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Cave or Compromise?
Aired December 6, 2010 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATHLEEN PARKER, CO-HOST: Good evening. I'm Kathleen Parker.
ELIOT SPITZER, CO-HOST: And I'm Eliot Spitzer. Welcome to the program.
Tonight's debate, a smart compromise or a cave?
I believe it's a cave. The president tonight announcing a deal -- tentative deal -- with the Republican Party on that contentious issue of tax cuts for the middle class and the rich.
Let's take a look at what the terms of this deal are. First, everybody's tax cuts extended for two years, including the rich, of course. Only the Republicans wanted that. Most economists saying, bad idea. Unemployment benefits get extended but only for 13 months, money for the rich, not the unemployed. Lower payroll taxes by 2 percent.
Even the president didn't seem to like it when he announced it, listen up.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have no doubt that everyone will find something in this compromise that they don't like. In fact, there are things in here that I don't like, namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years. And I'm confident that as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we're going to have to make to secure our future and our children's future, and our grandchildren's future, it will become apparent that we cannot afford to extend those tax cuts any longer.
(END VIDEO CLIP)
PARKER: Well, Eliot, obviously, if you're a Republican, this is a beautiful act of compromise, and if you're a Democrat it was a cave.
SPITZER: Well, you know, I don't say this as a Democrat. I say this as somebody who cares about equity in our economy. This was a cave. It's not good economics. It was bad politics for the president. But you know what? This is the way he's been doing things for much too long in my book.
PARKER: Well, now, we got the perfect person to talk to about that.
SPITZER: With us now, Democratic congressman from New York, Anthony Weiner.
REP. ANTHONY WEINER (D), NEW YORK: Thanks. It's great. You know, I like the table.
WEINER: It's the first I've been here. I feel a little bit like I'm a bus driver, though.
PARKER: We've learned a lot.
SPITZER: It is true. We're going to turn the tables on you, to pick up on your metaphor.
WEINER: No, this is great.
SPITZER: So, let me ask this question. The president is negotiating against himself on the tax issue. Has he caved? Or is this a meaningful compromise where the wealthy are going to get all their tax cuts and the Democratic Party gets nothing back?
WEINER: Well, we'll see. And, by the way, you know, compromise is a device. Somehow, I have no problem with it -- I mean, we often have to do it. That's why we go to Washington and govern about.
But it seems almost as if I missed the part of the fight, like where was the fight where he said what he believed in, campaigned on it hard, tried to get people? You know, the problem with the president -- and I think he's trying to do the right thing -- he believes that these vote counts are static things.
You know, he's the president of the United States. He can move the meter on these things. Considering how many people agree with his fundamental position that we should extend tax cuts for the middle class and those struggling to make it, and even people doing fairly well, he hasn't really made the full-throated fight for it.
Now, what I'm hearing is this deal is being worked out. It's more than just unemployment assurance. Other things are going to be put in there. But whatever it is, I think that to some degree he underplays his hand. As I said today, it's almost as if he wants to punt sometimes on third down.
PARKER: I saw that you were tweeting. I was reading your tweet this morning.
WEINER: Are you impressed that I do that?
PARKER: Yes, I am. And you don't mind my saying that publicly.
WEINER: Apparently, all the kids are doing it. PARKER: Yes. I want to read what you wrote. You said, "Memo to our president: why are we always punting on third down? Let's get our offense on the field."
So, what does offense look like for you?
WEINER: Well, what it means is -- first of all, when you have a popular position, you know, remember what we're talking about here. The Republicans and Democrats and the president all agree on the fundamental premise that everyone making south of $250,000 should have their tax cuts continue. That's a very popular position. The other side is holding up a whole bunch of stuff because they want tax cuts for everyone else.
PARKER: But you know what else is popular is $1 million and down. Why not -- why didn't you all go there? You could have --
WEINER: Well, it's funny, when I just campaigned for re- election, that's the number I talked about as well. And Chuck Schumer talked about it.
WEINER: Look, I think that -- there are some things we can do differently. I think we should that all businesses are off of the table. All of them should also have their tax cuts extended. There are things to talk about.
But I got to tell you, I must have missed the part where the president goes out and makes his case -- and that's what I think a lot of people are frustrated about.
SPITZER: It's been over four weeks since the midterm elections. He's not given a speech to the nation. He has not said, here are the principles I believe. And here's I know what you voted for. But I'm going to fight for "don't ask, don't tell," middle class tax cuts, START Treaty, pick the unemployment insurance extension.
SPITZER: -- spoken to the public, why hasn't he stood up? Not too much. He's the president of the United States -- he hasn't explained what he believes in.
WEINER: I think there's something to that. I think it's not the outcomes, and we're going to see whatever the deal winds up being, and again, I don't mind deal-making. That's part of the package.
The problem is, he's getting beaten like a rented mule by the Republicans who are going to say, I refuse to give on A, B and C. And the president doesn't seem to do that. He doesn't seem to realize he has a lot of arrows in his quiver if he would just go ahead and use them.
SPITZER: But who's going to stand up in Congress and say, we're going to act like the Republicans did when they were in opposition and actually take a stand? Whether you call it a revolt, there were, you know, rumors flying around today of a Democratic revolt. Filibuster against the Republican proposals, show some backbone in Congress, and stand up to them, why not?
