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tv   The Dylan Ratigan Show  MSNBC  October 12, 2010 4:00pm-5:00pm EDT

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denial as well. both refuse to get an ekg and find out how bad the illness that plagues our market and financial system is. that's what's going on right now with our housing market in particular. the question is, how sick are we? the short answer, right now, i don't think anybody can answer that question. and that's why we all need to demand an investigation to open the books at fannie, freddie and federal reserve and find out once and for all how many bad loans, fraudulent loans were made by banks and sold to the government, paid for with your money, hidden by the government and the fees for the loans continue to be collected by the very banks who pay out of our politicses. all of us need an evaluation of how much lending in this country was fraud, either between the borrower and lender in the first place.
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the banks and government or between the bankers and the pension funds they sold those loans to as well. we need to know what percentage is plaque in our economic arteries. all we know now is we have a heck of a lot in the way of symptoms and a lot of folks refuse to go to the doctor to find out how bad it is. joining us now, harvard law professor and zach goldbar. also, quite curious to note how bad this illness is. professor porter, i'll begin with you. what is the barrier to get ago real answer as to what percentage of the lending is based on fraud or malpractice and what is not? >> it would require a level of investigation we have not seen before. it would be quite hard at this point because many of these
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loans in foreclosure were made four, five, six seven years ago and as we know, the banks and servicers did a poor job of hanging on to the paper work did a poor job of hanging on to these loans, so doing the autopsy is going to be challenging. >> at the same time, considering the amount of money that the financial bankers are paying themselves for this sloppy work considering the lack of lending, $1.6 trillion, professor, in home loans that we don't know how much of that is garbage and the barrier to doing this is because it's hard? >> it may not make a legal difference. there are very limited remedies for a loan that's been made. so right now, the current controversy with gmac and bank of america centers on what to do
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at this foreclosure stage when those banks are making errors. when they submitted false affidavits. that's a problem we can tackle and we should, in my opinion, be tackling and am disappointed the government hasn't done more on that issue. to go back at the beginning and say five years ago, is it the homeowner who didn't document their income, the broker who pressured the homeowner. not only is it hard to do, i'm not sure it makes a difference to where we are today, which is we've got millions of homeowners who can't pay, struggling. we need to start thinking solutions going forward. >> the solution has been to pretend everything i'm discussing doesn't exist, print a bunch of money.
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is that the best solution? print it and buy an ice cream cone. >> yes, please. >> that's been the pattern so far. we've sent $160 billion to bail out fannie and freddie. this is for making bad loans in the first place. now, taxpayers could be on the line for cleaning up the mess. for finding out why banks couldn't do paper work right. >> and the beautiful thing about the way this country is set up that we call a democracy is that we've got a central government controlled by the banking industry that is paying itself hurrica hundreds of billions of dollars to administrate this system while foreclosing on homes they may not own the note to. and there's no legal recourse for taxpayers. is that the situation, kathryn porter? >> there's no remedy here for the taxpayer other than the
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political process. we have the oversight committee. t.a.r.p. pressure on the treasury. we have a consumer financial protection bureau, but short of those kinds of political and regulatory things, there's little taxpayers can do. >> one question that occurs to me, my understanding with that in order for the government to provide fund to a bank, the loan had to quote, conform to a set of standards and that conforming was set because we didn't want banks putting fraudulent garbage loans together that are profitable for them and paying off the politicians to cover it up because my goodness that's not good for a country, but at the same time, no one seems to want to figure out what percentage of the loans at fannie and freddie are nonconforming and shouldn't we push those back on to the banks and then the big argument is well, if you do that, you'll
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collapse the banks. so we're better to collapse the american country and tax space in order to keep the bankers rich. is that how this is set up? >> more or less. for most of the history, fannie and freddie did conform safe loans, but in the middle of the last decade, profits went to buy the profit loans. the fraudulent loans. that's part of what got us into this mess. there's a big fight right now between fannie, freddie. taxpayers on one side and the banks on the other. the banks don't want to take them and there's a fight in krourt going on. >> how on earth could the bans win a case where they forced nonconforming loans to be stuck with the american taxpayer? >> i imagine one of the arguments is going to be that they didn't do their due diligence in investigating and
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examining what they purchased. >> so hold on. so you're saying if i run a restaurant and i'm serving poison hamburgers and you're too stupid to figure it out, i have no responsible for selling poison hamburgers if you're so stupid to buy it. is that the logic behind the american justice system? >> i wouldn't say behind the american justice system. i would say behind the financial regulatory system. we don't have the kinds of safety standards for banks that we have for restaurants, so we don't hold banks to the same level of consumer protection, underwriting. >> zach, is that because 40% of all political donations come from banking for democrats and republicans so they're basically paid off to not make rules to protect us from predatory
