at 9:00 a.m. eastern, radio talk show host, joe madison and armstrong williams on the state of race relations. "washington journal" is next. host: a forthcoming report says changes are need to be made in how troops operate and calls for a near doubling of troops and the fdic shuts down banks in florida, new jersey, ohio and oklahoma, those banks being taken over by other entities but the stories in the paper are a slowing in the decline of the economy with suggestions by some of a strong rebound, which makes for the question for our first half hour this morning as far as the economic recovery as some are seeing it. we want to turn to you and say -- and ask, regarding the

economic recovery if anything else is needed, in your opinion. when it comes to the economic recovery, if you think anything else is needed. feel free to share your opinions on three platforms, by twittering or e-mailing us. the new york times is where we'll start, a story by katherine rappel, hopeful sign, output declines at slower pace. this is what the authors have to say this morning. the nation's output shrinks at 1% in the second quarter after contracting at a rate of 6.4% earlier this year, government spending, by the first $787

billion stimulus package propped up activity in the latest quarter and accounted for 20% of the country's output. but consumer spending, which makes up 70% of the overall economic activity has continued to fall as fearful americans save more. many economists express concern about what will happen once government spending lets up if consumers remain worried about losing their jobs and their weakened household finances. again, that from the pages of "the new york times" this morning. looking at it from a different take, "the wall street journal" in its editorial section this morning, here is how they phrase it "poised for a rebound" is how they title it. here are some of the thoughts from some of the folks at the wall street journal this morning. they say put it another way, the 2008 panic triggered a panic in real goods which sent the economy tumbling down. the rapidity of that reaction is a perverse compliment to the flexibility of u.s. producers

who reabilityed almost on a dime to a rout in the financial system. in the next column over they continue saying "what didn't seem to make much difference is the stimulus. transfer payments declined by 7.4% in the quarter reflecting the likes of jobless insurance. these payments offset declines in worker compensation but it didn't do much for consumer spend which declined by 1.2% in the first quarter. these transfer payments do nothing to improve risk taking which is the way to prosperity. the real question is whether we have laid the groundwork for a durable expansion? the economy should be ready for a ride up. even the government excesses came due in the mid or later 1930's. when it comes to the economic recovery, we're asking you if anything else is needed. the paper is talking about the slowdown and decline and talking about concerns about consumer

spending as well. you can weigh in. battle creek, michigan, ronald on our democrats line. you're up first. caller: good morning, how are you doing this morning? host: well, how about you? caller: great. i got something to say. listen, it is not a republican or democrat thing, it is a good and evil thing. this country has got a serious problem with certain people that are following a more evil interest in this country today, pursuing money and power instead of actually sharing what they have. the ones that have it in this country are so stubborn and thickheaded. they are the mentally ill in our

country today, the ones that have it all, the power, the privilege and the money. they are so selfish they don't want to share it so they're making up lies and trying to make lies into truth. they do it every time the republicans run for president. they lie about everything. host: let me hold you there and ask you with all those things in mine, how does that relate to your thoughts on the economic recovery and what, in your opinion, might else be needed? >> well, the lord tells us to love our enemy, and if we can ever learn to love ourselves, maybe we could see that maybe our neighbors are doing pretty hard nowadays in our country. times are tough in battle creek. we've got 15% unemployment in our town, and my god, we need jobs, and you know, i don't know if having a beer with a cop is going to get us jobs, you know what i'm saying? host: keysville, virginia, jerry on the republican line.

go ahead. i think he has left us. let's move on to magna, utah. caller: good morning. host: hi. go ahead. caller: i was just going to put my 2 cents in. i know most of the rednecks won't consider my opinion but we should subsidize our workers in this country. we should have a living wage and single-payer healthcare. i'm making a come p promize on single-payer healthcare because i would like to put the doctors on salary and put the board of directors of insurance companies in jail. i am willing to make a compromise and go with single payer. i'm tired of everybody deciding we smud gamble on wall street. we should invest it in our communities and have a strong safety net. the working people in this country should take precedent over the 6% of the people that

have most of the money. host: when you say invest in our communities, what is a practical way to do that? >> caller: start manufacturing things in the community like with a green economy, you can make small electric cars. you can make solar cells and things like that. these should be worker owned. the workers should have a share in what they do and not just investors. investors sell us out when they are unprofitable or when they think they can consolidate something. they only think about their bottom line. it's time to stop thinking like that. host: can you give us a snapshot, so to speak, of the economy there in magna? >> we're a smelter town. there is a mine up on the side of the mountain here. it has supported most of the community. magna is a smelter town where they smelted copper for years and years. it has a large aerospace

industry complex here. it is a lot of manufacturing, oh, there is a little bean plant and a few industries that get by and have survived the last 50, 60 years. the mine has been there probably 100. the aerospace industry started as a dynamite plant for the mine and it has been there for 100 years, too. host: we appreciate you chiming in. keysville, virginia, jerry on the republican line. >> caller: yes, i would like to know why we can't use the gold in ft. knox, kentucky to pay off the national debt. we're not using it to back our money anymore, so it seems to me we could use that gold. host: plainfield, new jersey, you're next. maury on our democrats' line. caller: good morning. i think that to help the economy we need to do a couple of

things. we need to do something with the banks to get them to help people out with their mortgages, and we need to do something about creating jobs. people are not spending money because they don't have it. host: one of the things in the paper highlighted this morning was consumer confidence and concerns about people spending their money. how do you think you reverse that trend? caller: first of all, you get them a job. people don't have the money to spend. that will help them to fine jobs with something to create more jobs and work with the banks that got the government money, our money, to get them to do something about helping people with their mortgages. host: when you say get them a job, do you think that is a direct involvement of the federal government then? caller: yes, they should be working with businesses to get them to create jobs for people. something has to be done. we've got to do something to get people in this country employed. host: lore are ry on our

democrats line from new jersey. she mentioned banks and the associated press wrote in "the new york times" about four banks that have closed due to efforts involving the fdic. it says that friday it raised to 68 the number of federally insured banks that have failed. the agency shut down integrity bank with $119 million in assets an $102 million in deposits. the first bank in elizabeth, new jersey with $166 million in assets an $157 million in des posits and also closed peoples community bank with $705 million in assets and $598 million in deposited an first state bank in oklahoma, with $103 million in assets an $98 million in deposits. atlanta, georgia, we're asking folks about the economic recovery and if anythings else

is needed on our independents line, daniel. good morning. caller: good morning. i have a couple of things. number one is we need to stop blaming the average person for what happened for the mortgage crisis. deregulation or unregulation by big business allowed those guys to sit on the top and play games with people's mortgages which led to this crisis. two, what we need most importantly and i'm encouraged to hear is the first caller and the last caller, pointblank, we need jobs. with jobs in the economy, it will help to stimulate of every facet of economy and take care all of our ills, and thirdly, we need to have assistance with people's healthcare is tied into their employer.

we don't need employers to pay for health coverage. we need to develop a much better system. host: new haven, connecticut on our republican line. caller: i just want to say that in order to create jobs, people are saying we need jobs, jobs, if the government is spending this much money and even if we are able to get out from the recession, what will happen is inflation will be so high that even the wages will not help, so what we need to do, the best way to resolve this problem is give people their money back. we need a still had lus package we then will have small businesses that will be able to hire people and then the dmi will bounce back. the the government has already

printed out money for a year and a half worth of money, so one year and a half has been already printed out. that is a danger to our society, and that is also a danger for this country. give tax breaks for businesses. i think that is the only way to go. host: "the washington post" this morning talks about the jobs aspect in a story by neal irwin, writing that the job market remains weak and even those who still have work fearful of layoffs an stung by lost stock market and housing wealth. the situation is underscored by a 1.2% drop in personal consumption expenditures in the second quarter despite a tax cut. we also have told you this morning that you can comment this morning on our twitter page at c-span at wj and a person who identifies himself as croupe py

says "we need american a-made products here. my vacuum is made in mexico and washinger and dryer made somewheres else. walker, louisiana, on our democrats line. justin. go ahead. >> caller: the government needs to do something about everybody that have all these credit cards because everyone gets in deeper debt if they think they can pay for it on the credit card instead of using cash. they should have to pay cash. the government should put a clamp down or some kind of hold down on people going overboard on credit cards. second of all is the department many of human services gives welfare out to all these people. here is us hardworking people living week to week, barely

making ends meet and we're paying for people driving brand new cadillacs, bran news escalades, bran new mercedes but they're running down to the welfare office and getting food stamps. the last thing i want to say is i think a lot of us american people got bull craped in through our new president, because he was talking about the stimulus package and like myself, i work and i'm self-employed, and the whole thing about it is, you know, people like me that, you know, we don't get a paycheck -- in other words, we don't get a paycheck every week through a company. we're self-contracting through another company. we have to wait until the end of the year to get our stimulus return. we have to file our taxes and then that is added on to our next tax return. host: "the new york times" takes into account the stock market, a

story by jack hill. the month of july as far as stock performance is concerned he writes after drifting lower during the first two weeks of the month, the stock market stormed back, corporate profits convinced investors that big banks and other companies could continue to make money despite the recession. the standard & poor's 500 stock index gained 7.4% for the month. and the dow jones industrial average rose 8.5%. as of yesterday's activity, the dow jones gained 17 points and standard & poor's was up .73 or a little less than that and the nasdaq fell as well. looking as day-to-day performance but overall the month of july showing a gain. from twitter, as far as someone who identifies himself as monte 1041 who says we need to mobilize our top economists to find out where comparative advantages lie.

