The USA’s Most Insane Political Discussion of all Time


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(Formerly The Great “Agronsky and Company”









9:00 AM

SENATOR-ELECT SCOTT BROWN (R-MA):  (From tape.)  I’m Scott Brown.  I’m from Wrentham and I drive a truck.

MR. SHIELDS:  This week on “Inside Washington,” a political knockout: a Republican wins Ted Kennedy’s Senate seat.

SENATOR-ELECT BROWN:  (From tape.)  People do not want the $1 trillion healthcare plan.

MR. SHIELDS:  So what happens to healthcare reform now?

REP. JOHN BOEHNER (R-OH) [House Minority Leader]:  (From tape.)  This bill is dead.

MR. SHIELDS:  The Supreme Court reopens the money faucet in politics.  Corporate and union bucks are back big time.  President Obama calls for bank reform now.

PRES. BARACK OBAMA:  (From tape.)  If these folks want a fight, it’s a fight I’m ready to have.

MR. SHIELDS:  And what does Scott Brown’s victory mean for the election year ahead?

JAKE TAPPER:  (From tape.)  Interesting anniversary present for you guys from the voters.

DAVID AXELROD:  (From tape.)  I mean, admittedly, we would have preferred a cake.

RUSH LIMBAUGH:  (From tape.)  This is a stunning and for Democrats an ominous development.

(Musical break.)

MR. SHIELDS:  Hello.  I’m Mark Shields sitting in today for Gordon Peterson.  Republican Scott Brown drove a pickup truck fueled by voter anger and anxiety straight into Washington this week.  Brown beat Democrat Martha Coakley handily in the special election for Ted Kennedy’s Massachusetts Senate seat.  Within 24 hours of his victory, the healthcare reform bill in its current form was dying.  And another blockbuster story broke Thursday.  The Supreme Court struck down parts of the McCain-Feingold campaign law.  Corporate and union money will be back in the game big time and on the airwaves in this election year.  We’ll get to that in a minute but we want to start with Scott Brown, senator elect.

SENATOR-ELECT BROWN:  (From tape.)  What I’ve heard again and again on the campaign trail is that our political leaders have grown aloof from the people.  They’re impatient with dissent and comfortable in making backroom deals and we can do better.  (Applause.)

PRES. OBAMA:  (From tape.)  We were so busy just getting stuff done and dealing with the immediate crises that were in front of us that I think we lost some of that sense of speaking directly to the American people about what their core values are.

MR. SHIELDS:  When a Republican comes out of nowhere to win Ted Kennedy’s seat taking down healthcare in the process, it’s clearly cause for worry for the Democrats.  Evan, the president admits he lost touch with the voters.  What’s the message for him and for Democrats?

MR. THOMAS:  Be more honest.  He tried to finesse this.  Regular voters can figure out that if you’re going to extend healthcare to 40 million people you’re going to have to pay for it someway and they’re just not going to believe it if you say to them nothing will change, this will be okay, no problem for you.

MR. SHIELDS:  Nina, your own sense.

MS. TOTENBERG:  Well, I wouldn’t panic if I were a Democrat but I would be –

MR. KRAUTHAMMER:  If you were a Democrat?

MS. TOTENBERG:  – but I would be extremely worried at this point.  And I’m not quite sure what the prescription is except to do a quick pivot and what we really know people are terribly upset about are the abuses of Wall Street – you saw the president this week in fact pivot to that.  They started doing this earlier, but that’s really – politically that’s where it’s smart for him to spend his time.

MR. SHIELDS:  Charles, you wrote about it in your column.  Can the Democrats really ignore this jilt?

MR. KRAUTHAMMER:  They might.  Some of them want to.  I think the message was clear.  It’s not technique.  It’s not the message.  It’s not tactics.  And it’s not anger.  The problem is it’s a center-right country and Obama attempted to govern from the left.  It can’t be done.  It could be done for a short while but not even a year and if Democrats don’t understand that and pretend it was the message or it was the way it was handled or it’s the economy or the banks, they’re going to miss the story.

MR. SHIELDS:  Colby, is that what it was?  Was it an ideological defeat for the Democrats and an ideological victory for the Republicans?

MR. KING:  I wouldn’t say it that way.  I mean, there was no bait and switch on the part of Obama.  What he essentially talked about during the campaign he proposed as president in his first year, the major issues.  What did seem to happen though is he got too much into the weeds here in Washington.  He got very much involved in a very partisan way with the tinkering of the legislative process and lost touch or lost sight of what was really going on out in the country.