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gambling banking practices? >> i don't know if it's -- >> hold on. i want zach here. >> i don't know if it's campaign donations, but banks are immensely powerful. they have the power to funnel money to all sorts of businesses. whether it's political donations or just the sheer power of banks to drek the flow of capital and pick winners and losers in our economy, that gives them enormous power and attention of policymakers. >> thanks for the conversation. zach goldfarb and kathryn porter. coming up, breaking news on a landmark ruling for don't ask don't tell. will the obama administration let this one stand? if they do, well, don't ask don't tell is is over. they've got 60 days to respond. plus, when you have conversations like the one we just had about the systemic extraction of the banks using the government in this country,
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how could america not be at a boiling point. record bonuses to be paid out not for lending or investing, but for high frequency trading and asset manipulation seems to be the primary profit setter. we'll talk about it with jason chafs. my guest after this. [ male announcer ] there's a big idea happening in health care
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breaking news on a federal judge in california with a landmark ruling on an order to get the pentagon to stop enforcing the don't ask don't tell policy. pete williams has the latest. >> the other shoe to drop in this case that produced a ruling in september from a federal judge in california in los angeles who said that the don't ask don't tell rule on probting gays in the military was unconstitutional. today, the second act in the legal drama. the judge said after asking both sides what she should do about it, issued an order blocking its enforcement nationwide because she said it's unconstitutional. as a practical matter, the judge has the authority to do this. so as a matter of law as of now, enforcement of this law is blocked. the dwe is, what's the government going to do about it
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and they'll be two answers to that. one is legally will the justice department go to the court of appeals and say you got to put a stop on this while we figure out what we're going to do. i think that's fairly likely. the second is will the obama administration appeal while they're saying to the congress, we don't need this policy. the second question, what's the military going to do about it. we've been waiting for about an hour to hear what the pentagon says about whether it will stop enforcement of it while it waits for the next legal step. this is a fairly dramatic thing, dylan. while congress decided whether or not to do away with the law, what the junl is now saying is that it's unconstitutional, you cannot enforce it. >> thanks for the reporting. tonight, keith will talk to the plaintiff in this case.
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as we turn our attention to the boiling point that is america, from wall street to washington, the financial scandals that remain uninvestigated. employer based health care system that mandates everybody by health insurance. the list of injustices, it's as long as as you want to make it and so much of that anger is about to be unleashed on our lawmakers. with elections just a few weeks away, was on pace for a second record breaking year for pay. nothing wrong with that if wall street was making that money and investing in america. that's not the case. the firms are set to pay out $144 billion in compensation. that as firms like goldman sachs make up to 85% of their money accessing the free money from our government for trading and speculation and $144 billion on
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top of the 139 billion dolled out in 2009. the government, they're handling it on wall street. only 24% lawmakers are doing a good job. 73% disapprove. i'm surprised anyone thinks congress is on the right path here. joining us now, a congressman who i believe tells it like it is. a republican from utah, jason chafis. >> 24%. are you kidding me? >> have they not seen the news? >> exactly. >> tom coburn has come on and said that partially tongue and cheek, partially not. here's the problem with washington, experience works against you. you show up working for the people and find yourself working for the special interest. where are you in that
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progression. >> when i ran, 12-year republican. senator hatch, gorge bush came out against me. i was outspent by $600,000 and we won. >> senator coburn's point was less about the character of the individuals. i think a lot of people who duogo to washington, d.c. have good intentions, but to stay in it -- do you feel that's fair evaluation? >> i think that's part of it. i don't mind going out and raising money. what is maybe not so fun for me and a lot of colleagues is having to raise money for the party. they have very specific objectives for you to raise a certain amount of money. >> no different than the bake sale at my local high school. in order, the republicans got to
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raise money for the republicans and democrats for the democrats. >> i wish it could be just a bake sale. my first year in office, i was expected to raise $50,000 for my party. the second near, $175 thourk. that's a lot of money. >> there's talk going back a few months where rahm emanuel would be on the phone with the freshman democrats saying get on the phone. almost like a hazing process in a fraternity where the freshman are told to raise money for the seniors. >> the seniors got to go out and do it, too. i'm all about helping the team, but you spend time doing that, you're not spending time doing other things. >> let's talk about the most basic frustrations. the perception that neither the republican nor democratic party has the courage to face the truth about this country right now.
