The Rachel Maddow Show, Transcript 11/23/10
CHRIS HAYES, GUEST HOST: Good evening, Keith. Thanks so much.
And thank you for staying with us for the next hour. I am still Chris Hayes, sitting in for Rachel Maddow, who is, we hope, relaxing somewhere.
As increasingly insane as the world appears to be getting from the Korean Peninsula to the Tea Party‘s apparent influence on a TV dance contest, Thanksgiving is nearly upon us and there is more to be thankful for than we probably allow ourselves to appreciate every day. In the case of some Americans, a little gratitude seems particularly timely. More on that in about a minute.
We begin tonight with President Obama on the road.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We made the decision to stand with you because we had confidence in the American worker, more than anything. And today, we know that was the right decision.
OBAMA: We know that was the right decision.
So here‘s the lesson: Don‘t bet against America.
(CHEERS AND APPLAUSE)
OBAMA: Don‘t bet against the American auto industry. Don‘t bet against American ingenuity. Don‘t bet against the American worker. Don‘t bet against us. Don‘t bet against us.
(END VIDEO CLIP)
HAYES: President Obama and Vice President Joe Biden traveled to Kokomo, Indiana, today to visit a Chrysler plant that was shut down when the company declared bankruptcy last year and then later reopened after the federal government stepped in to save the auto industry.
It might be hard to remember with scenes like this one today, but the auto loans pushed through by President Obama and Democrats in Congress last year were incredibly unpopular at the time. Remember how much grief the president took for trying to hoist the entire American auto industry on his shoulders? Remember how mercilessly he was mocked as the car dealer in chief?
(BEGIN VIDEO CLIP)
OBAMA: If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always. Your warranty will be safe. In fact, it will be safer than it‘s ever been because starting today, the United States government will stand behind your warranty.
(END VIDEO CLIP)
HAYES: The decision to invest in the auto industry came at enormous political cost for President Obama. But ultimately, it more or less worked. It benefited both auto workers who didn‘t lose their jobs and big business—all three American auto companies are now profitable again. This is good news, right?
And on the same day that the president traveled to Indiana to hail the comeback of the American auto industry, there was yet more positive news concerning America‘s slow but steady economic recovery.
It turns out the U.S. economy actually grew at a faster pace over the summer months than was previously estimated. The numbers still aren‘t great, but for those of you keeping score at home, that‘s five straight quarters of economic growth. Thank you, economic recovery package.
But wait, there‘s more. Did you see this headline in the “New York Times” today? “Corporate Profits Were the Highest on Record Last Quarter.” Quote, “American businesses earned profits at the highest figure recorded since the government began keeping track over 60 years ago.”
Now, that statistic is a touch misleading because it‘s not adjusted for inflation. But corporate profits are going gang-busters right now.
Here‘s probably the most accurate way to measure it. This is corporate profits as a percentage of U.S. economic growth over the past three decades.
There are a lot of numbers here and but here‘s what‘s important. This big dive right here is the great recession. Corporate profits plummeted to their lowest point ever when the recession hit. But here‘s where we are now. Corporate profits are nearly at their highest point ever as a share of GDP ever. Things have recovered for corporate America much faster than anyone really anticipated and much faster than they have recovered for average workers. For bankers and CEOs, the boom times are back.
So, given all of this data, given the fact that it‘s the holidays, time to give thanks, you would think the corporate titans of America who have benefited so disproportionately from the president‘s policies, from policies the White House has undertaken under great political cost to themselves, you would think that these corporate titans would take a moment to give thanks. If you thought that, you‘d be dead wrong.
On the same day that this headline appeared in the “New York Times,” “Corporate Profits Were the Highest on Record Last Quarter,” here‘s the headline that appeared in “Politico.” “Business: Obama outreach not enough.” In an article that will make you want to throw your laptop across the room, business leaders are now complaining that President Obama, quote, “needs to drop the name-calling, try to see their point of view better and step up with some specific proposals.”
After reaping record profits over the past two years, business leaders are now essentially demanding total abject capitulation from the White House, whining about President Obama‘s tone, whining they don‘t get to bring foreign profits back to the United States at really low rates, whining the ways of choosing corporate boards were changed by the Wall Street reform bill.
Ladies and gentlemen, say hello to America‘s ingrate ruling class—the same business leaders whose bacon was quite literally saved by the policies of this White House are now busy relentlessly attacking this White House. They‘re busy secretly funneling millions upon millions of dollars into organizations in order to attack the president and his policies.
Remember in the run-up to the midterm elections, corporate America threw a full-fledged hissy fit. The Chamber of Commerce spent around $130 million attacking Democrats and the White House for too much government interference in the private sector—millions of dollars that were, to some degree, earned off on economic recovery largely produced by the government.
Just so we‘re clear here: the government steps in and bails out the banks. The government steps in and passes an enormous Recovery Act—a Recovery Act that Chamber of Commerce endorsed at that time. The government steps in and saves the auto industry.
All of these policies lead to recovery, economic growth and record profits for corporations—and those corporations then take that money and sink it into ads attacking the president and his party for being anti-business.
