The Rachel Maddow Show, Transcript 03/16/10
RACHEL MADDOW, HOST: Good evening, Lawrence. I will say, you and
Gene talking about golf almost makes me interested in golf—almost.
LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST: – broadcasting right
MADDOW: Thank you, Lawrence. Appreciate it.
And thanks to you at home for tuning in.
Tonight, we have my exclusive and extensive interview with the
lightning rod of the Obama administration, our nation‘s secretary of the
treasury, Tim Geithner. In “The Interview,” the secretary opens up about
what wasn‘t done by him and others to prevent America‘s financial meltdown.
Also this hour, a fact-checking re-visitation of last night‘s guest,
conservative former Congressman J.D. Hayworth. That‘s going to be fun.
And, yet another round of utterly inexplicable photos of Russian Prime
Minister Vladimir Putin.
But we begin with national drive in a circle and honk day. Today was
national drive in a circle and honk day—as proclaimed by Americans for
Prosperity. They are the corporate-funded, fake grassroots group headed by
a long time Republican political operative named Tim Phillips. As you see
You might also recognize Mr. Phillips because he‘s been a guest on
this show a few times. That‘s because Americans for Prosperity has
organized a lot of the opposition to health reform. They are the big,
bloody hand-print people, for example, whom you might remember from their
bus tour with the speaker who said health care reform was like Pol Pot and
the Nazi “Holocaust” all in one.
So, that strategy didn‘t work. Health reform does look due to pass
shortly. And so now, Tim Phillips‘ anti-health reform group has resorted
to today‘s national directive to drive around in a circle and honk.
Next year‘s protest? Scratching your nails on a chalkboard to protest
Health care reform is about to pass, which—for all the clamor about
it—is a huge political victory for the Democratic Party. In one way or
another, presidents have been trying since World War II for health care
reform. For generation after generation, the system has just become more
and more unsustainable.
Health costs now rising to the point where they account for one in
every six dollars spent in our economy. That‘s dollars spent on anything.
But no one has been able to try to really do anything to fix this
problem. Nobody has been able to get this close to fixing the problem—
until now. Passing health care reform is going to be a landmark moment for
the Democratic Party.
And so, say it with me now, everybody freak out.
Those opposed to Democrats pulling of this political feat drove around
in circles and honked today. They also held a tea party on Capitol Hill—
though only a few hundred people showed up. What that event lacked in
numbers, they made up for in exclamation points.
(BEGIN VIDEO CLIP)
REP. LOUIE GOHMERT ®, TEXAS: I don‘t want to make you sick but I
brought an abortion to show you.
There are a lot of demons going on. There are a lot of demons around
(END VIDEO CLIP)
MADDOW: Congressman Louie Gohmert of Texas, unclear to be fair if the
demons are the same as the abortion he says he brought with him or if the
demons are a separate matter from the abortion he says he brought with him
unclear. Unclear but emphatic, which is the way to understand what is
happening to the opposition to health reform now.
Today at National Republican Congressional Committee headquarters,
Republican leaders gathered to promote their red alert campaign to try to
re-energize the opposition to health reform.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), MINORITY LEADER: We want Americans to go to
Code Red. Understand that we‘ve got to put all the pressure we can on
these wavering Democrats to make sure this bill never, ever, ever happens.
(END VIDEO CLIP)
MADDOW: Go to Code Red.
Here‘s the problem with the Code Red strategy. Even as Republicans
are calling for pressure on Democrats to vote “no” on health reform—
since they have locked up all the Republican votes already—Republicans
at the same time are admitting that even if any Democrats do what they say
and vote “no” on health reform, Republicans are still promising to attack
those Democrats on health reform.
So, in other words there‘s no incentive at all, no reason at all for
any Democrats to go along with Republican efforts to get them to vote “no”
on health reform. Either way, Republicans are promising to still attack
them. Democrats‘ only choice on this issue is whether they‘d like a record
of historic achievement to stand on when responding to those inevitable
Joining us now is New York Congressman Anthony Weiner.
Congressman, thanks for coming by. Nice to see you.
REP. ANTHONY WEINER (D), NEW YORK: My pleasure. Thanks.
MADDOW: “The L.A. Times” have a story they say for people who are
under the age of 65, who don‘t yet qualify for Medicare, one in four
Californians are uninsured. If you look just 18 to 64, it‘s closer to one
I‘m a native of California. That number blows me away.
Can you tell me that this long national nightmare is finally going to
be over sometime soon?
WEINER: Well, the important thing to remember about those statistics
is all of those people are getting health care. They‘re getting it in a
terribly inefficient way, and if they slip and fall, or they get hit by a
bus, or they get H1N1 flu, they‘re going to hospital emergency rooms and
we‘re winding up paying the bills. So—
MADDOW: Or they‘re going bankrupt trying to pay the bill.
WEINER: That‘s exactly right. So, the fact of the matter is, that
it‘s having a drain on society, the status quo is unsustainable. But what
you said in the introduction about the Republican thrust here is exactly
the conversation going on with wavering members of the House right now. We
are saying to them, look, you are going to get beaten up on health care
whether you vote yes or no. The difference is, if you vote no and this
bill goes down, they are going to keep making stuff up about the bill.