WEINER: Well, I think -- well, first of all, there's no one who can do that, who can fill that position better than the president of the United States. We can all do it as --
SPITZER: Yes. But he's not one to do it, though?
WEINER: No, no. Hold on a second. But -- the first thing we're trying to do is bolster the president to kind of say to him, listen, if you lead us into this fight, we're going to follow you.
I think the Senate is inching in that direction. I think they're doing some smart things, making them take some of these votes, make them filibuster in these things they're going to be against.
But I have to tell you, it's very difficult to do it when the president -- when we in the House of Representatives say, this is our position, (INAUDIBLE), this is our position and we're sticking in there -- and then the president says, OK, we're ready to deal.
SPITZER: You have seen two devastating articles about the president's strategy, by Paul Krugman and by Frank Rick in "The New York Times." This is the intellectual foundation for progressive politics having deserted the president, saying, you're spineless. Frank Rich saying, you're basically a hostage subject to Stockholm syndrome where you begin to sympathize you're your captor.
He has lost his capacity to fight, why don't you stand up and lead that charge?
WEINER: Well, what am I chopped liver? I'm doing that here, you know?
SPITZER: That's what we're saying.
WEINER: Fight when you're on "PARKER SPITZER," right? Isn't that what you guys are known for?
WEINER: But look, in seriousness, the president, I think, is -- he's animated by the right things. He wants to try to govern -- he wants to try to govern, he thinks this is the best way to do it. And I think that what he still believes is that bipartisanship is an ends rather than a means. He's going to keep getting spanked.
Remember Mitch McConnell, four days after the election, says his singular objective now is to stop the president from being re-elected. I don't know how many negotiations are going to go very far if you're already know that that's their position. SPITZER: You said something important a couple moments ago. You said that he views bipartisanship as the end rather than the means. It seems to me, and I am 100 percent behind him in terms of what he's articulated as his objectives, but he doesn't get there because he's always negotiating against himself and immediately, reflexively, so desperate for bipartisanship that he doesn't put up the fight that gets you to the right compromise. And somebody's got to teach them how to negotiate.
WEINER: And, by the way, look at the lessons, they did it in the stimulus bill. They shaved it down to smaller -- because they thought Republican votes, got none. We accepted 40 Republican amendments on the health care bill. We wound up getting zero votes back in favor of it.
Just about every single one of them complains about the auto bailout, and now, they're all going and bragging about how it worked.
The fact is, I don't think they quite -- the White House quite understands it's not good intentions. You need to show them that you're willing to give and take a punch in order to be able to make the next fight and the next fight.
PARKER: Are you the guy who elbowed him, the president?
WEINER: No, no, no.
SPITZER: The other thing is that they need to understand that it is rarely bipartisanship that is transformative. If you're going to be transformative, as this president wants to be, when FDR was transformative, when Teddy Roosevelt was transformative, even when Ronald Reagan was transformative, it was because they have a linear focus.
WEINER: Yes. But now -- but now you're not giving him enough credit. Remember, health care reform happened without a Republican vote, but it's pretty transformative. The bailout of the auto industry, which he got nothing but trouble for, frankly turned out to be a pretty good thing.
SPITZER: But it wasn't bipartisan, that's my point.
WEINER: No. But --
SPITZER: It would have been better to drive it through with a party that was unified and not give away so much. This was certainly --
WEINER: But in fairness, yes, we did that during health care. But then his inability to kind of make the fight after health care meant that we lost a lot of seats here. Well, you still have to have -- look, I think the president is not by constitution, a very combative guy. He probably looks at me and says, you know what, Weiner, you're all about fight and bluster, but we still have to get things done.
And my argument to him is that the two things have to work together. You have to have some fight in our party. Otherwise, each fight is going to be less and less successful.
PARKER: Can we jump ahead to January? What's it going to be like in the House with John Boehner leading the way?
WEINER: There will be a lot more room in the Democratic cloak room. That's for sure.
WEINER: Look, I happen to think that he is going to be have a very difficult time. They ran a campaign that was devoid of any real affirmative agenda. They know what they're against. They're going to try -- I mean, how many votes in a row can you try to undo health care? How many votes in a row can you try to turn back the clock on the stimulus bill?
Sooner or later, they're going to have to say what their affirmative two-year agenda is going to be. And he's going to have a very tough time.
PARKER: But to you, as a member of the House, feel that he reaches across and is he a deal maker? Is he someone that will work with Democrats?
WEINER: I like him. I don't believe his membership is in a deal-making mode at all. I just think that they came to town with such a sense of being against Obama, against the Democratic ideals that they're going to try to burn the place down. It's going to be tough for him because I think he's a fairly decent guy. Constitutionally and institutionally, I think he's going to be given no room by his caucus.
PARKER: Are the Tea Party people going to be a problem for him? Or for the more established Republicans?
WEINER: I don't know because I don't know what they believe either. You know, they're a diverse group. They believe a lot of different things. I mean, we'll see.
But I think he's going to be more so than usual, and being a leader of the majority party is never easy, Nancy Pelosi learned that. But I think he's going to be hurting cats that are running in all kinds of different directions.
SPITZER: Anyway, Congressman Weiner, thanks so much for coming in.
