>> larry: the trevor project, toll freconfidential suicide hotline, 866-4-u-trevor. liza minnelli is here tomorrow night. i didn't have to say the last name, did it? good evening. i'm kathleen parker. >> and i'm eliot spitzer. thanks for joining us for our first show. this is a show about ideas. the ideas that drive american politics. >> perfect. succinct and to the point, eliot. you know how i am. i hate labltz. conservative, liberal. no. we're going to do something different with this show. we come to the table with different perspectives. we're from different worlds clearly. i'm from the south. you're from the north. >> right. so far so true. >> i'm a journalist and you're a politician. >> yeah. but i'm recovering. this is step one. i promise. really, i'm going to move beyond

that. >> let me just say we're praying for you. >> that's big of you. i know what that means. i have in-laws from the south. when they say that i'm in deep trouble. >> bless your heart. >> yeah, a stake in my back when i hear those words. but the important thing, kathleen, we get to the office every day with something we care about, we want to talk about. right now i'm going to tell you folks, my opening argument tonight, very straightforward. mr. president, i'm a fan, big supporter. i promise. i really am. but please do yourself a favor, do us all a favor. fire tim geithner. you need a clean sweep in your economic team. larry summers is gone. finish the job. fire tim. they haven't done the one thing people care about, producing jobs. that's what we need. jobs, more jobs. they took care of wall street but not main street. look at the record that tim brought to your administration. he was at the new york fed. you know what he did? he coddled the banks. he was their cheerleader. he wasn't the cop he was supposed to be. he made the banks rich. surely not main street. you know what? we are suffering. he built the foundation that collapsed in the cataclysm of 2008.

so you brought him in as treasury secretary. not sure why. you know what he did there. he bailed out the banks with hundreds of billions of taxpayer dollars. just one example, goldman. they got billions of dollars. they said they didn't even need it. so you know what they did? they gave themselves bonuses with taxpayer money and what did main street get? pink slips. unemployment through the roof. 20% of our mortgages are underwater. you know what, mr. president? the reason we have a tea party is because your team took care of the same insiders as the last administration. we brought our hopes and aspirations to washington with you. and we've been disappointed. please, give us a treasury secretary who understands main street. i've got some names. give me a call. kathleen? what's on your mind? >> eliot, i want to talk about my favorite politician, sarah palin. she has a new commercial out that's pure palin. let's take a look. >> it is just so inspiring to see real people, not politicos, not inside the beltway professionals come out and stand

up and speak out for common sense conservative principles. >> so sarah, are you running or aren't you? of course, palin won't say because the suspense benefits her. as long as her fans think she might run, they'll keep sending money to sarah pac and they'll keep showing up for her rallies. i have to confess, i never thought sarah would grow the legs she has. no, guys, not those. the legs to keep building momentum. she has something that obviously appeals to lots of people. she has it. big-time. but she's also maddening to many others, especially women. she flirts. she's a tease. and of course all politicians do that. men do it. democrats do it. that's how they raise money. >> republicans too. >> but palin is also coy, which after a little while begins to feel dishonest. most important, other serious candidates may be locked in

limbo as they wait to see what the pallin machine intends. i know of at least one person who won't run if it looks like sarah has the wind at her back. and he should run -- >> who's that? >> you really think i'm going to tell a democrat this top secret? >> whisper it. nobody's listening. >> i'm talking to sarah. be quiet. because he can win it he should run is what i was saying before i was so rudely interrupted. he should run because he can win a national election and sarah palin for all her good qualities cannot. it may be that palin is waiting for a thunderbolt or a voice from beyond to instruct her next move. in the meantime, she's teaming with rnc chairman michael steele to raise money. come on, sarah, drop the tease and just tell the american people you're not running. as consolation, maybe and you michael steele can turn your road show into a moneymaking gig for real. a tv show perhaps. you could call it steele magnolia. >> clever name. we should have taken that. but you know, i will not defend sarah palin on the substance of anything. but you're not being fair to her. why are you judging her by a different standard than anybody else?

>> suddenly -- >> barack obama didn't denounce -- >> suddenly eliot spitzer is sarah palin's champion. i love this. >> you know why, because as democrats we want her to run because we can beat her. >> suddenly we're on tv and you're a -- >> no, i want you to be as fair to her as you are to everybody else. sarah palin should not need to decide before other folks do. barack obama didn't decide until late in the game. ronald reagan didn't decide until late in the game. everybody who has run successfully for the presidency was counted out at one point and was told you have no chance. >> i am not unfair to sarah palin. i actually like sarah palin. and others have been very unfair. so let me just state that for the record. but i do think she needs to get out of the way. she's not going to run for president -- for the president, and yet a lot of people kind of hope she does -- >> why do you presume that? the critical thing is like most politicians she hasn't -- >> she may ultimately decide she can't resist the temptation of running for president because when you've got all these crowds of people adoring you and when you only go on a certain network to be -- >> she is getting all sorts of good news that will push her

