Guests: Anthony Weiner, Dana Milbank, Ed Markey, Matt Taibbi, Craig Scarberry
CENK UYGUR, HOST: We‘ve got an awesome show for you tonight. The Republicans said during the elections it was all about jobs, jobs, jobs. But then they come in and immediately cost us jobs instantly. And they say they don‘t even care. Congressman Anthony Weiner on the Republican hypocrisy straight ahead.
Also tonight, mob mentality. What‘s really going on inside the top Wall Street banks. “Rolling Stone‘s” Matt Taibbi exposes how the feds protect the bankers instead of prosecuting them. You don‘t want to miss that. Matt‘s going to bring it.
Plus, how‘s this for outrageous? The richest oil companies in the world are getting over $40 billion in tax breaks. A group of Democrats want us to do something about it. Congressman Ed Markey‘s among them and he joins me tonight.
And Haley Barbour‘s race problem heats up again. A confederate group in Mississippi wants to honor a Ku Klux Klan leader. Barbour‘s response is creating even more controversy.
Now today, Republicans in the House began the process of trying to slash spending by about 60 billion from the budget. But what happened to one of their central planks of their 2010 campaign?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This election is about work. It‘s about getting people back to work.
JOHN BOEHNER, SPEAKER OF THE HOUSE: Why isn‘t the president focused on creating jobs that the American people are asking for?
UNIDENTIFIED MALE: We are determined to fight for the future of the American people, to create jobs.
UNIDENTIFIED MALE: The number one question in America continues to be, where are the jobs?
BOEHNER: Where are the jobs? Where are the jobs? Where are the jobs? Where are the jobs? Americans are still asking the question, where are the jobs?
(END VIDEO CLIP)
UYGUR: You just saw it right there. In 2010, that is what they pounded home. That‘s what they ran on, where are the jobs? Well, now that John Boehner is the Speaker of the House, he‘s singing a little different tune.
(BEGIN VIDEO CLIP)
BOEHNER: Over the last two years since President Obama has taken office, the federal government has added 200,000 new federal jobs. And if some of those jobs are lost in this, so be it.
(END VIDEO CLIP)
UYGUR: If some of the jobs are lost, so be it? From the guy who ran the campaign on where‘s the jobs?
And by the way, of course, Boehner is wrong about the numbers. The
number of federal jobs President Obama created, according to the Bureau of
Labor Statistics, the net increase in federal employees was 58,000 since
So Boehner was only off by about 142,000. You know why he was off by that? Because he picked the number from his back pocket. He‘s like, oh, I don‘t know, 200,000. They just make it up. It‘s amazing.
A “Washington Post” analysis of employment number from the Office of Management and Budget found that, in fact, in 2010, there were 8.4 federal employees for every 1,000 Americans. Under Bush, there were 9.1 federal workers per 1,000 citizens. Do you know what that means? That means that President Bush had more federal employees per capita. In fact, under President Obama, we‘re seeing the lowest level of federal employees per capita since before 1962.
So, less federal employees per capita, and they call him a socialist anyway. Oh, he‘s adding all these federal employees. It‘s time to cut the jobs. From the guys who ran on jobs.
Now, according to the Center for American Progress, the extreme cuts that the House Republicans want to make will have dire consequences. It‘s not just the federal job, it‘s—first, you‘ve got the direct loss of 650,000 government jobs if their plans go into effect. The Republican plans.
But there‘s also the indirect loss of an additional 325,000 jobs for a grand total of 975,000 jobs lost. No one does more math than this program. And we‘re proud of it.
Well, now we know the Speaker Boehner‘s response to nearly 1 million jobs lost with his party‘s spending cuts. It‘s this—
(BEGIN VIDEO CLIP)
BOEHNER: So be it. So be it. So be it. So be it. So be it.
(END VIDEO CLIP)
UYGUR: It‘s very, very clear. Now with all the Republican talk of cutting the deficit, they completely write off one simple solution. Let me give it to you now—repealing the Bush tax cuts.
Did you know that getting rid of all the Bush tax cuts would have saved $5 trillion over the next ten years, according to the Congressional Research Service? So let me put that into perspective for you. President Obama, deep spending cuts, heating assistance for the poor. You‘ve got the, you know, the education cuts and it goes on and on and on. Community grants. All those cuts. They total $1.1 trillion over ten years. That‘s a lot of cuts, right?
When you go to the Deficit Commission, the big cuts to Social Security, Medicare, et cetera, et cetera, that was $4 trillion over basically ten years. By 2020, it would be $4 trillion.
We don‘t need any of those draconian cuts. All we got to do is go back to the Clinton tax rate. Do you know how many jobs were created under Bill Clinton in eight years? Twenty-two million jobs. It totally worked. That‘s all we have to do and we‘ve got an extra trillion dollars.
We can save the $4 trillion that the Deficit Commission wants to without cutting Social Security and Medicare at all and with that extra trillion, you can do whatever you like. You can do heating assistance. The Republicans, you want to do another war? That‘s probably what you‘d spend it on. I wouldn‘t recommend it. But it‘s such an easy solution. Why don‘t we do that instead?