from missouri on the independent line, looking at the economic recovery of the federal government and if it needs to do something else. caller: well, they need to do plenty. first, during the depression, congress passed banking regulations. they gave confidence to the people again in the economy and that hasn't happened yet, and now the banks are international, which makes it even more difficult, and secondly, we need to make sure that we do get national health insurance passed like every other western industrialize the country has, because we're losing jobs to these countries because the health insurance is adding it on to the price of our products. nothing has really been done yet except a temporary stimulus package. george bush did that and it didn't do much for the economy. this didn't either. it is just temporary. these are a couple of things that need to be done or nothing

is ever going to change. host: next up is greenwood, indiana, anthony, republican line. caller: good morning. i listen to your show and what is needed. i can applaud the republicans and the democrats for pushing healthcare reform and hopefully they can get that enacted and done and help us out there in the private sector. one issue i have never heard of is dental care. prices have capitulated over the last 20 years. healthcare, doctor's fees, healthcare fees have gotten out of hand. it's been a heavy burden for the insurance companies but also dental has followed right along with the doctors and hospitals and everything else. to me, it is a very important issue because everyone in the united states has to have good

dental care. a lot of people can't get it because of the cost. i think that needs to be addressed somewhere along the line on the recovery. host: one of the topics we tackle here on the show is frequently that of earmarks and what is being said as far as money for states from congress. from "the new york times," federal agencies diverted earmark money. ron nixon and ashley southhall reported that 13 agencies took $ 1-- 3% off the top for prom ectses in federal spending bills, directed to pet projects. the defense department led the way with $240 million deducted from earmarks. several agencies, including the education and housing and urban development departments did not with hold any money to process and provide oversight of earmarks. the findings summarized in the

report from the office of management and budget provides the first government-wide look at how much federal agencies keep. frank on the democrats line. good morning. caller: hi. the comment i need to make in order to correct the economy, we need to reinstate the glass eagle act that was removed under the leadership of senator mccain and senator graham from texas, which removed the regulations from the financial institutions that were put in by president roosevelt. once we rein in the banks and financial institutions, then we will be able to regulate the economy. we must limit the compensation of these executives on wall street, c.e.o.'s make 44,000

dollars a day, the average c.e.o., and when they get that, we don't hear about them costing jobs. however, when we need to increase the minimum wage, we hear, oh, it's going to cost jobs. also, what we need to do is reform healthcare. the insurance companies are spending over $1 million a day putting money into conservative republicans' pockets to keep the healthcare system the way it is. it is terrible. we need guaranteed healthcare for everyone in america, making sure that insurance companies do not get between us and our doctors. host: bloomberg is reporting this morning that this week's presidential address, the radio address and the internet, deals with the economic recovery.

the story says that the president says that, quote, it will take many more months for the u.s. to fully recover from the recession as employers continue to shed jobs. the president said that yesterday's government report on the g.d.p. shows recession was deeper than anyone thought. he took office in january. the stimulus legislation passed in february and measures of foreclosures have helped stemmed the tide. that is a story you can find. on the independent line, a question about if anything else is needed when it comes to economic recovery. isa, are you are there? caller: i think a lot of problems has to do with the government waste and not enough government accountability. a lot of taxpayer dollars are wasted for unnecessary things

and in milwaukee right now, you have april riffen, a mother being prosecuted no, criminal record, who was raped by her ex, and she is in the criminal justice facility wasting away. off of interference with custody. she wasn't married to the rapist. the charges are absurd, an all this money being wasted in this criminal justice facility on a mother who is p protecting her child, and money then is being wasted in this p prosecution, you know, one of the things is that in the united states alone we have the highest number of incarceration rates but we're not looking at what is going on in the criminal justice facilities. a lot of these, with the government, how they choose to utilize federal dollars. you have the department many of

child support receives federal grants, and if you look closely, a lot of parents do not receive child support from the absent fathers, yet the government continues to he receive gantts to receive grants for these people they don't need to fulfill an obligation to. if we take a close look at the accountability of the government and the waste of the government, a large portion of economic recovery could be saved by the government accountability. host: mobile, alabama, mary on the republican line. go ahead. caller: good morning. i don't know what to do next except i don't know how to make more jobs but that's what we need. i think i know what the problem is. over the last 75 years, i have heard the word "economic,

economy," but i don't know of a single member of congress, either the house or the senate, who has a degree in economics. they are politicians, not economists. we need some people up there that have a background and have the knowledge and the logic to help the economy, and not just play politics. thank you. host: this comment is from twitter from stanley mosely who says that the problem is that we don't manufacture anything in this country. the only thing we make in this country are credit cards an debt. charleston, west virginia, up next, we talked to willie on our democrats line. caller: yes. i'm from franklin, indiana. host: you're on, sir. go ahead. >> hello.

host: you're going to have to stop listening to your t.v. you're a couple seconds behind when you listen. just go ahead and make your statement. caller: ok. what we need is a belt tightening in the federal government. the pentagon wastes money. as of january 31st, the secretary of defense says that the economic counts for 25% of the pentagon's money and fred thompson of tennessee said that 85% of the people who get money

from the government, the agencies of government, do not account for this. they're supposed to keep reliable books an supposed to get them regularly. host: we'll leave it there. thank you. leahmeister of massachusetts. we go to tim on the independent line. caller: unfortunately, i think a lot of the callers that are calling today are missing the point. the point is the economic recovery, and until we add just the federal reserve which is a private bank, i don't think we will get to the crux of the situation. unfortunately, a lot of the callers have no clue about the

federal reserve being a private federal bank. basically all of our income taxes get used to pay down the debt that the government borrows from the private an federal reserve. until we address that, we are not going to get spending under control. that's the problem. what we're doing now is printing all this money and the only thing that is going to happen is that the dollar is going to be devaluate and we will have a zimbabwe-type of inflation. i suggest that your callers start listening to ron paul and peter shift and tom woods and there is a few others out there that have a grasp and understanding of the economic climate that we're in now. host: i wanted to show you a picture from "the washington post" from linda david sop who took this photo. we have been talking about healthcare all week but the post says "the one health bill,

h.r. 32000 shows a series of cardboard boxes full of paper and these are p proposed amments to the bill. the photo shows 11 boxes of paper as far as amendments are concerned. this are other boxes seen, so there are probably more. apologies to the radio listeners by the way, but just to show you the amount of amendments attached to one piece of legislation, 11 boxes or more, and it gives you a sense of the process as far as getting legislation passed as far far as adding amendments. lynette, portland, oregon on our republican line. >> yes, i'm calling a few people back called about the tax deduction that we got through the stimulus in the obama plan in april. not one cent has shown up in my

check. when i knew it was supposed to happen, i knew the amount of money that getting paid twice a month, the total should have been $69, and i knew that my daughter, my niece, people that worked with them, not one person that was one person saw an increase in their monthly payments, so i would like to know if someone could explain to me, because i don't understand it, how this is supposed to help us if we're not he seeing it and that's supposed to be the one thing that several people talked about, the tax increase that we were supposed to get a tax decrease -- excuse me, i'm saying, and an increase in our wages, could someone explain that to me when they want to

call in? host: last call on this topic, on our democrats line, linda. caller: good morning. i'm calling concerning the fact that i was just listening to another station that was stating that within the year our president should have things turned around, but i think that if our attitudes would change concerning our situation, because our president didn't get us into this situation, it took eight years for us to get here and it is going to take longer. he inherited this entire mess, and we are in a mess, but our attitudes about what must be done, i have never seen so many smart people with so many solutions to the problem now that it is. where were they before we got into this situation?

why were they not making suggestions to president bush? we are in a mess. as far as the economic recovery, unless we bow, change our ways before god, we are just in a mess and we will be in it until that time comes. host: we'll leave it there. that will be the calls that we will take for this portion of the program. here is what is up ahead. in our last hour starting at 9:00, we will have a roundtable looking at race relations in the united states. joe madison will join us who has a talk show on sirius radio and armstrong williams will be along for that discussion. about an hour from now we will look at legislation passed by the house last night when it looks at executive compensation. first up, we will have a guest to talk about what is known and

what you have heard referred to as the cash for clunkers program in which you trade in an older car and get discount -- a voucher from the government to purchase a newer one. justin hyde will be our guest for that discussion. to give you a flavor of some of the debates that took place yesterday on this program, you probably saw that $2 billion added to iting two representatives from michigan commented on the program, and how it performed and the changes that are needed. let's listen to what they have to say. >> last night we learned from the national association of auto dealers that this program, in three days, has brought about almost a quarter of a million new car sales in just those three days, yet the cash is going to run out, literally in the next couple of days without an infusion. it's important that we're not taking new money. this is existing money.