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meaning the way that the government functions is for the benefit of the few not for justice for all. and that neither party is prepared to deal with the real authority issues like that investigation of fannie mae and freddie mac. like the federal reserve, like employer-based health care, like the actual things that are stra strangling our country because they are outdated or potentially fraudulent. >> maybe i'm just too nieve, but i didn't create this mess, but i am here to clean it up. when i became convinced internally that it was okay if i lost the election, i became a much better candidate and freshman member of congress. i really believe the only way i'll be able to represent the people of utah to washington, is if i stay rooted in that. and if i don't, kick me out just as fast as they can. incumbencies should be add ver
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tent. the number of years in service does not equal seniority. you're elected and pointed by your colleagues. the guy sitting to my right has been there ten plus years. i give a little credit to john boehner for doing that, but there are some lies that come out of these incumbents that shouldn't be stood for. >> what's the most screwed up thing you've seen? either culturally, the thing that's most disgusted you, most surprised you, most amazed you. >> how much a grip the majority party has on dictating what comes to the floor. as a freshman member of congress, even if i'm in the minority, i should be able to offer an amouendment to a bill. but you can't. that is stunning to me. couple that with a idea that you've got to raise all this money for the party --
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>> can we fix it? do you feel like we can fix it? i'll show up and do this show every day. you keep showing up in washington, d.c. >> i think that pendulum of power is going back and forth real quick and a whole new group of people are about to come into office. that's why the pendulum is so quickly shifting to the other side because we haven't changed the culture. >> it will be interesting to see if we move to a party of reform and process reform. >> you don't get the process right, you won't get a good result. >> a man who sleeps on a cot at his office in d.c. nice to see you. next, an update on the human drama unfolding in chile. 69 days trapped underground. you know the horror underground, but what about on the surface
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when they find out their wife and mistress are both waiting for them. that's breakfast with two pills. the morning is over, it's time for two more pills. the day marches on, back to more pills. and when he's finally home... but hang on; just two aleve can keep arthritis pain away all day with fewer pills than tylenol. this is steven, who chose aleve and 2 pills for a day free of pain. and get the all day pain relief of aleve in liquid gels. another heart attack could be lurking, waiting to strike. a heart attack that's caused by a clot, one that could be fatal. but plavix helps save lives. plavix, taken with other heart medicines
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ascending one by one, each man squeezing into the tiny rescue capsule for a long trip back to the surface. seven footballs, the trip inside the capsule. the miners reportedly fighting over who will be the last to leave. that man will set the record for the most time trapped underground. the miners will be inundated with book, tv, movie deal, but in the short-term, they may have bigger things to worry about when they get to the surface. apparently up at camp hope as they call it, where friends and relatives have been living for the duration of the ordeal, encouraging their loved ones stuck beneath. apparently, a number of the wives have had the opportunity to get familiar with their husband's girlfriends, so miners may have some explaining to do when they get back. still ahead, where have all the new ideas gone?
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a shocking report on the lack of innovation in american companies. no wonder they're not creating jobs when the easiest way is to pay off a politics. plus, karl rove, he is not alone. but he is. we'll talk about it with our -- our all-star panel. sorry about that. plus, make some cookies, meet the president. we'll talk to a 17-year-old entrepreneur starting her own bakery and her trip to the white house in exchange for those cookies. we're back after this. uh, i'm in a timeout because apparently
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we would need to add 11.5 million jobs to return to the prerecession employment.
