people cash? It turns out that`s a very effective and useful method.

ROY: The earned income tax credit does that. And so I think that`s --

JOHNSTON: You have to qualify for it.

ROY: The Paul Ryan plan actually expands, significantly expands, the
earned income tax credit. And more fundamentally, to get back again to the
macro, what`s Paul Ryan trying to do here, he is trying to say the debate
we have been having on the left and right, spend more money, spend less
money on these projects. We spend $900 billion a year on means tests on
anti-poverty program.

Let`s not have the debate. Let`s say we`re going to spend the same pot of
money, but let`s figure out how to spend it better. And that`s a
discussion that in theory should be less ideological. And we can just
start saying which programs work, which programs don`t work?

JOHNSTON: We don`t spend $900 billion on Social Security and Medicare --

ROY: But you know, I mean, and I think that`s what he`s trying to do. To
your point about how this is going to evolve in the future, this is the
first inning. I think what you are going to see is a healthy debate on the
right for the next couple of years on how to put this forward, what`s going
to work, what`s not going to work, the presidential primary --

HARRIS-PERRY: I would actually claim that it`s not the first inning. That
in fact this is -- maybe this is --

JOHNSTON: Overtime?

HARRIS-PERRY: Right. We have actually been having -- that said.

Thank you to David Cay Johnston and to Avik Roy. Peter is coming back in
our next hour.

But first, as working moms, Michel and I have a few things to discuss and
that is next.

(COMMERCIAL BREAK)

HARRIS-PERRY: For seven years, journalist Michel Martin has hosted
National Public Radio`s daily show, "Tell me More." Martin is gripping yet
relatable commentary offers clear eye examinations of difficult,
controversial, and pressing issues that shape our lives and our world.

I have long regarded her as an exemplar after which I model my own work.
"Tell Me More" may have aired the last episode on Friday, but Michel Martin
has more to tell us. She has shared some of those thoughts in the
"National Journal Essay" published July 26th.

In her article, "what I`ve left unsaid," Martin explores experiences women
of color have when trying to balance work and family. Amen. Motivated by
Anne Marie Slaughter`s 2012 essay "why women still can`t have it all,"
Martin tackles the unique complications women of color face in the elusive
effort to have it all.

And Martin draws on her personal narrative of managing career and children
and goes further, also exploring the struggles of women like Shanesha
Taylor, a homeless mother arrested after leaving two of her kids in the car
during a job interview. Women like Deborah Horell (ph), a South Carolina
mom arrested for letting her 9-year-old play alone in the park while she
completed her shift at McDonald`s.

In classic Martin style, the piece allows read force give context to their
own lives and forces them to move beyond the personal and grapple with the
political. Here to tell us more is Michel Martin. Nice to have you here.

MARTIN: Melissa, thank you. You`re going to make me cry.

HARRIS-PERRY: Well, I mean, I feel a little bit like I want to cry knowing
that I won`t have you on a daily basis anymore to listen to. And it seems
to me that so much of what you did on that show and in doing the piece, as
well, is to make us listen to voices we typically wouldn`t listen to.

MARTIN: Well, Thank you for that because that`s absolutely right. I`m
also to draw connections. I mean, to draw connection. I mean, I am not
one of these sort of people who buys into the 18th century enlightenment
can sit that if we all had the same facts we`d come to the same
conclusions. I think we know that`s not true.

But I try to kind of draw connections to people who may not have considered
the ways in which their lives -- you know, the struggles that they have and
how they`re connected to other people`s struggles, but also how they`re
different and to consider those things. I mean, I said that, you know, on
one of my colleagues that this is I`m not trying to be too, you know,
grand, but this is my letter from Birmingham jail. I`m trying to talk to
colleagues who, you know, we all meet up at Starbucks in the morning, but
they don`t understand what brought me to that place and where I`m going
after I leave and not just that, but all these other people. And that`s
kind of connection I`m trying to draw.

HARRIS-PERRY: I had such an amen moment on this question about connection
in your piece when you write, it`s been my observation that minorities are
more likely than whites to be involved with or take financial
responsibility for people other their own children and parents, if the
children have siblings or even close friends of their own children. Such
support can include everything from buying school supplies or paying for
tutoring to actually raising a child for an extended period of time.