WEINER: At least if it passes, you‘ll be defending an actual thing,
that accomplishment. And all of us have compromised a great deal from what
we would have liked. I talked to a thousand times of things I would have
liked to have different. But that‘s what it comes to, is whether or not we
are going to allow more and more people to lose their health insurance.
And I‘ll tell you something else where you‘re going to fight—if you
look at the last 10 years, incomes for people have been flat because every
dime that employers have are going into health benefits.
WEINER: So, we‘re not getting raises and the economy is at a
standstill because of it. So, hopefully, when we cast this vote, you know,
Saturday or Sunday, whenever it‘s going to be, we‘ll finally be on the road
to solving this problem.
MADDOW: Saturday or Sunday. What‘s the—what can you tell us about
the schedule, about what happens next? About what to watch for?
WEINER: Well, I‘m taking Siena plus, four points in their first game.
And I‘m taking the Democrats plus three or four. I don‘t know.
I mean, the timing of it is—I mean, this is going to have to become
public and visible and transparent for 72 hours according to our rules,
which means probably tomorrow, the next day, we‘ll actually see the
documents. Just to put into some context, and we hear a lot about how many
pages the bill is, we‘re talking maybe another 100 pages to the 2,000 or so
pages. There are relatively modest changes—
WEINER: – to the Senate bill, but they‘re important changes.
Because the Senate bill did not do enough for affordability, we‘re going to
add that. It doesn‘t close the donut hole. We‘re going to add that.
And these things are going to get put together. And, hopefully, by
Saturday, I mean, I don‘t know the exact timing of it, but we‘ll vote on it
when it‘s ready.
MADDOW: Is there going to be anything in that, say, 100 pages, in
those fixes, that are things that we haven‘t been told to expect? Are you
do you think there are going to be any surprises? Is there anything
still being negotiated at this point as to what goes in this bill?
WEINER: Well, I don‘t know how much is being negotiated. But there
are some things that have been kind of below the surface of this debate.
You know, the Senate bill was written essentially by small state senators.
And so, it doesn‘t do nearly what it should for poor people.
And in states like California and New York where we have robust
Medicaid programs, we have to make some changes. There are some things
that have to be in it. We‘re not going to further scale-back a woman‘s
right to choose. That‘s not going to happen.
WEINER: I think that if we are going to add a public option, which is
something we‘re still fighting for, we need to see the Senate do it. The
House has already included it in our bill. The Senate, in its amendments,
I think is going to be the place that that‘s going to do it (ph).
MADDOW: I thought the House has to do it first before the—
WEINER: The House has to initiate the bill, but there‘s nothing
stopping the Senate from putting something in. There‘s nothing—you
know, we are at a conventional legislative mode actually. We now have a
bill. This bill can go back—can go to the Senate and come back.
You know, a lot of us are exasperated with some of the phoniness of
the Senate. You know, they are signing letters that say they want the
public option. Durbin says I‘m going to whip the public option, and then
they‘re pointing to Nancy Pelosi and says, “What‘s your problem?”
The real problem is the Senate has to say, “We want to take this up”
and they haven‘t done so. But for the most part, the bill that the
president described and the one that he talked about when he had the health
care forum is the one we‘re going to consider. And it ain‘t perfect, but,
boy, is it better than the status quo.
MADDOW: You mentioned the issue of abortion. We talked a lot on this
show about Congressman Bart Stupak. We raised the issue of how many people
he actually seems to speak for. He said he speaks for a lot of people. We
don‘t exactly know who those folks are. A lot of pro-life Democrats are
now saying they can live with—strongly anti-abortion Democrats saying
they can live with the Senate‘s restrictions on abortion funding, that they
see it as not expanding federal funding for abortion in any way.
Do you think the Stupak threat to essentially hang health reform on
this issue of abortion is over?
WEINER: I don‘t know. I mean, maybe he is going to vote no. Maybe
he has some colleagues who are prepared to say, “We‘re going to deny health
care for 35 million Americans. We‘re going to stop the rise of costs
because we don‘t believe that simply banning abortions with the public
taxpayer dollars is enough.”
WEINER: And—look, I‘m not happy about the Nelson language. You
know, I think a lot of people should not be.
WEINER: And I think that—that it is a marginal setback that we
have to be concerned about. But one thing—you know, a lot of us are
over it, over this idea that two or three or four members of the House or
Senate are holding the rest of the place hostage. And, you know,
unfortunately, Congressman Stupak, he‘s a friend of mine, is falling into
You know, if you really can‘t get by the idea that we‘re going to have
the Hyde Amendment whether or not you vote for it or not, the restrictions
are going to be there and you are prepared to deny the people of Michigan
health care on author of some philosophical argument, then, you know,
there‘s not—there‘s nothing we can do to win their vote.
MADDOW: Yes. It should also be noted that there‘s not a single
abortion provider in all 33 counties that encompass his district.
Congressman Anthony Weiner, it‘s great to have you.
WEINER: Thanks. Great to have you in Washington.
MADDOW: Thank you.
WEINER: Stay was long—put anything you want on my tab.
MADDOW: Excellent. I have to go now.
MADDOW: All right. On the right and in some of the left, Treasury
Secretary Timothy Geithner has been vilified for not preventing the
financial meltdown of 2008, and for his role in the massive bailout that
followed. I sat down with Secretary Geithner this afternoon and asked him
about all of it. His responses were very candid given his position.