WEINER: Thank you very much. I'm going to drive this baby home.
(LAUGHTER) PARKER: And still ahead on "PARKER SPITZER": the president of the United States becomes the toast of Broadway. And no, I'm not talking about Barack Obama, I'm talking about Andrew Jackson. Who knew old hickory could still sell tickets?
Don't go away, we'll be right back.
(BEGIN VIDEO CLIP)
JOE WILSON, FORMER U.S. AMBASSADOR TO GABON: I also just wonder how you end up an operation like this, run essentially by a social misfit and a private first class in the U.S. Army. It does seem to me that, as others have said elsewhere, one ought to be looking at the possibility that this is an official penetration by a hostile intelligence service.
(END VIDEO CLIP)
SPITZER: U.S. authorities claim the latest WikiLeaks dump puts national security at risk, a target list for al Qaeda. Some of the sensitive locations revealed pipelines, ports and research facilities.
PARKER: And our next guest, a diplomatic veteran, knows the importance of classified cables. Back in 2003, he found himself in the center of a late controversy, after accusing the Bush administration of twisting intelligence to launch the Iraq war, his wife, Valerie Plame was outed as a CIA agent. A new movie, "Fair Game," chronicles the entire episode.
Former Ambassador, Joe Wilson, welcome.
JOE WILSON, FORMER U.S. AMBASSADOR TO GABON: Thanks. Good to be with you.
PARKER: Are these documents uniquely dangerous to us? To our interests?
WILSON: Well, I think they're probably dangerous to our interest and to the interest of our allies. And they're dangerous to every country that may be mentioned in them, their strategic infrastructure.
I remember when I was in Baghdad during the first Gulf War, we cataloged by virtue of where the hostages were, the hostages that Saddam Hussein had taken, we found out where they were. And those became the 54 strategic sites that we bombed during the first few couple of nights of the first Gulf War. We figured that if Saddam thought enough of the sites to put American hostages there, they were probably strategic importance to him and to his economy.
I'm quite sure that anyone who takes a look at those documents with those sites will be putting together their own target list if they have the ability to do so.
SPITZER: Did his capacity to get access to these documents surprise you? You've been in the foreign service for, you know, over 20 years. You had the rank of ambassador. Did it shock you that he was able to hack into the system or did somebody leak this volume of sensitive information to him?
WILSON: Yes, I'm awfully surprised at SIPRNet -- which I suspect is a classified information program that he was involved and are using. I'm surprised that wasn't better compartmentalized. That, in fact -- if, in fact, what we hear is true that it's simply a couple of disgruntled soldiers, that they would have access to information so far outside of their core responsibilities. So, I'm awfully surprised at that.
And I also just wonder how you end up an operation like this run essentially by a social misfit and private first class in the U.S. Army. It does seem to me that, as others have said elsewhere, that one ought to be looking at the possibility that this is an official penetration by a hostile intelligence service and begin asking questions who stands to benefit by this embarrassment as well as by this leak of some really essential information, national security information.
PARKER: When you say that this may be a front. There may be something else more nefarious going on. What -- can you expand on that a little bit?
WILSON: Well, you know, I'm not in that business. So, it's just speculation. But it does seem to me that when you're in the counterintelligence business, the first thing you look for is who's doing this and why, what do they have to gain by it. And I would hope that's going on here. Perhaps they've already sorted it out, and they've concluded it's just Mr. Assange and this Private First Class Manning.
PARKER: I want to Iran for just a minute. Now, they've revealed that they're mining their own yellowcake. What does that mean exactly? And what -- how much closer does that bring them to the ability to weaponize -- to have nuclear weapons?
WILSON: Well, I think, first of all, it means that they obviously have some uranium deposits of some significance where they're mining. That's not surprising. You have uranium in Canada. You have significant deposits in Niger. You have significant deposits Iraq, right across the border, that they were trying to exploit before the first Gulf War. So, that's not surprising.
Yellowcake is really lightly refined uranium ore. It's just basically separating the uranium from the rock in which it comes.
SPITZER: But what it does is, I suppose, tell us they are independent. In other words, if they can both mine it, reduce it to yellow cake and begin the enrichment process to the centrifuges that we know they have, what they're saying to the world is -- you have been imposing sanctions on us, four different set of sanctions. And you know what, it's not working. We now are independent and move along -- can move along this chain to get to enriched uranium sufficient for weaponization. And they're basically saying, keep on with the sanctions, we don't care.
WILSON: Yes, what they're saying is, we have the raw material.
Several years ago, when I was actually in Niger, looking into this matter of uranium yellowcake sales, I was told a report of that, that the Iranian's has made an approach in this area in several years prior to my trip there. So, that would have been maybe about a decade ago. So, clearly, the intervening years, they found their own deposits from tapping into those. So, they now have their raw material.
SPITZER: You have been to the center of trying to decipher what a nation's intent might be with respect to this enrichment process. How do you know, and how do you begin to look at a country like Iran and determine whether they are enriching for peaceful purposes, which is their claim, or whether they are enriching for military purpose, which is what, of course, the rest of the world believes?
WILSON: I think if you're operating or looking at the Iranian government as we do fairly closely, one has to operate on the assumption that they are in fact looking to build a nuclear weapon. I think all the signs and signals are there, whether they want it as a deterrent or whether they want as a hammer held over Israel and their Arab neighbors, as everybody fears -- it's a fact that would be one of the consequences of a nuclear program that goes much further than this and the enrichment side of it.