this bill buys existing money into other accounts so it will not add to this year's deficit but it will run out without this legislation. here is today's u.s.a. today, full-page ad by chrysler dodge jeep, $4,500 if you bring in -- dollars back if you purchase a new vehicle, turn in your old one and get something that is at least ten miles per gallon better. a lot of our auto dealers can do it, whether it is the big three or the transplants, too, nationwide, one in ten jobs are rawts tow related. in michigan, it is one in four, one in five jobs. auto sales, the last three years have declineed by nearly 50%. 16 other countries have done this, whether it be germany, south korea, even slovakia has done this. in all those countries, car sales have come back. >> i was skeptical when this program passed a while back but it has delivered customers into

the showroom and they are buying cars. being from michigan, experiencing a 15.2% unemployment rate, this is not only going to provide opportunities for employment for people who assemble cars but also for suppliers and other things. hopefully this can be a catalyst for a stronger economic recovery. it appears to be one of the programs in the stimulus program that actually appears to be working. at the same time, while we are -- maybe euphoric about the parts of the program that are working, we also have to recognize that the back end of this program, the parts being handled by the federal government have been a disaster for our dealers. i have yet to have one dealer who has sold a car that has gotten it approved by the department of transportation. we can't -- the federal government can't process a simple rebate. i've got dealers that have submitted the paperwork three

times and gotten three rejections. the last one came back and said no reason for rejection. what is a dealer supposed to do? they have already destroyed the cars that have been traded in. they have sold the car. they're now on the hook and expecting a check for $3,500 to $4,500 from the federal government and not getting it. we need to get these back room problems fixed to be able to call this program truly successful. host: on the front page of the detroit fres press, obama pushes $2 billion to refuel clunker offer. this is written by justin hyde to joins us now. could you talk about the cash for clunkers program an its role as far as the efforts by the administration to stabilize the economy? >> well, it didn't have a starring role when the plan to stabilize the economy came out but it has taken on one in the past few days. this has been one of the more successful stimulus pack ams, wildly successful, far more than anyone in the administration and

most people in the industry thought it would be. it was supposed to fuel 250,000 new car and truck sales, estimated to run through november 1. late thursday, the administration got word that they might have already hit that 250,000 number and the program could be running low or out of cash. the white house scrambled to piece together a new package. host: as far as the run on the dealers are concerned, how is that fueled? what caused this? guest: there were more people sitting on the sidelines waiting to take advantage than anyone anticipated. one of the better estimates is that there were at least 4 million people who could have taken advantage of this offer, who met all the qualifications and were in a position to buy. this plan thought it would sale 1 million and its was pared back to 250,000. there has been tremendous response from a lot of

dealerships in michigan where you could combine a clunker deal with other incentives an employee pricing. there are people getting a third, 33% off the price of a vehicle. a lot of dealerships have signed up some 23,000 around the country to take part in this program. each dealership only needed to do 12 or 13 sales to hit the limit. host: if i'm a dealer then, am i feeling the same euphoria that a consumer would have? guest: i think there is a lot of euphoria but also a lot of concern. the dealers are in a position where they have to apply to get reimbursed for the money they put out the door. part of the problem with the program is getting the reimbursements flowing. the reason that the administration lost track of how many deals were being made was, in part, due to the system they had for applying for the money. the dealers had concerns yesterday that even he though there is this program in congress to put more money towards the program that dealers

could still be on the hook if this bill fails to pass the senate next week. host: what is the possibility to that? guest: it is hard to say now. there is a push to slow it down in the senate more than the house. senators have come out and said unless the deal is changed to inkeys the fuel economy benefits in the new cars purchased they will not support it. senator mccain said he will try to filibuster it. host: the president of the united states weighed in on this issue yesterday. >> not more than a few weeks ago, there were skeptics who weren't sure that this cash for clunkers program would work, but i'm happy to report that it has succeeded well beyond our expectations ap all expectations and we're already seeing a dramatic increase in showroom traffic at local car dealers. there are legitimate concerns that the funds from this program might be exhausted. we're working can congress on a

bipartisan solution to ensure the program can continue for everyone out there still looking to make a trade. host: what would you add to that. guest: that was one of the messages that the white house tried to accepted out, that the program was still going. administration officials said they had to scramble after the response to unring that bell. there was a lot of comment yesterday from the white house that the program is fine until further notice, people should take advantage of the deal and hey, if there is a little bit of a rush to the dealership, it was compared to the scene in a wonderful life when there is a bank run, that is not bad to have, having people flood into dealerships for the first time. host: if they approve the money, will you have the same situation happen again? guest: that's part of the issue. there is no clear sign that the administration or anybody has an idea of how many deals are being written an agreed to under this program. there is a lag time between when

the dealers make the deal and when they can get their money back. senator levin was saying the government may just have to estimate how many deals are going on in order to control the amount of money and match it to the number of people seeking add vapg of it. host: justin hyde reports that the automobile industry is benefitting from the cash for clunkers program. first call up, massachusetts and the republican line. we hear from eddie. good morning. caller: since americans have v-8's and europe and japan are known for smaller ones, does that mean we will be trading in large american cars an buying foreign cars, since we import

or buy more foreign cars? i'm concerned about that. is the money just going overseas? glenn: chances are that that's part of what will happen because this program is where you will see more people driving foreign vehicles. the plan was structured as such that the definition of a clumpger tends to apply more to older american vehicles especially trucks an s.u.v.'s than older cars where the foreign automakers dominated ins previous years. a lot more foreign vehicles are qualified as well. the ranges of foreign vehicles are broad. we don't have data to firmly show what the new spread is. anecdotally, simply given the gains that market share made by honda, toyota an hon die over the years it is inevitable they will have more buyers. the extent of that shift is not clear. certainly ford, g.m. and chrysler trying to take as much of these sales as possible. a lot of auto make ares have

come out with incentives to go on top of the clunker plan. chrysler doubled the clunker benefit on certain models so they're fighting it out but i think it's inevitable that you see more of a shift towards foreign vehicles. we're talking about foreign nameplates some of which are now made in the united states. host: ruben on the democrats line in west virginia. caller: good morning. my concern is washington being washington, they love screwing up everything. i'm a car enthusiast. i have a couple of classics. are they going to try to include these antiques an classics into this stuff that they're trying to do, which i totally disagree with, because i love an old car, and i do love -- that's part of my hobby. that is my hobby. i like putting these things

together. guest: well, i don't think you have much to worry about. the age limit is 25 years. anything older doesn't qualify. the voucher is only worth $4, 500. so if your cars are worth more, there is no even to try to trade them in. there was concern among classic car buyers that you would affect the market for parts by doing this program. the thing is when a dlumpg clunker comes in it has to be disabled. the engine is run until it is destroyed with this caustic gunk that they pour into the engine to make sure it can never be used again on the road. there has been no effort to go after folks who have these old classics on the road. there are too many people out there who hoff those vehicles for that to happen. host: 250,000 bought and $1 billion spent in the six days of the program. 69 of average mile per gallon

improvement. $750 is the annual gas savings. 70% have been traded in for trucks or s.u.v.'s. s as fares as once the dealer gets it, what is their cost to get it scrapped? guest: the government has set aside $50 to cover the cost of taking the clumpger, destroying the engine and having it sent to a junkyard. the dealers are saying that may not cover all their costs. actually, the government made a rule change last night that allows dealers to hold off destroying some of those vehicles until they are repaid for some of their vouchers. the idea was to speed up this p process of getting the deals into the computer system that the government set up. host: pete hoekstra yesterday talked about the vouchers saying some dealerships were sending the same voucher three times and keep getting rejected.

where is the problem between what gets sent in an september out as far as a cash return. guest: there is a lot of paperwork. you have to have a proof of insurance for a year, a registration that shows it has been in use for a year, a dealer has to certify they will destroy the car. it has to be scanned and uploaded. dealers are having problems getting that done. some have said they were coming in from midnight to 6:00 a.m. and having staff put them in. on the other side, the federal government said a lot of applications had to be rejected because the paperwork was incomplete. it it's not clear how much of the problem lies on either side of the transaction. it is just clear there is a lot of problems. host: is this program biased towards larger dealers or can everyone get in? guest: as long as you are selling new cars, you can get

in. host: harry on the independent line. caller: question, why would the government want to give people $4, 500 to buy a car, and turn in an old car? request don't they afford this program to anybody that wants to walk into a showroom and buy a car? it's taxpayers' money. it should apply to everybody, not just people with juchgers running up ap down the highway. this is a waste of taxpayers money that takes nothing into consideration but filling their pockets from the ought automotive industry in this case. i think they need to step back and look at some of the stuff they're doing. guest: this program is an import of its own. there are a lot of countries around the world who have set up similar programs. pretty much every country that has some sort of auto industry has tried some sort of stimulus plan, a lot of them similar to this one. the idea of going after old cars is environmental.

if you get the older vehicles off the road that burn more gas per mile, and replace them with newer vehicles, there is an environmental benefit to be had. the program as it's structured has been a very hard fought compromise between a lot of different interests here in d.c. -- the environmentalists, auto industry, u.a.w. and the government, so when you see the mileage call of 18 miles per gallon on all models, yes, that does push it more towards trucks an s.u.v.'s coming in. that was hammered out after who is this program going to affect and how many buyers are going to come in and does it help or hurt one type of automaker over another? there was a lot that went into it. the problem getting it through the senate to fun ap additional $2 billion is that there is no time to rework the plan. if there is too much desire to rework the plan, that money

might not come in next week. host: how did this program get its start? guest: the industry had seen the success the program had in europe an germany where a plan similar to this size had been put into place and was wildly successful ap turned around the sales decreases that had been seen around the world. the auto industry is in a global recession. auto sales this year have been dragging along at their lowest rate in a couple of decades. the main driver of auto sales is personal income and unemployment. this is a way to spur auto sales and get people back shopping again and get environmental benefits. in addition, they made an economic argument which is auto sales tend to lead the economy out of recession. when you build a car, you have a lot of manufactured parts and a lot of labor input and resources that you draw on. if those can get back started again, you start to stimulate the economy in different ways.

