Return to Transcripts main page

Parker Spitzer

Interview With Rick Perry; Election Playlist

Aired November 04, 2010 - 20:00   ET


KATHLEEN PARKER, CNN NEWS ANCHOR: Good evening. I'm Kathleen Parker.

ELIOT SPITZER, CNN NEWS ANCHOR: And I'm Eliot Spitzer. Welcome to the program. Tonight, a blockbuster show. Kathleen, we start with a guest so angry at Washington he's talking about session. He's the newly elected governor or Texas, Rick Perry -- going to be a great, fun interview in a couple of moments. Also, we have somebody who knows a thing or two about the economy, Joe Stiglitz, got a Nobel Prize. He's going to tell us what we have to do to get this economy of ours moving once again.

PARKER: And Eliot, we also have fun tonight with none other than Sarah Palin who's got a new ad out, she's got a victory lap ad, even though she didn't win anything.

SPITZER: She didn't win anything, did she?

PARKER: Well, she thinks she did. Her people won. How's that?

SPITZER: All right, fair enough.

PARKER: So the grizzly is back, baby.

SPITZER: And we hope she hangs around a long time, good to talk about. I'm a big fan of Sarah Palin, always fun to chat about.

But first, tonight as always, our "Opening Argument." You know what, after Tuesday in the elections, everybody is saying, Mr. President, compromise, be bipartisan, all good, it sounds great, but I hope they don't move too quickly.

Just this morning, in front of a gavel, the press secretary to all the media says, "Yeah, fine, we'll concede on this critical issue of tax cuts for the rich. Why? It's bad economics, it's against the principles the president believes in, and he got nothing back. Don't move to quickly, that's what he did with the stimulus, he's done it over and over. Stand for your principle, people will respect you.

PARKER: That gaggle, by the way, is the gaggle of press not geese.

SPITZER: Often the same thing.

PARKER: And while we're on the farm, by the way, you don't ever give away the milk, because nobody wants the cow, right? So why are they going to buy the cow? So, look what he's done, he's come into the gaggle, it was odd, you know, it was just strange, because it wasn't even Obama saying this, it was Press Secretary Robert Gibbs saying, we will the tax cuts for the rich. You know? And jump back, what is that about? Where does that come from?

So, it reminds me of this, Eliot, it reminds me of President Obama's foreign policy. No pre-conditions, he's just going to down, sit down with anybody, any old person. Well, you know, this doesn't work in Washington. As you know, this is the jungle, right? So, you've got to hold back something, it's like -- as in the great big world. So, I think you and I are probably agreeing that the president is showing weakness.

SPITZER: I don't want to say showing weakness, showing not the same negotiating style I would like to see. But he did get something back, actually, from Mitch McConnell, the head of the Republican Party, minority leader, thankfully, for some of us -- in the Senate who took another shot at the president who took another shot at the president, just today, who said once again getting rid of him, replacing him is mission one for the Republican Party, the Party of no is becoming the Party of heck no. I don't get what's going on, here.

PARKER: Eliot, they don't say "heck," but anyway, I don't think this is a big surprise, look, it's the same old rule, when you show weakness, the pack turns on you, right? So, this is what should be expected. As a voter, I'm thinking great, we're going to compromise, lovely. But as someone who observes human nature, I think this is -- it looks like weakness, and people respect strength.

SPITZER: Yep. And he should take a lesson, once again, from Bill Clinton. When President Clinton had to negotiate after his '94 electoral debacle, he negotiated with Newt Gingrich, but he won those negotiations by hanging tough, forcing the Republicans to shut down the government and President Clinton said, "I will stand for principle, I will stand up for those who elected me, the American public," and made Newt Gingrich look like the ogre by shutting down government. Once again, President Obama, I think could, take a lesson from his Democratic predecessor.

PARKER: Well, indeed he could, for sure. But you know, who knows, maybe he's crazy like a fox. Maybe he's just setting it so he can say, hey, I tried to compromise, they wouldn't do it.

SPITZER: I sure hope so, and I'm waiting to see that fox emerge out of the foxhole or fox or whatever foxes live in. Foxholes, right? That's what it's called, a foxhole.

PARKER: Foxes live in foxholes? I have no idea.

SPITZER: In fact, we have some in our backyard, upstate, I can tell you they do know they live in foxholes. All right, and now Kathleen, let's get started, time for our "Headliner."

PARKER: He just won a third terms of governor of Texas going away and he's the author of a new book, it's called, "fed Up: Our fight to save America from Washington." Governor Rick Perry, congratulations and welcome. I promised Eliot he could have the question.

SPITZER: I do...

PARKER: I want to just -- but I have to. I have. Do you still jog with a pistol?

GOV RICK PERRY (R), TEXAS: No, I never let people know whether I'm armed or not.

PARKER: OK, keep guessing.

PERRY: So, that's the reason it's called a concealed handgun license.

SPITZER: So, we're on notice right...

PARKER: Now, you're not armed right now?

SPITZER: He just said he wasn't going tell us. I can't blame him for that. Tough questions coming up. First question and I say this as a Yankee fan, quickly, Rangers or Yankees next year?

PERRY: Well, if the decision is made on who has a personal income tax in their state and who doesn't...