“The Interview” is next. I think you are going to want to see this.
MADDOW: Senator Jim Bunning is the Kentucky Republican senator who
single-handedly brought the Senate to a standstill earlier this month to
stop people from getting extensions on their unemployment checks. Mr.
Bunning withheld his consent from the bill that would have allowed the
extension. He also, for a time, personally held up all of President
Obama‘s nominees in the Senate.
Well, now, Senator Bunning has another one going. Mr. Bunning has
placed holds on the nominations of assistant treasury secretary, the chief
agriculture negotiator, and the ambassador to the World Trade Organization.
The reason, he says, is candy-flavored cigarettes. Really?
Canada has banned candy-flavored cigarettes. Duh! And Senator Jim
Bunning is holding up those high-level nominations now because he wants a
formal complaint filed against Canada to try to make Canada unban candy-
flavored cigarettes in the Canadian parliament which itself may or may not
be the name of a cigarette. Canadian parliament. Sorry. Sorry.
MADDOW: Some stark and straightforward news on unemployment delivered
today to members of the House Appropriations Committee by Treasury
Secretary Timothy Geithner. Secretary Geithner called the nation‘s 10
percent unemployment rate unacceptable. He then warned that it may very
well go up before it starts to go down next year.
Immediately after that testimony today, I got a chance to sit down
one-on-one with Secretary Geithner at the Treasury. We started with jobs.
MADDOW: Mr. Secretary, thanks very much for your time. Appreciate
So, today on Capitol Hill, you said essentially that the rest of the
year looks tough in terms of unemployment. And then you urged lawmakers to
pass the new Wall Street rules, financial regulation. Is there a
connection between those two? Are those two items connected?
TIMOTHY GEITHNER, TREASURY SECRETARY: Well, for the economy right
now, the most important thing we do is to pass additional targeted support
for growth, for expansion, and for job creation. And, you know, the
president‘s proposed a series of measures to help small business, more
money for state and local governments so they can make sure that teachers
and firemen can, you know, stay on the job, support for infrastructure,
We think there‘s a very good case for series of additional targeted
measures to help strengthen the expansion, make sure it turns into more
jobs more quickly. But the financial reform is very, very important. I
mean, you‘ve seen the devastating crisis, you know, just deeply unfair,
brutally unfair—hurt, you know, millions of American families, hundreds
of thousands of small businesses.
And we all feel a deep sense of responsibility and obligation to make
sure we are fixing what was broken in this financial system and put in
place a kind of, you know, tough reforms, provide better protection for
consumers, and make sure we don‘t have financials that can take these kinds
of risks again.
MADDOW: I want to talk policy but we also have to talk some politics
in terms of what‘s possible for making the rules. After health reform, a
lot of Democrats in the Congress are looking forward to being able to run
on Wall Street regulation, these new rules for Wall Street. And with
Republicans essentially signaling that they‘re mostly going to oppose them,
it gives Democrats an opportunity to say we are running against Wall
Street, which I think a lot of them are salivating at the chance to do
Your political image does not help them do that because you are seen
as a Wall Street guy. Do you think that image is unfair?
GEITHNER: First, you know, I‘m not—you know this—I‘m not a Wall
MADDOW: But everybody thinks you are. People think you worked for
Goldman Sachs. They think you were a banker.
GEITHNER: I never worked on Wall Street. Just so, you know, your
audience knows, you know, I spent every job I‘ve had in life since I came
into graduate school, in effect, has been working as a public servant in
government. You know, I never worked for a bank, never run a bank, never
worked for a hedge fund.
But, you know, I sat at the New York Fed, I sat at the Treasury, and I
watched what financial crises do to innocent victims across the country,
and I feel a huge sense of personal responsible and obligation to make sure
we are putting in place the kind of reforms we need to create a more
stable, safer, more fair system in the future. And I am working very hard
to make sure we achieve that.
And I think this is a just war. I think it‘s a necessary and
important thing to do. I think we have a deep obligation together to do
this. And the president has put out a sweeping package of reforms,
strongest reforms we contemplate as a country since the Great Depression,
necessarily so because this was so damaging. And, you know, the House
passed a bill very close to what the president proposed. Senator Dodd put
out a very good, strong bill.
I do not think this is a Democratic or Republican thing. This is an
American thing. And I think you‘re going to see, when this gets to the
Senate floor, I think you‘re going to see a lot of support for this because
I think it‘s very hard for people in Washington to look their constituents
in the eye and say we just had the worst financial crisis in generations
but we couldn‘t find the will as a country to reform the rules of the game.
I don‘t—I believe, I‘m more confident in this country, that we‘re
not going to—we are going to see people in the end decide they want to
be part of reform, not part of resisting reform.
MADDOW: I think that you are right on one condition, and that is that
if people see these reforms and the actions of this administration, and
your actions in particular, as being standing up for the American people
against the predation of Wall Street and the banks.
GEITHNER: Yes. And again, you know, the great thing about is they
can look at what we proposed, they can look what the president proposed,
they can see those things and they can judge for themselves, whether they
look tough enough, whether they look fair enough, whether we think we got
the balance right. And this was a—we‘ve got a very tough, strong
package of reforms working with—
MADDOW: Why is the Consumer Federal Protection Agency inside the Fed?