host: justin hyde reports for the detroit free press. on the republican line from new york, good morning. caller: yes, i would like to have the guest comment on the unintended consequences of what is going to happen. number one, with all these cars that are being scrapped, it's going to depress the scrap industry, and require a subsidy to keep the junkyards going. number two, what is going to happen to the poor people that depend on buying a car for $1,000 or $1,500 and are not available queap more because they're being valued at $4,500 or whatever the number is. it is going to depress the automobile market in the coming

years. guest: well, two things. one on the scrap industry. the scrap ap recycling industry have had a lot of concerns on this program about the use of resources an effect on landfills. when you destroy vehicles there are parts in the landfills aparts in the junk yards. whether this will affect those stys is hard to say. not all the vehicles have been trashed yet. i don't know that we will know how much effect it will have for a few more weeks. in terms of the auto market and how it affects used buyers, this are typically three to four times more used vehicles sold every year than new vehicles. even though the plan has 250,000 used vehicles and they have been turned in, there are roughly 50 million units sometimes sold in used vehicles every year. it is a drop in the market. not everybody who sells a used vehicle is going to be in a

position to go in and buy a new vehicle under this. they may not want to spend the money and may not qualify for financing. there will still be a fairly healthy supply of used vehicles on the market. whether this particular range of $1,500 to $3,500 gets hurt, that is something we need to see data on. host: when the program program stop date was november first, will this affect anything? guest: it will run until it runs out of money. the question is how do you know when it runs out of money? how much can the government track, how much it's being put on the hook for, given the number of deals that have been generated. host: pennsylvania, janet on our democrats line. caller: thank you, c-span. i'm glad they're going to destroy the clunkers. i wasn't sure about that. my he question is, would there be a way to translate this into

the housing market and get housing going? i have no ideas of how they could do that but they could fill the gap between what people lost in their houses and what people have to sell their houses for now and help people who are trying to sell houses that would kind of get things going there, and for the gentleman who thought that he should get the $43,000 and doesn't have a clumpger, gets fresher air and that helps us all so i'm glad they're doing this. thank you so much. guest: there has been a lot of discussion on doing something similar for the housing market, whether it is for first-time home buyers or helping people who want to resell or home mortgage modifications at the treasury department which have had trouble getting off the grown and there is back and forth in the administration and the mortgage industry about trying to make those move faster

o.t. your wider point, there is political debate about why can't you help out other industries? there are two issues here. one, the auto industry is of a size where you can see an environmental and economic benefit that you might not see in other industries if you aid them in a similar way. secondly, this does not pay for the entire transaction. for roughly a bill imrop, you're getting 250,000 auto sales. when you go to help for home openers, the numbers become much faster and it is for millions and millions homeowners. the numbers get large quickly and any spending of that type has an extra level of scrutiny in congress. host: we hear from joe at twitter it helps the guy who sells cars an hurts the guy who has to pay for his neighbor's car and then destroy it. guest: the cost of destroying the car is barely minimal as far

as the overall transaction. the voucher is the key here. whether we start to see more pressure on, you know, up to $3 billion coming into this program versus other uses of taxpayer money will be a key part of the senate debate next week. host: who is going to lead the charge on that in the senate? guest: the person that is out in front is diane feinstein, a democrat in california and she an susan collins of maine sent a letter saying we need more data about what is coming into this plan and what is being sold, the environmental benefits, the costs attached to it and until we see the data we can't support it. senator feinstein has said in the past she had a promise from senate leadership that no more money would go to this program unless there were tougher fuel economy standards brought into it. because the house has left for a month and the senate will leave at the end of the week, there is no room to change the bill that the house passed, but simply here is $2 billion in the

program. the people who oppose this, if they are going to try to fight this bill, don't have to win the battle. they just have to delay it a week until the senate leads and then the senate leadership has to decide is it worth staying around to get it done. host: ohio, mary on our independent line. caller: good morning. i have concerns regarding this, and i'm just wondering that if we had just let everything just stand back a little bit and think about this a while, i think it's another issue of just running into something and doing it real quick. we have a recession that maybe if we would let it run its course, maybe things would just get a little bit everything will start to work. people will start buying cars again. i think everyone is jumping the gun on this and the government is using our money. it's not their money, and i'm

thinking that -- i'm concerned that it isn't going to blow up in our faces. it is like the mortgage crisis where people were guaranteed these fantastically expensive homes and it was going to be theirs. now they're buying these cars and they might not have the money for it. i mean, i'm in ohio. we're talking about a 12% unemployment rate here, and things rn getting better. i'm not seeing many people have new jobs here. in fact, i lost one of mine back in march. i can't afford to buy a new car at this point even with this incentive money, an actually, there's a lot of people here that really could use the older vehicles. that's what they can afford at this point. now we're talking about 250,000 cars that are being destroyed basically, and that's going to drive up the cost of these used vehicles for people. i mean, when i was a teenager, what was my first car? it was a clunker.

that's all i could afford, and i sat well with that for a year or two until i had a job and i could pay for a newer vehicle. i'm just worried about where it's all going. i think from what i hear, germany, they are going to continue the program and the government is going to continue to fun it. i don't think there is any end in sight for that. host: leave it there. guest: let's talk about on the used vehicle side, we're talking about 250,000 cars and if the money goes through, there might be another 500,000. there are roughly 250 million vehicles registered in the united states, so there are a lot of vehicles lying around that can be in the used car market. at this point, there hasn't been any sign that this is somehow affecting the used car vehicle sales. before this program came into effect used sales were going well because people who have lost their jobs or had cuts in

income or taking furloughs can't afford a new car. there was concern before the recession hit if car buyers had been oversold. one, there was never a subprime crisis like there was with home buyers. it is easier to get a car back that a home back from someone who can't make a payment. even though the loan failures and financial problems of buyers in the car market are more substantive than in years they have not hit the level of magnitude that they were in the housing market. one of the things that senator fiepstein proposed in the past to used car buyers is a smaller vouch fer they were willing to take a more fuel effecient vehicle. that was one of the changes in the mix for a while and then set aside because of complexity and cost, an sort of delicate

compromise that this program represented. right now, it is not sure where that could be put back in. if the program continues much longer and there is desire to get more money, that debate would be reopened. host: are dealers going to be as active at closing deals this weekend? .

host: lauderhill by the sea. we talk to mary on our republican line. caller: as we know, the obama administration and congress has increased mileage standards each gallon of gas. there are reasons for doing this. however, they have exempted -- and this is in the past week, the july 28, in the "wall street journal port tarp -- "wall street journal," they have exempted bmw and mercedes-benz from the standards, and it only gets 13 miles a gallon. how fair is that? this is the first time i have never called.

the obama's administration also blocked a house of representatives initiative to put a cap on you serious interest rates for credit cards of 15% and try to put a cap and the senate and 18%. guest: let me speak to the mileage point, because i am more familiar with that. the deal you're talking about, the agreement with the industry and environmental groups to set a standard of 35 miles a gallon by 2018 is a boost over what was planned before that. there does seem to be a call out for manufacturers to do not sell a certain number of vehicles. it may be smaller than you anticipate. they also think the exemption will phase out over time.

the original california plan that the system was based on is for manufacturers debt sold less than 60,000 vehicles in the state of california. folks like income even chrysler could be exempt from california standards. so far, the industry has not raised a significant objection. i think there was some concern that one or two lawmakers were getting off scot-free. i think the debate will be joined, and if it is as broad as you are concerned about, i suspect that there will be a lot of pushback. host: rocky mount, north carolina. mary, on our democrats line.

caller: this is a subject and so intimate about, that we cannot expect a change or come out with a different solution without taking a chance to change things. older folks -- and i'm 72, so i'm older, i do not think that it goes to change. we need to step aside and let other people take a chance can change. the old folks need to go in a rest home or somewhere. guest: well, there are young people trying to run the country right now. one of the chief staffers on the task force is not yet 30.

there are a lot of young people on this administration, and if you have spent time on capitol hill, you will see a lot of work that is done is done by younger people. but i would not discount older folks, as well. host: st. george, kansas. caller: this cash for clunkers thing is more spend, spend, spend, money we do not have. and all of the people buying the cars better hope they have a job. because they could lose their vehicle, and these in used cars could end up on a used car lot. will pay for that? guest: used cars buyers would pay for it, and probably get a deal. there were pelops' of value and the cars from new to used -- if people lose their jobs, yes, the

cars to come back. as far as the money, $2 billion in the program. this is money that has already been at to another stimulus program. it is money that was already out the door, being shifted from one to another. the administration wants to come back, but it will not get off the ground for another year or so. still there is a lot of concern in d.c. about the deficit and what happens to the economy if you do not stimulate in some way. the name cash for clunkers, it was the original description and it's sort of stock. it became so euphonious that there was no way around it.

the government has a more official acronym for it, cars. but that is just the way we talk about it. no way around it. host: mich., on our republican line. go ahead. caller: i am a 79-year-old widow, and i think that if this is to stimulate america's economy, it should be mandatory that only american-made cars should be included, made by american workers, since this is taxpayer money. guest: that has been one of the big issues. first, you have to start off with, what is an american vehicle? do you include mexican models for gm and chrysler, or toyota

models in tennessee and indiana? secondly, there are trade issues. you can not design a program that benefits domestic manufacturers to such a great extent that it violates international trade bloc periods -- trade law. and if you benefit one and got the other, not only do you have the government picking world winners and losers -- there is a lot of concern and effort to get things like you were talking about into the program, but they were not accepted for many of the reasons we have already talked about. this is a fairly delicate balance. host: san antonio, texas, albert, on our democrats line. caller: my question is, on this thing they are trying to get rid

of, what are the requirements? some would say that you have to be insured for one year, others will say that to get $4,700 off of it -- they do not know what the rules are. guest: the reasons the requirements are as stiff as they are is that the designers of the program wanted to get the apples off the road that were being used. if you take a vehicle of blocks and buy a new car, you do not have an environmental benefit. you are actually putting more carbon dioxide on the radar. they are encouraging you to take a car you use and replace it something with better gas mileage. i suggest to go to cars.gov, the

only official government website for the program. they can give you details. host: frep.com has the work of our guests, and other articles that have been written. later in the program, we will hear from david mason of heritage foundation with input and opinions on bills passed just today on executive compensation. in our last hour, a roundtable on rape in the united states with joe madison and mr. williams. we will be right back.