And because of all that whining and complaining, they get news coverage like this:
(BEGIN VIDEO CLIPS)
ALI VELSHI, CNN ANCHOR: President Obama is offering an olive branch to the business community in an effort to smooth over some bad feelings.
UNIDENTIFIED FEMALE: You got basically an anti-business environment right now.
SUZANNE MALVEAUX, CNN: Does he need to change his strategy, his approach with the business community?
UNIDENTIFIED MALE: Too little, too late? The president extending his hand to the business community as he starts wooing the U.S. Chamber of Commerce. But will he listen to anything they say, or is it all just business as usual?
(END VIDEO CLIPS)
HAYES: You can say all you want about this president and his policies. One thing you cannot accuse him of, at least for the straight face, is being anti-business.
In 2009 alone, President Obama and Democrats passed 11 separate tax cuts aimed at American businesses. That giant Recovery Act included millions of dollars in investments and green technology and the like. The president lobbied Congress for months to pass legislation establishing a small-business lending fund, something that was endlessly delayed by Republicans.
Before the midterm elections, the president laid out another $100 billion of additional tax credits for businesses. And for all of that, after pocketing record profits, American business leaders now say it‘s not enough. President Obama must do more.
Here‘s the thing: Big business should really be careful what they wish for. The recovery money that President Obama and Democrats passed last year is now running out. That much-maligned recovery package has put money into the pockets of average Americans, who might otherwise be unemployed. Money those people can now spend on goods and services.
But after spending months and months and millions of dollars attacking the president and congressional Democrats, big business now has a brand new Republican Congress that not only won‘t vote for any additional recovery dollars but wants to pull back the rest of the recovery money that hasn‘t been spent yet.
It might be fun to run to the pages of “Politico” to attack the president and his, quote, “anti-business” policies, but big business might soon look back on this moment and realize they never had it so good.
Joining us now is Heather McGhee, director of the Washington office of Demos, a nonpartisan public policy research group that advocates for a more equitable economy.
Heather, it‘s great to see you again.
HEATHER MCGHEE, DEMOS WASHINGTON OFFICE DIRECTOR: Great to see you, too, Chris.
HAYES: OK. Real talk here, Heather. Did that “Politico” article also make you want to throw your laptop across the room?
MCGHEE: It‘s really one of those only in Washington sort of bizarro world scenarios in which you‘ve got 15 million people out of work through no fault of their own. You‘ve got millions of Americans wondering about how they‘re going to make their mortgage payment. You‘ve got banks just raking homeowners over the coals through what we‘re learning is really massive fraud and yet, the question of the day is how much better can we treat American corporations? It‘s really flabbergasting actually.
HAYES: Now, do you think—I mean, on the substantive case of this, do you think the president has to apologize for businesses? I mean, have—what do you think the—the sort of substantive case is in terms of what—whether the policies have been good for them or not?
MCGHEE: I mean, I think all you have to do is look at the numbers -
$1.6 trillion in three months, the highest corporate profits in recorded history. Of course, the president doesn‘t have to apologize to big business.
The president may have to have a summit with big business. I think it would be great for him to bring the corporate titans of America into the White House as sort of political elites are talking about right now.
I‘d want to make a little tweak to the agenda. But I‘d want to make a little tweak to the agenda. I‘d want there not to be any sort of apology or olive branch, but a demand that the biggest corporations in this country actually plow some of that hoarded cash and profits back into hiring the American people again. We need to get Americans back to work.
HAYES: And that‘s exactly the irony. I mean, what we‘re seeing with these profits, right—I mean, the problem exactly is that it is, as you say, being hoarded, ala hoarders, that the money is being hoarded and it‘s not being plowed back in, it‘s not being invested and we‘re not seeing expansion of investment and employment, which are the things that really matter to average Americans. How do we make that start to happen? That seems to be the nut to crack in terms of getting a more robust recovery.
MCGHEE: I mean, what we‘ve seen is a real departure between the fates of Wall Street and Main Street—between the fates of the people who work in corporate board rooms and the people who work on the shop floor or who would be desperate to get a job on the shop floor. So, as long as that‘s the case, the president has a real risk here when he listens too much to the Washington Beltway buzz that‘s really planted by corporate lobbyists about, you know, the olive branch and is he anti-business and all of that, because you can very much lose focus on what really matters in this country, which is the fate of the middle class.
If President Obama is not waking up every single morning and saying that the most urgent economic problem is the decline of the working and middle class in this country, then he is absolutely missing the boat. I believe that he‘s—he does that. I believe that that‘s where his heart is.
But it‘s really difficult here in Washington to keep your focus on what‘s going on actually around kitchen tables around America.
HAYES: I think one of the interesting things here—we‘re sort of running a natural experiment now that we have the—we‘re an unnatural experiment now that we have Republican control of the Congress. And that the things that were taken—the steps that were taken for recovery are the things that Republicans got elected on opposing, right?