Why not a stand—why not as a stand-alone agency?
GEITHNER: Our view is it should be a stand-alone agency. We think it
should be an independent agency. And what we‘ve proposed meet that basic
test. You know, the key thing is that it have the resources it needs to do
its job, have to authority to write rules that apply to everybody, not just
to banks but to payday lenders, to mortgage brokers, everybody who is in
the business of providing credit to a consumer and we want the authority to
enforce those rules across the system.
GEITHNER: You know—you know what happened, you know, we‘ve gotten
to this mess because we allowed this country to get to the point where
there were a set of rules, they weren‘t tough enough, but they existed, but
they really only enforced on banks. And overtime, what happened is the
whole industry of other people could come in and provide credits to
consumer with effectively no constraints and no protection. It‘s
outrageous failure of government.
And the centerpiece of our reform is to make sure that never happens
again. There‘s a clean set of rules, tougher rules for consumers, and
they‘re enforced fairly and evenly across the system.
MADDOW: What about this threshold, though, that institutions that are
smaller than $10 billion are not going to be subject to the same kind of
rules as these larger institutions. I mean, I look—the more I look at
payday lenders, the more disgusted I get. I mean, I don‘t think there‘s
any reason to say they are like loan sharks, I think they are loan sharks.
GEITHNER: I think it‘s much worse than you think. And to say it‘s
much more than you think in the sense that, again, across our economy you
had people that did just terrible predation, terribly abusive things, and
they were left outside any effective set of constraints. So, we have to
Again, the critical test is: rules that apply to everybody enforced
with people who know what they are doing. That‘s the key test.
MADDOW: But what‘s with the $10 billion threshold? Institutions
smaller than that aren‘t going to be subject to the same rules that these
larger institutions are.
GEITHNER: Well, again, what—because I can only tell you what the
president proposed. What the president proposed is a very strong package
of reforms on enforcement. As this bill has made its way through Congress
in an effort to find any number of votes to make it pass, people have made
And, again, the tests we are going to use—the president is going to
use is: does it have strong independent authority to write the rules and
enforce them? Not just on banks, not just on large banks, but on the
nonbanks, consumer finance companies, payday lenders, check cashers,
mortgage services, mortgage brokers that, you know, were the centerpiece or
the center of all the terrible stuff that happened that caused so much
But, again, you know, our test should be and this should be a test to
the American people is, they should watch very carefully as these bills
move through the Congress, because you‘re going to see a lot of efforts to
weaken them further, and going to see a lot of amendments that try to
protect individual types of consumer finance industries, to protect the
banks from supervision, from oversight, from enforcement, and we should all
resist that. Because—
MADDOW: Well, that‘s—and there‘s an important precedent here,
which is what we are going through right now with health reform. I mean,
we passed the Consumer Financial Protection Agency as a nation through the
House with zero Republican votes. It‘s in the Senate right now, Senator
Dodd has introduced something that‘s a little different, but Republicans
are not promising any votes. I know you say they might be there.
But what‘s happened—like with health reform—is Democrats made
concessions, traded away, made the rules a little softer than what you and
the administration proposed. And in the health reform debate, the
administration sort of went along with those concessions. We ended up with
something that‘s a lot softer, probably a lot effective as a policy than it
would have been had we not been seeking those votes, and we didn‘t get
those votes anyway.
So, do you make the same mistake again? Do you trade away this $10
billion threshold for regulation, you trade away the independence, the
literal independence of the CFPA in order to chase these phantom Republican
votes or do you push further?
GEITHNER: And so, we are going to try to get a very strong bill. I‘m
very confident we‘ll get a strong bill. We‘re spending a lot of time
making sure that we‘re listening to consumer agencies, advocates across the
country so that we have their input on what makes a credibility test of a
strong bill. The president is very committed to this. The American people
are with us on this. I think we should have a strong hand.
Senator Dodd is trying to balance, you know, a complicated—he has a
complicated job. You know, he is trying to get a bill that‘s got enough
votes to pass. And, of course, we want to give him as much support. You
heard the president say yesterday that, you know, we are going to fight
against efforts to weaken this and we‘re going to take every opportunity to
strengthen it as it goes to the process.
MADDOW: There‘s more of my interview with Treasury Secretary Tim
Geithner ahead. We will talk about the bailout of Wall Street, the loans
that bankers still aren‘t making and the bonuses that they are. OK.
(BEGIN VIDEO CLIP)
GEITHNER: People are incredibly angry and they should be angry still.
(END VIDEO CLIP)
MADDOW: That is next. This is good stuff. Stay with us. It‘s just
MADDOW: The economy is technically no longer in a recession. It is
definitely not in a depression—a fact that a year and a half ago you
might have won a bet or two by predicting. The economy is actually growing
again. And while the jobs numbers still stink, the more economic growth we
get, the better chance we‘ll have of escaping the gaping horrible maw of
the financial meltdown in 2008 – the meltdown that almost killed the
While an increasing number of people will credit moves taken by the
Obama administration and his treasury secretary, in particular, for saving
the economy: A, there‘s a long way to go and, B, there‘s still the very
awkward fact that Secretary Geithner was in the middle of the financial
meltdown when it happened, as president of the New York Fed.