>> douglas brinkley looks at the first green president, teddy roosevelt, from his new book, "the wilderness warrior." today on c-span 2's booktv. >> race relations with juan williams, noon eastern on c-span 2. >> "washington journal" continues. host: 202-737-0001 for republicans, 202-737-0002 for democrats, and independent viewers, 202-628-0205.

john burns writes out of london for the "new york times." he writes, gary mackinnon has admitted he has tapped into dozens of military computers in 2001, 2002, saying he was looking for ufo information. the latest ruling denied his request for judicial review approving a request for his extradition. a court order also rejected his bid to be tried in britain. he and knowledge packing into 97 computers pulling to the defense department, navy, army, air force, and nasa in the months before september 11. his actions were influenced, says his family, by a form of autism that he has. there's also a story in the hartford paper that reflects off an announcement made by christopher dodd yesterday,

reporting that he has prostate cancer and will get surgery for that. current.com is where you find the story. he says that the cancer diagnosis -- the surgery will take place at memorial sloan- kettering test cancer center in new york city, the second week of the month, after the senate adjourns. he expects to spend time in the hospital after which he will recuperate at home. , " piazza poll last week shows many voters have lost faith in him and many disapprove of his job performance. pennsylvania, delores, on our democrats line. you are first. good morning. caller: i was just saying to a

young lady that i watch the show constantly and i think it is great, but i am so -- i do not want to say disgusted, but people constantly calling in, segregating. it is america of this, it has to be american that. don't people realize that we all came to this country as foreigners? our country -- our grandparents, are parents? my parents and father worked very hard. i work very hard. if i have a subaru, why is my car less a clunker than somebody else's, than a chevrolet? it is just -- i do not know. i watched the show the other day and we were talking about segregation which immigrants. my parents were immigrants.

they came here and worked very hard. 97% of your audience come from immigrants. host: wilmington, illinois. caller: we need more jobs for americans and we need to retire the federal debt, and i would like to see all 1% tax on all imports, including important services, and i would like to see it go 1% a month until the federal budget is balanced. they could use that revenue to buy back federal debt held by foreigners. that is my comment. host: eighth photograph this morning of -- a photograph this morning of corazon aquino. she is revered for helping rebuild democracy.

but it was the images of 1986, where she rose on a wave of popular protest against the dictatorship of ferdinand and imelda marcos that spirit is the imagination of many around the world. her death at the age of 76. if you are to go to the newsstand, or perhaps to have seen it at home, you would get the new issue of "time." "paging dr. obama." we have a contributor to the story writing about the ability to sell the message. how does this relate to the cover story? guest: i had an interview with obama tuesday afternoon, where he was very frank and candid about his own frustration in being able to frame the message,

because he had knowledge he is looking at the polls, he sees public opinion slipping away from him here on this health care fight. so here is a politician who is normally so gifted with language, and he told me that framing a message for the american people is the biggest challenge of his public life. host: you say he has gotten so far because he has put forth the thorny questions of who should pay and how big a role government should have. can you expand on that? guest: he pointed out that if you look at these bills out there in congress, they all agree on about 80% of what needs to be done to the insurance market, to expand coverage.

but the last 20% is very, very difficult, because it really does get to some fundamental ideological, philosophical divides in society, congress, and politics, things like whether or not taxes should go up. how big a role should the government have? what is the responsibility for people? what kind of responsibilities should individuals and businesses have? we are down to tough issues, and a lot of presidents have tried to do something about this and failed. now. host: what sticks out about what is going on in congress and whether or not we should have a health-care program from them?

guest: people are confused about what is in it, and they are not confident that good decisions come from washington. they are afraid their choices will be limited and costs increased, not brought down. this goes up against a big problem in this country with uninsured people, but most have health coverage, and our poll shows that they are overwhelmingly happy with what they have got. it was just about health care, and a lengthy interview, so it gave us a chance to kind of go more in depth about how we see the choices. the choices we have. host: can you add to what the

president thinks about his role as far as changes made, and the lessons as applied to health care? >> it is interesting, because he asked two weeks ago for a memo on how lbj got medicare and medicaid passed in 1965, and he told me that it struck him that so much has changed since then. lbj was coming of a landslide, he had a bigger majority in congress, and democrats and republicans were not so ideologically divided. but a lot of things are still the same, and one thing is that he sees the president's role is having to keep the pressure on congress, making them keep moving. over the last couple of weeks, we have really seen the president devoting a lot more of his time to pushing congress,

and a lot of it happens behind the scene. host: he brought up his grandmother's health care. why? guest: at the end of her life, barack obama's grandmother was terminally ill and broker hip. she had the decision, did she want to get a very expensive hip replacement operation. this is a woman who knew she did not have a lot of time left, and this would be expensive and dangerous. so i asked him, is this the kind of decision that was a smart decision to make, and is this the kind of decision people might be limited under your vision for health care reform? the president insisted that, you know, this kind of decision will remain with families. other families may have made a different decision, but she

decided to go ahead and get her operation. host: and you brought up the fact he was doing this in a recession. what was the response? >> he said that has increased his difficulty in persuading the people that this is worth doing. they have seen the bailout, they have seen tarp, all of this stuff, and people are just overwhelmed by all of it. when they see a big, new government program coming on the heels of all the other things government has done, they worry that this is just too much. they think he is just about building a big government and not about fixing the problem. host: ms. tumulty, thank you for your time on saturday morning.

i hope you join us soon on the set. atlanta, georgia, lawrence, independent of wine. go ahead. caller: by the way, "washington journal" is the greatest show ever created. i am still stuck on the cash for clunkers thing. i am a little discouraged because a year ago, i was driving around in an old pickup truck, lived quite a distance from work, and i was spending hundreds of dollars on gasoline. i went out and bought a car that got 30 miles a gallon and moved closer to work and got my cost down to seven or $8 a week. now, the economy is bad, times are getting tough, and i can barely pay for this car. i feel like i'm one of those

that helps do something about gasoline prices when i dropped my demand. now i feel like the thanks i am getting for making that is a slap in the face, because the people that will benefit our people who did not care about gas mileage or the economy or anything else until they were offered a deal. that is discouraging to me, so i would just like to say that. thank you very much for allowing me this time. host: tyler, texas. caller: i wanted to inform your viewers, that previous guest gave a government site, cars.gov, and when you go into that site, the government literally takes over your computer. you have to agree to that.

they are able to track you forever. so all of your information is on the web site, available to them. they can track you with that with all of the stuff that they have. host: a story by the associated press this morning that you can find on the philadelphia inquirer of looks at strategy in afghanistan. it talks about a forthcoming report on afghanistan. they write that the biggest change urged in the report is a cultural shift, with changes in how they live and where they fight. the latest draft of the assessment also double in the

numbers to roughly four and did thousand senior defense officials in washington. several officials spoke on anonymity, because the report was not made official. one thing it says is to use intelligence less to hunt and more to understand the structure, getting more troops more active in fighting corruption. forces will have to take care of their dealings, and powering corrupt officials. caller: the other day, you had roy blunt on, and i was

wondering, have you ever watched cnbc? host: occasionally. caller: when they have analysts on to talk about stocks and markets, they will show potential conflicts of interests, whether he owns the stock or not. when you have representatives on that have many members of their family that are lobbyists, it would seem to me that the potential for conflict of interest, or at least to doubting what they represent, would come in mind if you knew how many lobbyists were in the families of these representatives. and mr. blog -- his wife as a lobbyist, he has two children, amy and andrew, who are lobbyists. you do a good service to your viewers to ask any

representatives will come on if they have members of their family or lobbyists, and give the total number and post it so that viewers can see the incestuous relationships that congress and the senate have with business. there is a definite conflict of interest, and i think you do your viewers a tremendous service by letting them know. how can you trust with someone will say when their pockets are being and their families' pockets are being lined with money? host: can i ask you a question? how did you find this out? caller: it was on wikipedia. every rep has a page. i would say to go check out your own representatives. depending on who is doing the editing on the page, some information is not as extensive as others and certainly -- i went to jeffs late's listing on

wikipedia and i was very pleased that that man is about as squeaky clean honest as you can get. i am a democrat, but i admire him. he is opposed by republican organizations in washington because he is always trying to cut back on spending. host: when you look at wikipedia, a few cross reference it with another -- do you cross reference it with another source? caller: i understand there is always the potential for -- it is like the old journalists rule that you get another source on this, but i have worries that the information using one source is dangerous. i try and peru's other sources. what was the place you mentioned? >> center for responsive politics.

caller: i will certainly try and use that. i have found that this is helpful, to understand the people. i watched jeffs slate, assuming he was a traditional republican, involved with big business and trying to harm the country. i was surprised to see he was such an honest man. i will try to do a second reference, and i will also say to viewers, use that center for double checking information. the more informed we are, the better decisions we can make. i made a decision that was pro

with blake because of that information. host: florida, independent line. caller: just a quick comment. there is an emblem on the back of the mercury dime. if he wants to find out why there is such a business and politics together, look at what the emblem's mean. secondly, there is a number being spotted out about how many people are uninsured. what is the percentage of people who just choose not to? we do not get down to the nitty gritty of the number itself. i would appreciate it if you

could throw up the number being spotted out and what percentage of people there are who have been kicked off their insurance. we do not know that, and nobody tells us. they just say that there are a lot of venture people -- uninsured people. host: there is a story on the united states making a deal with u.b.s. about turning over names of people with swiss bank accounts. there is a closely watched dispute over whether they should be forced to reveal the identity. the story continues, saying that if they do hand over client names, authorities could use this as a precedent that would

further breached secrecy. switzerland's image as a haven had taken a hit in february, when u.b.s. had to hand over names of clients suspected of using sham companies to evade tax. "americans decide to sit out the economic downturn to a degree of." -- the "washington post" disclosed a loss, while the caplan higher education arm saw a 31% jump in enrollment. higher education's countercyclical nation was also highlighted by pearson, the educational publisher and owner.