SPITZER: All right, I see you're a good governor. Yeah, but we can pay more.

PERRY: You better pay a whole lot more to cover that income tax.

PARKER: All right, the good news of the day is that President Obama has said he would consider extending the tax cuts to the rich. So sounds like compromise, what's your take on that?

PERRY: I hope he takes every opportunity to get our country back on track economically and one of the best ways they can do it is to keep from spending this money that frankly we don't have on programs that we don't need.

I'm a big fan of letting people keep more of their money. As a matter of fact, one of my goals in "Fed Up" is to have a national conversation about how do we send less money to Washington, D.C., keep more of it in the states, because I truly believe that the states have a better idea of how to take care of their citizens whether it's educating our children or health care delivery or transportation infrastructure, not send it to Washington skimming it off part for operational purposes, or whatever they do with it, and then send it back to the states with a lot of strings attached all too often. Whether it's health care, or for instance, unemployment insurance, they had $550 million in '09 that they were going to send back to the state of Texas, but they said if you take it, though, you're going to have to change your program and expand it and we said no thank you.

SPITZER: Yeah, but let me ask you, the state does the same thing to cities and towns. You are a governor, I was a governor, there's no question when the state sends money to a city for education, it says, but we're going to obligate you to do certain things, so you can't disagree with the notion if its you're money from Washington or your money from Texas.

PERRY: And the fact of the matter is that Newt Gingrich said, you know, if it's good for the gander, it's good for the goose as well, so let's make sure that in your state you're not creating unfunded mandates and taking the people's money. So, look, I don't leave anybody unscathed in this book.

PARKER: We've noticed. It reads like a Tea Party manifesto, so, you know, you must feel good about what happened Tuesday night.

PERRY: I feel good that the people of America stood up and said let's quit spending money. I think that is the real issue. That's what I saw in the Tea Parties that I went to. These are people who are really concerned about fiscal conservatism and small government, they want to see more of both of those.

SPITZER: Governor, let's take a look at some of these numbers because -- health care, and we're going to get to the federal bill in a moment. Your Medicaid budget, since you have been governor, has doubled. The volume of federal dollars has doubled to $13 billion per year and you still have 25 percent uninsured rate, which means that when those folks who are uninsured go to the hospital, they get care and everybody else pays for it because their taxes cover the charity care for the hospitals, right? So, what is your answer to that? You've double what you have taken out of Washington for a health care system that isn't functioning very well in Texas. It's the highest uninsured rate in the nation.

PERRY: Well, I happen to think the states need to be left to deciding how to deliver that. One of the problems, Eliot, that we run into is that Washington sends these dollars and says here's how you have to spend it. And that's the problem and that's the issue that, I think, needs to be addressed in Washington, D.C. today is allow -- I think you ought to block grant it back to the states and let us decide how the best way to take care of health care.

SPITZER: Governor, I can tell you that in New York we get money from the federal government, a fair bit of it. We figure out how to spend it, we've got the toughest areas, some of the lowest income populations. We don't have an uninsurance rate anything close to what you got in Texas and we deal with the same federal constraints and so, on the one hand, you're willing to take the money, but you're not even insuring people. How do you justify that and you say you don't want federal money...

PERRY: And you don't have a 1,200 mile border with Mexico and a substantial...

SPITZER: No, no we're talking health care.

PERRY: Well, a substantial number of those individuals that you're talking about are the uninsured that are in our state illegally.

SPITZER: We've the same issue of immigration here in New York City and New York state that you've got in Texas...

PARKER: Well, it's not like the Texas border.

SPITZER: Sure it is. But we don't have anything close to 25 percent uninsured that everybody else in the state and now the nation is paying for.

PERRY: And you also have a state that's damn near bankrupt.

SPITZER: Oh no, oh no.


No, no, but you're taking...

PARKER: Governor duel, governor duel.

SPITZER: You're taking $14 billion of federal money for your Medicaid system and you've still got 25 percent uninsured. So how are you going to overcome this? What's your answer to that uninsured rate?

PERRY: I happen to think if that the federal government will block grant the dollars, allow us to use private insurance, come up with different schemes so that we can get people into insurance, that's a lot better way to do it than being directed by Washington...

SPITZER: But the highest uninsurance rate in the nation. You know, every other governor's got to deal with the same set of constraints imposed by the federal government, nobody has an uninsured rate like that.

PERRY: Texas has always decided that they wanted to be a state that had fewer government services. That's one of the things I talk about in "Fed Up." If you want to live in a state that has high taxes, high regulations, big government programs.

PARKER: He does.

PERRY: Then they can move to New York.

SPITZER: Let me ask you a question, Governor, when somebody goes into the hospital and has no insurance, they get health care, they're in the emergency room, they get care, the state then reimburses that hospital on charity care, right?

PERRY: That's correct.

SPITZER: And so, everybody else in the state's paying for it. And as a federal taxpayer, I'm in New York paying for it.

PERRY: And that is how Texans want to run their system.

SPITZER: But you're happy to take all the federal money to do this.

PERRY: Actually, we would like to have it block granted without their strings attached.

SPITZER: OK, let's switch to the stimulus, you were against the stimulus, I gather.