In our interview today, Mr. Geithner made a frank appraisal what‘s his
fault, what‘s the system‘s fault, and why you have every right to be
MADDOW: From 2003 to 2008, you were the head of the New York Fed and
that was a time on Wall Street of untrammeled, defying common sense, both
risk-taking and deceit that almost destroyed the American economy. And I
think some credit due to you and the administration for saving the economy
and having not happen, and there‘s not be a Great Depression.
But where were you when it was happening in the first place? What do
you wish you had done differently?
GEITHNER: Excellent question. It‘s important to start with the basic
mistake and it‘s lacking consumer protection, OK? What we did as a country
– and it was a tragic failure of government—is we left vast swaths of
the financial system with no oversight. OK?
So, pick your example—Fannie, Freddie, the major investment banks,
Lehman Brothers, Bear Stearns, countrywide, IndyMac, you can take—AIG,
any example you want. You can take derivatives, any example you want. And
we left that swaths of the financials without anybody in charge and
accountable for overseeing those things.
Now, the Fed had a very important responsibility as the supervisor of
the nation‘s largest banks. And the Fed did a very good job. The New York
Fed did a very good of trying to move early to bring a little bit of order
to derivatives markets, to try to make sure that we were inducing these
firms, the biggest firms across the world, to try to make sure they were
building stronger capital cushions against risk, but we did not do enough.
I‘m the first to admit it. And I know a lot about what our
mistakes were. I would be the first to admit we could have done a better
job in this case. We were very aggressive in New York. We made a lot of
difference in New York, but we could have gone further.
But the big mistake we made as a country was to allow a system to
develop where you could get around those rules, build up a huge business
with a huge amount of leverage with no oversight and no transparency. And
that is what brought the system to the edge of its knees.
If we hadn‘t made that mistake, that huge a mistake, not moved
earlier to put in place this kind of sweeping reforms across the system,
this would have been a much more manageable crisis, much less damaging to
the American people.
So you are right to focus on the Fed. But the Fed was the
strongest, the best, most able of those regulators around the world. And
the mistake the country made was not to provide broader authority to
constrain risk-taking across the entire system.
If you only do it on one part of the system, you know, what
happens is, the risk and the (inaudible) just moves.
GEITHNER: It just moves and that is what happened over time.
MADDOW: You move to more lawless neighborhoods.
GEITHNER: Yes. So you had a whole parallel banking system emerge
outside banks almost as large as what was done in banks, funded in a very
vulnerable way, very vulnerable to run, with none of the protections or
constraints we built after the Great Depression to constrain that kind of
That was the big mistake we made. That was not the Fed‘s
mistake. It was not the Fed‘s mistake. But it was that mistake that
brought the system to the edge of collapse because in those - what happened
was we faced, you know, just the modern version of a classic run on the
People were not just trying to take their money out of banks, but
they withdrew their money as quick as they could from all those
(inaudible). They came down just with forceful, you know, brutal pressure
on the rest of the system.
And the government didn‘t move early enough to try to contain the
damage, but that is what we are trying to fix and reform. We are trying to
make sure we have as much authority to contain those - that kind of risk-
taking more broadly early.
MADDOW: How much authority you have though is where I get hung up and
why I‘m still concerned about the fed now. Why - I‘m still concerned about
your record at the fed, frankly.
GEITHNER: Rachel, I‘m happy you can go back over my record. I can
tell you with a lot of knowledge, of course, the stuff we were on right on
early, the stuff where we made a lot of different (inaudible).
But I can tell you - I know a lot about this where the fed was
behind the curve and rate. And the best example of that was the fed did
not use its authority to write rules to provide better protection for
consumers like in mortgages early.
The chairman of the fed has said that openly. I agree with that.
That is why we propose to take that authority away from the fed and give it
to an agency where the people wake up every day and they think about one
thing, which is how to how to protect consumers.
MADDOW: That is actually getting at the crux of my worry which that
it is not that just that the fed didn‘t have the authority to do all the
things that, in some cases - and you see it because that has done some
things post-crash -
GEITHNER: Of course, you can see it. You can see it.
MADDOW: Pre-new rules, that it could have done before and those
statutes of change hasn‘t gotten any new rules. It just decided to exert
some (inaudible) pressure it didn‘t choose to exert before.
And that makes me worry about the overall mindset of the fed. It
is one thing to be a supervising agency of big banks where you get along
very well with your board and all of those things.
GEITHNER: The fed was tougher on banks.
MADDOW: It‘s another thing to be a representative of the people
against the banks.
GEITHNER: But judge them by their record, OK? The fed was much
tougher on the banks than with the other supervisors. That is part of what
produced Countrywide. Countrywide did not like things subject to the tough
regulation of the fed, and it chose to become a thrift, so who could evade
The reason why there‘s so much risk and leverage built up outside
the banking system was because the fed was reasonably tough, much tougher
than banks supervisors in other countries.
I‘ll just give you another example. You know, we messed up a lot
of things in this country and we are living with the cost that. And we‘re
going to be aggressive in putting reforms in place.