Well, let‘s ask Congressman Anthony Weiner. He‘s joining us now. Congressman, am I missing something? Isn‘t that a million times more obvious solution? And a much easier solution?
REP. CONGRESSMAN ANTHONY WEINER (D), NEW YORK: Well, the short answer is no, you‘re not missing anything. The problem that we have here is we have combination of things going on at once. One, we extended the Bush year tax cuts for millionaires and billionaires. That dug us a very deep hole. Now in order to dig out of that hole and others, they‘re doing basically the Republican budget cutters are saying, let‘s make air traffic controllers take a 20 percent cut. Let‘s reduce the amounts of cops on the beat and these types of efforts.
But you know what‘s important to keep in mind here, the single greatest thing that we can do to reduce our deficits and our long-term debt is to get people back to work. When fewer people are working, fewer people are paying income taxes. More people are getting services from the government.
And so, we have to be careful that we don‘t go in the direction that Ireland and England went into where they slashed budgets during their recession and accelerated the downward spiral. That‘s what this budget fight is about. Which side are you on? If you think that it‘s smart to cut air traffic controllers, then you probably want to vote Republican in the next Congress.
UYGUR: Look, the tax rates, if it went back to the Clinton levels, the rich would get about three or four percent on money over $250,000. Or, as you said, we can cut these other programs, including food safety. Who wants to cut food safety? It‘s crazy.
So now let me focus on the jobs, though. The Center for American Progress numbers, we put up just now, about a million jobs lost if the spending cuts of the Republicans go into effect. I know they‘re a progressive think tank. Do you think those numbers are accurate? And if they are, you guys should be screaming that from the roof tops, shouldn‘t you?
WEINER: Yes, I think they are accurate. And let me explain to your viewers why it is. You know, when you cut some of these services, there‘s a knock-on effect. Sure, when you cut the cops program, you‘re going to lose police officers in just about every district in the country. But also when you cut back on investment programs, when you cut back even on the one I gave you, air traffic controllers, which means fewer flights can fly, which means that the airline industry has to take a hit, this is the impact that winds up happening when you swing at the budget with an ax rather than going at with a scalpel.
So not only that, let‘s remember something that I think John Boehner leaves out. There have been more jobs—private sector jobs created in two years of President Obama than in eight years of President Bush. He‘s already created more private sector jobs than the last president did in two full terms.
UYGUR: Congressman, here‘s what I‘m worried about, though. Whether it‘s President Obama or now the fight in the House, it seems like people are accepting the Republican framing. Hey, we already gave the tax cuts for the rich and we cannot discuss that. That‘s off the table.
So now let‘s concentrate on hitting the poor and hitting the middle class. So, go, give me your spending cuts. Isn‘t it wrong to accept that framing altogether? And say, no, I don‘t accept that the only answer is spending cuts to things like food safety and safety of our planes as they‘re landing.
WEINER: I agree with you 100 percent. You know, I have a Web site democratswhofight.com and we are having this exact conversation. And overwhelmingly, the rank and file in the country are saying, listen, we have to look at this frame much broader. We have to see if things are basically fair, is it basically fair for billionaires, literally billionaires to get tax cuts? And then say to senior citizens that we‘re going to provide only half of you food—help with energy.
Are we going to say to middle class families trying to get Pell grants to put their kids through college that we‘re going to slash those back so that we can afford these billionaire tax cuts?
I agree with you 100 percent, we have to broaden this scope to talk about general philosophies in this country. Democrats generally believe in the idea we have to help the middle class and those struggling to make it. Republicans generally believe in the idea of lower tax rates for millionaires and billionaires. Which side are the American people on is the fundamental question?
UYGUR: You know where I like to leave interviews? Where I‘ve got 100 percent agreement. OK.
WEINER: I only come on your show because I agree with you all the time.
UYGUR: Congressman Anthony Weiner. Thank you for your time tonight.
We do appreciate it.
WEINER: Thank you, sir.
UYGUR: All right. Now for more, let me bring in the “Washington Post” political reporter Dana Milbank. Dana, first, let me ask you this. How many jobs bills have these Republicans proposed since they‘ve gotten in charge because they ran on jobs? How many jobs bills?
DANA MILBANK, THE WASHINGTON POST: Well, let me count on my finger here. None so far, Cenk.
UYGUR: Really? None? Huh, that‘s really strange. How many amendments on abortions? I don‘t know if you know the answer to that. But it seems like there were several.
MILBANK: There have been a couple. One very prominently. I think it‘s called HR-3. I mean, part of the problem here is the whole notion of creating jobs from the Republican point of view is just get the government out of it and the private sector will create the jobs on their own.
So basically they‘re saying, by cutting the government, we are creating jobs. That may be true in the very long term, you know, as the budget comes into balance over many years. But in the short term, that‘s one huge whopper of an economic shock that could—as you‘re discussing, nearly a million jobs could be lost and that can be the kind of shock that sets the economy right back into recession.