26% jump in 2009. one more call, from indiana. alice, of our republic . -- on our republican line. caller: i make a good income. but i let people with more income than meet by the new car and traded in, and i have a good income. my concern is that they will have some kind of payment, and i think we might be setting up these people for failure. if you're driving a $1,000 car, i am not sure you have the income to purchase a new car. we are encouraging people to buy homes without deposits are down payments. so i of a concern that we are getting ourselves in a mess here.

and we have to get it worked out where the government can give a rebate of dealers selling the cars. they are selling them and junking these old cars and not getting the money back. host: a headline says that "held executive pay legislation put to pay czar in the door." our guest, david mason from the heritage foundation, will be up to talk about it next.

>> in 1968, lbj phone calls his secretary of state, dean rusk. richard nixon, and evangelist billy graham's, today at 10:00 a.m. eastern on c-span radio. >> as expected, the judiciary committee voted this week to recommend that the confirmation of judge sotomayor as supreme court justice. watch the debate and hear the vote today at 7:00 p.m. eastern. next week, her confirmation moves to the senate floor. live coverage on c-span 2. coming in october, tour the home of the supreme court. >> he signed the declaration of independence. he was also murdered. bruce chadwick sunday on his book about the killings that shocked the new nation.

>> joined the conversation on race relations with npr and fox news analyst juan williams, life c-span 2 -- live sunday at noon eastern on c-span 2. host: a vote yesterday on executive compensation. what took place? >> there was a bill to limit pay at banks, all banks, and set up a procedure where shareholders and companies would take an annual vote on the pay of the most highly compensated executives of a company. and a third provision required companies to have what they call independent compensation committees to set salaries for top executives. that was the notable thing about the bill. there was potential for big bonuses paid by aig and other companies that were recipients

of government aid, and to what we were arguing about was that there would not be much of the dispute. take the number -- government money, take their conditions. but one of the things this bill does is give regulators the authority to set payrolls applying to every bank in america, regardless of whether or not they took money. and it does not just stop the most highly paid executives but rather goes to any compensation program based on performance. anybody earning a commission, anyone with an annual performance bonus, will not be subject to these federal regulations. host: barney frank was a driving factor. here is what he had to say. >> we do not talk about the amount. we say that the shareholders should. we say that the people who own the company, the shareholders, should be able to express their

opinion on compensation. we go beyond that to say that we believe the federal government has interests not in the level of compensation, but in the structure. when you have, as we have seen, structures where a company's move lots of money on a particular deals, but the people who made those deals make money on them, it has a systemic impact on society because it incentivizes much too much risk. what is the republican approach to that? nothing. they admit that these are problems. they regret these things are happening. but their regrets will not stop the damage. guest: he starts off by saying the government will not do this, shareholders will, but then he says that government is worried about structural compensation. so with these public companies, he is coming in, saying that the government needs to regulate company pay.

not individual salaries for individual employees, but that is a huge step, the government stepping in, telling companies we have to rearrange the way compensation is set, and this risk concern is all the rage today. if you are bailed out, there is a risk, and there is a penalty. but controlling risk is not the principal purpose of compensation. traditionally, you reward the employee for work, and secondly reward them for performance. you try to get that in line with the interests of the company. now we have the government saying that we will insist you set up a structure with a high emphasis on risk. maybe that is a good idea. i do not think so. but it is a big government intervention in the private sector, and by saying it, you are only setting up a structure, it minimizes the effectiveness this can have, because what then happens is the

board members are sitting on these committees saying that the government is telling us we have to set it up to pay this way, and they will do it that way. what they have is a system heavily concentrated on risk. the second point i would make about that is that the government does not have a good idea about what causes breast and what reduces risk and compensation. right now, in the tarp program, there are regulations prohibiting tarp recipients from paying bonuses in the form of stock options. when you go out in the world of compensation and look what contributes to risk and what does not, it turns out that stock options produce less-risky behavior among new recipients. the first step the government has taken is down the wrong road, which is one of the problems we can get into what the bureaucrats said private- sector pay, that they do not have a good idea of what works and what does not.

host: 202-737-0001 for republicans, 202-737-0002 for democrats, and 202-628-0205 for independences -- independents. c-span.org. you wrote about this for the heritage foundation and boiled down to three points. just for a recap, as far as this plan is concerned when it comes to check of compensation, the first point out is that they pay, or nothing else. guest: the government is intervening, and we are saying he will tell shareholders you have to decide on pay, you do not get a vote on structure or anything like that. so that distorts the process of corporate governance and tells people that pay is really important, when in fact it is a minor factor in the performance of corporations.

when government puts its hands and there, they distort the process. host: taking dictates from the government? guest: what they would do is have instructions. the people serving on the committees are more and more worried about liability for the government, from shareholders and things like that. to say that we're just going to give them advice or guidelines minimize the effect. when they will be told that they have to do this, the government wants to to, and they will follow the rules. so the process of setting corporate pay is going to become more and more bureaucratic and less and less business oriented. the pay rules apply right now only to banks and other regulated institutions. the striking thing about that is they do not stop top executives. they run through the entire structure of the institution, down to anybody who gets a performance bonus for any

reason. so you get eight shots of where it leads. i think what you're going to see is going into a more bureaucratic process. they want to reduce risk and they have success with that, to a certain extent. one problem is that right now on the economy we have had a big problem with a boom in the financial sector, and the natural reaction is to withdraw. all over the economy right now, people are lending less, putting more barriers in the way of economic activity, and they're saying to do this some more. risk is an important factor in business, but it is a positive and negative factor. people take risks, and companies tend to grow before they fail. but that risk-taking behavior is something that on balance, you

want to encourage in an entrepreneurial economy. so if the government is trying to suppress rest, to lower growth over the long term -- there might be an argument for doing that in a bubble. but the bubble is over, and the economy is naturally point at risk. it is the wrong time, among other things, to be piling on more. host: i was going to say, what is the parallel between risk and who gets paid? >> pay structure is set up in a way to reward the ceo with performance, and they would have a payment that is in a variance with a long-term interest of the company. in 1993, when clinton came to

office, there was a concern about million-dollar salaries and bonuses. they put a cap on salaries, but not the deductibility of bonuses. so naturally, all of the compensation is moved from the salary side to the bonus side. by fiddling with the tax code 15 years ago, congress almost forced people into the area, and now they are going back. this is a problem the government created, and the way to fix it would not be to fix the bad ones, but rather to change the tax code to make compensation decisions neutral and not penalize one type and occurred another. host: our first call is from home would come up illinois. -- home would -- homewood,

illinois. caller: it appears that you are not ignored and the difficulty people are having with these decisions because things have gotten -- it appears you are ignoring the difficulty people are having. you talk about risk, and that is fine if both parties have the same information. people are losing millions in investments. you hopefully know your objective. people are thinking they are giving information, but they are not. you talk about conflict of interest. well, this is a transparent conflict of interest. people are working in institutions when they are given money based on loans given

out, notwithstanding who the loans are given to. guest: thank you. well, first of all, we are in hard economic times. it is one of my fears about this bill that people will react. people are looking at revising loan disclosures now, but here again, government rules may have encouraged some confusion and bad behavior we're talking about, but it is a separate question from pay structure. >> good morning. i am watching this with a lot of

trepidation and fear. my question for mr. frank -- i know he will not respond because i'm not important to him in the way of donations, but where is his constitutional authority in regulating the pay of a private individual in a non-government run business? i looked through my copy of the constitution, which i have on my computer, and i do not see anything in their about regulating pay. when we start down this slope of, "you cannot pay this person this much," it is a slippery slope that will send us into a

hole that will take us two or three generations to get out of. that is my biggest fear. guest: i agree with you, and i could go into a long discussion about how the commerce clause and the power to regulate securities and banks act as a leverage, and you can go through court decisions and regulatory actions to get there, but your final point is right, and that is that if the government comes in to start setting salaries in the private sector, they will not do a good job of it. that is one of my fears, that i'm far from defending these bonuses, but i'm skeptical that the government will do a better job, and i am fearful that if the governor -- government comes in, it will bureaucratize the

process and we will end up with one that is more difficult. >> one story came in light thursday, with a million dollars paid to $4,800 -- 4800 companies. how do you get that money spent for the federal government? let's start with the fact that tarp recipients are already subject to federal salary regulations, and so people are concerned and the answer is to go back to the treasury department and regulations in a way that is going to satisfy people. another problem is that a lot of sellers are paid up for contracts. you have the contract, it did certain things, you will be compensated certain ways. when companies do not pay salary, employees are entitled to file suit and get money back. sometimes there are voluntary elements, but the plan itself

and the assurance of some bonus as part of your compensation is built right into the contract. so if we think that the companies made bad choices, and want to abrogate those contracts, we can do that, but there is a cost, and people signing a contract to agree to work are entitled to get what they agreed to. and again, it is a very dangerous business. we're all upset about the banks and the economy. but when we come in and watch are punishing people by essentially cutting their pay and limiting their pay, because we are unhappy about things that happened, it is a dangerous business for the government. the sec would set up the framework for the structure, and it would be an annual stockholder votes to come out with proxy each year. there will be a box to check to decide whether to approve.