I mean, I was like, yes and amen, indeed. Because that notion that we are
-- we find ourselves in communities are so under resourced means that we`re
spending individual household resources in ways both time, energy, money,
and love. That may not -- may be invisible to others.

MARTIN: It is. This is one of the reasons that I was so glad to have the
opportunity to have this piece. But also why I`m really grateful for
scholars like yourself who are bringing these issues to the floor and using
language that other people could understand like whole kinship circles.

For example, I saw a piece the other day which is, you know, online
publication where somebody actually gave language to this which I had never
heard before. It was kinship service.

This is a fact and I understand that. But this is where policy loops in to
it because a lot of times our workplace policies -- people don`t understand
what we are doing. I had -- colleague who was very involved in the raising
of her nephew. But you know, does FMLA cover when you have to leave at
3:00 to go pick up a nephew? Do people understand what you are doing?
When you say, well, you know, I`ve had people write to me and say, you
know, I am behind in my career because I`m taking care two of elderly
aunts. And there is no other family to do this. But that`s what I`m
doing. And so, can I get recognition for that? I also think this is an
issue --

HARRIS-PERRY: What about when the aunt isn`t really your aunt? It`s your
mom`s best friend who`s been your aunt your whole -- and you`re right.
That policy doesn`t cover that. But that is -- those are the realities of
life.

MARTIN: Like I think you covered this on your show, the woman in Kelly
(INAUDIBLE) in Ohio who was arrested and sent to jail for selling her child
to school in the district that she wasn`t -- they said she was not allowed
to go to. Well, the children live with her father, their grandfather. He
considered himself and she considered him a co-parent. And they resided
with him. And yet, she was prosecuted for this for sending her children to
school in the district where he lived. And I also note in that case
because I talked to the school superintendent in that case, that there were
some 30-some people who were similarly investigated. The majority of whom
were white and Asian. She was the only one prosecuted which brings me to
another aspect of the piece that I wanted to point out. The fact that the
relationships that a lot of us have with institutions like law enforcement
can be very different. And so you need to pay attention to that.

HARRIS-PERRY: It seems to me that in your work, in your writing, you have
a very clear eyed focus on finding solutions. And it`s not just about -- I
mean, you have the barber shop, but you don`t let the guys who come from
the barber shop and complain about, right? So this piece isn`t -- man,
it`s so hard for us brown girls to balance it.

MARTIN: Thank you for saying that because I wanted to be clear. As I said
in the piece, I`m not, you know, we`re not -- I`m not looking for pity.

HARRIS-PERRY: No, no.

MARTIN: And guilt is not interesting to me because I don`t have that it
achieves anything.

HARRIS-PERRY: Just the complications. So how would you begin imagining --
how does rendering these complicated kinship networks for example visible
help us to make better policy?

MARTIN: This is where -- you know, in our previous segment, you know,
talking to the other gentlemen, this is where I`d like us to be free in our
imaging. I mean, the test of some of these issues, like for example for
me, the test of Paul Ryan`s seriousness about his budget proposal will be
does he find a peace partner. Does he find somebody on the progressive
left who shares his vision about re-imaging some of this progress, and is
he willing to work with those people.

So this is why I really believe in diverse panels. This is why I believe
in diversity broadly defined. Because that kind of -- that`s what it
requires to move forward on these issues. And I -- and it requires people
to re-imagine some of these issues in places where we get stuck. So that`s
the -- the first thing.

I just want to be clear. I don`t, you know, write this piece. And I`m not
buying in to a particular strategy or solution. I think there are
strategies on the left and right. But what I don`t like is the silence. I
don`t like the fact that we can pretend that the issue don`t exist or that
we are blind to them or work ourselves into grooves around these issues
where we don`t acknowledge the world as it`s really lived.

I mean, I was grateful to have the opportunity to write this piece because
I go to forum after forum. And just like I`m grateful for Anne-Marie
Slaughter writing her piece, but all the conversation was about, well, how
can I get my promotion, how can my daughter get what she want, how can I
get what I want when the whole point of the conversation is -- how can we
get more of what all of us want.