PERRY: Yeah, we're spending money we don't have on programs we don't need.

SPITZER: But you took $18 billion.

PERRY: How much money did we send up there, Eliot? I mean, Texas is a huge donor state.

SPITZER: So is New York.

PERRY: And I think it's really kind of disingenuous for you guys to say, oh, my god, you took some federal money. Well, look what we sent up there in federal income tax and federal gas tax dollars, et cetera. You bet, when the federal government says, here's some -- just don't put the strings attached to it, that's my problem.

SPITZER: But you were in favor of the stimulus?

PERRY: No, I'm in favor of the federal government getting their spending habit under control. He dollar -- I'll tell you what I'm really in favor of, I'm in favor of not sending anywhere near as much money to Washington, D.C., allowing the states to come up with the ways to deal with these issues. That's what "Fed Up's" really all about, it's talking about the abuse of the Constitution, the commerce clause to expand it and to allow for Washington to be in control of our lives more than the states.

I can't believe a governor would want to have Washington telling you how to run your state, Eliot. I mean, I'm stunned. I think you would say when you were the governor, you would rather run the state, not Washington.

SPITZER: But we worked with Washington, we worked with Washington to figure out what the best way was to do it and we certainly understood the stimulus was necessary to bring back our economy. Let's discuss the issue of tenth element. I don't want to get -- where do you think the government's overstepping its powers?

PERRY: Let me back up. I don't think the federal government is what brought our economy back, I think the federal government is still stymieing and the stimulus dollars and all of those programs that they funded are still stymieing this economy.

I happen to think if they would get some predictability and some stability in the tax code, and I'm in favor of expanding these taxes and allow people to know what the tax structure is going to be. There's a lot of money out there people are sitting on it today because they're scared to death because they don't know how it's going to... SPITZER: I'm been confused by this argument about certainty. I think you and I would agree there's about $2 trillion that corporations are sitting on, just kind of sitting there, isn't being invested. Now I know it's sort of the storyline, I'm not saying that to impugned it, but storyline of the of the business community right now, we need certainty, certainty about what? Tax rates are set. There has been the same...

PERRY: People know what the capital gains tax next year is going to be?

SPITZER: It's no more or less uncertainty, no Rick, there's no more, no less -- no more or less uncertainty now than there's been at any point over the last 20 years when Congress will makeshifts and discuss these issues. The issue is demand. Every economist I speak to says there's no demand and that's why the stimulus saved two to three million jobs.

PERRY: Yeah, well, we agree to disagree.

SPITZER: So, what should the government have done when unemployment was back...

PERRY: I think the government needs to stand back and let the market work us way through. That's why we have bankruptcy laws. I would suggest to you that someone were to come in and said listen, Jim, if you're going to fold up, here's the offer that we'll make, we'll restructure it, these people will keep their jobs and we will go on down the road and America would have been substantially happier, I think. I don't think the federal government, coming in and being this central decision maker for all the states and -- I mean, the idea that we're owning an automobile company today? Holy mackerel.

SPITZER: So you would have let GM and Chrysler and Goldman-Sachs and Citibank and Bank of America all go bankrupt?

PERRY: I would have let them restructure.

SPITZER: Through -- you would have made them file bankruptcy?

PERRY: Yeah.

SPITZER: Even though after when Lehman went bankrupt you saw what happened to the economy.

PERRY: I think that the federal government getting involved with private sector dealings is not good public policy.

PARKER: Governor Perry, please hold that thought just one minute. And don't go away, we'll be back in just a few minutes.


PERRY: But let the states decide. Don't force us from Washington, D.C. to say here is the size of tube socks that you're going to wear down in Texas, put them on. (END VIDEO CLIP)


PARKER: We're back now with Governor Rick Perry of Texas. Let's talk about your book for a minute. You -- it's called "Fed Up" and you spent 185 pages talking about how fed up you are. What are you most fed up about or with?

PERRY: I think we've pretty much covered it in the early segment here that Washington has abused the Constitution. You go back to a decade ago with Woodrow Wilson, we start, you know, with the 16th amendment and allow for the income tax to be used to start funding all of these programs of government then you really see the explosion during the new deal. And government has now become this nanny for us and I think the Tea Parties and the election Tuesday night was a confirmation that Americans are really ready for Washington to quit spending all this money that they don't have on programs that we don't want.

PARKER: Well, of course, Eliot and I have talked about the day after the election everybody's suddenly running for president, everybody's got a lot of books out, everybody's got a lot of red and blue on their covers and of course there's a lot of speculation about what your intentions are. You have said that running for president steals the soul or something along those lines.

PERRY: I've probably said that, but more importantly I said I'm not interested in leaving the best job in America. I really believe that governors are more closely aligned with the people of this country and that let the states compete. That's how our founding fathers foresaw this country was the states being the laboratories of innovation. I can promise you, Bobby Jindal, one really smart, capable governor out there, and if Bobby comes up with a way to deliver health care that is efficient and effective in his state and it will work in the state of Texas, I'll go over there and snitch that idea and move it over to the state of Texas in a heartbeat. Mary Fallin, a newly elected governor up in Oklahoma. My bet is, she will pass tort reform in her state.