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but that's a debate for another day. to put that in perspective, the joblessness, that is, last month, we added 65,000 jobs. the bad news is that american companies are neither investing nor invating. they are sending money to washington, d.c., getting long china, using robots, you name it. anything that requires something that's much less work and an easier way to make money. a new report shows just 9%, 9% of employers say they have committed to invating in the way they do business. chances are, they found an easier way of doing business. mike mandell, former chief economist at business week. talk to me about what you see as the barrier. obviously, i express my opinions
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there, but what is the barrier? >> what's happened is that companies invated in the 1990s and found an easier way, a lot of them. they went overseas. they did financial things and they moved away from innovation as something that was risky, too risky. they had easier ways to make money. there are some sectors that continue to innovate. our communications sector. think about the companies we think about as innovative. >> apple and the ipad. a much -- threw in a lot of innovation and what happened is it worked for a combination of regulation. the science was too hard for them. but they tried. i give them credit for trying that. and then a whole chunk -- they
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put money in. then a whole chunk of other businesses. were these guys really committed? you don't see it. it's hard to figure out what the reasons are. >> how much of a barrier do i think is the fact that if i'm a business and i know that if i hire a lawyer or a lobbyist, some legal changes that make it harder for my competitors, if i become more profitable doing that, than having to assemble a work team, the interesting thing is whether the tech companies or drug companies, they have to create a better product. a lot of businesses do not. >> you make a good point. what we have is a regulatory set-up in washington. so that washington is committed, i saw you had the congressman on. washington's not committed to innovation.
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it's committed to regulation. it's committed to giving up the existing pie. what happens if any existing -- i tried to work out this idea, which is kind of a long way of saying maybe we shouldn't be beating up on the innovative industries now. maybe what the administration and congress need to do is commit themselves to invasion and growth in this period. >> but what is doing that, for instance, what if accepting that the principle you just offered up mean that the political donors you relied upon are displaced or see their profits annihilated by the innovation and makes the industry obsolete. >> that is the definition of leadership, dylan. the definition of leadership is doing what is right for the country, even if it runs into
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your political donors at that time and so for me, for the u.s., innovation is number one. and if i look at a politician in washington when there's obama, i have to question, what e they doing to fund innovation? exactly. an environment and if they're not doing it, this is a problem and i say leadership for me is focusing on this. >> i agree and i thank you for helping me and our audience understand it. the nice thing about innovation, it creates jobs. >> absolutely. it is the single biggest job cry ator we have. up negs, know next, show us the money. we'll talk to the e-team about karl rove and corporate cash. why would you secretly be sending money to washington,
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d.c.? oh. it must be because you figure that's good for your business and easier than having to innovate. we're back after this. [ animals calling ] ♪ [ pop ] [ man ] ♪ well, we get along ♪ yeah, we really do - ♪ and there's nothing wrong - [ bird squawks ] ♪ with what i feel for you ♪ i could hang around till the leaves are brown and the summer's gone ♪ [ announcer ] when you're not worried about potential dangers, the world can be a far less threatening place. take the scary out of life with travelers insurance...
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back now with our e-team. our election panel counting down to the midterms and we are almost there. three little weeks away from the big old day. every tuesday from now to november 2nd.
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we've been gathering the best political minds in the business. with us, duking it out for the dems today, karen finney and a veteran voice on the right. a man we are honored to have at the table. we don't know what he is going say, but he seems prepared to say a lot of things. matthew dowd. along with our favorite money man, lobbiest and well, a man who can get things done if you know what i'm saying, jimmy williams and our numbers guy to keep us all honest before we get too far off the reservation with our ideas. nate silver. you're looking good. let us commence with the issue of the secret money, specifically karl rove and his secret money as an emblem of secret money run rampant in our political process. here is the president's press secretary. >> if there are organizations
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raising tens of millions of dollars who won't tell us who their donors are, my guess is they won't tell us for a reason. because they have something to hide. >> that makes a certain amount of sense. do you know this karl rove? this character, this man? who is this man? >> yes. for a long time. >> can you speak to his character? that's guy who would spend secret money? >> karl and i never talked about it. i know the left and karl and i have had agreements and disagreements on many levels. he would say if he came on this show, karl is, you know, he's a great foil for the left to play off against. they like to call him an evil genius. he's neither. he's neither. he's a smart guy, but he doesn't run the world. >> that makes it so much easier