toward a candidacy. >> but she can't win a national election and that's the reason. >> see, that's where i think you're wrong. we don't know yet whether she can win. i certainly hope she can't because i don't think she should be president. >> you're dying for sarah pail tony run and that's why you're saying this. >> i think barack obama will be re-elected almost regardless of the republican candidate. that's the debate -- >> wow. you really did get hooked on the hope thing. >> the hopy changy thing is -- >> let's change gears for minute. how long have you hated tim geithner? >> i worked with him. i respect him. he's a decent guy. he's just not right for the job right now. the problem we've got is republicans cheered when he was named treasury secretary -- >> so it's the republicans' fault? >> no, not your fault. but look, this was a cabinet that looked too much like continuity you can believe in. the same policies when it came to economics that had guided the past administration. >> i know that's always been a theme of yours. >> absolutely. >> and you've been very consistent on that. let's see what our other -- >> we'll play nice. >> some of our guests think about this. >> we have a whole show going on.

now we're going to invite some of our first guests and get into the arena. joining us tonight conservative blogger andrew breitbart and tom frank, who is a writer for "harper's" and also wrote the brilliant book "what's the matter with kansas." you guys heard me in my opening comments say that the white house and tim geithner in particular forgot the middle class. the flip side of that is the middle class seems to be forgetting about its love for the white house. what explains this? what is this dynamic all about? >> well, look, if you -- you look at the obama administration, you've got incredible unemployment in this country right now, worse than it's been in a really long time in this country. now, traditionally the democratic party knew what to do about things like unemployment, but this administration doesn't seem to and they don't seem to feel the pain, they don't seem to understand the anger that's out there -- >> should tim geithner go? >> oh, hell, he should never have been hired. >> one vote. i'm with you on that. >> andrew, do you think that he should go? >> this is less about individuals and policies than it is that this is not your grandmother's democratic party. i think that we have a new coke

versus old coke formula situation. i think that barack obama promised a utopia and that was new coke, and i think that what the democratic party has to do is harken back to the old democratic party. >> but the coke that was promised in the campaign is not the coke that was delivered when he took office. tim geithner was not what we talked about during the campaign with change and a whole new reformed financial services sector. we got george bush's economic policies. and that's what's driving a lot of us crazy because it's killing the middle class. >> totally exactly right. and it's just so massively frustrating to be -- and i was one of the guys, i was drinking the new coke. you know. >> democrats love to say that the tea party movement is nothing but a vapor of anger and that it's nebulous and going nowhere, it's happened before. do you agree with that assessment? >> of course i don't. as a matter of fact, the tea party has been framed by the mainstream media before it even started as angry, on the verge of violence. and it's not only non-violent, it's not only not angry, it cleans up after itself, unlike

yesterday's event that showed communists and socialists, you know, openly -- >> we're not just talking about cleaning up. and i know what you're talking about. >> he's talking about these are nice people. >> sure, they're nice people. >> they demonstrate -- >> i can vouch for that. i've been to a bunch of these rallies and i've stood with these people and they actually are -- they're super polite, they say excuse me when they're moving through the crowd. >> the idea we're talking about is not anger people are going to punch each other. it's the anger politically the middle class has been ignored. >> it's righteous. and they have every right to go out there. you know, for eight years of george w. bush the left found itself again and manifest itself in protests, anti-war protests. and the mantra became dissent is patriotic. the second that the tea party came out there, they were attacked by the mainstream media -- >> wait-i went to the first tea party rally because i thought i was going to see something that i liked. i was looking for insurgency. i mean, we are in a time -- you go back and read the journalism from the early 1930s, that's what we're repeating now. and i went out there looking for the angry iowa farmers or

marchers in detroit -- >> and what did you find? >> well, they talked a good game about the t.a.r.p. remember this, they were the only ones out there -- we talk about tim geithner and stuff. they were the only ones out there that were saying this is a bad idea. and they won a lot of points for saying that. >> which was a bush idea. which they were the first anti-bush conservatives to say that much of the last eight years went again conservative economic principles. >> this is an important point, that they're against the republican spending as well. >> right. >> it's too late to say that. >> just to clarify your point, i happen to think that what they're doing is patriotic. i'm a big fan of grassroots activism. i happen to think they don't have answers. so i think that they are failing in terms of articulating a meaningful agenda. but as a grassroots activist movement i love it. and i think that's what politics should be. i just wish that there were somebody on the democratic side -- >> on your side. >> that's exactly right. wish we were giving them the answers and tim geithner's what we offered them instead and that's too bad. >> well, there's an elephant in the middle of the room.