One of the reasons I was never for a national tort reform was because I think we do it better in the state of Texas. We protect against those frivolous lawsuits in the state of Texas, we may visit the concept of loser pay in Texas this coming session of the legislature to further protect from frivolous lawsuits. But that ought to be our decision in the state. And if you want to live in a state that has, as I said earlier, high taxes and a, you know, substantially broad regulatory heavy burden, then move to that state, but don't make all of us wear the same...

PARKER: Trans fat free donut?

PERRY: Yeah.

PARKER: Yeah. SPITZER: Let me come back to a different issue. We're asking all of our guests, elected officials, private sector folks, a question, saying, name your cuts, everybody looks at the federal deficit in the out years and says this is more than we can afford. Everybody agrees on that principle, but everybody begins to dodge and dance quickly when we say how are you going to balance this. So, tell us if you would in the context of Medicaid, Medicare, Social Security and the Defense Department, which is where the big dollars really are, how would you save and cut in a serious way in that domain?

PERRY: Well, there's $106 trillion worth of unfunded liability in those three Social Security, Medicare and Medicaid. And I think we need to have a national discussion about -- I've got a son that's 27, and a daughter that's 24. I can promise you those kids think, and rightly so, that Social Security is a Ponzi scheme, they know for a fact that it's not going to be there, if it continues down the path that it's going now. So, why should we try to fool anybody and pull the wool over their eyes. Let's have the discussion. Let's talk about it.

SPITZER: Right now, I mean, would you raise the retirement age to 70 starting next year?

PERRY: I don't know whether 70's right the number or not, but you know, let's have the discussion, though. I mean, what does that mean to people? What if you go to 66 or 67 or 68, but let's have the conversation, lets intellectually...

PARKER: Would you consider basing it on whether people can afford to live without it?


PERRY: It's -- all's on the table, let's talk about it. But let's not put it over there and say, oh, we can't talk about that, that's the third rail of politics. I don't believe that that's wise and thoughtful.

SPITZER: You'll forgive me if I push you a little bit on this.

PERRY: Sure.

SPITZER: You've been the governor of the great state of Texas for...

PERRY: Ten years.

SPITZER: Decade now. You've run social welfare programs. Saying, "let's make it part of the discussion," is fine, but begs for the follow up, are you for it? You've studied this question, you have a book here complaining about government obligations. Yes or no, do you want to raise the retirement age?

PERRY: I'm pushing -- I'm on with two very right, capable commentators having this discussion with the American people. I don't put in that book, "Fed Up," that I have all the answers, but I think we ought to have this conversation.

SPITZER: But you got to have an answer. I don't expect anybody to have all the answers, but you got to have an answers. Having a conversation isn't an answer. Having a conversation is a political punt. What's the answer? Will you raise the retirement age or not?

PARKER: I have not control over him.

PERRY: I'm not going to be the President of the United States.

SPITZER: You've been governor for 10 years and you've written a book, harshly critical of federal policies.

PERRY: Here's what I think would be a very wise thing. In 1981, Matagorda, Brazoria and Galveston counties, all opted out of the Social Security program for their employees. Today their program is very, very well funded and there is no question about whether it's going to be funded in the out years, it's there. That's an option out there.

SPITZER: So you want to let people opt out?

PERRY: I think -- you know what? Let the states decide if that's what's best for their system?

SPITZER: So the states will opt out of Social Security?

PERRY: They should, I think it's a...

SPITZER: I haven't seen anybody propose that before because that's...

PERRY: We just laid it on the table, let's talk about it.

SPITZER: And so that's your plan?

PERRY: No, it's not my plan, Eliot.

SPITZER: Well, I know, Governor, I'm trying to get you...

PERRY: I know, you're trying to get me in a corner, and I don't corner very good. What I'm trying to do is have a discussion with the people of this country on an issue that...

PARKER: I think that's a brand new idea. Nobody has said that.

PERRY: ...nobody, nobody is willing to talk about.

SPITZER: No, no, here is the problem that I have -- the Tea Party, and we have had everybody from Dick Armey to Richard Viguerie -- folks who have been leading this movement, dodging and dancing unable to give a single answer about what they actually support. Having a conversation is to push it someplace else. I want to know if there's an answer, will you raise the retirement age? Are you saying you want to have private accounts, you can say it, we'll disagree, but at least it's an answer. PERRY: OK, I think all those are legitimate options out there, but let the states decide. Don't force us from Washington, D.C. to say, here is the size of tube socks that you're going to wear down in Texas, put them on.

PARKER: We need Texas.

PERRY: I'm on the record. Boy, do you ever? Four out of five private sector jobs created between 2005 and 2009 were in Texas. This country does need Texas.

PARKER: Is it true that a lot of businesses are moving from New York down to Texas?

PERRY: Hundred and fifty-three since January have moved out of California to Texas.

SPITZER: All right, well I'll send you a little e-mail in a couple of days showing how many moved back from Texas to here.

PARKER: All right, Governor.