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when someone like karl, you go to bed at night and everything's gone wrong, you need someone to blame and can put a picture of rove there. >> it's interesting that the president of the united states and the vice president of the united states and the press secretary think karl is their peer and they have to compete with him. if i were to give them advice, it would be to ignore him. >> rove is a good foil because he's emblem attic of all that was going wrong when we voted for change. we're talking about secret dollars, buying candidates wholesa wholesale. who's actually paying for these ads. it's a fair question. >> have not secret dollars been buying candidates wholesale for
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some time? this is not a new phenomenon. >> it's not. doesn't make it any difference this is 2010. but look at. it's a simple problem and that is that if you're out in and breaking the law, you should be held to justice. gibbs said something interesting today when one of the reporters said, hey, can you show us who's on the enemies list rove came up with. he said, yeah, and gave him a blank piece of paper. then said, now that we've told you what our enemies list is, why don't they disclose -- >> that's the key. >> this is indicative of two things. first, it remipds minds me of a scene in casa blanca. the president of the united states benefits in 2008. there was large -- >> by donations from real
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people? >> from george soro, a multi-million nar. >> when karl lied about the real disclosure between labor unions. >> i think this is indicative of a white house and democratic party that brings up an issue that 99% of the american public cannot care less about. they're not willing to talk about health care reform. they want to talk about a process question. >> you think it doesn't matter? >> does america care? baseball, right. >> there is an issue about who do republicans stand for. is it main street or special interest. they're coming at that question, which is an important question in an awfully obtuse way. it seems like a little bit of -- i don't know. >> so, how would you reframe it so it was more relevant to people outside the beltway. >> i would circulate the story to those who do care about it,
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but i think gibbs' time needs to be spent talking about more important things. we have 21 days until the election. >> and what i think most would probably recognize here, james carville certainly did, the white house has now officially woken up from the long slumber of two years. it means they're firing back. i keep telling my friends on the democratic side of the aisle, you need to start governing like republicans. if we want to win, we need to do what they do, which is attacking. it's a bogy man. >> what's not these days? i disclose everything i do. >> the problem though with this is to me, i think it creates a difficulty for the democrats because in a time the american public is so disenchanted with washington and everything that
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goes on, there is one incumbent party that holds office. so every time you create an issue that makes the country more disenchanted and pissed off at what's going on. >> republicans are trying to make an argument they're going to be the party of fiscal discipline and small government. in iowa, you have a candidate who is opposed to certain ethanol regulations and who's funding his opponent? big ethanol company. i think the voters ought to know that the ads they're seeing of that guy are paid for by someone who doesn't agree. >> i agree. which brings me to my next topic, the race to the bottom. as we have these problems, the politicians emerging trying to fight on our behalf don't seem to be improving in the quality of the candidate, but seem to be deteriorating in the quality of the overall candidate. a sampling, if you don't mind.
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>> what would you, your responsibility -- if the attorney general of the united states decides to hold terrorist trials? >> again, since when is bleep him a policy improvement? if you were to look at why, what is it about the system, jim, that is giving us weaker and weaker candidates. i don't care what the politics are. but you look at sharron angle, the guy running against demint. you look at the california governor's race. the candidate quality by my view and i represent a large percentage of this country when i say this, seems to be deteriorating in quality, not improving and it's hard to figure out why that is. >> we're in the age of bathroom
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politics. no one likes to be in the bathroom. you like to be in the living room where you can talk to each other. >> strike a deal. >> that's fine, but at the end of the day, washington is a different place than it used to be. we have the ones who want to abolish is minimum wage. or sharron angle or sue loudon, who thought you should trade doctors for chicken. the quality of candidate today on the left and right and i'll give both parties major flak for the people they're putting up, but it's just pathetic. they've got to -- >> why is that? >> i think people are too focused on these crazy candidates that have emerged. there's a number of crazy candidates otherwise who would not have emerged. they're a symptom on the problem. dysfunction is washington is causing people to turn to candidates that they otherwise normally would not.