UYGUR: You made a really interesting point in your article today, though. That when you talk about the politics of this, that maybe that‘s not such a bad thing for the Republicans. Now why is it? Explain that.
MILBANK: I don‘t want to say that, look, the Republicans are wishing for the economy to go back in the tank. Let‘s take them at their—remarks at face value and say they want to grow the economy and grow jobs but it is a political fact that it is in their interest if the economy is not growing very quickly. And if the unemployment rate does not budge by 2012, that will—that‘s how a Republican president will get elected and a larger majority in the House and conceivably taking over the Senate.
So certainly, if it does have the unintended effect, shall we say, of throwing the economy back into recession, there is a political dividend, even if that‘s not what the motive was in the first place.
UYGUR: Right. Plus, that‘s exactly what the motive is. OK. So now
but on the other hand, the politics that they played with that clip from John Boehner, not so smart. I mean, for him to say, so be it, that‘s got to be terrible politics, doesn‘t it?
MILBANK: Yes, I was at that session yesterday morning. And as soon as I heard that, I said, I think there‘s going to be a problem with that. And sure enough, over the afternoon, it exploded. There were a couple of problems. One is the 200,000 figure, as you pointed out. is wrong. And otherwise, it just sounds so callous.
And even if we can sort of understand what he‘s trying to say, and that is, yes, some jobs may be lost in the path to a long term larger number of jobs created, you don‘t say it by saying, so be it.
And as I pointed out in the article, John Boehner is not taking a so-be-it attitude towards workers in his own district. He was fighting for this thing that looked very much like an earmark to make sure this engine at the Pentagon said it does not want for the new joint strike fighter, make sure that that continues to be built. He actually lost that battle today.
UYGUR: Dana, one more quick question. And I want to talk about that F-35 at the end of the show because I thought that was really interesting. But is there a price to be paid here? I mean, are the Republican voters, or the people who voted for Republicans, waking up today and going, God, when are they ever going to do anything about jobs? Or have they not gotten that message yet?
MILBANK: You know, I think it‘s going to be measured by results and, you know, they‘ll get some credit. Of course, Obama and the Democrats will get more credit for it because they‘re mostly in charge if jobs grow in advance of the 2012 elections. So look, and the reverse is true if people feel that the Republicans are doing great damage with these cuts.
But, you know, it will take—it‘s not something in the abstract that people can grasp right now. They‘re going to have to wait and see their kid‘s Head Start program canceled or they‘re not going have—you know, be able to take that flight they were going to take. That‘s how it will begin to be felt over time.
UYGUR: All right. Dana, Milbank from the “Washington Post.” Thank you for your time tonight.
MILBANK: Thanks, Cenk.
All right. We appreciate it.
Now it‘s a question I‘ve been asking for years. Why are some of the Wall Street bankers who crashed our economy not in jail? “Rolling Stone‘s” Matt Taibbi has the answer again.
And Michelle Bachmann is at it again. She‘s picking a fight with Michelle Obama over breastfeeding. That‘s got to be interesting.
UYGUR: Today, there was another simple but dramatic test for all those on the right who brag about cutting spending. This time it was about a giveaway to the nation‘s oil giants worth billions of dollars.
Congressman Ed Markey and other House Democrats put forward an amendment today. It would close a loophole in the law that allows oil companies to drill in the gulf of Mexico without paying any royalties. The loophole would cost taxpayers about $53 billion over 25 years. I want to pause here to explain something to you guys.
All the stuff about drill, baby, drill. And they‘re like, OK, then we get the oil here. We don‘t get the oil here. Look, we get no royalties in the Gulf of Mexico. Fifty-three billion, gone, to an oil company. In that case, some of it is going to BP, a foreign oil company.
Now last week, Markey and other Democrats put forward a bill to end tax breaks to big oil. That was worth over $40 billion over five years.
So taking that—think about that, by the way, that‘s separate. That‘s outside of the $43 billion, OK? All of this going to the companies that are the most profitable in the world.
So taking that $40 billion, plus the money saved over the next five years by closing the drilling loophole, put those two together, just over the five-year period, and you would put about $51 billion back into the pockets of taxpayers. Fifty-one billion.
Now, you might say, or some Republicans might say, oh, but the poor oil companies, they need the money, too. Really? Let‘s find out. You know what the profits were for ExxonMobil in 2009? $19.3 billion. It looks like they‘re doing pretty fine without us. Chevron, $10.5 billion. ConocoPhillips $4.9 billion. Look at all—that‘s not revenue, that‘s profit. OK?
Now, how about them giving back to us? Are they giving us any taxes? ExxonMobil in 2009 got back $156 million from the U.S. government. They paid nothing. They got $156 million back. Chevron got $19 million back. But you think well, OK, I guess that must have been their tax (INAUDIBLE). No. Did you know to other countries Exxon paid $15.2 billion in taxes and Chevron paid $7.8 billion. You know what that means? That means, yes, they paid taxes, they just don‘t pay it to us. They don‘t give us the royalties. They don‘t give us the taxes. The whole thing is outrageous.