PERRY: And that's perfect, that's the way it ought to be, Eliot. I mean, the first phone call I got after a competing cable network chose Texas as the No. 1 state in the nation to do business was from Bob McDonnell who came in second, and he called up and said, "hey, Perry, congratulations for being chosen the best business climate in America, enjoy it, because we're coming at you." That's perfect. I mean, that's the type of competition that the states need to have with each other and I will suggest to you will really strengthen this country's economy.

SPITZER: All right, thank you much.

PARKER: All right.

PERRY: Good to be with you.

PARKER: Governor Perry, thanks so much.

Don't go away, we will be right back.


PARKER: Time for "Fun with Politics." Well Eliot, it's already started, just 48 hours after the midterm election is over, and the race for the White House has already begun with Sarah Palin's victory lap. Here's her latest viral video celebrating the candidates she helped to win on Tuesday. Take a look.


SARAH PALIN (R), FMR ALASKA GOV: Across the country, everyday Americans are standing up and they're speaking out and based on what I've seen, there's more than enough reason to have faith in America.


We're going to get back to the time tested truths that made this country great. They've enabled us to weather tough times before and they will see us through the challenges that we face today.

I'm confident and I am hopeful because this is our movement, this is our moment, this is our morning in America. It may take some renegades going rogue to get us there, it may take folks shaking it up to get there.

We got to do this together.


SPITZER: Oh, my goodness, you know, won't see give us at least one day off before Sarah Palin starts coming back at us on the TV screen? Love the bear at the end, but I don't get it, she just edits out everybody who lost, like Christine O'Donnell, the famous witch, you know, Carly Fiorina, Meg Whitman, Joe Miller. In her own state, her chosen candidate lost to a write in candidate. I don't think Sarah Palin would win in Alaska, today.

PARKER: Well Eliot, you know, I have my own doubts about Sarah Palin and of the Tea Party, but you got to admit this ad was kind of brilliant. Come on. A serious run at the White House; however, she's going to have to get all the votes in Alaska and she's going to need her own daughter's.

Well, that's Bristol Palin. Apparently, she was too busy "Dancing with the Stars" to turn in her absentee ballot.

SPITZER: Not so sure mama grizzly's going to like that. You don't want to be the bear cup who doesn't vote for the mama grizzly.

PARKER: Stay with us. We'll be right back.


SIMON SCHAMA, PROF. OF HISTORY, COLUMBIA U.: So the message to the rest of the world is panic. In fact, you're justifying really in having incredibly dark view with the relationship between American economic prospects and politics. So politics are, as you know, is being said in London where I come, actually extremely scared of total paralysis actually gripping the American system.



PARKER: Tonight in "The Arena," he's the former George W. Bush speechwriter who the "Wall Street Journal" calls the media's go-to basher of fellow Republicans. I have no idea what that means. David Frum and it's from

Welcome, David.


PARKER: And he's an art critic and a professor who has recently enlisted to fix England's education system. Welcome to Simon Schama.

SPITZER: And Nobel Prize winner Joe Stiglitz, author of "Free Fall: America's Free Markets and the Sinking of the World Economy." I bought it in hard cover, read it, and now it's out on paperback. Everybody should read it, a brilliant, brilliant book.

Joe, thank you for joining us. And congratulations as always on the Nobel Prize. You know something about this stuff.

PARKER: Now you understand you guys got together in the Green Room beforehand, so you're ahead of us in the conversation. We're going to have to catch up. But I want to start with you, David, because you were looking at the election results. The Tea Party had a huge influence. But you have said that the Tea Party scares Republican leaders. Tell us what you mean by that.

FRUM: Actually, the introduction, I can't do anything but praise Republicans for the next 12 weeks.

PARKER: That's the reason I said it. (INAUDIBLE) as you well know.

FRUM: You cut off my exit. Look, the drama that is going to be played out in Congress over the next little while is how much authority to do business do the formal leaders of the Republicans have, John Boehner in the House, Mitch McConnell in the Senate. They are in both Houses the alternative powers. Senator Jim DeMint who's got cash on hand by the bucket pool. Michele Bachmann, the House has raised more money in the past year than speaker-to-be John Boehner raised. These are very powerful people. Who will command the loyalty of the caucus and what steps can be taken by those leaders to build up their own authority and to persuade their followers, in fact, to follow them?

SPITZER: Clearly, with the Tea Party playing some significant role in the Republican Party, there is absolutely no tolerance in the Republican side of the aisle for an additional stimulus, for anything that would have been considered traditional Keynesian economics. And so, Joe, I want to ask you, you have said the stimulus worked. We are in desperate shape/shapes. Unemployment is at 9.6 and not going anywhere. The Fed is doing this QE2, quantitative easing thing which is almost too complicated even to talk about. Many people don't think it will work. What's going to happen? What do we do now?

JOSEPH STIGLITZ, NOBEL PRIZE-WINNING ECONOMIST: We're going to go into a Japanese-style malaise. I mean, you are right, the stimulus did work. If it hadn't been for the stimulus, unemployment would have been two percent or more higher. Quantitative easing is going to help a little bit.

SPITZER: Tell folks what that means, I mean, in a straightforward and easy way as you can. STIGLITZ: Yes. Basically, what they're trying to do is lower the longer term interest rates, the interest rates for, say, government borrowers for five years. And that's around 2.5 percent. The general view is that it might be able to be lowered a little bit. Very little. But then, that doesn't have much affect directly on the U.S. economy.