PARKER: Well, Ambassador, let's talk about your movie for a minute -- the movie about you, that is, "Fair Game," about you and your wife. I understand it was based on memoirs written by each of you. Of course, we all know that all movies take some license and making a story more interesting. Where do you feel the director took the most license with your story?
WILSON: By and large, the movie is a reflection of the times we lived through. It's an accurate reflection in both of Valerie's work and of what I was doing, and the -- what we were trying to do to defend ourselves against this campaign that was run against us by the Bush administration and its allies.
PARKER: Well, I assume you have read the editorial in "The Washington Post"?
PARKER: They rarely take a movie -- review a movie as an editorial. But in this case, they took exception to some of the facts in the movie, specifically in one scene that I found very compelling. Your wife was portrayed as leading this rescue to ferry Iraqi scientists out of Iraq. And then after she was outed, that program was brought to a halt, according to the movie. But "The Washington Post" editorial says that was not factually true.
Do you want to comment on that?
WILSON: Well, I think "The Washington Post" and the reporters upon whom they based that particular judgment ought to go back and do some fact checking. There's other reporting in the public domain that contradicts that. And in fact, there is a special prosecutor Fitzgerald's unclassified summary which he submitted to the court in the trial of Scooter Libby which says very specifically, not only was she employed by the CIA as an operations officer, she was in the counter-proliferation division where she serves as chief of the CPD component with responsibility for weapons proliferations issues related to Iraq. That puts her fair and square at the heart of our efforts to find the scientists and to determine whether or not there was an active WMD program going on in Iraq prior to the second Gulf War.
PARKER: All right. Well, thank you, Ambassador Joe Wilson, for a fascinating conversation.
WILSON: Thank you very much. It was nice to be with you.
PARKER: Thank you for joining us.
SPITZER: Up ahead on the program: Ben Bernanke on "60 Minutes" last night, a couple of prominent Wall Streeters join us with some questions about what the Fed chairman said and how he said it. Don't go away, we'll be right back.
SPITZER: Welcome to cultural politics. Tonight, who would have thunk it. The most provocative drama about our current political climate is not a TV show or a movie, but a Broadway musical set in the early 19th century. "Bloody Bloody Andrew Jackson" moved uptown from the public theater, rocking crowds with numbers like this one. Take a look.
SPITZER: Joining us tonight are: the show's star, Benjamin Walker, who plays Mr. Bloody, Bloody himself. And to talk about the historical context, Rebecca Traister, who has seen the show several times and knows its creators. And she also wrote the fabulous book about women and the 2008 election, "Big Girls Don't Cry."
Welcome, everybody. Thanks for being here.
BENJAMIN WALKER, BLOODY BLOODY ANDREW JACKSON: Thanks for having us here.
SPITZER: Let's understand the title, "Bloody Bloody Andrew Jackson." I mean, most of us don't think when we think back to what little we know about the seventh president. We know he was a populist. We know he was sort of an army guy who went out and did wage some wars.
Why the name "Bloody Bloody Andrew Jackson"?
WALKER: He did have a bloody legacy. That time in America is a very adolescent time. If you think about the Founding Fathers being, when we were in our infancy, when Jackson comes around, he is that adolescent hormonal, silly, pushing against his parents and we're expanding as a nation, unapologetically, and I think that title encompasses it.
PARKER: Well, of course, he also committed genocide against the Indians, then he was pro-slavery. So, you know, he wasn't a sweet guy by our standards today.
PARKER: Well, if that were -- if that were our adolescent period, what stage of maturation are we in now, do you think?
REBECCA TRAISTER, AUTHOR, "BIG GIRLS DON'T CRY": We apparently just repeat our adolescence over and over again. I actually, I saw this show for the first time probably in 2009. I was in the midst of writing my book about the 2008 election, and specifically just obsessively thinking about the 2008 primary campaign, I was writing about Hillary Clinton's campaign but thinking about Obamamania.
And so, I went to see "Bloody Bloody Andrew Jackson." And just that moment, when that's the only lens through which I was looking at the whole world, and I came out and the show is so much about these populist crowds, he stands in front of people, and they're, you know, projecting upon him their every fondest wish and hope and dream for the country. And he's inspiring.
And then I came out of the theater and said to my friends, that was totally about Obamamania, right? And they all said, no, that's about the Tea Party.
SPITZER: That's actually what I think. I mean, the see the mania for Sarah Palin and Andrew Jackson, even, you know, Kathleen knows I can't go three sentences without talking about the banks. But even the bank, Andrew Jackson waged a war against what was the Fed of the moment, the national bank.
SPITZER: Saying the big bankers are the root of all problems. This was the originally, you know, the original populism, whether it is Sarah Palin or Barack Obama.
TRAISTER: The issues of Indians, the issues of immigration, the issues of who's in America, what it means to be an American, how we protect borders, how we form borders -- I mean, these are all so much of what you see in the show just -- it is history that comes back again and again.
SPITZER: So, are we making progress?