stanley greenberg, clinton's pollster, or ex-pollster, polled on whether or not americans thought that barack obama was a socialist. 55% believe he's a social of the and 33% of liberals and democrats believe that. and so that is not what people voted for. and the idea of solutions, let's eradicate the ideas that they perceive to be socialist because we're not a socialist nation. >> well, sure. but the thing about that is what do they mean by that? do they mean he's a socialist in the sense -- conservatives often use this term to describe anybody who believes in the welfare state, like franklin roosevelt is one or jimmy carter is one or i'm one. and then they switch the definition to mean stalin. >> i agree with you. >> it's because i've got on the glasses. and the wrist watch. the khmer rouge would come after me. >> big beneficiary of the socialist program have been banks and so the great irony to those of us who wish we had a meaningful agenda for the middle class is that those who are eating out of the trough of government spending are the wall street folks who created the crisis and now they're saying enough once we've had it, nobody gets any.

that is what's frustrating. >> well, if you want a middle ground, and obviously some exists in this room, then crony capitalism is something that i think most people can universally disagree with. >> absolutely. >> some people are talking about a third party, a third-party candidate. do you see a tea party person emerging as a candidate for 2012? >> i would hope not. but that depends upon whether or not the republican party gets that the message is not strictly an anti-left, anti-democratic party one. i don't think that the republican party gets that there is true discontent with the establishment republican party. >> can we talk about sarah palin for a moment? you heard my little commentary earlier. >> mm-hmm. >> do you think that sarah palin is bad for the gop? >> absolutely not. we live in the 21st century. it is a media age. and conservatives exist almost exclusively in the political realm and don't understand pop culture. she uses facebook and social media better than anybody. she's a kingmaker like oprah

winfrey helped to make barack obama and anointed him, sarah palin has already shown that she has anointed women. women, women, women. >> but the most important aspect of sarah palin's career is that she captures this sense of grievance that average people have. whether she has a right to it or -- i don't think she does. but remember, one of the biographies of her is called "the persecution of sarah palin." and this has been the motif of her career. >> every time i speak out against her she ends up in the polls. >> that's also the conservative grassroots grievance -- >> why is there nobody on our side who can channel that sense of grievance and frustration? it all evaporated. >> there are people, but -- >> who? >> well, look to the labor movement. look to, you know, people who -- angry middle-class people all over america, you know, who understand which side their economic interests are on. there's lots of people like that.

the problem with the democratic party is they don't see it like that anymore. they identify themselves with the professional class. unfortunately, like i said, i like barack obama, i voted for him, i was drinking the new coke. but you look at a guy like barack obama and that's what he epitomizes. >> andrew, i just need to ask you about shirley sherrod. the controversy about a month ago. to remind our viewers she was forced to resign from the agriculture department after you put out a truncated copy of a speech she had given. you then corrected it the next day. and everybody including the white house picked up on it. when you look back at that, what happened? who's at fault? is this coverage about the media? >> it is certainly a complicated story that we can't, you know, end a show on. but i will tell you this. the video in question did not come from outer space and land in the media. it came in the context of a 1,000-word piece that had another video in it. in that 1,000-word piece i offered this exact phrase -- "eventually, her basic humanity informed her to help the white farmer." so the context was granted in the 1,000-word piece that

offered it. >> thanks so much for joining us, guys. we have to take a quick break. please don't touch that remote. >> up next, elizabeth warren, one of my heroes. she'll be with us in 60 seconds. >> i've been knocking on doors in congress for over two years now, in effect like a door-to-door salesman, saying i have this idea for this consumer agency, would you like to spare five minutes just to talk about it? somebody wants to talk about the consumer agency, you can almost always count on me to be there. >> sarah palin's an idiot. come on. >> pulling your punches here. >> this is a remarkably, stunningly, jaw-droppingly incompetent and mean woman. fiber one honey clusters?wae yeah. you must really care about him. what? no, no. you gave him fiber. no she didn't. this tastes way too good to be fiber. they're delicious crunchy clusters with sweet honey and half a day's worth of fiber. you care about my fiber?

not really. i care about your fiber too. i have for a while. ok, carl. why don't you care about her fiber? hey carl. [ male announcer ] fiber one. cardboard no. delicious yes.

welcome back. it's time for our headliner interview. tonight, lz beth warren, the gutsy, tough protector of the middle class who has ruffled lots of feathers. the president just gave her the job everyone wanted her to get. she's going to be in charge of creating the new consumer protection agency, jurisdiction over mortgages, credit cards, everything else that matters that the middle class. >> but eliot, her efforts have also created skeptics. some question whether she's the right person to help launch the consumer agency or even if we need it. >> elizabeth, welcome. let me tell you, i am absolutely so thrilled you are there. now, let's be frank. in the past year or so you had t.a.r.p. oversight as part of your responsibility and there was a little bit of friction between you and your new boss. you're also going to be an assistant to treasury secretary tim geithner. and just so it's clear, you heard me state my views about tim earlier in the show. we're not going to go there. but let's take a look at a clip of you interrogating tim earlier this year. >> we had no other choice in that circumstance. >> i do believe that it had a choice until you moved in and that was that they could pay 90 cents on the dollar, 85 cents -- >> i don't understand why this is -- >> -- 80 cents on the dollar. >> i don't understand why this is so complicated. >> you either prevent -- >> it is complicated, mr. secretary. >> but it comes down to the nature of choices.