And whether you‘re a conservative or a liberal, it shouldn‘t matter. Why would you want our money going to the most profitable companies in the world? It‘s basically a bailout for big oil. It makes no sense.
Now luckily, there‘s some people in Congress fighting back on this.
With me now is Democratic Congressman Ed Markey of Massachusetts. Congressman, great pleasure to have you on. Seems like a lovely bill you put together.
So, you know, some people have got to be incredulous about this. Are
you saying that if we‘re drilling in the Gulf of Mexico, that we‘re getting
the United States taxpayer, drill, baby, drill, we do all that, and we get zero dollars for it?
REP. ED MARKEY (D), MASSACHUSETTS: That is right. Because of a glitch in leases that were put out there in the late 1990s, BP and other huge multinational oil companies are drilling for free.
And they don‘t pay the American people anything to drill in public waters for the oil, which is owned by the American people. So what my amendment will do is to remove that loophole because oil companies, who are making $100 a barrel, don‘t need tax breaks, don‘t need loopholes so that they can make the $100 billion a year, which they made last year, and the trillion dollars which they made over the last ten years.
UYGUR: Again, I want to understand this better because I‘ve got Republicans telling me every day, hey, we‘ve got to drill over here so that we can have the oil. But you‘re saying we‘re not getting a dime for that oil. And BP is a foreign company and then—do I have this right? BP can then sell it to anyone in the world? The oil they got from our Gulf of Mexico and they don‘t have to sell it back to the U.S. at cheap prices or anything like that? Is that right.
MARKEY: There‘s no requirement at all. All they have to do is drill for the oil, sell it, make a profit and they don‘t have to give anything back to the American people at all. So, today we‘re debating cuts to Public Broadcasting System, the big bird, but the Republicans don‘t put out any cuts for big oil.
So we all agree that we have to reduce the size of the federal deficit, but we have to be mart about it. Let‘s look over at who doesn‘t need a subsidy? And you don‘t have to subsidize oil companies to drill for oil any more than you would have to subsidize a bird to fly or a fish to swim. They‘re already making so many profits that they don‘t need an extra $50 billion from the American taxpayer.
UYGUR: So I want the viewers to understand, the next time you hear drill, baby, drill, or anything about drilling here in the U.S., we don‘t get any of it. We don‘t get any of it, right?
MARKEY: Well, for certain leases, yes, that are out in the gulf of Mexico.
UYGUR: We‘re talking about Gulf of Mexico.
MARKEY: It‘s about $53 billion over the next couple of decades which the taxpayer will not get back. And there are another set of tax breaks that give the oil industry $43 billion in breaks that are 100 years old at their oldest.
And at $100 a barrel, why are we providing tax breaks for the oil industry when people are being tipped upside down at the gas pump, having money shaken out of their pockets to give to the oil companies for their profits right now?
UYGUR: Congressman Markey, here‘s the last part. This has got to be the easiest bill in the world to pass. I mean, you‘ve got to present this and go, OK, who‘s for the oil companies, who‘s for the American people? And you should win unanimously. So obviously, you‘re not. Give me names, name names. Who‘s holding this up?
MARKEY: I‘ll tell you what. We will have the vote sometime in the next 24 hours. And then I will have the list of names and you will know who believes the oil industry, while they‘re reporting record profits, still believe that they need American taxpayers‘ money as they‘re cutting the programs for the poorest people in our society. Free lunches for the oil industry they say? OK. Free lunch for grandma? No. That‘s an extravagance the federal government cannot afford. We‘re going to have a vote on that in the next 24 hours.
I‘m going to be very curious which so-called conservatives vote for bailouts for the oil companies. So we‘ll watch that.
Congressman Markey, thank you so much for joining us today.
MARKEY: Thank you.
UYGUR: All right. Now, Haley Barbour‘s in some trouble again over race. This one involves honorary Klan leader. Haley, what are you doing? Don‘t do it, man. Don‘t do it.
And this Missouri state senator has a jobs plan. But wait until you hear it. Watch out kids. That‘s next.
UYGUR: It‘s the battle of the Michelles. It‘s Michele Bachmann versus Michelle Obama over the pivotal issue of breast pumps. The first lady wants them to be tax deductible because she wants to encourage breastfeeding. Makes sense. Research shows that babies who are breastfed are actually healthier plus it would result in less taxes. So you would figure Bachmann would love it, right? Of course not. She‘s not buying it.
(BEGIN AUDIO CLIP)
REP. MICHELE BACHMANN ®, MINESOTA: This is very consistent with where the hard left is coming from. For them, government is the answer to every problem. To think that government has to go out and buy my breast pump for my babies? I mean, you want to talk about the nanny state? I think you got—
UNIDENTIFIED FEMALE: Literally.
BACHMANN: -- new definition of the nanny.