SPITZER: And they're going to spend about $800 billion doing this?

STIGLITZ: About $600 billion, but they're continuing on the program that will bring it up to $800 billion, $900 billion.

SPITZER: So if that's not going to work, what do we do?

STIGLITZ: Well, the only thing that we could do that would actually work would be some fiscal stimulus, dealing with the mortgage problem that still hasn't been dealt with. So there are things that could be done, need to be done. The real problem is with this Congress, will it be done?

SIMON SCHAMA, PROF. OF HISTORY, COLUMBIA U.: So the message to the rest of the world is panic. In fact, you're justifying really in having incredibly dark view with the relationship between American economic prospects and politics. So politics are, as you know, is being said in London where I come, actually extremely scared of total paralysis actually gripping the American system.

STIGLITZ: One interpretation of what's happening in monetary policy is they saw paralysis coming. The monetary Federal Reserve said paralysis is coming. We're not going to get anything fiscal. We know, and Bernanke has said this, we know that there are very strong limits to monetary policy, but in situation with this dire economic situation, having created the problem in the first place, we have to do everything that we can.

SPITZER: The Fed, you mean?



STIGLITZ: It has to do everything they can. The problem is and this goes back to what's happening around the world, most of the counties that are actually doing well in the emerging markets see this as an attempt at competitive devaluation, a bigger than neighbor (ph) policy. And Europe sees it very much this way.

SPITZER: Explain that because that's a hugely important point. We are basically getting into a currency war with our trade partners and nobody is going to let us as United States dictate the terms of trade. They're going to say you do that, we'll respond.

STIGLITZ: Exactly. So the way this works is, in the Great Depression, what we did is we put tariffs. That's not allowed now because of the WTO. SPITZER: Right.

STIGLITZ: So what we do is --

SPITZER: World Trade Organization.

STIGLITZ: What we do is we lower the interest rates. That makes it less attractive for money to come into the United States. That means the value of the dollar goes down. That means our exports are cheaper and this is what is meant by a currency war.

SCHAMA: There's politically -- there's a card that the president can play, you know, and at the moment he seems to have no cards to play whatsoever, or they're very, very bad deck that he's been dealt. Just as bad when he was inaugurated. But in effect, it's the political system dominated by this enormous House majority is going to seize up, while the country sort of sits and fries or turns into Japan. The president can position himself.

FRUM: It doesn't have to be that way. It can be positive. And here's what can happen.

I can paint a dark scenario, here's the positive one. The habit of cooperation can be infectious. The habit of delivering results and gaining success can be infectious. As leaders succeed, they enhance their credibility with their followers. If, for example, there's an early agreement on the extension of the Bush tax cuts for a certain period of time, you won't like it. But if there were such a deal, the effect of that would be, I think as a layman I would suggest it might be helpful to the economy. But politically, it would enormously enhance the power of John Boehner and Mitch McConnell if they were seen to deliver that. And suddenly the idea, well, maybe we have to give the president something in return. That would also seem a reasonable thing to pay for something that Republicans want so --

SPITZER: What you're saying is rational logical, you impute good faith to a John (ph) McConnell who even today was blessed -- at the president.

FRUM: No, Mitch McConnell is stuck. Look at Mitch McConnell's problem. He was just badly humiliated in his own home state of Kentucky. He has got --

SPITZER: Fair point.

FRUM: Jim DeMint won a local political war against him. He cannot afford to be the man he is. He's not a radical. He's looking over his shoulder at radicals. But if he can do something that Jim DeMint could never do and that Rand Paul could never do --


FRUM: -- he can get that thing. He's a much more powerful man.


SPITZER: Hold the thought. We have to take a break. We will be right back, I promise. Hold the thought.


SPITZER: We're back with Simon Schama, David Frum and Joe Stiglitz.

Simon, jump right back. Yes.

SCHAMA: Well, I think there are differences between Tea Partier and Tea Party, oddly enough. Mad hatter and mad hatter. Oops, I didn't really say that. The difference between Marco Rubio who we were saying in the Green Room has smells to me like a handsome pragmatist. You know, protege of Jeb Bush and Rand Paul.

SPITZER: Looking much like Scott Brown.

SCHAMA: Much more like Scott Brown. Maybe not that, you know, bending quite that much. But Rand Paul is another Michele Bachmann, but Rand Paul is another kettle of fish all together. And it's unclear that, you know, if the notion that the extension of the Bush tax cuts for everybody is going to persuade people like Rand Paul into delivering. Rand Paul doesn't really care. He's got true religion. He sort of sees the passionate surge of an entire reformation of the American political system at hand like a kind of sacred apparition.

STIGLITZ: And beyond that is the problem which is those tax cuts are not going to stimulate the economy very much. And they're going to leave a legacy of more debt. And then the question comes, can we stimulate the economy? Can we do anything about the mortgages? Can we do anything about the small and medium sized banks, the community banks that are not lending? And there, the core you might say philosophy, if you can dignify it by that word, but that belief system, what they ran on becomes a real impediment because the only way you stimulate the economy is unfortunately by spending.