WALKER: I don't know. I certainly think we're having -- we're continuing to have a mid-life crisis, where we're reinventing ourselves to be ourselves again. And -- but I do think that what Jackson understood was the importance of theater in politics. And as we watch the news and watch Obama's campaign or any campaign, you can't help but draw parallels between the theater aspect of it, the entertainment, how important is charisma in your political vote?
PARKER: Well, is there a political message that you are trying -- that you hope will be conveyed or is it strictly entertainment? What are you trying to say with this play? I realize you're the star?
WALKER: Well, I think if -- the other night, a woman came up to me after the play, and she said, it was too loud, it was too bright, but I'm going to go home and Google Andrew Jackson.
PARKER: There you go.
WALKER: That's the best possible reaction we could have. And if you walk away with an understanding of the complexities of him, in that he embodies the worst aspects of us as Americans, as well as the best aspects and that someone -- the politics is that complex when we're having a party line forced down our throats or when the complexities of an issue are being scraped under the rug, it's important to remember that it is complicated and that we are all just people trying to govern ourselves.
And I think that is something that Andrew Jackson embodies and he was one of the first presidents to be of the people, someone we could relate to in that way.
SPITZER: Who's the Andrew Jackson of our day?
WALKER: Goodness gracious. I have no idea, but I do think if he were alive today, he'd be tweeting. He'd have a Facebook page. He would be very much alive in the way our candidates are.
PARKER: Well, in the same way that Sarah Palin is doing that. I mean, she's very much the populist queen and she can't get through an hour without tweeting something.
SPITZER: He was very much of the U.S. frontier spirit in terms of his survival techniques.
PARKER: Right. At 14 he joined the militia and was captured by British officers, at which point, he wouldn't shine their shoes so they struck him in the head.
PARKER: Rebecca, not every president would be suitable fodder for a musical. I mean, you know, "Bloody Bloody Eisenhower" --
PARKER: What other president would make good musicals today?
TRAISTER: Oh, my God. PARKER: And not necessarily one that's leaving, but is there anyone that comes to mind?
TRAISTER: Well, Teddy Roosevelt would make a terrific president, I mean, a terrific musical.
PARKER: Obama the musical?
TRAISTER: Obama makes a great book. I just wrote a book of him. I'm so happy that the narrative is so great. I mean, come on.
SPITZER: Would there be nothing jagged about it yet?
TRAISTER: The most colorful character in our current political scene for this sort of treatment.
TRAISTER: She's practically already a reality show -- I mean, the reality show. She's in "Dancing with the Stars." You mashed those two together, you already have a stage play.
PARKER: Benjamin Walker, Rebecca Traister, thank you both for coming.
And let's all go see "Bloody Bloody." We'll be right back with what we think might just be the solution of all President Obama's political problems. Don't go away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There's a morphine drip in all of our arms, you know, making us think that everything's OK because they keep getting bailed out. But sometimes, bankruptcy is a good thing. I think in irony, in reflection upon, and I've thought about this a lot, letting Lehman Brothers fail may actually have been a good thing for the system.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
WILLIAM COHAN, FORMER WALL STTET BANKER: There's a morphine drip --
SPITZER: That's right.
COHAN: -- in all of our arms, you know, making us think that everything is OK because they keep getting bailed out when sometimes bankruptcy is a good thing. I think in irony, in reflection upon, and I thought about this a lot, letting Lehman Brothers fail may actually have been a very good thing for the system. (END VIDEO CLIP)
SPITZER: In "The Arena" tonight, the economy as patient. We've tried several different medicines and the patient still isn't improving. Our economic doctors tonight, first, Bill Cohan. He worked on Wall Street for 17 years and is author of the best-selling book about the collapse of Bear Stearns, "House of Cards." And Robert Johnson, former chief economist of the Senate Banking Committee and a managing director with Soros Fund Management.
Welcome to both of you. I want to start with Ben Bernanke's interview on "60 Minutes" last night. Let's take a look at Scott Pelley asking Ben Bernanke about inflation. Take a look at this.
(BEGIN VIDEO CLIP)
SCOTT PELLEY, "60 MINUTES": Is keeping inflation in check less of a priority for the Federal Reserve?
BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: Absolutely not. What we're trying to do is achieve a balance. We've been very, very clear that we will not allow inflation to rise above two percent or less.
PELLEY: Can you act quickly enough to prevent inflation from getting out of control?
BERNANKE: We could raise interest rates in 15 minutes if we have to.
(END VIDEO CLIP)
SPITZER: He looked downright uncomfortable during that interview in every answer whether it was about inflation or quantitative easing which we'll discuss. How did he strike you?
BILL COHAN, FORMER WALL STREET BANKER: I think he's on the hot seat, Eliot. I mean, you know, how often do you get a Fed chairman who is not revered and looked up to in every word is like an oracle. I mean, it's the first time we had a Fed chairman in a while where people are actively criticizing and questioning his decisions.
SPITZER: We found out last week the Fed lent $9 trillion with a "t" to the major banks, otherwise they would have collapsed and nobody knew about it. What is going on with this lack of transparency at the fed? It's crazy to me.