But I‘ll give an example. In all the major economies in the
world outside the United States, the banking system is dramatically larger
as a share of the economy. The banks are much more concentrated. Far
fewer banks command - dominate the entire industry and that‘s because in
those countries, they did not do a good job of constraining risk-taking by
We were not good enough at it, but the fed was better than its
supervisory peers, much better than we are internationally, not good enough
which is why we want to put in place these reforms.
MADDOW: On the issue of the bailout, why not make help - why not make
rescue contingent on reform? Why not say, “OK, AIG, here is your $180
billion, OK? And X Firm here is your X billion dollars. You are not going
to give any bonuses for the next five years at least. You‘re not going to
do any number of other things. And when reform comes around you are going
to be onboard.” At that point, you‘ve got maximum leverage. Why not use
that leverage about that?
GEITHNER: Let me walk back a little bit. You have been very good on
this. But let me walk back and tell you what we do when we came into
office. When I came into office, we had - my predecessor put investments
of capital in banks representing, I think - I don‘t know - 75 percent of
the U.S. banking system.
And we moved very quickly to force them to raise private money to
replace the public investment dollars so we get that money back and use it
to meet the challenges we face as a country still.
So we were very tough and we moved very quickly and very
forcefully. And we have achieved a huge improvement in base of cost of
credit confidence in the system and much lower costs than anybody
And that is a very good thing because it means that, again, we
have more resources as a country to meet the many challenges we inherited
MADDOW: That the loans still are not at the level anybody would want
them to be.
GEITHNER: Absolutely. But you know, if you look at just the cost of
borrowing for use of the government, for small business, for a family who
wants to buy a house, buy a car, put their kids through college, cost of
credit has come down very, very dramatically because of what we did.
So we have done a very good job of running a very well-managed
program that is in the interest of the average American, not just because
they care about the cost of credit, but because, again, we faced a lot of
challenges as a country and we didn‘t want to see their resources used
unnecessarily to benefit a bunch of big guys.
MADDOW: I understand how mad people are to see that the loans are not
being made and the bonuses being paid.
GEITHNER: People are incredibly angry and they should be angry still,
because again, we had a terrible failure of government and judgment in the
financial system that caused catastrophic damage to a people who were
totally responsible, didn‘t borrow beyond their means, were careful in
their basic judgment. And they‘re suffering because of the mistakes that a
bunch of other people made.
And people should be angry, and we hope that anger turns into
more political will in the Congress, frankly, to legislate a tough set of
reforms. You know, the president has proposed that we put a $90 billion
fee on banks over 10 years so that we can say to the American people that
they won‘t be exposed to a penny of loss from all the terrible things that
we had to do to step in to rescue this financial system that was burning.
So of course, they are angry. They should be angry about it.
And they are right to be angry and they should be angry until they have
more confidence that the government is actually going to put in place
reforms that will fix what was broken. And they see more traction in all
the things that we‘re doing to help bring growth back, bring unemployment
MADDOW: The bonus issue specifically - and I know it is not central
to the structure of the financial system. But it is absolutely central to
how much political will there is to get things done in this administration,
even on a host of things that had nothing to do with financial reform.
GEITHNER: Most important - what caused the crisis. Because, you
know, we - it was just a crazy system. You know, you could get paid for
taking a lot of risk and not be exposed to any risk of losing that
compensation if you are not losing the bank a lot of money.
It was a crazy way to run a financial system. So it didn‘t
matter to the crisis. And we think it is very important, as part of
reforms, to change the way these people are compensated. So we proposed
again two very simple things.
MADDOW: But you already gave them like - you already gave them the
rescue money before you proposed the changes.
GEITHNER: No - again, we came into office. Judge us by what we did.
GEITHNER: My predecessor had to do what he did, which is he had to
put - you know, it was a panic. We were on the edge of collapse. He had
to do the terrible thing of pushing a bunch of capital into the banking
system providing some temporary guarantees.
Those emergency actions saved us from the Great Depression. That
was necessary. But we came in. We went in and forced them to replace that
money - that public money with private money as quickly as possible.
They did it very, very quickly and that is good for us, good for
everything you care about, everything you value because it gives us much
more room now to deal with all the many challenges we face.
Now, about the compensation though - again, we are proposing a
very simple thing, which is that firms have to disclose to the public and
allow their shareholders to vote on how they are paying their senior
And they were proposing that the supervisors, the people in
charge, the police in charge of supervising institutions actually enforce a
set of standards designed to make sure that these guys have money at risk,
that it pays out over time. There‘s no golden parachutes. They are not
insulated from the mistakes they made. Those things are very powerful
reforms. Frankly, there has not been much progress to it, but it takes the
leverage legislation (inaudible) to bring that about.
MADDOW: In terms of the overall politics here, the sort of the rap
that you have gotten - and I don‘t know if it is deserved or undeserved,
you can make your case - is that you are a little allergic to populism.
And maybe that is in part because you feel like just - from your position
as Secretary of the Treasury, it is not appropriate to take that sort of
tone from this office.
I would love to hear your explanation for it. If, though, people
do not believe that this administration and the government in general is on
their side against predation from big firms, Wall Street, the result of
that is that there‘s going to be a lot of people elected in November who,
if they don‘t show up with actual pitchforks, probably will have flaming
And we are going to get very, very, very populist very fast
unless this administration takes a more populist tone and people start to
believe in it because that is the mood of the country.