(END AUDIO CLIP)
UYGUR: Hard left. OK. Now look, if you‘re breastfeeding though, wouldn‘t you not need a nanny? So this would be the exact opposite of encouraging a nanny state. It would be a nanny-free state. I‘m trying to apply logic with Bachmann here, which is a terrible idea. And if you do that and I ask her, Bachmann would probably, anyway, whatever, dude. It‘s socialism, I tell you, socialism.
All right, then she took some time-out to make one more mistake.
(BEGIN AUDIO CLIP)
BACHMANN: Can you imagine if Laura Bush was doing that? Out trying to pass for legislation? I think that the media would have been after her.
UYGUR: Yes, I can imagine that pretty easily since Laura Bush did try to pass her legislation. It was called the “Read to Read, Ready to Learn Education Initiative.” By the way, she also was a major advocate of “No Child Left Behind.” If she was a Democrat, Bachmann would say, look at the nanny state with all their teachers trying to get our students to read and learn. Socialist, hard left.
But Bachmann better watch out, OK, because she‘s got to compete with a new person in town, it‘s Missouri state lawmaker and she‘s trying to out Tea Party, the Tea Party leader. Missouri State Senator Jane Cunningham wants to get rid of her state‘s child labor laws, saying they intrude on parents‘ rights. She has introduced a bill, eliminating the prohibition on employment of children under the age of 14. What‘s more, it would allow them to work all hours of the day. Fun for everybody! Oh, the good old days of child exploitation.
Remember these lovely days? Oh, when we had the kids working at the factories for 10, 12, 15, sometimes 18 hours. Good, old conservative America. I literally cannot believe they introduced this bill. I didn‘t even think they‘d go that far. It‘s stunning. Now, speaking of stunning, Mississippi Governor Haley Barbour is having a tough time loosing that old white southern boy like racist image. He‘s refusing to denounce efforts by some of his fellow, Mississippians to create a license plate honoring Nathan Bedford Forrest. You know who that is? He‘s a founder of the Ku Klux Klan. Here‘s Mr. Barbour‘s rational.
Quote, “I don‘t go around denouncing people. That‘s not going to happen. I don‘t even denounce the news media.” Wow, aren‘t you merciful? You haven‘t denounced the news media. But it‘s just actually totally not true that he doesn‘t denounce people. He did it two months ago. He was forced to denounce the segregationist White Citizens Council after he said they were just great because they kept the KKK out of town. Now, after an uproar, he released a statement calling them indefensible. But now, apparently, denouncing people who want to honor the KKK founder is a bridge too far. (INAUDIBLE). The child labor I think was disastrous, right?
Like KKK founder, I can‘t denounce the people are trying to support him. And by the way, ironically, this is from the party who thought that denouncing Reverend Wright was the most important thing in the 2008 election. All right, now for fun times at the United Nations. The foreign minister of India got up to give a speech. He started reading what was put out on the podium, which turned out to be the speech for Portugal. So the Indian foreign minister is giving a shutout to the Portuguese speaking nations of the crowd. It‘s like, yes, Portugal, his house. That‘s a little weird, right? Then he started praising the cooperation between the U.N. and the European Union. India is not in the European Union.
He‘s going on for three minutes, that‘s when the Indian ambassador went up to him and told him, dude, you‘re a little pitchy and I think you‘ve got the wrong speech. The foreign minister‘s response was, does that mean I have to start all over? Yes, dude. You got to start over. You just read three minutes of Portugal‘s speech. You‘ve got to start with India. It‘s like, damn it, then he started all over. All right. At least it‘s not just our U.N. ambassadors like John Bolton that are embarrassing anymore.
So, now, Bernie Madoff says, the banks had to have known about his scheme. No, the banks wouldn‘t do a thing like that. They would be, of course, totally honest with their customers. “Rolling Stone” Matt Taibbi exposes how the feds do more to protect the banks, then to prosecute them. That‘s next.
UYGUR: Welcome back to the show. You ready for more? Well, you‘re not, here it comes. Now, here‘s a question. Why isn‘t Wall Street in jail? It‘s a question I love. It‘s also the title of a great new expose in “Rolling Stone.” Reporter Matt Taibbi, we‘ll talk to him in just a moment want to find answer to that question. So, he started looking into it. An investigator gave him this spoiler alert. Quote, “Everything is f‘d up and nobody goes to jail. That‘s the whole story right there.” Now, that turns out to be slightly inaccurate. Actually, one guy did go to jail. His name is Bernie Madoff. He‘s the Ponzi schemer who‘s serving a 150-year prison sentence.
But he said in a jailhouse interview released today in “The New York Times,” quote, the banks had to know, but the attitude was sort of, if you‘re doing something wrong, we don‘t want to know. And that gets it exactly right. They didn‘t want to know. They‘re making money hand over fist. Who wants to find out? By the way, you know why Madoff went to jail when no one else did? He stole from the rich. That was stupid. If you steal from the average guy, you get away with it. Now, you want to see examples, how about Dick Fuld, he was running Lehman brothers and of course, it imploded. You know what he walked away with? Five hundred and twenty nine million dollars. He‘s suspected of hiding compensation to make it appear that he got less and he‘s also suspected of lying about his compensation to Congress. What kind of charges did he get? None. How about punishment? Squat.