ROB JOHNSON, ECONOMIC POLICY INITIATIVE, ROOSEVELT INST.: Well, there's one narrative that says they had to do it, and they rescued us and they're heroic. And the other says, they should be pretty darned embarrassed because they had to risk $9 trillion in taxpayers money because they had been remiss in regulation, supervision for years. But most importantly, Bernie Sanders and others in this legislation had to force their hand open to show us what they've done. They should be facilitating the correction, not resisting it. SPITZER: The lack of transparency is one thing. And even if you believe as I do, and I know Bill, you do that they had to make those loans at the moment of crisis. The crisis occurred because of the Fed policies for the past decade. Is that a fair statement?
COHAN: Well, I mean, absolutely. The Fed and the SEC, and the bankers themselves, I think caused this crisis. This is yet another crisis, Eliot, that I think that Wall Street has caused, perpetrated in the last 25 years, all because, in fact, of the way they're structured, the way their incentive system works. I think yes, this could have been easily avoided if the right incentives were in place. And unfortunately, there's a revolving door that has existed for some time now between the regulators and Wall Street. The best job in Washington is to get to Wall Street as quickly as you can. And that allows these kinds of oversights left to be done carefully.
SPITZER: Am I correct to saying there are two resolving doors. One is the people who go back and forth between the Fed and the banks, and the other is the money that goes back and forth between the Fed and the banks. The Fed just keeps pumping money into these same banks that create a crisis. The bonuses go up and the compensation goes up, but banks get bigger. And then we have another crisis. So how do you break this crazy dynamic? What's the next best step?
COHAN: If you really want to change what's going on on Wall Street and the behavior, you've got to change the incentive system. And that is not happening.
SPITZER: Tell us how you do it.
COHAN: What that means is that when these firms were private partnerships, these partners had their full entire net worth on the line every single day for everything they did. When they went public, which began in 1970 and this continues to all public companies, none of them have any assets.
SPITZER: So what did they do? They're playing with other people's money.
COHAN: They're playing with other's people money.
SPITZER: And just so it's clear, who are those other people? Our money?
COHAN: Creditors, shareholders and taxpayers.
JOHNSON: Who buy their bonds are anesthetized because they don't have to fear default.
SPITZER: That's right. Because the government stands behind them, because what was the metaphor you used, how do we -- we bail them out?
COHAN: There's a morphine drip --
SPITZER: That's right. COHAN: -- in all of our arms, you know, making us think that everything is OK because they keep getting bailed out when sometimes bankruptcy is a good thing. I think in irony, in reflection upon, and I thought about this a lot, letting Lehman Brothers fail may actually have been a very good thing for the system because it reset the bar and it made everybody realize what's going on.
SPITZER: It was a good thing we then took the message back by guaranteeing a bill that everybody else --
COHAN: That's two days later.
SPITZER: It's two days later. The current debate about tax policy, we are giving away $700 billion of tax dollars, otherwise taxes paid to the rich. Does this make any sense? Rob, tell me how do you process this?
JOHNSON: Do you think rich people need to be supported in consuming more right now? Is that the highest priority?
SPITZER: So how do you see it? What should we be doing?
JOHNSON: We should be doing public long term investment and infrastructure, education and basic science. That's very, very simple way of target productivity going-forward. We should not focus on austerity. We should focus on support and stimulus and get this economy going.
SPITZER: There is a mania right now that has overtaken our debate about economics which says the deficit, the deficit, the deficit. And other people are out there screaming jobs, jobs, jobs. If you had to choose between reining in the deficit and jobs, which would you do?
JOHNSON: I would choose jobs. And as a matter of fact, I think it's a win-win gain. I just wrote something on new deal 2.0, a new working payroll that says if you focus on austerity, your debt to GDP ratio is going to deteriorate. If you focus on productivity, it will come back down.
COHAN: Look, I think you had a very rare moment in time. You had Paul Krugman today on the "New York Times." You had David Stockman on your show a few weeks ago. They are both in agreement. If you think of two people on further ends of the political spectrum, I don't think you could find them, and they are both in agreement. We need to let the tax cuts expire. You need to put some of the savings towards paying down the deficit. And I think that will go just like it happened in '94 because that unleashed sort of the animal spirits that we saw March 1. There's $2 trillion of cash on the balance sheet, a quarter (ph) of America. They don't need more cash to decide whether to invest. They need to understand that the United States is getting its fiscal house in order so we don't go the way of Ireland, we don't go the way of Greece, we don't go the way of Portugal.
SPITZER: But the $4 trillion that we saved over the next decade by the Bowles/Simpson bipartisan commission is exactly the amount -- COHAN: If it's in effect?
SPITZER: If it were put into effect --
SPITZER: -- is precisely the amount that we're giving back to taxpayers by extending the Bush tax cuts.
JOHNSON: That's right.
SPITZER: So why not simply say to some piece of it, the wealthy in particular, you don't get the tax cut, we can use that revenue to either draw down the deficit or invest it as you're suggesting, wouldn't that be a better plan for the economy?
JOHNSON: My father is a retired physician. He said the way you get people out of paying is you convince them it's transitory. Anybody can bear a transitory payment (ph). Ninety-seven percent of our population needs some reassurance right now. The three percent who are best off do not need more after taxes.
COHAN: And letting the tax cuts continue is more morphine drip. We need to reset, you know, ourselves and the amount of money we spend, the debt we take on as a country and as individuals. We need to reset all that, and start again and learn how to behave properly again and fiscally responsibly again.