PARKER: Has Obama forfeited his leverage by coming out this morning and saying he would consider the tax cuts without anything else on the table?

FRUM: On the contrary what he has, he's opened the door to the cycle of positive cooperation. I think he sees this as a possibility too. He didn't say he would do it. He says I'm ready to talk. I'm ready to do business with you. And, by the way, this is not a crack, because one of the things that people in Congress have to fear is the president has centralized decision making. Congress will never negotiate as well as the president. There are too many of them. And so they have to worry that if he makes an offer, he can trap booby -- he's just more nimble and deft inherently because he's won. So by going first, he opens the door. He makes it possible for others to follow. And that can then, we can then have some cooperation in reforming some of the things in health care that Republicans like without blowing up the whole --

SPITZER: Analytically that's right although the record of this White House is that they give everything away, get nothing back. Their negotiating strategy has not been one that I would use in a course other than say don't do it that way. I want to come back to some of what you said.


SPITZER: Exactly. Capitulation not negotiation. Mortgages, you have written a lot about this. What is the answer to this mortgage overhang which is really the huge dead weight around our real estate and housing market?

STIGLITZ: Yes, just remember, one out of four Americans who have a mortgage are more under mortgage than value of the house. The mortgage foreclosure problem is not going away. Two million or so people lost their homes in 2008, two million in 2009. The pace is likely to get greater in coming years. And there are a lot of these, you know, technical things that are very, very serious.

Actually I think the rule of law is really at stake here. What needs to be done is, in one way or another, the value of the mortgages have to be written down. They will be written down in one way or another. A foreclosure is an unpleasant way of doing it.


STIGLITZ: It doesn't do anybody any good to have empty houses and homeless people. To throw people out of their homes, it destroys communities, it destroys the homes.

FRUM: What is going to happen you can do fiscal stimulus, you just have to call the tax cuts.

STIGLITZ: Tax cuts don't work. We had them do something else and call it --

UNIDENTIFIED MALE: Call it a tax cut.

FRUM: But that is going to be the test of the administration's ingenuity is they have to understand -- look, as you know, spending and taxing --

SPITZER: You guys apparently wasted games than we are then.

FRUM: The same thing, right? Just find something, do your stimulus, design it as a reduction in tax, not an increase in spending and you will find people who will support that.

STIGLITZ: There are some things like investment tax cut, would be something that could stimulate the economy. It's not the best way of doing it. But there are a variety of ways of doing that.

SPITZER: And nobody is going to invest in capital right now where there's no demand. Anyway, Simon Schama, David Frum, Joe Stiglitz, fascinating conversation, politics, economics, gossip, who knows what. Thank you so much.


UNIDENTIFIED MALE: Thank you. PARKER: Thank you so much. We will be right back.


SPITZER: So what's your song?

JOE QUEENAN, COLUMNIST, "WALL STREET JOURNAL": For Nancy Pelosi, obviously "Sympathy for the Devil."

SPITZER: Oh, my.

QUEENAN: And I think for the Democrats, it would be you're on the "Highway to Hell."

SPITZER: Oh, wow, you're tough.

QUEENAN: We're on the highway to hell.



PARKER: It's time for "Our Political Party," a provocative conversation with people who have strong opinions on a whole range of subjects. So let's meet our guest. We have S.E. Cupp, who is the columnist for the "New York Daily News" and an editor at OK, I just have to ask you, what does S.E. stand for?

S.E. CUPP, NY DAILY NEWS: Sarah Elizabeth.

PARKER: Well, of course, it does. I knew that.

And we have Joe Queenan who's a columnist for the "Wall Street Journal" and the author of the memoir "Closing Time."

SPITZER: And Errol Louis is back. Errol just took over the prestigious host position of NY1's "Inside City Hall," a must see for every news junkie. Unfortunately, not up against our show.

Errol, congratulations anyway.

Rush Limbaugh selected as his theme songs for the 2010 campaign a whole bunch of songs we all know. Let's take a listen.



RUSH LIMBAUGH, CONSERVATIVE RADIO HOST: Don't let anybody tell you differently. Unprecedented in modern times, previous record: 55 seats back in 32. When Hoover was rejected. And it's bye-bye Pelosi.


SPITZER: All right. So, Errol, we'll start with you today. What would your theme song be for the thankfully ended elections.

ERROL LOUIS, HOST, NY1's "INSIDE CITY HALL": You know, there's an old song by The Pretenders. My City was Gone. You know, I went back to Ohio and my city was gone. And I thought about that because the president went to Ohio about a dozen times in the last year. He staked a lot on it. He put a lot of personal prestige on the line.

SPITZER: Votes were gone.

LOUIS: Votes were gone and, you know, it happens to be the theme song for Rush Limbaugh as well.


CUPP: That's deep. That's really deep. I mean, it's esoteric.

JOE QUEENAN, COLUMNIST, "WALL STREET JOURNAL": But "The Pretenders" is grooving it up into the modern age. I mean, "Wipeout" is like 1961 and ding dong -- my kids wouldn't get that connection, I don't think.

SPITZER: So what's your song?

QUEENAN: For Nancy Pelosi, obviously "Sympathy for the Devil."