cutting pay is really a poor way to manage. you have a ceo who is not performing well, and that does happen in corporations a lot more than people think. if you have a ceo who is not performing well and cut his pay, you will have an unhappy ceo, a bad solution. focusing on pay as opposed to performance, and how the company is doing overall, it is a bad way to go. whether the ceo goes with them depends on the structure. a lot of times, high-level positions have severance packages of various sorts, and that is something negotiated going in. in other words, the ceo is types -- typically a hiring away.

if they go to a new company, and of times they will say, hey, i do not want you to tell me goodbye in a year or two. so that is part of the negotiation going into hiring decisions. caller: good morning. i would like to shift a little bit to corporate governance come and the issue of the capital gains holding. many executives are compensated in the form of stock options, and we also have shareholders, who under the current short holding perio for capital gains, and neither one of them has the incentive to manage the company for long-term viability rather than short-term stock valued -- values. i would like to know your

opinion on that. guest: i guess what i'm understanding is -- caller: i did not think the government should do it. i think they should extend the holding. for capital gains out to about a year. guest: there are so many different ways to pay executives. you can do it with a restricted stock, stock options, a whole lot of other things. one of the government concerns is that the variety of choices out there are often crafted to set a particular company and its strategy. so if you have a growth-oriented company, they want the price going up on a fairly rapid place, but if you have a consumer goods company, you do not expect it to generate

income. if they say this compensation is that in general, it will take with options for private companies to decide how they want to reward their investors -- their executives and their investors. it is the same with investors. some buy growth stocks opened for rapid growth, others by long-term stocks, wanting to preserve value and generate income. those are decisions that individual investors make, and i do not think the government should be in the position of saying everyone has to buy these conservative stocks that do not lose value and generate income rather than gross. -- growth. more money for executives means more money for the average worker. one of the things is an issue of envy. i have never made a huge amount

of money, nothing approaching a million dollars a year, and if you look at those salaries, you scratch your head and say, "what could anybody possibly do that is worth 20 times more than what i do?" that is one of the mysteries of a private market. if the government is in the business of leveling everybody down, i think it will take away from the dynamism of our economy. host: where does the board of directors fall in, and worker relations between the ceo and directors come together? guest: well, what this bill would do is require -- the border directors typically has a presence of top executives and outsiders who do not work for the economy, and this bill would require a compensation committee composed of outsiders,

meaning that the ceo would have no voice in his own salary, but also no voice with senior executives, and to me, that is a recipe for having a poorly managed company. you want to see no -- of the ceo -- of the ceo -- v. -- the ceo to consider it. host: you are with david mason of the heritage foundation. caller: mr. mason, the heritage foundation pushed for policies that got us into this mess. corporations crashed the entire world economy. why should the american people believe you now? you blame it barney frank, one person, when republicans had

control for the last eight years. you did not say anything about the orchestration of the mess with enron and the rest. your comment about ceos making 10 times more? they make 300 times more than the average worker. this is ridiculous, these lies you are telling. guest: i am sorry that the caller things we're telling lies, and i am sorry we disagree. i think barney frank has some bad ideas. but because of the economic crisis is complex -- the causes are complex, and i wish we were able to blame that organization for the choices. a lot of the choices came from the government itself. the boom of subprime mortgages related directly to government

policies that discourage banks to issue those kinds of mortgages and it encouraged -- encouraged banks to issue those mortgages and the securities going along with them. when it went into play, economies collapsed. there can be serious questions about what the causes were. . . host: one more call. this is our republican line.

caller: this is brian. i believe in the sanctity of the contracts, but i have a problem with the hypocrisy of contracts for the uaw workers were they have assistance from the government, but those contracts were meaningless. they were to be broken. the biggest cheerleaders for breaking those contracts were the wall street bankers themselves and those from the heritage foundation. that is hypocritical to say that the contracts for average, middle-class americans, contracts that provide them with health insurance, should be broken while we should protect contracts for millionaires.

that is a hypocrisy that should not be allowed to stand. guest: i am not sure what contract the caller is talking about. he is probably talking about the bankruptcy process with general motors and chrysler where there were issues related to the employee health benefits. i do not know how that relates to the particular issues that we're talking about a year. if a company goes bankrupt, then all of its obligation, whether to the ceo or employees or others, are up to the bankruptcy court in successor. in fact, what happened in the auto bankruptcies is that the health plans were taking care of. the employees may have different benefits now, i am sure there sorry about that, but it is not as if it were left without health benefits as a result of

that process. host: you could go to the heritage foundation website. david mason is a visiting fellow. thank you. guest: great to be with you. host: we will talk about race relations in the united states. we will be joined by joe madison. they will be our guest coming up next. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

>> on c-span radio, lbj radio calls. this is today at 10:00 eastern on c-span radio. >> the senate judiciary committee voted to recommend the confirmation of sonya sotomayor as supreme court justice. next week, her confirmation mousse to the senate floor. live coverage of the full senate debate on c-span to. coming in october on c-span, tour the supreme court. >> george with signed the

declaration of independence spirited he was also murdered. bruce chadwick on c-span. >> enjoyed the conversation with npr and fox news analyst on both tv. >> douglas brinkley looks at the first president. this starts at 6:00 eastern and -- on c-span to on book tv. -- cspan2 on book tv. >> how is c-span funded?

>> i have no clue. >> maybe government grants. >> i would say donations. >> advertising for products. >> public money i am sure. >> how is c-span funded? america's cable companies created c-span as a public service, a private business initiative. no government mandate, no government money. >> washington journal continues. host: a discussion on u.s. and greece relations. we will have ron williams and joe madison. thank you very much for coming in. mr. matheson, what did this week for the last couple of weeks revolving around statements by the presidents and concerning mr. gates and the officer, what did this say about u.s. relations? callguest: there are still raw

nerves. i am thinking about going to cambridge with our show. we are working with nacp and other individuals to have what we would refer to as a truth and reconciliation town hall meeting pitted the reason is that we have to finally reconcile the remnants of what has existed, not only in this country, but globally, for centuries. the only way you do that is to have to be very truthful on both sides of the the issue of race relations. it is not just a national issue. it is not just cambridge, but it is a global issue. guest: i think it has taught us about individual experiences. how we view the police. how we trust them and how they

impact our lives. we have people that live in communities and interact with police on a daily basis. they are in school together with the kids. there is a connection. if you have a certain segment in society that does not trust police officers based on history, the media, and i think what professor gates showed was his relationship and his level of trust and police officers. the police officer was just doing his job. professor gates was in his home. we can understand why he was upset, but still, someone called to report a burglar. what if it was not professor gates and his home and they did not go to the home? that would be a case of may be racism. but the police officer did.

he needed to try to cooperate. it goes to how you view police officers and officers of the law in this country. that was not a situation about race. this sad situation is that the president himself got involved. this is a president who has not used race. when the president said, he sort of felt obligated, but he has to realize he is president of the united states for all look the people, but when he used this inflammatory comments it was more towards working class america. americans were offended by it. i think it damage the president. he should have never been involved be, even though his intentions were good.

what we have learned is that while some people saw this as an issue of race, most people saw it as a police officer doing their job. sometimes this just blows up to a place where we're having this discussion today. guest: i would agree and disagree with various points on this. i interviewed professor gates. matter of fact, one of the few people and talk radio that went into great detail with him. i agree, he had come off of a long trip from china. he was not feeling well. he found he could not get into his house. he was frustrated. he said it was not so much is a relationship with police, it was how he perceives the officer approaching him, and the fact that the officer had said to him, and we found out now inaccurately, that it was two black maen with backpacks.

we now know that is false. the woman who called said she went to great efforts not to describe anyone because she did not know. i have the police report year. i have the incident report here. the officer has a real problem. right now he has to explain why he falsified his police report to explain his conversation about the description of the people who broke into mr. gates's house and he never had that conversation. that is a fact. that is a real problem. it is part relationship. i play a humorous pieces that richard pryor once did about relationships that african american people have with

police. my point is, where i agree with you armstrong is that you are absolutely right, too much testosterone. the officer should have said to mr. gates, once he identified that he lived here, sir, here is my name and my badge number, i apologize if we cause you any problem and if you need to file a complaint, do so. i agree, a professor gates, and maybe i would have settled down if my wife was with me, but i have been in many situations like this where it depends on how you are approached by people who are obligated to protect and serve. guest: i do concur with mr. matheson on this point. despite the comments by mr.

gates with the issue of racial profiling. he should have taken a high road and not arrested him. i do not think he should have been arrested. however, i think the larger issue is culturally how we as americans see ourselves. i do not see myself culturally as an african american. culturally i am an american. i can understand culturally why many american blacks identified them as of african american spirit and there is the african- american church. there are historical black colleges and universities. sometimes you are inoculated into the culture. for someone who grew up in american black church and attended a black university, my

value system and the things that lead in as a conservatism -- as a conservative and republican, my values are different. i hang out with people that are reversed. sometimes our job and our environment for the -- force us to interact with different people. you do not see people with different backgrounds and races in your home and on vacation but you. the problem is we do not get to know each other, because even though racism is over. barack obama has been elected president, we still elect to segregate ourselves. it is not just black people. what happens is we assume because someone looks like us, we get along with them and trust them better. that is not necessarily the

case. we just do not take this time to get to know one another. until we interact with each other, we will always have this issue. host: let's put the phone lines up. cspanwj is a twitter account. guest: we are americans. we had 9/111 everyone was to get there because the people who attacked us did not care if we were black or white. there is no question of that. robertson ticket does not wish you as an american -- your birth

certificate does not wish to as an american. i think you are right, we do not get to know each other. one of the things that i say on my radio show is that in america we are culturally conditioned to believe that one group is superior, one group is inferior. unfortunately, that is part of the culture. the manifestation of that cultural conditioning and this speaks to what you are saying, is that one group undervalues, underestimates, and marginalizes another group. what we have to do, and i think i understand where you're coming from, is we have to understand there is no dominance. we have a problem of racial dominance. we used to have this legally. we now have to factor appeared dead -- now have defacto.