And the question, I think, is to what degree do you see going forward the fates of Main Street and Wall Street tied together, and to what extent are they going to continue to be separated? Is it possible, without future recovery dollars, for big business to keep reaping these kinds of profits?
MCGHEE: I think it is possible. I think that we‘re going to see—
I mean, we saw even in boom times, even in—even in sort of not—even before the great recession, we saw that inequality was this yawning gulf. As long as we‘re not investing in infrastructure and early childhood education and basically rebuilding America and shoring up the middle class, as long as we don‘t have trade policies that work for the average worker, as long as we‘re not really seeing the words “Made in America” again, we can obviously see companies like ExxonMobil, which do great even though the average American working isn‘t doing great, that pay zero taxes. G.E., which is actually got $1.1 billion in tax benefits last year, it exploited so many loopholes.
As long as the tax policy, the trade policy, and our global labor policy is so skewed towards the biggest multinational corporations, I actually do think that we can see a lot of benefits still for corporate America and none of that trickle down to working people.
HAYES: I should note, a disclaimer: G.E., of course, is the parent company of MSNBC, the network on which we are now appearing.
Heather McGhee, but thank you for calling that out. Heather McGhee is the director of Washington office of the nonpartisan public policy research group Demos—and it‘s always a pleasure. Thanks for your time tonight.
MCGHEE: Thank you, Chris.
HAYES: The White House has big, big legislative plans for the lame duck session. Apparently, they‘re trying to overlook the adjective “lame” and the verb “duck.” Is that a verb?
Senator Tom Udall joins me for that next. Stay with us.
HAYES: Rush Limbaugh slammed “Motor Trend” magazine for naming the American-made Chevy Volt its car of the year. So, how did “Motor Trend” respond to Mr. Excellence in broadcasting? How does it feel to be thrown under an electric car?
That‘s still ahead. Stay with us.
(BEGIN AUDIO CLIP)
REP. JOHN BOEHNER ®, OHIO: Hell, no, you can‘t!
(END AUDIO CLIP)
HAYES: You asked the White House what‘s left of the lame duck session of Congress is going to be very, very busy. Today‘s headlines are abuzz with the president‘s uber ambitious plans for the final days of the 111th Congress—plans laid out this week by Press Secretary Robert Gibbs.
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: As you‘ve heard the president say, we‘ve got—we‘ve got to deal with issues around taxes. We‘re going to have to deal with issues around unemployment insurance and compensation as well. You‘ve heard the president make mention of START. There are issues around “don‘t ask, don‘t tell.” There are priorities such as the DREAM Act. There‘s no doubt we have plenty of work left to do.
(END VIDEO CLIP)
HAYES: That‘s a lot of stuff. That‘s a big, long, sweeping, ambitious to-do list for a relatively short legislative session. It‘s the kind of agenda that would be tough to accomplish under ordinary circumstances, but consider this: Republicans either have filibustered, are filibustering, or plan to filibuster pretty much every item on that list.
And in the meantime, while all those filibusters are simmering in the background, the people who might have been the moderate salvation of not only the Senate but of cooperation and bipartisanship and the simple idea of getting things done, Susan Collins and Olympic Snowe of Maine are signaling they are no longer interested in moderation or productivity.
The Republican leadership has filed a friend of the court brief in support of a court case challenging the constitutionality of health reform. The would-be moderates from Maine have both signed on in support. Why, you ask? Well, Olympic Snowe is, for one, up for reelection in 2012. According to the folks at “National Review,” she‘s getting a primary challenging of the Tea Party variety very soon.
And if the Republicans learned anything from the 2010 election cycle, it‘s that these days, it‘s tough to win a primary if you don‘t want to repeal Obamacare. It usually doesn‘t hurt if you also want to criminalize abortion, do away with birth rights citizenship and vow to block any conceivable kind of climate change legislation.
So, what does that mean in practical terms? It means that the Republicans in Congress are running for reelection starting now and they‘re running to the way right. And that sets up a face-off between progress and its old nemesis, the filibuster.
If you thought the Republicans‘ unprecedented use of filibuster in recent years has made it difficult for Democrats to get things done, if you thought the near-constant threat of filibuster created a world in Washington where 60 is the new 51, where the minority is the new majority, just imagine what it‘s going to be like in the next Congress—in a version of Washington where not only is the Republican filibuster assumed, but where the two people perhaps best known as Republican moderates are getting behind a repeal Obamacare lawsuit, where Democrats will need seven Republican votes to break a filibuster.
Forget the lame duck session. How are we going to get anything done over the course of the next two years?
Joining us now is someone with a plan and an answer to that, Senator Tom Udall, Democrat of New Mexico, a member of the Senate Rules Committee.
Senator, thanks so much for being here. I hope you‘re bringing optimism and cheer.
SEN. TOM UDALL (D), NEW MEXICO: Thank you. I bring holiday cheer anyway.
HAYES: OK. So, Senator Udall, in January last year, you came out with a plan to reform the filibuster in a column in “The Huffington Post” and basically it involves voting on the rules at the beginning of this next Congress in January to change it. How is that plan coming along?