SPITZER: Oh, my.

QUEENAN: And I think for the Democrats it would be you're on the "Highway to Hell."

SPITZER: Oh, wow, you're tough.

QUEENAN: You're on the highway to hell. Yes, yes.

PARKER: All right.

QUEENAN: For Mr. Obama, probably yesterday all my troubles seem so far away. A horrible song but --

SPITZER: Oh, come on.

PARKER: How about "Bridge Over Troubled Water"?

QUEENAN: No, no. Those would be it. And maybe "Gimme Shelter" for the Democrats.

PARKER: That's a great one. That's a great one.

CUPP: Well, yes, I got if I wanted to be snarky, I would go --

SPITZER: Which I can tell you.

CUPP: No, I'm just going to go -- I would go with "Loser" by Beck. But I don't want to be snarky.

QUEENAN: That was Rush Limbaugh's pick. He's a big Beck fan. CUPP: That is great, but I don't want to be snarky. If I wanted to go sort of classic rock, I'd maybe say "Landslide," Fleetwood Mac. But I'm a big pro-rock fan so I have to go with "Burning Down the House," talking heads.

QUEENAN: There you go. That's good.

CUPP: Yes.

SPITZER: Yes, that's good.

PARKER: I love it when anybody starts a sentence with if I wanted to be snarky.

CUPP: Well, then you can get away with being snarky. Right?


PARKER: If I were a snarky kind of person, I would point out that Senator Mitch McConnell today gave a speech at the Heritage Foundation establishing himself as the opposition voice. So in "Our Political Party" drinking game, what word from Senator McConnell's talk would get us drunk.

LOUIS: You know the one that I found most jarring and would get us drunk actually is Democrat use sort of an adjective. You know, the Democrat leadership, the Democrat Party. It's kind of a little code word for the far right to say we're not even go to say Democratic. We don't want to give the opposition party. We don't give those Democrats any reason to think that they're actually Democratic.

And I don't remember actually hearing him ever do that quite as often. And that's a tip of his hat to the Tea Party movement. It's a tip of the hat to the far right. He clearly wants to sort of cater to them. And he sort of did a code, but I caught it.

PARKER: It's been a slip up and use Democrat instead of Democratic, and it's been a slip up in my case. I notice I've been very quickly corrected by Democrats.

SPITZER: Sometimes we're too sensitive.

QUEENAN: I'd go with the phrase the American people have spoken. I love that phrase, because 52 percent of the people always say what I don't want them to say or 48 percent. But when they say the American people have spoken loud and clear, I just love that. I think that's great. I think that's what politicians -- I don't even care what politicians believe or what they do, as long as they say the American people have spoken.

That's it. Cut taxes, reform health care, they have spoken, you heard them, loud and clear. Aye, aye.

SPITZER: Who was that one person who speaks to that one voice? All right, S.E., and you? CUPP: Well, I mean, if you just look at the speech, he actually said the words Americans are worried maybe seven or eight times. So if we really just wanted to get drunk, that would be the phrase to go. Not that I need anyone to tell me how to get drunk. I know how to do that pretty well. But I think over the course of the next weeks and months, I think the words to look for are going to be pragmatic. Everybody is going to be wondering if Obama is going to be a pragmatist. Negotiate, I think you guys said it a number of times on tonight's show.


CUPP: Mandate, that's going to be a word you hear a lot. So if we wanted to play a month long drinking game, I think those are the buzz words.

PARKER: We all would be knee walking if we had to deal with compromise.

CUPP: Yes. I know.

SPITZER: If it's Mitch MConnell, the word is no. You're going to say it every day 100 times between now. Anyway, we need to get a partisan word in there.

PARKER: All right, Errol, S.E. and Joe, thank you so much for being with us.

SPITZER: We want to hear from you. Check out our blog at Follow us on Facebook and Twitter. 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.

Heavy rain is hitting Haiti tonight as tropical storm Tomas approaches and the island nation is bracing for dangerous flooding. The government is urging earthquake survivors living in tent cities to move to storm shelters. Health workers fear the rains will accelerate the cholera epidemic that's already killed hundreds.

Qantas has grounded its entire Airbus A380 superjumbo fleet after part of an engine came off in flight. The airliner landed safely and no one was injured.

Tonight on "360,' is Sarah Palin trying to cover up a tweet that went too far. Palin re-tweeted a link to a photo that says President Obama is a Taliban Muslim. She also made it a favorite on her Twitter page then she wipe that page clean. Is she trying to hide something? We're keeping them honest. That's the latest.

"PARKER SPITZER" is back after this.

SPITZER: Before we go tonight, a postscript. It was announced today that the popular comic book hero "Batman" is no longer just for Gotham City.

PARKER: And in an upcoming storyline, the writers of the longstanding comic are going to introduce caped crusaders to cities all over the world. I kind of like G.I., Barbie, I guess. We're going to have a Beijing Batman or Brussels Batman and a Miami Beach Batman. But one city can sure its use own super hero to bring some order.

SPITZER: Washington, D.C., fear not. Residents of our nation's capital, help is on the way.

Thanks so much for being with us. Good night from New York.

PARKER: "LARRY KING LIVE" starts right now.