This healthcare issue, it is important.  The idea of extending healthcare to 30 million people who don’t have it, but when you try to do something like that, you’re telling other people you’re going to have to pay for somebody else’s healthcare.  That they didn’t get across very well to people.

MR. THOMAS:  Because he tried to finesse it.  That’s the point.  He tried to finesse it.  He kept saying, nothing will change for you.  If you like your healthcare, that will be okay but we’re still going to give 30 or 40 million people healthcare.  Voters instinctively know that that’s not true.  That’s why you had these tea parties.  That’s why you’ve had this popular revolt because he was fundamentally dishonest about the process.

MS. TOTENBERG:  If we had 5 percent unemployment, he probably would have gotten the plan through.  But you can’t refocus people’s attention on an aspirational goal for a society — I think it’s very difficult to do that — when people are hurting so much in the immediate sense and businesses are going down the tubes, small business on a daily basis.  You just look in any mall, places you’ve gone for years, they’re gone now.  People in every level of life are struggling to even have a job or they’re working part time.  Kids coming out of school can’t find jobs.  This is a very dire situation and he has – I can’t say he’s ignored it, but he hasn’t focused on it in a way he probably should have.

MR. SHIELDS:  Charles, on the question of healthcare, I think you could have argued that the biggest beneficiary was really the insurance companies in the sense that you have a universal mandate, everybody has to buy it and you have subsidies to people who can’t afford it.


MR. SHIELDS:  Now, the Democrats are – some people say, and to save the healthcare bill what we ought to do is just have a preexisting condition and so forth.  Can you do that?  What can you do on healthcare right now?

MR. KRAUTHAMMER:  No.  No.  I don’t think you can do a piecemeal thing because it’s so interconnected.  If you do no preexisting conditions, you bankrupt the insurance companies or you’d have to raise premiums.  It means all healthy people will not have health insurance and they’ll wait until they get ill and then get health insurance so you don’t have any revenue.  It’s so interconnected that it can’t be done.

Healthcare is dead.  There’s no way it can be revived.  If the administration wants to redo it with the Republicans, it’s going to have to include tort reform, but it will take weeks and weeks and weeks, and I’m not sure that rank and file Democrats want healthcare again and again in the public eye after spending a year and getting massacred on it in Massachusetts.

MR. SHIELDS:  But Colby, to come out of this with nothing, I mean, on healthcare, wouldn’t that be the ultimate defeat for Democrats in control of the House, the Senate and the White House?

MR. KING:  I think you have to come out of here with something but it’s not going to be anything like what was originally proposed.  But Charles is right here.  They cannot spend a lot of time on this issue.  It’s not just Massachusetts.  You take the state of Maryland.  There’s a poll that just came out this week that showed among Maryland voters, 54 percent are saying the economy is most important; healthcare, 11 percent.  That’s all for healthcare reform.  And you’ll find that probably reflected across the country.  So, yes, do something about healthcare, but don’t invest all the time in it because it’s the economy, the economy, the economy.

MR. THOMAS:  But that’s a fundamental myth.  You know, the mantra is jobs, jobs, jobs.  They did a huge stimulus package to do jobs.  They did pretty much what the federal government can do about jobs, which is put a lot of money in the economy to try to create some jobs.  They did that.  They don’t really have many other tools.

MS. TOTENBERG:  Oh, yes, they do because people are furious about the banks and president has got a proposal about that.

MR. THOMAS:  But that’s not going to create jobs.

MS. TOTENBERG:  That doesn’t matter.  It appeals to a populist urge.

MR. SHIELDS:  Okay.  Let’s talk about that.  President Obama wants to get tougher on the big banks that take the big risks.  That’s one issue that might connect him with voters.

PRES. OBAMA:  (From tape.)  Never again will the American taxpayer be held hostage by a bank that is too big to fail.  Now, limits on the risks major financial firms can take are central to the reforms that I’ve proposed.

MR. SHIELDS:  The president is proposing tough new rules for banks that take reckless risks.  He wants to ban banks that accept federally insured deposits from investing in hedge funds and other risky investments.  Bank shares took a dive on the news.  Colby, you’re the banker.  What’s the practical impact here?

MR. KING:  I think the practical impact will be very important as far as stability of the financial system.  I think it’s important that the president takes those steps that have been recommended by somebody like Paul Volcker, something he had resisted doing because of Timothy Geithner, the secretary of the Treasury, who didn’t want to do it.  I’ve long advocated putting up that wall between the investment banks and the commercial banks going back to something like Glass-Steagall.  They haven’t gone all the way yet but it’s a step in the right direction.