UDALL: Well, Chris, as you know, it‘s a two-step process really. What we‘re talking about is—on the constitutional option, is that at the beginning of every Congress, every two years, the Senate has authority under the Constitution, under Article I, to move forward and adopt rules or amend rules that are in place. And that part of it is moving well.
And I intend at the beginning of the next Congress, on the first day, this will be January 5th, to offer a motion to adopt the rules of the 112th Congress.
The more difficult part, and kind of the second step, Chris, is that part of what do the 51 senators, if—and this is a 51-vote, what—it‘s a majority vote. What do the 51 senators want to be the new rules that we put in place? And that‘s what we‘re working on in our Democratic Caucus right now.
And I am hopeful. I am hopeful that we‘re going to come up with a set of rules that will make the filibuster more transparent, that will shift the burden to the people that are filibustering, and really encourage senators who are filibustering to be on the floor, be—require them to be on the floor. So, that‘s what we‘re looking at and—go ahead.
HAYES: So, just so we‘re clear here, so folks understand—you know, we have the current status quo, which I think everyone agrees is dysfunctional. There‘s the total extreme option, which is no filibuster of any kind. It sounds to me like you‘re saying there are some places you can change the procedure in the rules that puts us somewhere in between those two, a kind of “mend it, don‘t end it” approach?
UDALL: Well, they—and that‘s really, it seems to me, where our caucus and some of the Republicans are coming out. You may remember Dan Coates who was a U.S. senator. He actually said on the motion to proceed, this is at the beginning of a bill, that what we ought to do is allow the majority to move ahead and get on to a bill and we shouldn‘t filibuster on the motion to proceed. That was something that was very positive to me.
And I—and I think within our caucus, there‘s some support for that. I don‘t know that there‘s a majority today, but I think we‘re working on it.
HAYES: There‘s two arguments that people make about this. And one of them is—well, Senator Udall wouldn‘t be doing this if he were in the minority. And there are people on the progressive side who look around and say, great, we‘re going to pass this big health care reform when we have this very robust filibuster, and then we‘re going to get rid of those filibuster rules and make it easier to repeal it.
I wonder how you respond to this notion of kind of looking very short-term to kind of capture the gains that you‘ve made, how you argue people past that?
UDALL: Well, I think the first issue that you‘ve outlined there is really the one—shall we move forward in every Congress, at the beginning of the Congress, to take a look at the rules? It doesn‘t mean we need to throw all the rules out. But we should take a hard look at how the rules have been utilized.
And in this particular case, we know that there has been unprecedented obstruction. Almost everything requires 60 votes. And yet, the Republicans and the Republican leadership that do this are not held accountable.
What we‘re going to try to do in those rule changes is expose them, to bring them out of the shadows, to all this secrecy that‘s going on with filibusters to bring it out in the open and allow people to know who it is that‘s holding up the show on these particular bills.
And I think that that should be done at the beginning of every Congress. And it doesn‘t matter who is in the majority. It makes us more accountable.
You can imagine if you go through two years and you adopt rules and they‘re not working and you know that they can be changed if you‘re abusing them, you‘re more accountable. And my argument is—is about accountability, not about majority/minority battles that are constantly going on. And I think that‘s the important thing to focus on.
HAYES: Senator Tom Udall, Democrat of New Mexico—I really appreciate you joining us tonight.
UDALL: Thank you. It‘s been a real pleasure.
HAYES: So, how hard is it to pass as a high-ranking member of the Taliban? Based on recent reports, not hard at all. Investigative journalist Jeremy Scahill joins us with the scary/bleakly comic details.
Stay with us.
HAYES: One of the classic characters in farce is the impostor. Whether in Shakespeare‘s “Twelfth Knight,” or in Oscar Wilde “The Importance of Being Earnest,” or even in Eddie Murphy/Dan Aykroyd‘s classic comedy “Trading Places”—the impostor serves a key purpose: to reveal the delusions of the characters around him, to reveal the absurdity in any given situation.
And nowhere was that better exemplified today than in Afghanistan where the most senior Taliban leader engaged in the secret peace talks there, the man flown out by NATO to negotiate with the Afghan government, turned out to be an impostor, a fraud.
Now, this prompts some questions. Was he acting alone, trying to get money? Was he acting as a Taliban spy or as a Pakistani spy? Could he actually still be the Taliban leader he claimed to be as some Afghan leaders hope? Or he is just a shop-keeper from Quetta in Pakistan?
Did he pay him money, as a Western diplomat claims? Or did we not, as the White House claims? Did the Afghan president actually meet with the impostor as almost every western newspaper reports, or is that claim just propaganda as Mr. Hamid Karzai himself claims?
It‘s all very murky. The only thing that does seem to be clear and clearly illuminated in this impostor is that the situation in Afghanistan is degenerating into farce.
Joining me now is someone who just got back from an extended trip to Afghanistan, meeting with Taliban commanders and officials, my colleague at “The Nation,” Jeremy Scahill, also author of “Blackwater: The Rise of the World‘s Most Powerful Mercenary Army,” which is a fantastic book. Jeremy, a real pleasure.