it's you either prevent default because default would be cataclysmic, or you don't. >> look, just so it is clear, you were absolutely right. the treasury department did not need to pay off the big banks 100 cents on the dollar on the aig credit default swaps that they had bought, and that was one of the sort of under the rug ways to bail out the banks. it shouldn't have happened. but put that aside right now. the question that i care about and i think all americans care about, will you have the freedom you need to create the agency that's going to protect the american middle class? >> so i had a lot of conversations with the president of the united states before he finally asked me to do this particular job, and i am convinced, first of all, that he wants a strong agency and, secondly, that he put enough tools in front of me to start a strong agency. >> tools that are in the statute? >> that's right. >> just so it's clear. >> and i think some people are concerned about those tools.

let me just ask about the confirmation process itself. >> sure. >> because the president bypassed that and appointed you, there's some question -- you know, a lot of people have normal questions about the transparency aspect of this new position. if you're supposed to be transparent, then why not go through the confirmation process and let people ask the questions? >> you know, it's a fair question. and it was on the table. the problem we've got is with the confirmation process itself right now. as both of you know, there are lots of people who are less outspoken than i am who are awaiting the confirmation process. so here's what probably would have unfolded. it would have been literally months, perhaps moving into a year, before i could get a hearing of any kind. as you know, the confirmation process can be held up by secret holds. and during that period of time there would be two restraints on me. the first one is i couldn't talk about this agency. all of its enemies could, but i couldn't. and i wouldn't be able to do anything to help it. so the question in front of us was you want to go the confirmation route, a year from now maybe you get a chance to

make the case. >> i think it is such a sad commentary about the united states senate that investment banker from wall street after investment banker from wall street gets confirmed without hesitation and the one person in america who stood up for the middle class, who was screaming for years saying there's unfairness, it's leading to a disaster, can't get confirmed. but let's put that aside. what is your agenda? give us issues one, two, and three because you're about to get to work. what are we going to see that the middle class will say a-ha, this will change my life? >> what i really want to see are credit products. right? which is what they really are. in many ways they are. like toasters or refrigerators. these things that people buy like credit cards and mortgages. i want to see them short and readable. so that a consumer can say i can see how much that costs and i can see what kind of risk comes with it and here's the key part, i can compare this one to that one to that one to that one and tell that's the one that's cheaper or the one that has lower risk. >> i'm all for simplified the credit card forms, and that would be nice, but isn't it

really -- i mean, aren't we falling into the trap of taking care of people who refuse to take care of themselves? i mean, if i run up credit card debt, that's my fault. it's not the fault of anyone else. >> there's plenty of room for personal responsibility here. when these agreements are clear and people can see exactly what the credit costs, it's up to them whether or not they do. but here's the part that i care about and i think the regulation should be about. nobody should have to worry that hidden back there somewhere in the pages and pages of fine print are tricks and traps. you know, there is nothing in the fine print that's ever good news for the consumer. >> what can we do to make the mortgage market better, more transparent, and permit people to compete for good rates? >> it's really basically the same principle again, because that's what this agency is driving for. this is not the whack-a-mole let's do one more, let's ban this practice, then let's go somewhere else, let's add on layers and layers of more disclosures. people already sign too many papers at closing. this is really about how about a

one-page mortgage shopping sheet that basically says here are the three key terms you need to know, and it'll be binding, you can compare. you've got, you know, five days to compare. so that once again, all we're driving toward is you can tell what the cost is to you, there are no surprises, and you can compare one product to another. >> one last question before we close. will you testify before committees as -- when they ask you questions, will you go before them and answer? >> i certainly hope so. i mean, that's exactly the right thing to -- >> do you have the right, though, as an appointee to decline? >> i don't think so. >> i mean, can you -- can the president call executive privilege and -- >> let me say this a slightly different way. i've been knocking on doors in congress for over two years now, in effect like a door-to-door salesman, saying i have this idea for this consumer agency, would you like to spare five minutes just to talk about it? somebody wants to talk about the consumer agency, you can almost

always count on me to be there. >> so you created your job, didn't you? >> i did. >> and you know what? the good news is the right person got it. if not in title. i've got to tell you, this was a statute, and i'll editorialize, a statute that had a lot of down side. it didn't deal effectively with a lot of big issues. this is the one bright spot. both elizabeth and the agency unambiguously for the middle class. it is just good news all the way around. elizabeth, thank you so much for being here. we're going to take a quick break. we will be right back in just a moment. >> i'm sorry. but the democrats -- since i've done it already. okay? since the cat's out of the bag and honesty -- >> give it to us straight. >> the democrats may have moved into the center, but the republicans have moved into a mental institution. okay? so i'll take the democrats. [ man ] november 15th.

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anyone who loves politics or tv for that matter knows the name aaron sorkin. his series "the west wing" create a modern mythology of the presidency. the president as noble leader surrounded by young idealists who always do the right thing. >> kind of sounds like the obama white house, doesn't it, eliot? >> i just kind of wish it were that way. but as much as i love "the west wing," my favorite aaron sorkin moment, perhaps my favorite movie moment was that scene in "a few good men" when tom cruise is taking on jack nicholson. remember this? >> colonel jessup, did you order the code red? >> you don't have to answer that question. >> i'll answer the question. you want answers?