What is not probably going to fly very well are some of the more populist things that he wants to do to the banks, like placing a levy or a tax on their earnings to take back some of the money that was lent to them.  That kind of anger is contrived anger to respond to voter angst about the banks.  I don’t think that’s going to get him as far as he wants to go because nobody believes it.  He spent too much time working with the banks over the last year and all of a sudden he’s going to turn on them because the election results?  That’s not going to sell.

MR. SHIELDS:  Charles, you agree?

MR. KRAUTHAMMER:  I think in principle I agree with Colby.  You really have to have a wall between investment banks and the ones that accept deposits as we had for half a century.  But I think the president is trying to play the populist here.  This is the beginning of the pivot.  He got a message from Massachusetts.  People are angry and he thinks it’s all about Wall Street.  Well, A, he doesn’t – a guy who likes arugula is not exactly a populist type; a guy who mocks a truck in Massachusetts doesn’t quite have it.  I’m not sure it’s going to work.  And second, I’m not sure that he’s got a program on the banks that’s going to have a populist appeal.

MR. SHIELDS:  Evan, as our resident populist, do you feel that this is authentic?

MR. THOMAS:  No.  No, it’s not.  It’s pure politics and it’s going to play as politics.  I mean, on substance, I like it.

MR. SHIELDS:  You do like the substance.

MR. THOMAS:  Whatever Paul Volcker is for, I’m pretty much for.  But I think the reason why he went in that direction was 100 percent politics.

MS. TOTENBERG:  Well, this has been in the making for a little while to begin with, before the Massachusetts results, but having said that, I think what the bankers who are – you know, the market took a dive – what they have to understand is they made this mess and people are outraged and this is like a societal pressure cooker and if you don’t let there be some steam come off of us, even though it’s going to burn the banks, it could be very damaging to these financial institutions in the long run.  It could be far worse.  If populist tea party rage about the banks governs, it would be far worse than anything in terms of regulation that Barack Obama has proposed this week.

MR. KING:  I agree, but –

MR. KRAUTHAMMER:  But Democrats misunderstand what the populism is about.  They imagine it’s all about the Wall Street.  It’s about big government, an administration that governs Left, an administration that –

MS. TOTENBERG:  Oh, come on, Charles.  It’s about Wall Street.

MR. KRAUTHAMMER:  – that is making all the backroom deals –

MS. TOTENBERG:  It is about Wall Street.

MR. KRAUTHAMMER:  The tea party is not about Wall Street.  It’s about Obama.  That’s how we started.  That’s how we express ourselves.  If you want to have –

MS. TOTENBERG:  Some of that’s true.

MR. KRAUTHAMMER:  – your head in the sand and believe so –

MS. TOTENBERG:  – but we are talking about populist discontent.

MR. KRAUTHAMMER:  – you’re going to have a dozen Massachusetts on your hands if you ignore the message.

MS. TOTENBERG:  When you’re talking about populist discontent, if you look at the polls data, it’s Wall Street.

MR. SHIELDS:  Colby, three out of four voters believe that the government policies have helped Wall Street rather than them; only 20 percent feel that they’ve been helped by the government’s economic policies.  I mean, is this an accurate reading?

MR. KING:  No.  I think it’s an inaccurate reading on the people who say that because if we had not done something about the problems on Wall Street with the financial system, it would have had an awful effect on the people who are most concerned about the problems now.  They had to do something.  Everybody from Barney Frank to the president to even people on the Right agree something had to be done about the financial crisis.

MS. TOTENBERG:  I agree.

MR. KING:  The problem is I don’t think – it’s not just a communications question.  I don’t think they adequately explained the connection.  And now to turn around into just Wall Street is a big bad actor and got us into all these problems and now we just have to beat Wall Street, it doesn’t sell over the long haul.  It’s not a substantive argument.

MR. SHIELDS:  Evan, quickly – you alluded to the Geithner – Tim Geithner, secretary of Treasury, Paul Volcker tension or conflict.  Do you think this means the emergence of Volcker?

MR. THOMAS:  No, but the body language is plain to see.  I mean, all of a sudden, Volcker, who had been cast out – nobody is talking to Volcker, there he is standing right next to the president – Geithner is kind of off to the side.  I mean, clearly.

MS. TOTENBERG:  The president offered him secretary of the Treasury.  He thought he was too old.  I wonder if that might eventually come to pass nonetheless.

MR. SHIELDS:  Okay, Nina.  Corporate and union money is back.  Let’s talk about this week’s campaign finance ruling.

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