JEREMY SCAHILL, AUTHOR, “BLACKWATER”: Thanks.
HAYES: How are you?
HAYES: What do you make of this story? I mean, I saw it first on your Twitter feed. To me, it was kind of - I mean, it‘s sort of bemusing but also depressing. What does this say about our efforts in Afghanistan?
SCAHILL: I‘m still waiting for us to find out that this is like a Joaquin Phoenix documentary that‘s going to come out in 2014 when it‘s like pull the beard off and it‘s really Joaquin and the whole thing was a joke. Or like James O‘Keefe is going to - you know, we‘re going to hear that it was James O‘Keefe in a pimp costume getting (UNINTELLIGIBLE) Hamid Karzai.
HAYES: This is the famous Breitbart operative.
HAYES: Or maybe ACORN -
SCAHILL: Or maybe ACORN was the Taliban impostor. You know, they‘re to blame for everything. No, the reality is that this is actually a very serious issue because I think the U.S. and the Karzai government - they are very lucky that it wasn‘t worse.
I mean, the last time that they let someone onto a NATO base, at Forward Operating Base Chapman in December of 2009, it was a double agent who blew himself up and killed more than a half a dozen CIA operatives and two Blackwater guys.
So - but what I also think this says is that, look, the U.S. intelligence, the NATO intelligence, the Afghan government intelligence on the ground is horrible. If they can‘t even figure out who is a real Taliban leader to meet with, what does it say about the people that are being killed on a regular basis by special operations forces?
Well, it says that what we heard on the ground is true, namely that a lot of people are being killed that have no connection to the Taliban.
HAYES: Is it also partly a function of the fact that the concept, the unified concept of the Taliban, that main - as a category, is a lot more complicated upon closer inspection than it suggests when we read it in the newspapers?
SCAHILL: Absolutely. I mean, we met with various factions of the Taliban when we were in Afghanistan. Some of them are still loyal to Mullah Mohammed Omar. Others are members of the Haqqani network, which is backed by Pakistan and the ISI spy agency there.
And then you have people that are sort of freelancers. You know, one of the most disturbing things we heard is that Mullah Omar, the amir of the Taliban, the Afghan Taliban, sent an envoy to meet with a new Taliban commander who was replacing the old-school Taliban guy. And they hacked to death Mullah Omar‘s envoy.
These guys are a much more radical generation. So when the U.S. is killing these Taliban commanders and we read about it every day, what the Taliban, the old-school guys, are telling us is, “Look, this new generation of guys, they won‘t negotiate with you the way that we would. We actually ran a government. You may think it‘s a horrible government, but we at least have some semblance of knowledge about diplomacy.”
HAYES: OK. Diplomacy - that seemed to be - I mean, if we‘re not going to
win this war on the ground fighting it, if it‘s not fundamentally going to
be a military victory, which I think it increasingly looks like it cannot
HAYES: Then, the only other option, right, is some kind of diplomatic end.
And when I heard this news, the reason it sort of upset me was that - well,
when I heard they were meeting with Taliban leaders and there were reports
that maybe this actually is the beginning of something that can look like
HAYES: Do you still think diplomacy is feasible? Is it the only way out?
SCAHILL: Well, look, anyone who knows anything about Afghanistan will say there‘s not going to be a military solution. But the Taliban actually have a large constituency. They don‘t operate in a vacuum.
So in order to have a political solution, you have to negotiate with the Taliban. The problem is that the Taliban people are saying, “We won‘t negotiate with Karzai until the U.S. and NATO leave.” The U.S. is saying, “We‘re not going to bow down to the demands of the Taliban.”
So either one of those sides backs down or we‘re going to have a continued situation where there is bloodshed. The worst-case scenario could be that the U.S. creates a more radical generation of the Taliban, leaves the country, having fueled a civil war and Afghanistan lives in war in perpetuity. I think that the bottom line here is that we have our special operations forces, the most elite, highly-trained force in the world, essentially killing farmers and mid-level commanders.
Those guys, Chris - I talked to former Special Forces guy today - they don‘t even want to be there anymore. They see it as just an un-winnable war and they want to move out into Yemen and Somalia.
HAYES: Finally, I wanted to just ask you, what was the biggest surprise of being there? I know you‘d been there before and you were just back in the country. I‘m wondering what your biggest takeaway was from being on the ground there.
SCAHILL: I guess that the takeaway for me was just the sheer level of suffering of people. You know, when you take off your journalist hat and you just look as a human being at what‘s happening in Afghanistan, the immense poverty, the immense suffering and so many people caught between various factions, warlords, Taliban and our forces.
And the Petraeus strategy is making it worse, and that‘s the sober question the Obama administration needs to look at. Is our policy in Afghanistan making America less safe? I think it actually is.
HAYES: Jeremy Scahill is my colleague at “The Nation.” He is the author of “Blackwater” and a good friend. Thanks, Jeremy.