Now, let‘s go to Joe Cassano. He worked for AIG financial products which crashed spectacularly. And by the way, that was largely thanks to Joe Cassano, nice work Joe, and he walked away with $280 million during his tenure. He suspected of misrepresenting the risk of mortgage derivatives which he famously said, wouldn‘t, quote, “lose a single dollar in the market.” What kind of charges he faced? Oh, my God, look at that, he also faced no charges. How about punishment? Zilcho. Who could have seen that coming? How about John Mack? He was on again, off again head and actually is the current chairman of the board of Morgan Stanley. He was investigated in 2005 for allegedly giving out insider information. Which may have resulted in a quid pro quo deal worth $10 million to him personally.
He also faced no charges and no punishment. And the way that that went down is actually a perfect illustration of everything that‘s wrong with our financial system and why they get away with all this. Gary Aguirre was an SEC investigator who smelled something fishy in Max deal, so he wanted to look into it. And he—basically, this is the good guy, he was trying to do the right thing. So, what happened to Gary? Well, he went to his bosses. And his boss at the time were Paul Berger, he was the SEC associate director of enforcement. Oh, he got fired. But when he got back in a second.
All right. So, he goes to his boss with the guy we just told you about. And now—his boss at the time work for today. Are you sitting down? Are you sitting there? Mortgage Stanley. Weird. The guy who wouldn‘t prosecute, now works for the guy he wouldn‘t prosecute. Then Linda Thompson, she was SEC‘s director enforcement and another boss of Gary. Guess where she is now. She‘s a lawyer representing Wall Street firms. Weird. Huh? I didn‘t see that coming. Now, here‘s the external forces who pushed back on the SEC to make sure that there was no investigation. Mary Jo White, she was an attorney representing Morgan Stanley.
Guess where she was before that? She was the U.S. attorney in New York. The top cop on Wall Street. And of course, there was Gary Lynch. Now, it was Max attorney, before that, he was the SEC‘s director of enforcement. Do you see what‘s happening here, guys? It‘s called a revolving door. They‘re waiting for the payout. Are you going to investigate the guy who might give you millions of dollars in your next job? If you‘re a really good guy like Gary, you might. And remember what happened to Gary, now is to it, boom, fired. Gone. Everybody else gets paid, Gary gets fired for being a good guy. Now you see how they get away with it? All right. Let‘s do more do.
Joining me now is Matt Taibbi, he wrote that article. He‘s a contributing editor for “Rolling Stone,” and by the way, that article appears in the new issue of “Rolling Stone.” It‘s fascinating. All right. Matt, look, I‘ve got a lot of guys who I went to school with who are part of the circuit. And if you go tell them what you tell them or I tell them that, oh come on, you‘re being totally unfair, right? Are we being unfair to them? They‘re just good guys trying to do their job?
MATT TAIBBI, REPORTER, ROLLING STONE: No, we‘re not being unfair. Look, in this country, the reality is if you go out and you sell a dime bag on the street and a cop sees you, there‘s a very good chance that you will actually go to jail, and you will do real jail time. But Insider Trading, fraud on a massive scale, stealing billions of dollars, putting a million of people into foreclosure, defrauding thousands of janitors and cops and fire them out of their pensions, nobody is going to jail for this stuff. It‘s really, it‘s a class issue. These guys do not go to jail. Madoff was the only person in the entire financial crisis who is doing time. Even somebody like Angelo Mozilo, they couldn‘t find a way to put him in jail and all they did was fire him, less than half of his network. So, it‘s an incredible situation. It‘s really, really dangerous for the country.
UYGUR: So, Matt. Look, a lot of them was saying, look, I use bad judgment. My bad, dog. So, I lost, you know, a couple of billion dollar, but there‘s nothing criminal here.
TAIBBI: Right. No. Look, all of these banks on a larger level were complicit in a sort of general fraud scheme, and that fraud scheme was to sell toxic mortgage-backed securities, toxic mortgage-backed securities as triple A-rated investments. During this mortgage boom, they were essentially selling worthless crap as triple A-rated investments. And they were selling it to people like pension funds. That‘s why your pension has decreased in value. Because some banks sold you phony securities that they knew were going to blow out. That‘s securities fraud. That‘s a broad fraud scheme. All these banks were complicit in. But at another level, they were also involved in basically every kind of crime you could have in the financial services market. Insider trading, they were hiding billions of dollars in losses. A lot of these banks were involved in Enron-Esque schemes to hide losses. Again, fraud. You know, insider trading, all of that stuff was going on. And nobody got prosecuted for it.
UYGUR: At the banks, were there e-mails specifically saying hey, we know this stuff is toxic or we know it‘s not going to work or we know it‘s junk?