>> i think i'm entitled. >> you want answers? >> i want the truth! >> you can't handle the truth! >> of course, eliot, you remember that jack nicholson was the villain. >> you know, i'm not so sure. the whole thing here is jack nicholson may have been telling us the truth and we can't handle it. and i loved that moment. it was just beautiful. >> sorkin's latest movie, "the social network," tells the story of how facebook began. i loved the movie. it's beautifully written. smart and entertaining. we're so excited to have him here today. tv and screenwriter, playwright aaron sorkin. live and in living color. how are you? >> wonderful to see you. >> thank you for coming. >> my pleasure. >> let's pivot if we can. we'll come back to the movie in a moment. let's talk politics. you created in "the west wing" -- you know, i was a prosecutor. "the godfather" did for orlgd crime figures what "the west wing" did for politicians. it taught us how we're supposed to ak. what's wrong with the white house when you critique it to the mythology you created? >> first of all i had it easy. not only did i get to decide how the president says, i get to decide how everyone is going to react to it. i think what everybody feels

like they're missing is the goose bump experience he gave us during the campaign. and he's even -- and this is something that the republicans don't do. they tend not to eat their own. if you're a democrat and you're not left enough for other democrats, they will come at you just as hard as the republicans do. which is an honorable thing. it's called sticking to your guns. it's just not good politics. >> as a storyteller what do you make of sarah palin and the tea party? >> again, you -- >> you don't have to give sophisticated answers here. >> okay. i won't give sophisticated answers -- >> the country lawyer, too. >> let me make it clear that the movie "the social network" has absolutely no politics in it at all. >> yeah, yeah, yeah. >> nobody has to agree with anything that i'm saying in order to see this movie. >> okay. >> but. >> but. >> sarah palin's an idiot. come on. this is a remarkably -- >> pull your punches here. >> this is a remarkably, stunningly, jaw-droppingly incompetent and mean woman.

>> wow. what do you base that on, the meanness part? >> when she talks about real americans versus not real americans, that's a divisive thing. i'm pretty sure i fall into the category of a not real american. >> right. you're not real. because you have those horn-rimmed glasses. >> because i have these glasses, because i'm from new york, and because i work in hollywood. let's ignore the fact that my father fought in world war ii, put himself through college on the g.i. bill, that his parents were immigrants who came here and my paternal grandfather was one of the founders of the international labor's garment workers union. >> from our perspective you're american. >> i appreciate that. >> we'll get you a lapel pin. >> thanks. because i feel american. i feel very patriotic. and a lot of the juice behind "the west wing" was redefining patriotism in a way that for me makes more sense, not bumper sticker patriotism but honest to god -- i mean, some people might even say overromanticized or idealized patriotism. but that was the most patriotic

show on television. and it began with flags waving -- >> i know people who went during -- just on a normal evening. >> the show would be attacked by the religious right for being anti-god, yet we had a character in the president of the united states, martin sheen's character, who was a devout catholic. there's a scene, he is praying on the floor of the oval office before he makes a decision. that show had more religion on it than any episode of -- >> can i make a suggestion? i think you need to make a sequel. and you know why? >> to "the west wing"? >> to "the west wing." because there was -- you're absolutely right. when people watched it, there was patriotism. people believed in our government. there was a sense of purpose. and the government was living up to it. >> as a patriotic gesture shouldn't you do that? >> okay. well, i think you're selling me nicely. >> before we let you go -- >> i'm sorry, but the democrats -- since i've done it already. okay? since the cat's out of the bag and honesty --

>> give it to us straight here. >> the senior people at sony are just killing me right now for what i'm saying. >> we'll protect you. >> but the democrats may have moved into the center, but the republicans have moved into a mental institution. okay? so i'll take the democrats. >> before we let you go we've got to watch a clip from the movie. >> yes, please. thanks. and before you show the clip, please, you can really disagree with my politics. this movie has nothing to do -- >> i promise you, everybody's going to go see it. >> i actually went on tv and lost ticket buyers. >> mr. zuckerberg, do i have your full attention? >> no. >> do you think i deserve it? >> what? >> do you think i deserve your full attention? >> i had to swear an oath before we began this deposition, and i don't want to perjure myself. so i have a legal obligation to say no. >> okay. no. you don't think i deserve your attention? >> i think if your clients want to sit on my shoulders and call themselves tall they have a right to give it a try but there's no requirement that i enjoy sitting here listening to people lie.

you have part of my attention. you have the minimum amount. the rest of my attention is back at the offices of facebook, where my colleagues and i are doing things that no one in this room, including and especially your clients, are intellectually or creatively capable of doing. did i adequately answer your condescending question? >> it's riveting. >> that's awesome. >> i love the lawyers in there too. i feel good. >> a great scene. >> amazing scene. one last question. >> yes, sir. >> somewhere in the movie i think maybe you say or a character says, obviously, that 85% of a deposition is exaggeration -- >> it's a young staffer. she says with emotional testimony like this i always assume that 85% is exaggeration, and mark zuckerberg says and the other 15? she says perjury. >> awesome. every lawyer should watch that. you're right. you're right. >> i have a thousand other questions i'd love to ask but that movie but we're going to have to wait for the next time. >> well, i appreciate you having me here. thanks very much. >> everybody's going to see this movie. >> i hope you're right. >> we have to take a quick break. we'll be right back.