HAYES: Appreciate it. It‘s been a long, hard recession but we‘ve taken steps to avoid the next devastating financial meltdown, right? Anyone? “Rolling Stone‘s” Matt Taibbi joins us next. Strap yourself in.
HAYES: Let‘s never do that again. That was the main idea behind the financial reform bill President Obama signed into law back in July. After several decades of steady deregulation of the financial sector, the White House and Democrats in Congress produced a bill whose stated purpose was to make sure history did not repeat itself in another catastrophic real estate boom and bust.
(BEGIN VIDEO CLIP)
BARACK OBAMA, UNITED STATES PRESIDENT: With this law, we‘ll crack down on abusive practices in the mortgage industry. We‘ll make sure that contracts are simpler, putting an end to many hidden penalties and fees and complex mortgages so folks know what they‘re signing.
(END VIDEO CLIP)
HAYES: The new law also created the Financial Stability Oversight Council, which, led by Treasury Secretary Tim Geithner, met for the first time - second time, I‘m sorry, in its brief history today.
The folks on this Oversight Council are supposed to look out for threats to stability, to climb up into the crow‘s nest as it were, take up their binoculars and survey the scenery below, searching for the icebergs on the distant horizon.
And if you‘re looking for something dangerous on the economic horizon, there‘s almost nothing more panic-inducing than the burgeoning foreclosure scandal. Now, do not be bored, confused or alienated by the words “foreclosure scandal.”
It‘s not only comprehensible, it is fascinating and it‘s hugely important, because many would have you believe that the unprecedented number of foreclosures is the fault of those darn deadbeat homeowners skipping out on their mortgage payments sinking the American economy with every delinquency.
The foreclosure mess didn‘t become this dangerous because people missed their payments. The problem isn‘t with the borrowers; it‘s with the lenders and servicers(ph).
And to understand why, indulge a brief analogy. When you buy a car, you have to make sure you get the title transferred into your name. That document says you are the rightful owner. If someday you end up pulled over by the cops or someone steals your car and ends up caught, you need a foolproof, straightforward way of establishing the car is your property.
What‘s happening now in the foreclosure world is that homeowners are starting to demand that the banks that foreclosing on them produce the housing-world version of a car title called the note.
They‘re simply saying, “OK, you want to kick me out of my house? You have to show that you legally own my mortgage.”
And guess what? In a lot of cases, the banks don‘t seem to have them. That‘s your cue to put on your shocked and horrified face, because the banks are saying, as they did about the subprime crisis, that the problem is contained, just a few bad apples and some missing paperwork.
But a growing group of lawyers, activists and journalists who are now digging into this say it‘s beginning to seem possible that literally hundreds of billions and maybe even trillions of dollars in securities at the heart of this financial crisis were never properly created.
And what that means is that the investors who own these awful assets and bought them from the banks might be able to turn around and force the banks to take them back. Now, how do you think the banks would be doing with $1 trillion dollars of liability on their recently restored books? That is one colossal iceberg. We may be headed right for it.
Joining us now is Matt Taibbi who wrote a great article about the foreclosure crisis in “Rolling Stone” where he is a contributing editor. Matt, how are you doing?
MATT TAIBBI, CONTRIBUTING EDITOR, “ROLLING STONE”: How are you doing?
HAYES: OK. So you did a great job of breaking this down for people. You went down to Florida and you were reporting from something that‘s called a rocket docket. What is a rocket docket?
TAIBBI: I have to back up really quickly and explain a few things.
HAYES: Yes. Let‘s back it up.
TAIBBI: First of all, this whole mortgage bubble was the result of a gigantic transnational fraud scheme where the banks - at least what they were doing is they were bundling hundreds and thousands of these subprime mortgages and fawning them off on unsuspecting third-party suckers like insurance companies, pension funds, German land banks, Dutch trade - trade unions.
HAYES: Some Norwegian town.
TAIBBI: Exactly. They were buying this stuff as AAA-rated securities. And what the banks were doing - once they sold these mis-marked AAA securities, once they completed that fraud, they stopped doing their paperwork.
Why bother doing the paperwork? You‘ve already committed the crime.
Why spend any more money properly upkeeping these loans? So pretty much
every one of these mortgages that was securitized, that was chopped up and
sold as securities during the last 10 years or so, there‘s no paperwork on
them. And I was at one of these -
HAYES: Let me stop you. Is that really true?
HAYES: When you say pretty much every one of these, that seems implausible.
TAIBBI: No. I was at this foreclosure court in Florida. And I‘ve been actually to other courts in the meantime since. The rocket docket is a court where they‘re trying to close 25 cases an hour because they‘re - the banks are trying to speed all of these fraudulent loans into the next stage of their existence so that nobody will look at this phony paperwork.
Every single foreclosure case that I saw had bad paperwork in it. I saw a case where a bank claimed on the same page that it was both the owner and holder of a mortgage note and had lost and was unable to locate the mortgage note on the same page, it claimed, in front of a judge.