TAIBBI: Yes, absolutely. I mean, a great example is the Bear Stearns Hedge Fund that blew up. This was the one case that they actually took to trial. Where these two guys, these guys who are running this Hedge Fund that were involved, sub-prime mortgages, and that was the blowing up of this fund is what caused Bear Stearns to go out of business. But they had e-mails from these guys telling their boss, look, we are never going to make money on this stuff. And then a few days later, they were out saying publicly, this isn‘t a disaster, it‘s all going to be fine. And that‘s just straight up fraud when they do that. That‘s what a Wall Street crime looks like and they weren‘t convicted for it.
UYGUR: Right. And then you‘ve got Goldman Sachs e-mails saying, hey, that we‘re selling craft and stuff, you know, we got Mozilo and his e-mails said, I can‘t believe we‘re selling this crap. But if people at home got to be wondering, so why are they doing it, right? It seems like that‘s going to sink your company. It sunk AIG, sunk Lehman Brothers. So, why they do it anyway?
TAIBBI: Well, people have to understand is that the system of incentives on Wall Street has been completely perverted. I mean, all of these guys, it doesn‘t matter—they don‘t care if they blow up their companies. They don‘t care if we have to end up having to bail them out. They get their bonuses anyway. All these guys, even the ones who are in disgrace now, guys like Joe Cassano who, you know, helped blow up AIG, he lost—he made $280 million and he‘s keeping all that money. It doesn‘t matter how irresponsible or how wrong you are, the incentives are there for these guys to do all this stuff because they never have to pay in the end.
UYGUR: The taxpayers had to pay every dime of that $280 million eventually when AIG went under. And the guy—it‘s crazy. But he‘s not crazy because as you explained it, finish that up for us. Why don‘t they prosecute?
TAIBBI: Well, I think the key issue here is the revolving door. I mean, I think that every source that I talked to in researching this story pointed out the same thing. All these guys—the two main cops of the SEC, and the U.S. attorney here in New York, if you‘re one of the top investigators in the SEC or the U.S. attorney‘s office, when you leave those offices, there‘s a partnership waiting for you at one of these big corporate defense firms. And those partnerships are worth millions of dollars a year. These guys have all the equivalent of all college basketball players waiting for their first NBA deal. It‘s an enormous amount of money. And—what‘s happening. It‘s a collegial, sort of merry-go-round of lawyers who all know each other. They‘re all on a first-name basis with each other. You have a situation like Aguirre, you know, he‘s trying to prosecute, investigate Morgan Stanley, and Morgan Stanley‘s lawyers are going five levels over his head to talk to the director of enforcement, they‘re talking to his boss‘ boss while he‘s trying to prosecute this case.
UYGUR: Right. And at the very least, it‘s implicit saying hey, if you‘re good, you‘re a team player, we got a job at Morgan Stanley waiting for you with millions of dollars.
UYGUR: Or the law firm that is working for Morgan Stanley. And that‘s how it works. That‘s what is no prosecutions. Great piece, Matt. I really appreciate your time tonight.
TAIBBI: Thanks, good to see you, Cenk.
UYGUR: All right, now this navy vet says his constitutional rights were trampled when religion ripped him away from his kids. But he‘s a step closer to justice today. He tells us his story, next.
UYGUR: Sometimes it‘s hard to find voices you can trust in politics. That‘s why this next story is such welcome news. Justin Bieber has spoken out about his political views. Oh, thank God. This is what America has been waiting for. Now, here‘s what he had to say about health care, quote, “You guys are evil. Canada‘s the best country in the world. We go to the doctor and we don‘t need to worry about paying him. But here, your whole life, you‘re broke because of medical bills.” That‘s actually not bad. It‘s fairly astute. Now, of course, Canadians do pay for health care through taxes but their system is ranked much higher than ours and they don‘t have the problem of going bankrupt because of medical bills. Score one for Bieber. Bieber for president. Ok, probably not. Don‘t get too excited.
Here‘s what he thinks about abortion, quote, “I really don‘t believe in abortion, it‘s like killing a baby.” Oh, Bieber, there goes my dream ticket of Bieber Gaga 2012. But you do have to give it to him. He is a bipartisan Bieber. In fact, this is what he has to say about the two parties, quote, “I‘m not sure about the parties, but whatever they have in Korea, that‘s bad.” Very astute again. I‘m assuming he means North Korea, and I totally agree with him. We‘re back for Bieber for president. But it turns out, he‘s a Canadian citizen, so he can‘t run for president, so back to the drawing board. Who is Lady Gaga, is she? Oh, she isn‘t not. All right. Maybe, another one. All right. Let‘s come back.
UYGUR: Not time for a hopeful story. Sometimes when you flight back, it turns out, you can actually win. A few months ago, I told you about a father in Indiana who got a raw deal in a custody battle. Craig Scarberry had shared 50-50 custody of his three kids with his ex-wife for four years. In the fall, that time was reduced to only four hours a week and Scarberry wanted to know why. Why did that happen? Well, it turns out. He found out a shocker. The judge ruled that, quote, “the father did not participate in the same religious training as the mother. Father was agnostic.” Which apparently was unacceptable to the judge. The ruling also stated, quote, “When the father considered himself a Christian, the parties were able to communicate relatively effectively.” Now, of course, that‘s a weak excuse for discriminating against him because he was agnostic. I had him on MSNBC on November 29th of last year to talk about this.