>> that's what my sense of you always was. that you were coming in, you say enough is enough, we are going to change this system. and you had huge balls to do that. i have to say, a lot of prosecutors, a lot of regulators are sitting back. i voted for you for governor later. as a result of that.

now for "unfinished business," where i get to revisit a big case i worked on. and this case when i was attorney general. and this may be one of the biggest. i don't think henry blodget ever thought he and i would be sitting down for a friendly chat because when we first met there were lots of lawyers on both sides. back when i was attorney general, i went after people like henry blodget. he was a superstar analyst at merrill lynch earning millions of dollars, but to me he symbolized everything wrong with wall street. henry was part of a system that knowingly misled investors about bad stocks, and i found the e-mail trail to prove it. one example. an internet stock called excite@home. on the same day his own company rate td a strong buy an internal e-mail called it, and i quote,

"a piece of crap." i prosecuted henry. he paid a big price. $4 million in fines. banned from the industry for life. henry. >> thank you. >> it is -- >> quite an introduction. >> not your normal introduction. but let me say this from the bottom of my heart. thank you for being here. and most importantly, congratulations. you now run a website whose name is? >> business insider. >> and you get 4 million hits per week. >> 4 million people. >> unbelievable. and your voice is valued on wall street, everywhere else. and so i applaud you at every level for that. and bygones are bygones. >> and i applaud you. >> thank you. >> for your own comeback. >> thank you much. so we share much more. and you know, that is the good news about our society. let me ask this question first. is it kind of weird to be sitting here with me? >> it's a little bit weird. but you know, you said earlier when we first met. and the funny thing is in that whole prosecution we never met. >> but i did meet your lawyers

and you had lots of them. >> absolutely, yes. merrill had lots of them. >> merrill had lots as did you. let me ask you this fundamental question. did you think we were unfair to you? >> me personally? i think -- >> yeah. >> i think the frustration wall street had with you when you were prosecuting and i think with other prosecutors is that it's a very competitive business. there were clear rules and so forth. a lot of people felt that people came in afterwards and said let's change that in hindsight. this was a terrible system. >> here's the interesting thing. >> so the researching banking, which was the center of our case, obviously, you know, when i got into the understand, it was there, it was just simply the way everybody worked -- >> you were part of a pre-existing system. and the system, i think it's generally accepted, now, did mislead investors. people were recommending stocks they didn't really believe in. >> well, i think you've got to be -- i mean, i think you've got to look at each specific case because some of these things you talk about, people talk all day long when they're chattering back and forth. when you have a stock that has totally collapsed that you actually have been positive on, there's a certain amount of frustration and anger about that stock. >> right. >> and it doesn't mean that going forward you don't think it justifies the rating but you're mad and you're venting in e-mails -- >> let me tell you what the

defense was. this is interesting. i think you know this little tale. when the lawyers for merrill lynch came in after we had alleged all this misleading set of recommendations, fundamental misleading of millions and millions of investors, the merrill lynch defense was not that we didn't understand it or that we were wrong. it was yes, you're correct, but you're not -- we are not as bad as our competitors. in other words, they were saying sure, we broke our fiduciary obligation, our bond of loyalty and truthfulness, but so did they. >> if that was the defense, and i actually don't know -- >> it was. this is what they said to me in the office. >> what i would have said is okay, we've got to look at the e-mails in context. we've got to understand the chatter between analysts and the people getting angry with whatever a ceo says or whatever. it's like locker room talk. >> let's -- >> but that's it. i do want to say that i think wall street is riddled with conflicts of interest which you spotted and you went after, and i have a lot of respect for that. you picked a good one.

there's no question -- >> my objective was to change the system, was to make it safer for the middle class in particular, the small investors who never had been given a straight shot on wall street because we'd said come in and invest but we weren't protecting them. and you're right about the conflicts that were riddling the entire system. >> and still are. wall street, it's a middle man riddled with conflicts of interest. >> that's the question i wanted to ask you. >> and by the way, i want to say that it's because of that, that's what my sense of you always was, that you were coming in, you'd say enough is enough, we are going to change this system. and you had huge balls to do that. i have to say, a lot of prosecutors, a lot of regulators are sitting back. that's great. i voted for you for governor later as a result of that. because i felt -- >> that is the best endorsement i've ever gotten. i'm never going to be in a position to use it, but i appreciate that. let me ask you this question because you said earlier that wall street is still riddled with conflicts. you were the quintessential wall street insider, right in the vortex of everything that happens. has wall street learned anything after this last cataclysm? >> no. i think that wall street's an incredibly intense place. and this is why i think to be fair to people on wall street and in business regulators have to set the rules and then they have to stick by them.