And this was typical of the kind of stuff that we‘re seeing in these cases. The banks never did their upkeep, so they‘re going back in time and they‘re doctoring and making up paperwork to fit the foreclosure later on.
HAYES: OK. So that‘s the thing that I think blew up a little bit and people may have heard of. It sort of was in the periphery, this “Wall Street Journal” reporting about people called robo signers.
HAYES: Right? What was a robo signer and how does that fit into this crime scene?
TAIBBI: OK. Again, you don‘t have the paperwork, right? So -
HAYES: That‘s why I‘m trying to foreclose on you. I don‘t have the paperwork. You say, “Where is the paperwork?” I say, “I don‘t have the paperwork.” So now, what do I do?
TAIBBI: So what you have to do you have to make a chain of custody. You‘ve got to go back in time and create a whole bunch of paperwork and get somebody to sign. I‘ll sign it and say, “I personally swear, I attest, that this is all true and I have personal knowledge of these documents.”
And what they would do is they would drag these entry-level guys, these pimply - you know, people straight out of college in many cases. And they would get them to sign hundreds or even, you know, more than hundreds of these documents a day.
And that‘s why many of these cases - we actually saw names that people recognize from the news because there‘s so many - they signed so many of these foreclosure documents.
And that‘s what robo signers are. They‘re just essentially committing fraud when they‘re submitting these documents to the court.
HAYES: OK. We got this big - these big pooled securities. They never did the paperwork properly.
HAYES: The banks say this is just a paperwork problem. They basically say, you know, if I actually bought a car, right, to use that analogy, and I just lost the title, it doesn‘t mean that I didn‘t buy the car, right? So why isn‘t that the same case here?
TAIBBI: OK. Well, there‘s a whole bunch of problems here. First of all, there‘s a whole legal principle involved. It‘s sort of like saying, “Well, we know this person is guilty, so why bother collecting evidence to send them to jail?”
There‘s a whole - there‘s a whole process that dates back to old English law, the principle of transferring the note legally from person to person. If we just throw that system out the window now, we might as well not have any legal system at all.
That‘s the first thing. The other thing is that these banks were legally bound when they bundled these securities. They took on all kinds of obligations to their investors.
In some cases, they were legally obligated to buy back any loans that were in modification or in foreclosure. So there, you have banks like Bank of America that have billions of dollars worth of these securities.
If they were to legally go by the books, by what they agreed to, they‘d have to buy back billions of dollars‘ worth of these loans from their investors. And they wouldn‘t be able to do that.
HAYES: Matt Taibbi is a contributing editor at “Rolling Stone,” wrote a great piece on the foreclosure crisis, has a new book out, I believe, called “Griftopia.” And I look forward to reading it. Thanks a lot.
TAIBBI: Thanks very much.
HAYES: Appreciate it, Matt. Coming up in “THE LAST WORD,” Chad Condit, son of former Congressman Gary Condit, talks about the conviction in the Chandra Levy murder case.
And coming up on this show, Rush Limbaugh versus “Motor Trend” magazine over the new electric Chevy Volt. One of them reviews cars, the others use noxious gas. Which one gets better mileage? We‘ll tell you next.
HAYES: One of the weird tendencies conservatives have is to order their politics around the goal of making liberals mad. They think liberals like something, they automatically hate it. And if they think something would set liberals off, then they love it.
And this leads to inscrutable tantrums. Take, for example, Rush Limbaugh‘s strange jihad against the Chevy Volt, the car recently named by “Motor Trend” as car of the year, not just green car of the year, but the best car being made anywhere by anyone.
To Limbaugh, the Chevy Volt, a clean energy car produced by a company that Obama helped save, represents all that is tyrannical and annoying and insufferable about liberalism. So he‘s against the Volt, you see, very against it.
(BEGIN AUDIO CLIP)
RUSH LIMBAUGH, CONSERVATIVE RADIO HOST: The charging station is your house, so that 40-mile range has got to include you getting home and then staying home for three to four hours to charge the thing. It‘s 20-mile range. So I‘m saying to myself, I can‘t in good conscience recommend that.
(END AUDIO CLIP)
HAYES: And after “Motor Trend” gave the Chevy Volt the award for car of the year, Limbaugh blew a gasket.
(BEGIN VIDEO CLIP)
LIMBAUGH: Of all the cars in the world, the Chevrolet Volt is the car of the year? I forget which - “Motor Trend” magazine. “Motor Trend” magazine - that‘s the end of them. How in the world do they have any credibility? Not one has been sold.
(END VIDEO CLIP)
HAYES: That rant got Limbaugh smacked down by “Motor Trend” editor Todd Lassa. Lassa gave Limbaugh a lesson on credibility writing, quote, “Our credibility, Mr. Limbaugh, comes from actually driving and testing the car and understanding its advanced technology. We test, make judgments and write about things we understand.”
Boom. Then Lassa explained to Limbaugh why the Volt was selected car of the year even before, as Rush put it, not one has been sold. Quote, “Chevrolet has not sold one Volt because it‘s not on sale yet. See, rush, because we‘re the world‘s automotive authority, we get access to many cars before they go on sale.”