HARRIS-PERRY: And you know, I think you have laid a challenge at the
Nerdland table which doesn`t happen often. But I feel like we`ll have to
go back and revisit Mr. Ryan`s plan, totally free of the politics. Just
think about -- because if I don`t like the ideas, ought to be able to say
what it is about the ideas that I don`t like as opposed to just the
politics.

MARTIN: You`re in the ideas business. Go get it.

HARRIS-PERRY: Yes, I love that. Michel Martin, thank you so much for
joining us.

MARTIN: Thank you.

HARRIS-PERRY: And coming up, Attorney General Eric Holder says we`re at a
watershed. Why he is pushing harder than ever and who some of his most
unlikely allies are

There is more Nerdland at the top of the hour.

(COMMERCIAL BREAK)

HARRIS-PERRY: Welcome back. I am Melissa Harris-Perry. We are at a
watershed in the debate over how to reform our sentencing laws. That was
what Attorney General Eric Holder said Friday to a gathering of criminal
defense lawyers in Philadelphia. Progress has been made in Holder`s and
others` efforts to reform the practices that disproportionately incarcerate
people of color and keep American prisons overcrowded.

Just two weeks ago, the United States sentencing commission agreed that
judges should be able to retroactively apply new, more lenient sentencing
guidelines to those already in prison on drug-related charge. 46,000
prisoners could be eligible to have their sentences reviewed. And, efforts
are underway throughout the states to reduce prison populations. Not least
of all because of the tightness of state budgets, but also stemming from a
growing recognition that incarceration does not necessarily lead to less
crime.

But, Friday, holder warned against one of the newer tools some states are
experimenting with using data-driven risk assessments to try to calculate
the likelihood that a person will commit another crime in the future. The
higher the risk, the longer the prison sentence. As you can imagine,
sentencing defendants based on the statistical likelihood that they may
commit another crime at some point the future raises some red flags.

Attorney General Holder said, quote, "By basing sentencing decisions on
static factors and immutable characteristics like the defendant`s education
level, socio-economic background or neighborhood, it may exacerbate
unwarranted and unjust disparities that are already far too common in our
criminal justice system and in our society."

With me at the table is Ari Melber, Co-Host of MSNBC`s "The Cycle," and
also a lawyer; Reverend Vivian Nexon, Executive Director of the College and
Community Fellowship and co-founder of the Education Inside Out Coalition
and Peter Suderman, who is Senior Editor at "Reason" Magazine and
reason.com. It is nice to have you all with us.

ARI MELBER, MSNBC CO-HOST OF "THE CYCLE": Good morning.

HARRIS-PERRY: All right, Ari, you have been thinking about these questions
for a long time, but certainly quite explicitly in your public work
recently. Is Holder on to something about the problems posed by large data
as a basis for sentencing on the front end of the process?

MELBER: I think he is. And, he took pains in that speech to talk about
the fact that a lot of data in policy in other fields can be used really
well, money ball kind of stuff that we all say, "OK. Yes, you can use
numbers and see larger patterns. The point he makes that I think is so
valid here is that whenever we learn about larger patterns in criminology,
we have a system that has to value each individual`s situation.

HARRIS-PERRY: Yes.

MELBER: And, the idea that we are going to focus on a pattern of potential
re-offense to actually deny someone their liberty under due process of law
is highly problematic. We do not generally do pre-crime in the U.S. for
good reason. We leave that to Tom Cruise and "Minority Report" because it
is scary and so unjust.

There was one exception to that, which is under American law in the
particular area of child sexual abuse and pedophilia, which even still from
a justice perspective can be controversial, but there is sort of extended
time there. And, that is something special for preying on children. But,
we generally say in most crimes you should be judged for what you did, and
not what you may do.

HARRIS-PERRY: Which is why the Attorney General then made a distinction
between data-driven assessment at the front end of the sentencing about, as
he said, immutable characteristics versus data-driven assessment at the
back end around parole and probation where you look at actual behaviors and
when you say, "Oh, this person while in jail received their GED while
incarcerated made these 10 steps towards sort of demonstrating their good
citizenship within the incarcerated community and we know that people who
do that have a tendency to not recidivate, right? That is a very different
way of using those data predictions.