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i have written something on this, these are votes of passion. just like a crime of passion. the aftermath, you think, maybe i shouldn't have done that. but people are so fed up with washington and the direction of both parties, they're willing to turn to candidates considered nutty to do something about it. >> i think we focus too much on the outliers who are pretty ridiculous. >> make for good cable. >> there are 80 or 100 house seats in play this year. it's because you have very prepared candidates in a lot of places like local state senators or businessmen who knew well in advance it was going to be a competitive, interesting november and got their fund raising organizations ready early. >> you're arguing that the crazy candidates as much a function of distortion of cable, the snl factor of the candidates. >> christine o'donnell won her primary in delaware by a few points. if she lost, we wouldn't be
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talking about her. paladino came back at the end. you have about a half dozen. >> i agree, so let me talk. >> let her talk. >> i think unfortunately, the reality of both parties is that people are focused more on who's the candidate that will win rather than who's the good person with good policy ideas. the gop establishment tried that in the primaries an a number of places, the votes of passion, people rose up and said, we don't care who wins or loses. we want to make a statement with our vote. we need to have better candidates. we need to be recruiting better people into the system, but unfortunately, the system is so broken, who would ever want to do this? >> the way you fight a vote of passion the same you would fight a crime of passion? >> i think more importantly than that, obviously, people should give more thought when voting
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for a candidate. i agree with you that there's a few, but i don't remember and i've been involved in politics from the mid-70s, that where you had a major candidate run a spot where she had to say she wasn't a witch. i think we have a virus in washington and the public sees washington as a virus. they don't -- they see people on both sides not doing anything to solve problems. they've elected two administrations in a row. the bush administration, which i was a part of, and the obama administration, with promises of things they were going to do within a short period of time, they did not do them and the public is very fed up with both parties and that's why they're turning to people who would consider crazy. >> matt, a pleasure to have you at the table. he talks a lot. >> he does. >> he talks like that so he
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didn't have to defend karl. >> it's a pleasure. nice to see you. jimmy. >> always. >> pretty good to see you. very good to see you, actually. nice to see you. thank you. coming up on "hardball," chris matthews talking about the women's vote in this election. karen, maybe we'll get matt dowd back to the table. nate and jimmy with us next tuesday. but first, building the business of tomorrow, one cookie at the time, people. we'll talk to a teenage entrepreneur who just baked her way into a face to face meet wg the president of the united states. trust me. trust me. ya i like that. trust me. bankers are known to be a little bit in love with themselves. are we going up? we can get the next one.
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i'd like to get your advice on hedging - risk... exposure. what makes us different? for 300 years we've chosen to focus on our clients. what a novel idea.
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we're talking about the job crisis and a solution to it. training the next generation of
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young in this country. exist whistle please. what is the network for teaching entrepreneurship doing? four high school students who recently won the challenge got the meet president obama. today, one of the winners, a 17-year-old from valley stream new york starting her own vegan bakery business. she joins us from washington along with amy rosen, from the network for teaching entrepreneurship. tell us about your day. >> my day was insane. meeting the president was one of the best moments of my life. it was overwhelming. it was great. >> did he like the cookies? >> he actually didn't eat them. security took them and said they
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had to go to maryland for testing. >> it's an outrage to send the cookies to maryland for testing. what have you learned and what can you share with us and young people about the idea of taking any sort of idea, whether it's a bakery or a biotech company and turning it into a reality. >> don't be afraid of failure. you're going to fail a lot of times. it's inevitable. just pick yourself back up. start over. i failed a whole bunch of times in trying to perfect my recipes, but i came back. >> al, giamy, give us a since o what nifty can help young entrepreneurs with? the from the business end, understanding taxes, the things that maybe a lot of focus who have a great idea don't know how to deal with. >> thanks, dylan. it is so easy to teach young
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people how to do this. they take their natural street smarts and turn them into business smarts. in 60 hours, basically, one course in high school, you can teach kids how to do a business plan from end to end. from marketing to things like testing. for nia, she had to find a test kitchen and then a professional kitchen and produce food online, market it, sell it and this plan, this year, we had 24,000 kids in america in classes, doing their own business plans who entered this competition that nia came in first on. every kid competes in a classroom and in a city wide competition. we bring the top 32 kids to new york. when i say compete, they have to in eight and a half minutes, present this business plan, answer questions to top financial leaders from this
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county tru. these kids are outstanding. what does it take? it takes roughly the time of one course in their school life. >> nia, what is the plan from here for world cookie domination? >> i definitely want to sell nationally and i'm going to college next year, which is going to be fantastic. >> amy, you mentioned the course, that it is a simple, single course in high school. revolutionary for a lot of people in the way they think about how they want to work and live the rest of their lives. what percentage of american schools teach basic entrepreneurship in school? >> not enough. we have a pretty well home curriculum offered and it's growing, but there's more and more understanding that if we're going to make these kids ready


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