GEITHNER: I will say a different view. I think people are going to
judge me and then judge the president. They‘re going to judge their
elected representatives in Washington by what they do to make a difference
in the lives of Americans.
So we are overwhelmingly focused on trying to make sure that we
are acting as quickly and as forcefully as we can to make things better
here. And we - this president - he moved with enormous speed and care and
force doing incredibly important, difficult and, you know, these unpopular
things because they were necessary to save the economy from collapse and
make sure we had an economy that was growing again, creating jobs again.
That is what people are going to measure us by. If we don‘t
focus on that every day, then, we are going to be in a position where, you
know, we are going to leave the economy much weaker, Americans losing even
more faith in their government.
And that is what guides all the actions we are making. We are
trying to focus on what is going to make the biggest difference as quickly
as possible and things that matter to, not just the basic lives of
Americans, but their confidence in their government again. Because again,
this government, the government of the country, failed them terribly.
And you know, it‘s not just that we‘re actually in the worst
recession of this generation. We came into this recession with, you know,
frankly, an education system that did not do a good job - fair job of
educating our children.
We saw a huge rise in inequality over time. The average American
didn‘t see a rise in basic living standard over a long period of time. You
know, we just came into this with really difficult, really bad long-term
challenges that governments have to fix.
So again, our test, what people should judge us by, what are we
trying to achieve and how much are we achieving in terms of making these
things basically better. I think that is the essential obligation that we
MADDOW: Secretary Timothy Geithner, you are a busy guy. Thank you
for your time.
GEITHNER: Nice to see you.
MADDOW: Nice to see you. Thank you.
MADDOW: There are some behind-the-scenes photos of the show‘s field
trip to the Treasury Department today at the “Maddow Blog Online” if you‘re
still (inaudible) to look at that sort of stuff.
All right. Last night on this show, former Republican Congressman and
current John McCain rival, J.D. Hayworth, joined us as a guest. He then
accused us of messing up our research on his record.
So today, in addition to visiting the Treasury Department, we
also researched our research about J.D. Hayworth. The findings about our
findings are just ahead. I‘m very much looking forward to showing you the
MADDOW: I don‘t know Vladimir Putin personally, but I feel like I
know him better than I know most people, certainly better than I know any
other world leader. And we‘ve all just gotten even better acquainted with
Mr. Putin, thanks again to his weird proclivity for releasing unusual
photos of himself.
Previously, we‘ve seen photos of him fishing, for example,
topless. Horseback riding, topless. Swimming, topless. And now, telling
pictures with the prime minister with his clothes on this time. And what
clothes they are.
Yes. Here is Vladimir Putin posing with a horse in the snow,
awkwardly staring at it. Here is Mr. Putin letting the horse sniff his
ungloved hand. And then, here Vladimir Putin sitting on a completely
I‘m sad, actually, that we didn‘t get a comment from J.D.
Hayworth on this one. But we do hope that Mr. Putin will be happy with his
horses in sickness and in health.
MADDOW: Gen. David Petraeus went to Capitol Hill today to testify
about the progress of the wars in Iraq and Afghanistan. But just in case
it came up, he also had a ready answer to another question.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ): Do you believe that the “Don‘t Ask, Don‘t
Tell” needs a thorough review before action is taken?
GEN. DAVID PETRAEUS, COMMANDER, UNITED STATES CENTRAL COMMAND: My
position is that - can I give my statement on that, sir?
MCCAIN: We‘re short of time, but, please, go ahead. How long is that
PETRAEUS: About eight minutes, sir.
MCCAIN: No. No.
(END VIDEO CLIP)
MADDOW: After taking up a minute discussing whether or not the
committee had eight minutes, the general decided that he would just keep
his answer short.
(BEGIN VIDEO CLIP)
PETRAEUS: Senator, let me just answer that. I believe the time has
come consider a change to “Don‘t Ask, Don‘t Tell.”
(END VIDEO CLIP)
MADDOW: That individual sentence generated frenzied headlines today.
For example, this one at “Huffington Post,” “Petraeus Says the Time Has
I, for one, want to hear the whole eight minutes. Gen. Petraeus,
we would love to have you any time. We would give you eight minutes.
We‘ll probably give you 18 minutes. We‘d give you 28 minutes. You could
even just mail us the statement and we will act it out. Call us. Please
MADDOW: On last night‘s show, I had a really good time talking with
former Arizona Congressman, J.D. Hayworth, who is challenging John McCain
in the Republican Senate primary in Arizona.
It is hard to get Republicans to agree to come on this show, so I
was really happy. The whole staff was really happy that he was here, even
after he took at shot at said RACHEL MADDOW SHOW staff.
(BEGIN VIDEO CLIP)
FMR. REP. J.D. HAYWORTH (R-AZ): Rachel, your researchers should have
done a better job.
(END VIDEO CLIP)
MADDOW: Now, we take that kind of allegation seriously. Mr.
Hayworth, in fact, alleged a number of times last night that we got stuff
wrong in our research. Now, here is the first time.
(BEGIN VIDEO CLIP)
(on camera): You were ousted by a Democrat in 2006. And by that
point, people who knew nothing about Arizona politics knew you for being
one of Congress‘ top recipients, if not the top recipient, of money from
HAYWORTH: Well, first of all, Rachel, your information is incorrect.