REV. VIVIAN NEXON, COLLEGE AND COMMUNITY FELLOWSHIP EXECUTIVE DIRECTOR: It
is a different way of using those data predictions, but it is also up it`s
flawed because not everybody who is incarcerated has equal access to
opportunities as well. For instance, women in general have less access to
programs inside of prison than men.

HARRIS-PERRY: So, not completing the program may not be because you just
refuse --

NEXON: It may not be available to you.

HARRIS-PERRY: Right.

NEXON: And, in addition, one of those data factors as widely considered
during parole hearings is the nature of the crime, which is something that
the individual can never change.

HARRIS-PERRY: Yes.

NEXON: I would argue that this whole risk assessment thing is being looked
at backwards. I really want to know, will we ever consider -- what is the
risk to the individual of being released into a community where there are
still 45,000 individual collateral consequences to criminal conviction that
they will have to face upon release.

What is the risk to the individual of being released back into a community
where doing something as mundane as selling loosies on the street, you may
be choked to death. I mean what is the risk to being black in America?
These are the risks that I would like to see us assess as a nation.

HARRIS-PERRY: Well, it is interesting because -- as you asked that
question, as you flipped that, it is very similar to something that Ari
asked. You know, we were just talking about Paul Ryan`s budget and I heard
Michel Martin say, "The question is, can he find a partner on the left."

But, of course, the most interesting partnership now between the right and
left is Rand Paul and Cory Booker, the senators who are thinking about this
question. I want to show a little bit of Ari`s interview, but then I want
to ask you about the responses that we heard from these gentlemen.

(BEGIN VIDEO CLIP)

MELBER: Sen. Paul in your view, is the enforcement of the war on drugs
racist.

SEN. RAND PAUL, (R) KENTUCKY, JUNIOR U.S. SENATOR: Well, I think it has a
racial outcome. It think it is a better way to put it.

MELBER: Do you think it is accidentally racist or explicitly so?

SEN. CORY BOOKER, (D) NEW JERSEY JUNIOR SENATOR: I think you are
complicating this far more than it needs to be. Rand said it very simply.
This has a profound racially disparate impact. And, we need to solve it
using means by which we just take a dumb, broken system, frankly, and make
it work for every American. So, this system is broken. You do not need to
be black or white. You do not need to call it racially intent, racial
impact. You just got to do something about it.

(END VIDEO CLIP)

HARRIS-PERRY: Do you have -- I mean, on the one hand, here is the kind of
libertarian aspect in the liberal aspect finding common ground on the
question of sentencing reform and on drug policy reform. But, there is
still this race piece which - which Rev. Nexon put on the table for us that
still seems difficult for us to tackle.

SUDERMAN: So, the specific proposal that Rand Paul and Cory Booker have
come out with most recently is a proposal to basically say that employers
cannot take into account or do not always have to take into account the
criminal history for individuals.

HARRIS-PERRY: The ban of the box that we have seen in states.

SUDERMAN: And, so, what that does, it institutionalizes forgiveness. That
is something that we do not talk about very much when it comes to policy
and when it comes to politics. We talked about it a lot, personally.
Everybody understands the power of personal forgiveness. It is a big thing
in somebody`s personal life, but systematically and institutionally, it is
incredibly powerful as well. And, especially when it comes to criminal
justice issues, but you will see this in things like bankruptcy.

HARRIS-PERRY: Yes. Is it about forgiveness or is it about paying off
one`s debt?

SUDERMAN: Well, the America has an incredibly forgiving bankruptcy
standard. One of the most forgiving standards in the developed world.
And, if you go to Europe, they think that our standard is crazy because it
basically allows you to go to a judge and say, "I cannot pay this off" and
the judge says, "You cannot? All right, OK."

And, so, what we end up with is a system that forgives people and allows
them to have a fresh start. And, that is something that is hugely powerful
when you apply it systematically. And, that is a big part of what Rand
Paul is looking at.

HARRIS-PERRY: Although, your point that we have forgiving bankruptcy law
and we have, you know, as you point out, 45 -- you know, individual
consequences for having ever been incarcerated. I mean, was their answer -
- the answer both of them gave about race sufficient for you? Because it
certainly felt to me like, well, there is a reason why bankruptcy law is
more forgiving than criminal law.