Oh, snap. And for good measure, Lassa also points out Limbaugh‘s inconsistency with facts, “Last time you ranted about the Volt and you got confused about the range and said on air the car could be driven no more than 40 miles at one period. At least you stayed away from that issue this time.”
At the end of the column, Lassa delivered the knockout punch, quote, “If you can stop shilling for your favorite political party long enough to go for a drive, you might really enjoy the Chevy Volt. I‘m sure GM would be happy to lend you one for the weekend. Just remember, driving and OxyContin don‘t mix.”
The cheap shot at the end, in case he wasn‘t listening, “Motor Trend‘s” FTW.
HAYES: And finally tonight, a brief pause on the last time I‘ll be sitting here before Thanksgiving - pause for an important ritual. It‘s obviously been a strange and, in many ways, disheartening political season.
It is our job to document and illuminate and sometimes fulminate against the entire rogue‘s gallery of actors in our political drama whose extremism and obstruction threaten the welfare of so many both at home and abroad.
But I want to pause here because we‘re approaching the eve of my favorite holiday - probably a lot of Americans‘ favorite holiday. There‘s something both humbling and life affirming about the simple act of looking around and saying thanks. Just, you know, thanks.
So I‘m thankful for civil servants, for government workers like officials and teachers who keep teaching in evermore crowded classrooms and police officers on the beat keeping communities safe and firefighters who run towards burning buildings as the rest of us are running out. May the chattering classes stop saying you‘re paid too much.
I‘m thankful for President Obama‘s student loan reform which cuts out the middlemen who soaked up millions, added next to nothing and which will make college debt and life in general easier for the next generation of students than it was for mine.
I‘m thankful for the First Amendment which is seriously one of the world‘s great inventions and which allows me to personally pursue this profession and lets everyone out there speak their minds.
And while I‘m at it, I‘m thankful for the Internet with dogs dancing merengue and babies who can‘t stop giggling and people who don‘t have the First Amendment but somehow get their messages out anyway despite the ugliest efforts of oppressive regimes to stop them.
I‘m thankful for our troops and the sacrifices they continue to make, both when we remember to appreciate them for that and when we don‘t. I‘m also thankful for all those working for peace, for anti-war activists and pacifists and conscientious objectors.
I‘m thankful for whistleblowers and dissidents, for Lt. Col. Victor Fehrenbach and others who courageously fought to end the practice of “Don‘t Ask, Don‘t Tell.” I‘m thankful for organizers of all stripes, even those on the other side of the spectrum because democracy is a garden that must be tended with the thankless work of making phone calls, knocking on doors and talking to fellow citizens about our shared future.
I‘m thankful for generic AIDS drugs and the longevity they‘ve provided for so many, thankful for Partners in Health for its incredible work in Haiti and other parts of the developed world. And when life seems its darkest, I think back to this, in 2008. Remember Sarah Palin as president?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Uh-oh.
(END VIDEO CLIP)
HAYES: This year, we‘re all thankful that when it‘s 3:00 a.m. and the hotline really does ring and the Korean peninsula is actually, really and truly on the brink of war, we can be thankful that someone else is answering the phone.
Today, as I was thinking over all this, I started a discussion on Twitter. Thank you, Twitter, about everyone‘s Thanksgiving list. And you, folks, wrote with so many ideas like, “I‘m thankful for that little bell on my car that reminds me to turn the lights off when I park.” Abso-freaking-lutely.
And more seriously, you wrote that you‘re thankful for health reform because “my toddler is a cancer patient.” And (UNINTELLIGIBLE), “Thanks for being able to stay on my parents health insurance for another three years.”
You told us you were thankful for public transit like buses and trains and you‘re thankful for highways, of course. You said you‘re thankful for the obvious absurdity of Sharron Angle and Christine O‘Donnell who, thank goodness, didn‘t win.
You wrote you‘re grateful for the people in your lives and for that manatee who nosed up to you in Florida, for being able to say to your nine-year-old daughter, yes, he did win, he really did.
That‘s why we love you, people out there. You wrote to give thanks to the U.S. Postal Service, because, seriously, they‘ll take a letter across the country, door to door, for way less than a buck. You said you‘re thankful for feminists who never give up, for social justice Christians who never give up and for three liberal women on the U.S. Supreme Court which would have been impossible even 20 years ago.
And that Bristol Palin‘s turn on “Dancing with the Stars” is over, so now, someone else gets a chance, for the better of humankind, you know.
I guess you could say we are thankful for the ground gained in increments large and small, for any and all progress, for a better America and world and for the chance to keep working at it together.
Also, for that little bell on our car that reminds us to turn the lights off when we park. Man, I really, really need that. Happy holiday.
That does it for us tonight. You can read more of my work at “TheNation.com.” You can follow me on Twitter, user name chrislhayes.
And now, it‘s my pleasure to introduce “THE LAST WORD.” Sitting in for Lawrence tonight is Willie Geist.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
Copyright 2010 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.>
Copyright 2010 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>