SPITZER: Bill Cohan, Bob Johnson, fascinating discussion, great ideas. Thanks for being with us.
When we return, you may think the Chinese government doesn't like global. It turns out there's been a little bit of ego surfing going on at the highest levels over in China. Details when we come back.
(BEGIN VIDEO CLIP)
REZA ASLAN, AUTHOR, "TABLET & PEN": One thing that people need to know, especially Americans about this incredibly diverse mosaic part of the world, is that there is a chasm between the people of the Middle East and the leaders of the Middle East. And if we really want to know what's going on over there, we need to hear from the people.
(END VIDEO CLIP)
SPITZER: Time for "Fun with Politics." You know, Kathleen, everybody in the world is reading WikiLeaks, but not if you work for the Defense Department or the State Department. The federal government has said their employees can only read WikiLeaks if they have security clearance even though our kids are reading it. And right here, I'm holding the very document --
KATHLEEN PARKER, HOST: Give me that. SPITZER: -- that today is causing all the excitement around the world but our Defense Department won't let its own employees read it. It makes no sense to me. I've got to tell you.
PARKER: Yes. Well, you know, I can talk back because in China, as you know, they've been trying to block Google all together. They call it the great firewall of China, get it?
SPITZER: The great firewall, I kind of like it. That's cool. Is it going to work?
PARKER: Yes. Well, I don't know. We'll see. Not only are they censoring Google, but they're even trying to sabotage Google's China operation. And how do we know this? From WikiLeaks, of course.
SPITZER: The source of all good information.
PARKER: Yes. Well, apparently so, and that information too. Now here's the fun part. While the Chinese (INAUDIBLE) bureau is trying to keep people from connecting to the outside world, guess who's Googling themselves?
SPITZER: I can't imagine.
PARKER: You've got it, the Chinese leaders. They've been googling themselves.
SPITZER: Well, of course, everybody does at one point or another until you find out that you don't like what you're reading. And that's what's happened over there.
PARKER: They find out nobody likes you.
SPITZER: They call it ego serving or self-googling or master googling. I'm not sure what the Mandarin phrase for it is, but there's a leader there, Li Chang Chuan (ph), who saw on Google that people were saying negative things about him. He was not beloved by the people. Not a good thing in a communist regime, apparently. So what did he do? He said, we're going to shut down Google. Not so good.
PARKER: I didn't know that you spoke Chinese, Eliot? That was quite impressive pronunciation, I have to say.
SPITZER: We're taught of that.
PARKER: Don't these guys ever learn? I mean, the Great Wall of China was built to keep out invaders out, right, and had that work out. But listen, if a boy in Beijing can friend a girl in Birmingham, if you're a Birmingham, and if your own kid can read Wikileaks --
SPITZER: That's good.
PARKER: There ain't no high -- there ain't no wall high enough.
SPITZER: I'm with you on that. I'm going to quote President Reagan. I don't do it very often. But here he was absolutely right. He said it to the Russian, Soviet Union at that point in time. We're going to say to the Chinese leadership "tear down that wall."
PARKER: Here here, Eliot. And not true, he quotes Ronald Reagan all the time. He's a closet Reagan --
SPITZER: I don't give you away. Don't give me away.
PARKER: We'll be right back.
SPITZER: Tonight's "Person of Interest" is an Iranian-American writer and scholar who has the unique perspective that the gap between the Middle East and the West can be bridged through literature and the arts.
PARKER: Reza Aslan is the editor of "Tablet & Pen: Literary Landscapes from the Modern Middle East." It's a new anthology of modern Middle East literature.
Reza, thank you so much for coming on our program.
REZA ASLAN, AUTHOR, "TABLET & PEN": Thank you for having me. It's a pleasure to be here.
PARKER: Now, you assert that we can bridge the gap between Middle East and the west through literature.
ASLAN: Well, look, I mean, the truth is that the only time we ever hear about this region is when we hear from their political or religious leaders. And if there's one thing that people need to know, especially Americans, about this incredibly diverse mosaic part of the world is that there is a chasm between the people of the Middle East and the leaders of the Middle East. And if we really want to know what's going on over there, we need to hear from the people.
PARKER: You know, recently, I guess it was over the summer, some of the higher ranking officials in Iran threatened Ahmadinejad with impeachment. How likely is that? Is that remotely possible?
ASLAN: Impeachment will be difficult because you would need the OK of the supreme leader. And while there is ample evidence to show that there is no love lost between the supreme lead Ayatollah Khamenei and Ahmadinejad, on the contrary they are very much in conflict with each other.
SPITZER: You raised the domestic political situation that Ahmadinejad is in and painted a picture that he's not really very popular with anybody at this point. Which inevitably raises the question, is he using the issue of obtaining nuclear power, nuclear weapons for domestic political purposes. Is he playing it for his domestic base, or does he really intend to get weapons and then use them as an international force?
ASLAN: Not weapons. The term nuclear weapons is never used in any political or social circle in Iran for obvious reasons. But the idea of being able to enrich uranium to their heart's content is something that every Iranian, regardless of their politics or their piety absolutely unconditionally believes in. There's nothing that's going to change, that sentiment in Iran. Nothing that anyone can do is going to keep Iran from continuing to enrich uranium. Now, the question is --
SPITZER: To what end.