MELBER: I thought their answer was fascinating, and that they are both
doing more than most members of the senate on this issue.

HARRIS-PERRY: Yes. Absolutely.

MELBER: But, the way, as you saw, they are framing it, is avoiding really
getting into whether it is deliberately racist. My answer is -- I am not
them, but my answer is there are parts of our enforcement of the drug war
that are racist and there are parts that are inadvertently unfair that may
not seek to be racist.

So, on the criminal background check example, we know there are uniform
laws that are applied equally, requiring the people have to say that they
have their rap sheet, right? And, then we know that employers individually
have discriminated based on the information more against African-Americans
than against others.

HARRIS-PERRY: Reverend, I mean, I just want to point out, great data
showing that white men with a criminal record get more interviews and
callbacks for jobs than black men without one. So, stick with us. We got
much more -- I know, the commercial thing we have on this show.

Everyone, hang on. Because of course, we are not going to separate this
issue from the school-to-prison pipeline. We are going to come back. I am
going to have a brief conversation with a mother about her 3-year-old
getting suspended for doing things that other children were simply
reprimanded for. And, then we are going to come to talk to this panel a
little bit more about whether it is just accidentally racist.

(COMMERCIAL BREAK)

HARRIS-PERRY: Our next guest has received a lot of attention for a recent
and quite powerful peace she wrote for the "Washington Post" headlined "My
son has been suspended five times. He is 3." Tunette Powell`s two sons
have been suspended from their preschool a total of eight times this year.

And, their mother has reason to believe it might have to do with race.
Powell wrote, quote, "I blamed myself, my past, and I would have continued
to blame myself had I not taken the boys to a birthday party for one of
J.J`s classmates. One after another, white mothers confessed the trouble
their children have gotten into. Some of the behavior was similar to
J.J`s. Some was much worse. Most startling, none of their children had
been suspended." This is not an isolated incident. It is not a problem of
perception, but a nationwide problem of racial disparity. Here is Attorney
General Eric Holder in March.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: African-American students made up just
under one in five preschoolers enrolled during the 2011-2012 school year.
They accounted for half of all preschool students who faced more than one
out-of-school suspension. It is not acceptable.

(END VIDEO CLIP)

HARRIS-PERRY: Joining me now from Los Angeles is Tunette Powell,
motivational speaker, author, and co-founder of "The Truth Heals," a
nonprofit for women and children affected by fatherlessness. It so nice to
have you this morning.

TUNETTE POWELL, MOTIVATIONAL SPEAKER AND AUTHOR: Thank you for having me.

HARRIS-PERRY: So, I am sure that you have had many reactions as a result
of you telling this story. Tell me what those reactions have been for the
most part.

POWELL: I think that they have been a combination of good and bad. So,
obviously, I have had a lot of people that have been very, very supportive.
I had lots of parents coming out and saying, "You know what? i am going
through the exact same thing, and I do not know where to turn."

But, there have been some people who, you know, have really, really blamed
me and said, "You know? It has nothing to do with race. It is your kids.
You have bad kids." And, lots of things like that. So, that has been the
difficult part.

HARRIS-PERRY: Yes. I completely get sort of how that happened, right?
So, when you are telling an individual story, we have been just talking
about whether or not we should use big data to make decisions. And, so
here you are telling an individual story. The easiest thing to do is to
say this is not about a system. This is just about your kids or your
parenting or your school or your household. What makes you think that it
is related to some bigger phenomenon?

POWELL: Well, the reason why I know that -- because like you read just a
few minutes ago, that is not what I initially thought. I tried to blame
myself. I looked inward. But, at a certain point where you are meeting
other parents who are not African-American, and they are telling you that
they could not believe that they even suspended at the preschool level
because of what their children already had done. It gave me no choice but
to start thinking, well, what is really going on?

HARRIS-PERRY: I do want to point out that we did reach out to the school
for comment but did not hear back from them. Have you had a conversation
with the school, and what are they saying in response to you?

POWELL: I have had several conversations with the school. And, I think
what they did -- they were not looking at the issue in which is what I had
a big problem with. They were more looking at we do not want to call it
suspension. We want to say they took a break. Well, these are when they
were sent home for one-day suspensions. So, you can call it whatever you
want it.