(END VIDEO CLIP)
MADDOW: Actually my information was correct. Mr. Hayworth argued
that on one list, he wasn‘t listed first or third in terms of Abramoff
money. He was listed ninth. This is his defense, “I was only the ninth
biggest recipient of funds related to the corrupt lobbyist in prison.”
(BEGIN VIDEO CLIP)
HAYWORTH: If you really go back and take a look at the numbers, I
ranked ninth in overall contributions from those who might even have a
tangential affiliation to Jack Abramoff. In fact, some other groups rated
(END VIDEO CLIP)
MADDOW: Groups. When he says “groups,” that‘s the giveaway. Mr.
Hayworth is ninth on a list that he found of everyone, including campaign
committees and groups who got Abramoff money.
I had only asked Mr. Hayworth about being a top Abramoff money
recipient among members of Congress. He was, in fact, a top recipient of
Abramoff-related money among members in Congress. I was right. I did not
have my facts wrong.
(BEGIN VIDEO CLIP)
(on camera): In terms of you receiving money from Abramoff, your
chief-of-staff in 2005 admitted that it was over $150,000 of money linked
to Abramoff. The “Washington Post” listed you third. The Center for
Responsive Politics listed you first. Others have listed you second.
HAYWORTH: Rachel, your researchers should have done a better job, for
had they checked, they would have seen corrections from the “New York
(END VIDEO CLIP)
MADDOW: Actually, my researchers did a great job, and I am one of my
researchers. That “New York Times” correction does not make Mr. Hayworth‘s
case better; it actually makes it worse.
You see here - the congressman received $101,000 that was donated
by Mr. Abramoff and his family, Indians tribes and a gambling cruise ship
line he once owned. It did not include donations from Mr. Abramoff‘s
lobbying partners or other associates.
So in other words, what the correction says is that while Mr.
Hayworth took a ton of Jack Abramoff-related money, they couldn‘t promise
they have counted all of it.
Take me on all you want, Congressman, but my researchers do and did a
great job. They were right. Anthony, Trisha(ph), you guys were right.
And nothing provably true in print anywhere on earth mitigates how up to
your eyeballs you, Congressman, were in Abramoff slime when you were in
Congress which is, in part, why you lost your job in Congress a few years
I also asked Mr. Hayworth about the comments that he made to an
Orlando radio station on Sunday about gay marriage.
(BEGIN AUDIO CLIP)
HAYWORTH: You see, the Massachusetts Supreme Court, when it started
this - this move toward same-sex marriage, actually defined marriage - now
get this - it defined marriage as simply, quote, “the establishment of
Now, how dangerous is that? I mean, I don‘t mean to be absurd
about it, but I guess I could make the point of absurdity with an absurd
point. I guess that would mean if you really had affection for your horse,
I guess you could marry your horse.
(END AUDIO CLIP)
MADDOW: Try as we might, neither my mare nor I could find this
“establishment of intimacy phrase” anywhere in the ruling, which I brought
up with Mr. Hayworth while I still had him here.
(BEGIN VIDEO CLIP)
(on camera): What you said about the establishment of intimacy being
the definition of marriage in Massachusetts - I don‘t think it‘s true, sir.
HAYWORTH: Well, that‘s fine. You and I can have a disagreement about
MADDOW: Well, it either is true or isn‘t. It‘s empirical.
MADDOW: All right.
HAYWORTH: I appreciate the fact that we have a disagreement on that.
(END VIDEO CLIP)
MADDOW: We don‘t, in fact, have a disagreement. Mr. Hayworth is
actually just wrong. What he says is in the Massachusetts court ruling is
not there. It‘s not something to agree on or disagree on. It‘s something
to look up. I looked it up again. He‘s wrong. The ruling doesn‘t define
marriage as the establishment of intimacy. It just doesn‘t.
So those are the facts. What Mr. Hayworth said I got wrong and
weirdly what he said the staff on this show got wrong, we didn‘t get wrong.
I am still thankful he agreed to be on the show. I am honestly not sure,
though, if there will be a round 2.
MADDOW: Tonight‘s “Moment of Geek” concerns Pi Day which takes place
every March 14th - 3/14, 3.14, get it? In recent years, Pi Day has become
a kind of world nerd core holiday when mathletes find also sorts of awesome
ways to celebrate the ration of the circumference of the circle to its
But regardless of how well you may have celebrated Pi Day this
year, Kent Jones has found someone who one-upped you, I promise you. Hi,
KENT JONES, MSNBC CORRESPONDENT: Hi, Rachel. Teresa Miller, a 20-
year-old studying to be a math teacher at the University of New Mexico
accomplished a feat involving pi, a hula hoop and Rubik‘s cube you will not
believe. For now on, humans must be divided into two groups, us and Teresa
Miller. Behold the perfect storm of geek.
(BEGIN VIDEO CLIP)
TERESA MILLER, STUDENT, UNIVERSITY OF NEW MEXICO:
(END VIDEO CLIP)
JONES: Yes, and she completes the cube, too. 450 places of pi,
MADDOW: Thank you, Kent. I am humbled. All right. That does it for
us tonight. We will see you again tomorrow night. Until then, you can E-
mail us, firstname.lastname@example.org. “COUNTDOWN” starts right now. Have a good
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United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>