SPITZER: Here I ask that question.
ASLAN: Exactly. The question is, well, to how far, and can we keep them from weaponizing that program? And I think that's something that is actually we're far more successful in doing than we actually think.
PARKER: You know, you've said that the Iranian people are -- it's nonnegotiable whether they have a right to nuclear energy. But do they feel they also have a right to have a nuclear weapon.
ASLAN: You know, this is actually quite a robust debate in Iran. A lot of people say to themselves, look, we don't want nuclear weapons because it will create greater isolation. Sanctions are really starting, particularly these targeted sanctions that the Obama administration has applied, really starting to have a major effect on the Iranian economy at a time in which the global recession is making life much worse. So there is an understanding that with nuclear weapons comes profound consequences that no Iranian actually wants. At the same time, Iran is a nationalistic very patriotic people. They look over at India, they look over at Pakistan, they look over at Israel, they see three nuclear powers outside of the MPT. And all three of whom are not -- not only are they not getting punished for their programs, they're actually getting rewarded for those programs, and they figure, I think a lot of them, well, why not? It's much easier to beg for forgiveness than to ask for permission.
PARKER: That's not irrational. I wish the whole world were nuclear free. But if someone else is going to have one, I want my country to have one. You know, so it's not completely insane that they should feel that way.
SPITZER: But there is a fundamental distinction. The Iranian government is the only one that speaks forcefully and consistently with a voice that both denies clear historical facts referring to the Holocaust, and speaks, saying it wants to eliminate the state of Israel. And so you can understand the Iranian government must understand that with rhetoric like that the prospect of its obtaining this weapon evokes a certain response. And if its rhetoric and its stated purpose in the international community were to take a fundamentally different direction, then perhaps people would react to it differently. So this is not a self-enclosed environment in which they're just saying, well, others have it, we need our toys too.
ASLAN: There is no question that an Iran with nuclear weapons would be a threat to global security. It would be a threat to America's regional ambitions in that part of the world. It would empower and embolden the regime, particularly the military elements in the regime that are becoming increasingly a part of the political process there. So we have to do everything in our power to make sure that Iran doesn't develop nuclear weapons. But not because they're going to use them in order to commit collective suicide. Anyone who thinks that, anyone who thinks that Iran wants a nuclear weapon in order to commit suicide with it, doesn't really belong in the debate.
PARKER: All right. Reza Aslan, a fascinating discussion. The book is "Tablet & Pen." Thanks for being with us.
ASLAN: It's my pleasure.
PARKER: And we'll be right back.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Hello, I'm Joe Johns. More of "PARKER SPITZER" in a moment. First, the latest.
President Obama announces a deal with Republican leaders to extend the Bush tax cuts for two years and unemployment benefits for 13 months. The president made it clear, neither side is completely happy with the agreement, but says it's time to put politics aside.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: People didn't send us here to win symbolic battles or win symbolic victories. They would much rather have the comfort of knowing that when they open their first paycheck on January 2011, it won't be smaller than it was before.
(END VIDEO CLIP)
JOHNS: The agreement also lowers the payroll tax by two percentage points for a year. But congressional sources tell CNN House Democrats may not be quick to rubber stamp the compromise.
The first ever murder in a town created by the Walt Disney Company may be solved. Police in Celebration, Florida say a homeless man admits attacking his counselor with an axe. That suspect now faces a first degree murder charge.
Defense Secretary Robert Gates is not optimistic that the ban on openly gay and lesbian troops in the military will be repealed by Congress any time soon. Democrats are hoping to do so before the lame duck session ends next month.
Coming up tonight on "360," at 10:00 p.m. Eastern, the latest on Elizabeth Edwards and her decision to stop her cancer treatment. Her estranged husband John is now at her side. That's the latest. "PARKER SPITZER" is back after this.
PARKER: Oh, post script. Well, if the devil is in the details, then maybe a little thing like a cell phone could make a difference for President Obama. You know, some people are saying that ever since he was elected and he had to give up his BlackBerry, he's just not quite the same. You know, he seems a little, I don't know, detached.
SPITZER: Disconnected as you said?
SPITZER: You know, it is true, Kathleen, when he was campaigning, it was never out of his hand. He was always in communication with somebody. His poll numbers were good. The public liked him. I don't know who he's talking to. Find that e-mail address. Send him another e-mail.
PARKER: I think he was talking to Harry Reid and Nancy Pelosi. And maybe that's the problem.
SPITZER: No, no, no, no. I don't think he had their e-mail addresses yet. Maybe that was the good news. I don't want to dump on them. They've done fine stuff, but he needs a different bunch of advisers. We've been talking about who he should bring in. Maybe he just gets rid of all the advisers, just uses the e-mail. Sends those people messages he was talking to back in the campaign.
PARKER: Why don't we send the president a message right now and tell him.
SPITZER: You got his e-mail?
PARKER: I got it right here.
SPITZER: Do you really?
PARKER: You don't have his address? Oh.
SPITZER: I can't tell you if I had it.
PARKER: Too bad. Of course, we're not endorsing any brand of mobile device. Just saying the answer, Mr. Obama, is in the palm of your hand.
SPITZER: Thanks so much for being with us. Be sure to join us tomorrow night.
Good night from New York. "LARRY KING LIVE" starts right now.