They were saying, you know -- I was asking them -- "Can you give me the
data on how many suspensions you have had in 2014," and they were never
able to give me that information. I tried to talk to them about what is
their suspension policy because I want people to really think about what we
are saying here. We are saying at 3 and 4 years old, there is a reason for
you to be suspended and sent home at 3 and 4.

HARRIS-PERRY: I want to go to one of the things you talked about in the
piece, which was this -- this sense in your own life and then you wrote
that you feel it beginning to happen in your sons` lives of being labeled
as and then accepting one is self as bad. That you are bad, that you are
problematic, that you are troubled kind of at the core. Is there a way in
which these preschool suspensions are creating that for your boys? And,
how are you trying to counter that as a parent?

POWELL: Absolutely. I mean, it is just as the same things as if you tell
a kid they have a big head or they are going to believe that, right? So,
it is the same thing where when -- especially with my 3-year-old because
every time he entered the school, the next day after being suspended, it
was not a very warming atmosphere. So, they were not saying, "Good
morning." It was, "What are you going to do today? I hope you are going
to have a better day today."

So, he started to feel that and he did not want to go school. So, my kids
at home, they play school. So, for them not to want to be in the school
environment was really disturbing to me. And, I kept, you know,
continuously hearing them. You know, ask about what was going on, and
wondering, you know, why do they even have to go to school? And, then they
started to figure out, that you know what? "If I act bad, I do not have to
go to school." That is what it started to become.

HARRIS-PERRY: Yes. Tunette Powell in Los Angeles, California. Thank you
for sharing your story.

POWELL: Thank you.

HARRIS-PERRY: And, you took me to a core pain place with that big head
comment. I really was -- teased a lot for the size of my head as a child.
Up next, the city with the new controversial curfew plan.

(LAUGHING)

(COMMERCIAL BREAK)

HARRIS-PERRY: We have been back and talking about sentencing reform,
criminal justice system. And in that case, the school-to-prison pipeline
where we hear that mom saying that her experiences that the white children
in school were not being suspended for the same things her children were.
Do we begin criminalizing as early as 3 and 4?

REV. NEXON: I do not think that there is any master plan to criminalize
children at any certain age. I think it is more subtle than that. So, we
have created this world where we have created the idea of the scary black
man, right? So, imagine that the young people going to school to be
educators, somewhere in the back of their mind they have this idea that
black men are more likely to be criminals than other people.

And, they are going in to our school systems, and they are teaching little
black boys. So, very subtly in the back of their minds, they are liable to
look at little black boys a little differently, discipline them a little
differently, be a little more fearful of them. And, that comes out in this
insidious ugly ways that leading to the school-to-prison pipeline, which is
a -- there is many stops along that pipeline starting with failed school
policies beginning with no child left behind.

And, then you have the zero tolerance issues, and then you have police in
the hallways, then you want to segregate students into disciplinary-type
school situations that leads into the juvenile systems and then here you go
with the school-to-prison pipeline. But, it is a lot more insidious than
this master plan to send all 3-year-olds to prison.

HARRIS-PERRY: Right. And, this goes, Ari, to the question that you asked
to send -- it need not be an intentional set of bad racially angst driven
actors. It can be people with good intention, but nonetheless generate
racially disparate outcomes.

MELBER: Right, the policy can be uniform or potentially fair. It can be
applied in a discriminatory way. You are speaking to some of the biases
that some people, not all educators, some may bring to the table. There is
a larger policy framework here as well, which is we now have 10 states in
this country that try children in the adult court system.

The Redeem Act, which you mentioned, showing the interview I did with Rand
Paul and Cory Booker this week, actually we would try to push back on that
which is interesting. There are many democracies around the world that
consider it completely inhumane that we would take children and try them as
adults. And, there is a big reason why we make that separation.

And, then, beyond whether you think that is a good idea, whether you think
it is moral or not, there is the policy implication of taking people
younger and younger and pushing them toward an adult system where they will
clearly be hardened, much less likely to be rehabilitated, much more likely
to have higher recidivism rates, right?

That is just for us. You do not care what is inside the jail. You just
care what is going on in your neighborhood. You are still better off and
probably more secure and more safe if we find a way to treat children as
children and take the chance that they are young and moldable and reform
them rather than throwing them into an adult system, where they will be
more likely to be victims inside the cell, more likely to be preyed upon,
and less likely to rehabilitate.