and you can't change them as things go -- >> are we changing the rules right now? >> i think rules are changed in hindsight is the problem, and people who have just been competing very hard -- >> let me ask you. the only rule we really insisted on was tell the truth to investors. >> and -- >> and that's not a change. it's just people were restrained from that. how can wall street say that's a change? >> i think again, the research situation's very complicated because what does a buy rating mean? does it mean everybody should buy a stock? it actually doesn't. at any firm on wall street. and the answer is because you may have a different portfolio than i do. no single word can encompass it. so it's much more complicated than that. but i think so it has to be set out. obviously, the rules have to be set. >> henry, time is up. we will continue this in the days, months ahead. all i can tell you is thank you for being here. it has been a pleasure. we will continue it. and good luck with everything you're doing. >> congratulations. >> henry, thanks again. that was really spectacular.

don't go away. our political party is next. we've been a little hard on sarah palin tonight. but finally, someone will have something nice to say about her. >> everybody has to say something nice about sarah. >> i'm going to actually put the politics aside and talk about fashion. because that palin family, i don't care what you say, they're always put together and sarah palin has done more for the leather jacket than david hasselhoff. when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket. these are the only medicare supplement insurance plans... exclusively endorsed by aarp. when you call now, you'll get this free information kit... with all you need to enroll. put their trust in aarp medicare supplement insurance.

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welcome back to "our political party" on "parker spitzer." this show is about strong opinions and we thought what better way to let people speak than to have a party right here in the studio? >> we get to invite really smart people to the party we always wanted to have. welcome to everyone. let's introduce you. henry blodget, who's the editor of "business insider" and about whom people know a great many things, all of which we've now resolved. ari melver, who is a columnist for "the nation" and politico

and who in his resume i think i read that when you were in third grade you wrote a play in which -- recommending the prosecution of the exxon valdez. yes? >> exxon, yes. >> well-g. >> did you win? >> i won. >> i won. and i wrote it. >> send that down to d.c. they need some advice with bp. they need a theory. >> some kids are playing with trucks he's writing plays. >> katie linendoll who is a tech expert on a&e but two unbelievable things. you've been a computer hacker since you were 12. >> which started last year, right? >> right. >> you're a prodigy. and you won a wing-eating contest eating 52 wings in one hour. >> this is true. that holds more clout than my emmy these days. >> and an emmy. that we don't care about. >> we don't care about emmys. wings. >> the smaller the person the more they can eat faster. >> we can put it down. >> someday after the show we'll see who can do that. and will kane, who is a writer for the "national review." and this one is serious. congratulations. just found out, baby number two on the way. >> that's right. thanks. >> very, very exciting.

rest up now. that's my advice. >> all right. we start out with a party game. and as it turns out, this show has resulted in some pretty harsh criticism of sarah palin. so we're going to go -- >> all from you, i'm glad to say. >> not all from me. >> i like her. >> no, no, no. so we're going to go around the table and everybody has to say something nice about sarah. >> sarah palin ticks off all the right people. she has a strong female voice and i think they dislike her for the same reason that the naacp dislikes clarence thomas, she's not adhering to the groupthink they require. >> that's one explanation. katie, how about you? >> tough to follow. i'm going to actually put the politics aside and talk about fashion because that palin family, i don't care what they say, they're always put together and sarah palin has done more for the leather jacket than david hasselhoff. that's all i've got. >> not to mention red heels. >> and the glasses. >> and the glasses. >> see? >> she made glasses cool. >> hasselhoff, palin, "dancing with the stars." palin family's doing better. >> i like that she gets in there and she supports people who are part of the incumbent establishment in washington. i don't always like her picks. but we need more of that. and if you compare her to the

democrats, who've been all about incumbents and protecting their own, she gets out there and mixes it up. i think that's a good thing. >> well, that's the truth. she's fearless, she's got gumption, and she really is a maverick unlike her former running mate. >> she's an insurgent. >> that's the problem. it's too easy to say positive things about her. she's incredibly talented, compelling, feisty. she's smoking, which doesn't hurt at all. >> wow. this is a wall street guy. >> gee. okay. well, everybody feels better about sarah. >> we've just given her this -- a promo. i don't know if i should play along with this. let's come back to the real world. every election cycle there are celebrities who come out of the woodwork who say, you know, warren beatty, donald trump.