(BEGIN VIDEO CLIP)
UYGUR: Have you made any demands for your beliefs? I mean, isn‘t this—isn‘t this a giant constitutional issue? Don‘t you have the same exact rights as your wife?
CRAIG SCARBERRY, AGNOSTIC DAD WHO LOST CUSTODY OF KIDS: Yes, and I plan on them, I actually have put together and receive the permanent in order to protest that side of the massive county government center here on December 16th in order to stand up for eco-rights and religious freedom that we all have here in this court, or in this nation.
(END VIDEO CLIP)
UYGUR: And guess what, that fight, it actually worked. The Indiana Court of Appeals has restored Scarberry‘s custody rights pending a decision in the case. Now, let‘s find out how it happened.
Craig Scarberry is joining me now. Craig, first of all, how sure are you that this was because you were agnostic?
SCARBERRY: Well, Cenk, I mean, you‘ve seen the court order. After looking through everything, it just, there doesn‘t seem to be much left to explain, other than the fact that he decided to point out my religious preference twice in the court order with nothing else really to substantiate a change for the children. Which is what would be needed based upon Indiana code to change a previous custodial agreement.
UYGUR: Right. So, how did you fight back? What are the different things you did to try to get custody of your kids again on a 50-50 basis?
SCARBERRY: Well, I‘ve just been, we got the appeal filed and we‘re still going through that process. Obviously we put in the motion to stay, which is what‘s been granted by the appeals court now. And we did the protest. I‘ve been just filing motions to try to preserve what little rights I still had according to the Indiana parenting guidelines. And really tried to just keep on top of making sure that there was no question, you know, how much I wanted to be involved in my children‘s life.
UYGUR: Craig, I mean, you‘re regular guy in Indiana. So, how did you wind up fighting back? Did you get any legal help?
SCARBERRY: I had help from an Indiana custodial rights advocacy group here, INCRA, from the executive director, his name is Stuart Showalter. He helps write bills in legislation for custodial rights. For non-custodial and custodial parents. Also, once this came into the public view, the ACLU also of Indiana here also decided to represent me on the state level. And that‘s who‘s taking on my case now on the state level.
UYGUR: Right. So the case isn‘t over. They‘ve done a motion to stay, which means you can at least get custody of your kids as the case goes forward. That obviously has to be a very good sign. So, you‘re now back sharing 50-50 of your kids and you get to see them a lot more?
SCARBERRY: That‘s correct, yes. We‘re actually, I got the order yesterday and we‘re proposing that it begins starting on Monday next week. And I will once again have split custody 50-50, half the month and half the decision, and say in what‘s going on in my children‘s lives, yes.
UYGUR: All right. It‘s great to see a little bit of justice. We‘ll see how the case finally concludes, of course. Craig Scarberry, thank you so much for joining us tonight. I really appreciate it.
SCARBERRY: Thank you, Cenk.
UYGUR: All right, now the president of the Tea Party fought together today. Can you believe that? And they won together. What did they win on and how did they do it? That‘s next.
UYGUR: The battle over the f-35 fighter jet spare engine has been raging for months now. Now, why is this important? One, because it‘s really expensive. But secondly, it‘s symbolic. Can we cut wasteful spending when every reasonable person in the country says we should? Look, even the Pentagon doesn‘t want it. Our Defense Secretary Robert Gates spoke out about it this week.
(BEGIN VIDEO CLIP)
ROBERT GATES, DEFENSE SECRETARY: The president and I, as well as the department‘s senior military leadership have consistently and firmly expressed our opposition to continuing this costly program. We consider it an unnecessary and extravagant expense, particularly during this period of fiscal contraction.
(END VIDEO CLIP)
UYGUR: I mean, isn‘t this crazy? The Pentagon says, don‘t give me the plane. But some people want to give it to them. But Obama‘s budget clearly said, we‘ve got to get rid of this alternate engine, right? But, who was fighting back? John Boehner. He was one of the biggest supporters. And Eric Cantor, also in favor. Now, you want to know why? Boehner‘s district is just outside of the main GE plant where the alternate engine is built. Full disclosure, GE is one of our parent companies. But apparently that isn‘t stopping me, so here you go. Eric Cantor‘s district also includes a Rolls Royce plant. Now, that‘s other company involved in this second engine. Well, guess what? They lost. It was killed today. The final vote was 233 to 198 to eliminate the project. That‘s 110 Republicans joining 122 Democrats in voting against it, real bipartisanship.
But 55 percent of Republicans who say that they want to keep wasteful spending out of our government voted in favor of this wasteful spending. Now, the cut will save about $3.45 billion over the next several years.
So, how was it done? President Obama, Tea Party, they worked together.
Real bipartisanship and we all saved.
All right. That‘s the show. Thanks for watching. Chris Matthews and “HARDBALL” is next.
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