HARRIS-PERRY: And, when we look at these practices that can be even meant
to be good for kids. So, you know, the city of Baltimore had introduced a
new harsher curfew. A curfew that will, in fact, have young people, 14 to
16, have to be in by 10:00 P.M.

On the one hand, the mayor of Baltimore is saying, look -- who is an
African-American woman herself, saying, "This is to protect our children
from the crime that is in the streets." On the other hand, there is this
high likelihood that you end up criminalizing kids for being out late,
where actually turning a criminal activity from a kind of normal kid
practice.

SUDERMAN: Right. And as part of this, they are setting up these community
centers where there are police officers there kind of keeping watch on the
kids. Look, relative to putting these kids in jail, I will take this any
day, but this is a bad idea. And, it is going to have bad consequences for
-- two in particular. One is that it is going to really mess up relations
between teenagers and cops in the communities because teenagers --

HARRIS-PERRY: Because they are so good now.

SUDERMAN: Well -- yes. Right. But, even more so, teenagers are going
view cops as, "That guy who is going to pick me up just for being out for
not doing anything wrong. I am standing outside on my block. I am not
doing anything wrong at all, and he is going to come pick me up."

The other thing is that it is going to be used by cops as a pretext to pick
up kids who are not doing anything wrong. "That kid looks suspicious,"
whatever that kid is doing. It is going to be used by cops that way. And,
that is going to further exacerbate the bad community relations. And, so
it is a policy that -- yes, relative to putting these kids in jail, will
take it any day, but it is not something that is going to end up being good
for community/cop relations.

HARRIS-PERRY: Is it because we do not know how to use our police force? I
mean, you know, honestly, as we bring up the broken windows policy that we
think contributed to the chokehold and the death of Mr. Garner. As we look
at dropping crime rate and yet aggressive policing in these cities, is it
because we simply do not think we have any alternative for engaging with
one another except through a criminal -- except through a legal system?

REV. NEXON: Well, that is a good question. I think we have got -- come so
far down this road that we cannot remember a time when we have dealt with
each other a different way. I mean -- so, I am thinking about New York
State and North Carolina being the only two states where you still throw
children into the adult system.

And, New York State saying that, "Every 16-year-old is an adult," right?
Where did we cross that line, where we no longer dealt with children as
children? So, I think it is very similar to the question you are asking
where do we cross the line where we no longer dealt each other at one human
being to another human being?

HARRIS-PERRY: I am wondering if those community centers were open
beginning at 9:00 P.M., but it was not police officers that were there,
like -- I am just wondering, do we even think of anything available for our
public use other than our -- than our policing?

MELBER: I would pause that part of it is an idea that there has been a
goal of getting to some sort of perfect security state. It is like when
people say this is an analogy, not the same thing. But when people talk
about terrorism and they say, "Well, we should have zero terrorist
attacks."

Most of the world does not actually look it at that way. They would like
to prevent them all, but they do not have the idea that that what security
encompasses. And, so when you look -- when you mention broken windows and
the idea that Brandon has had here in New York, well you have to go after
the little stuff and that will create the order and make sure the big stuff
does not happen.

What that also means is we are all walking around to your point as
potential criminals. Because if selling a cigarette or jaywalking or
loitering or wearing baggy pants means you can be stopped, that we can be
stopped at any time, and we put discretion at the individual officer over
who gets stopped. And, when that starts to look ugly, then we have to go
back to the original policies at the root and say, "You know what? I do
not want to be stopped and frisked for jaywalking."

SUDERMAN: Yes.

MELBER: And, you know, guess what? Because I am Caucasian, it is unlikely
I ever will be, but it is unfair, period.

HARRIS-PERRY: Thank you to Peter Sudcerman, to Ari and to Vivian -- excuse
me, Ari and Vivian are coming back. I also want to point everyone to Ari
Melber`s online series "Presumed Guilty." You can find it on msnbc.com.
Imagine being sentenced to life in prison without parole at 15 years old
for armed robbery. When we come back , one young man request for a second
chance.

(COMMERCIAL BREAK)


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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