who is your favorite celebrity candidate now to get in for president in 2012? take a little time to build the base, who would you want to see from the celebrity ranks? >> has to be a celebrity. >> well, the conservative movement is chock full of celebrities. i'm going to pick a fictional character. i'm going to take the dude from "the big lebowski." because what we need -- >> you know that movie, right? >> i do. >> what we need is an unambitious laid back slacker. we need someone who doesn't have energy -- >> didn't we have that for eight years? >> that's your theory of government? slacker government? >> someone who doesn't have the ginn to med until our lives. >> white russians all around. >> someone who knows calvin coolidge's lesson of government. first rule, do no harm. >> i don't know if a slacker does no harm. we tried it for eight years. all right. who's your celebrity? >> i need somebody that knows the value of a dollar. that is relatable. jared from subway. hands down. >> okay. >> that's -- >> have you tried the cheese bread? then come back and run for president. >> i always get the cucumbers in the sandwich. that's only available at subway. >> i had a daughter who we could only go to subway for about a year. it was about all i could take. thank goodness she passed -- >> henry, i bet you never thought you'd end up having this conversation. >> it's got to be the governorator. come on. he's the only celebrity ready for president. >> i like him. he's a wonderful guy. but look what happened to california.

>> i know. >> are you saying it's going to be easier to be president? >> no, it's not. >> but there is a difference. >> he's a republican. the republicans already think the current president was born somewhere else. so i think an actual immigrant would be a problem. >> this guy was. >> very inspiring american story. >> we've got to take a quick break. when we come back, we'll have another great question to get you going. thank you. we'll be right back. i remember being at the hospital thinking, "i should have done more to take care of myself." you should've. that's why i'm exercising more now. eating healthier. and i also trust my heart to lipitor. [ male announcer ] when diet and exercise are not enough, adding lipitor may help. lipitor is a cholesterol-lowering medication that is fda approved to reduce the risk of heart attack and stroke in patients who have heart disease or risk factors for heart disease. lipitor is backed by over 18 years of research. lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant,

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welcome back to our "political party." i could stay all night but we've only got a few minutes.

so kathleen, take it away. >> okay, all you movers and shakers, we want to find out what your guilty pleasure is. eliot loves nascar. henry -- >> not so guilty. >> i don't know. but most people wouldn't look at you and say ah, nascar guy, right? so what is your secret guilty pleasure nobody knows about? >> i could make it up, but sitting on a couch with a bowl of shredded wheat and a laptop. >> oh, my goodness. this is wall street, guys. >> but you're already married. >> that's right. >> studying what credit default swaps are all about. all right. we like it. >> i'll tell you my problem, you can guess the pleasure. this past summer in august i had eight cavities. >> ooh. >> a little sugar. >> sugar. mike & ike's, especially. i went cold turkey after that. >> yeah? >> mm-hmm. >> that must have been miserable. >> did you have novocain when you had the fillings? >> i did have novocain. >> we have this in common. neither one of us had novocain when we had our cavities filled as children and our fathers

forced us to watch william f. buckley's firing line. >> and we ended up very different people. >> but we could be tortured endlessly. >> guilty pleasure, i'm a huge, huge wwe fan. never missed a "raw," never missed a "smackdown." rick flair. >> so is linda mcmahon going to be a great -- >> linda mcmahon for senate. >> in case the testosterone goes out of hand i'm bringing it down. i'm a big fan of the real housewives series on bravo. you line up all the sports nut straight guys who can say that and we'll get together and have a watching party. >> thanks to our guests. appreciate it. loads of fun. >> we'll be right back. i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare,

call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket. these are the only medicare supplement insurance plans... exclusively endorsed by aarp. when you call now, you'll get this free information kit... with all you need to enroll. put their trust in aarp medicare supplement insurance. plus you'll get this free guide to understanding medicare. the prices are competitive. i can keep my own doctor. and i don't need a referral to see a specialist. call now to get a free information kit. plus you'll get this free guide to understanding medicare. and the advantages don't end there. choose from a range of medicare supplement plans... that are all competitively priced. we have a plan for almost everyone, so you can find one that fits your needs and budget. with all medicare supplement plans, there are virtually no claim forms to fill out.

plus you can keep your own doctor and hospital that accepts medicare. and best of all, these plans are... the only medicare supplement plans endorsed by aarp. when they told me these plans were endorsed by aarp... i had only one thing to say... sign me up. call the number on your screen now... and find out about an aarp medicare supplement insurance plan. you'll get this free information kit... and guide to understanding medicare, to help you choose the plan that's right for you. as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now.

i'm anderson cooper. "parker spitzer" continues in a moment. first here's the latest. the state department says the travel alert issued to americans visiting europe isn't tied to a specific plot threat. sources tell cnn the agency is following multiple streams of threat information, none of it specific enough to name countries of concern. in connecticut jurors began deliberations in the widely watched murder trial. steven hayes charged with 17 counts, including capital murder in the killings of jennifer hawke-petit and her two daughters during a 2007 home invasion. hayes could face the death penalty if convicted. in new jersey two college students who allegedly recorded and posted a video of another student during a sexual encounter face criminal charges. 18-year-old tyler clementi committed suicide after investigators say a video showing him kissing a man was posted online by his roommate. we're learning more about how the tragedy unfolded on "360" tonight at 10:00 p.m. eastern, new details about tyler's roommate and how strong a case