my daughter just got married and it is an interracial marriage. those kids were in the wedding and did not care who was what. i have children who are african american who you can't tell them you can't do anything you want. we had changed. in large part, i agree with you. we do have to get to know each other, but i am not going to change my heritage. it would be absurd to sit here and tell frank sinatra, if he was a lot olive, you are not it- american. he would say you have to be out of your mind. he was proud to be an italian american as much as he was proud to be an american. guest: there is nothing wrong

with saying you are an italian american. a jewish american. a long as it does not mean anything. it says nothing about you. as long as you feel you are better than its rigid as long as you do not feel you are better than someone. -- as long as you do not feel you are better than someone. there is a part of society that because of what you look like it applies a certain class. guest: racial dominance. guest: children do the best jobs upbringing children -- children doing the best job of bringing their parents at the shackles. guest: with all due respect, from the beginning of the constitution of the united states, this has been a major

debate. it was a natural progression. lawsw who are what creates a foundation. host: earlier this week, eric holder making comments about race as well. let's listen to what he had to say and then we will listen to your comments. >> i was a young college student driving from new york to washington. i stopped on a highway and was told to open the trunk of my car. the police officer said he wanted to search for weapons. i remember thinking how humiliated i felt. al angry i got. >> have we reached a point where law-enforcement is color blind? >> not yet. i think we are certainly at a much better place than we were. i think work remains, but there is also work that needs to be done in community of colors. i think people too often want to

assume that the police or people in law enforcement are doing the wrong thing. they see police policies as a misguided or directed only at the people of color, when in fact, that is not the case. host: let me get a quick comment from each of you and then we will take calls. guest: police officers are human. unfortunately in our society when you think of a serial rapist or a pedophile, you think of a black man. when you think of someone who rapes, you think of black men. when you think of crime in this city and someone to stop, sometimes that is associated with being black. i think sometimes in police training they are taught that many of the culprits of the crimes are black men police

officers are supposed to have the judgment and experience to make sure they should not stop someone just because they make assumptions. they should have real facts. the difference with me is that if eric holder is thought by a police officer and a see that as rachael -- racial profiling, that does not say that that will happen to me. that is an individual act. i have not been profiled. i have not experienced this discrimination. just because the color of my skin i cannot say that is my experience. everyone assumes that is their story to. that is where i draw the line. that is not my story. it happens, but it does not mean it will happen to you. guest: i agree with 90% of what

he said. armstrong was very fortunate that has not been -- that he has not been racially profile. stories. the bottom line is that when it does happen to individuals over and over again from state to state, border to border, then the question becomes, what do you do about it? that is why i want to get to the point of truth and reconciliation. i do not think the assumption is that it happens to every african american. as a matter of fact, i know from people calling in to my talk show, but i say very briefly that we thank god that we live in a country where 50 years ago you could not do anything about it because of public policy. today we can respond to it to

make sure it does not happen to an eric holder and hope that you will not have that experience at some point in your life before you get too old. [laughter] caller: good morning. i have to disagree with mr. williams on a couple of points. when the officer -- if mr. gates did indeed do something wrong and the officer was doing his job, then i say arrest him and charged him with whatever he did wrong. the was no lock broken, and he also was not doing his job. -- if there was no law broken, then he also was not doing his job.

also, the officer has the power. they have the power to arrest you and shoot you. they have the power to do these things. the average citizen does not have these things. i think it is the officer who should show restraint. guest: i respect what the caller is saying. i do believe that. i emphasize that the officers should not have arrested professor dates. he should have taken the high road from his training and realized he was off to that of the home. -- he should have taken the high road from his training and realize that he was the occupant of the home. caller: congratulations on your daughter's wedding.

guest: i am broke now but thank you. [laughter] caller: first of all, excuse my ignorance, but i really do not know the purpose of the congressional black caucus. if everyone is working together, why is there a separate organization, and what do they do? second question is, how can you guys have a question -- a discussion on race relations without a white guy in their? guest: i find that interview -- interesting because when i interviewed the president of the nacp in cambridge, i found interesting that she had only been invited on one of national talk show to discuss any complaints that have happened prior to the gates situation, so

i ask myself the same question, how can you have this discussion about cambridge and not talk to the head of an organization who probably received a lot of complaints? she also said to me that the city manager, not the mayor, they have been pushing the mayor of more than anything, but that they were putting together a commission. to her knowledge, there had not been one person of color put on that commission. i hope that changes. the reality is that armstrong and i are very capable of having this discussion from a perspective that often is not heard. it should be heard a gimore oft. there are agreements and disagreements. the congressional black caucus is like any other caucus.

there is a sedan darfur caucus that i work on. there is a women's caucus. there is a hispanic caucus. there are public policy issues that we certainly have in common, but there are times when they are impacted with issues that are important to a particular group of people that have to be addressed. i forget how many millions of people that the national black caucus represents. they represent many white americans who live in their district. if unemployment is twice that of the general population, and they get together to discuss what type of legislation we will

address. armstrong and i will just redid were just discussing about the artist tax or radio attacks. it impacts clear channel one way, but it impacts minority radio stations another way. that is why you have caucasus, so that people can look at particular problems and then come out to the general body and make sure they are incorporated in any discussion. host: someone on twitter ask is that race or class more of an issue in the united states? i would ask if they are intertwined. guest: when you think of minorities you think the people who are disadvantaged and did this sort of synonymists this -- synonymous with black people.

i think the issue is class. i think there is a grievance class that feels that they have not realize the american dream. we have many immigrants coming from abroad. and they have sunday immigrant song to the point that they are successful. -- they have sang the immigrant song to the point that they are successful. i think the issue is certainly with class, especially in cambridge. i think something we do not talk enough about is the cap and gown issue where we have an ivy league school in the middle of a working-class community. if you have the cambridge police but you also have a harbour police. had to harvard police and call to the situation, you would have never heard about it. they protect embarrassing

situations from the university. if you have someone who is a working-class person and comes in and sometimes there is an elite mindset that how dare you come in my house? how dare you arrest me, this working-class person? i do think in many ways that it is more of an issue of class, and people do not talk about enough's. -- do not talk about tit enough. this situation had nothing to do with race. it had to do with class and had to do with the procedures of the police officer doing his job. guest: i would say the reason you heard about this is because it was a professor gates. this type of thing happens more often than we shearer about it. in a way, it had had been john

doe, maybe even joe madison, we would not have probably heard about it. i guarantee you somewhere in america this has happened. these other kinds of calls that i am getting. i disagree with you about a harbour police. there was an incident in harvard and we talk about it with a harvard police were they stopped a young teenager who was taking a walk off of his bike and harvard police pulled a gun on him and made him show identification. he had to pull out a library card to show that he lived in cambridge while the guns were drawn on him. that was the harbour police. -- teh harvarhe harvard police. cambridge police used to train

their officers that people who were reduced to eating cayenne papeepper were immune to pepper spray. the police officers in cambridge were taught this in training. we have a real problem here. the good thing that has happened here is we now have it on the surface. we should honestly look at it and discuss it to prevent these kinds of things from happening, whether it is someone with the prestige of the harvard professor who happens to be one of the most 25 influential people in the country. guest: i do not want to disappoint you. most people in this country could care less about race. they could care less.

guest: i think he is absolutely right. at this point in the stage, most people are trying to figure out how to get a job, keep a job, get health care. but there is a pocket that keeps raising its ugly head. i want to finish one other point, and that is, and i do not want to gthis to go by, and thas sergeant crawley has a bigger problem. that is, why did he interject race and to his police report when it was not there to begin with? that is the explanation that he has to have. it is right here. even the ladies who held a news conference is lying -- either the lady who held a news conference is lying, or the sergeant falsified his police report. if he did that and interjected

to every zero black men with backpacks -- interjected two black men with backpacks, why was that put into the police report? guest: in the beginning the person who made the call was not lying. it was not true. i have not going to be so quick -- i am not going to be so quick to further inflame the sergeant. there is so much we do not know. the problem is we want to know too much and we want to make assumptions. i actually believe -- i actually believe that he is decent, like most police officers. if you know his history as a

police officer and the thing that he was involved in, he does not strike me -- and i could be wrong -- that his goal was to pick a fight. there is so much that we do not know, and until we know the rest of the story, i am not going to say that for some reason he wanted to believe that these were black men with backpacks. guest: i am not implying anything. with all due respect, i am not implying anything. i am stating facts. guest: i do not understand where you're going with this. guest: do you realize this is an official document? this is what calls people to get arrested. i am saying to you, armstrong williams, if a police officer on wheels a false report that

allowed you to end up in court, and you had to defend yourself based on a false statement -- guest: what were his intentions? guest: they have to be reviewed by a court. now i am getting angry. i will tell you why. i am stating facts. do not interrupt me. a police report is an extremely important document. i have had police officers called me all week long to say the biggest mistake that an officer can make is to file a false police report. guest: all i am asking is why would he filed this? guest: if i was a defense attorney that would be my first

question. caller: good morning, gentlemen. thank you for inviting me into this conversation. i think the question i asked talk to the screen about has already been answered. i will ask it anyway and i have a follow-up question based on the police report. my first question is really simple for both of you, which is simply, once it was established that the professor lived at that address, should he have been arrested? this is a question that can be answered with one word, yes or no. guest: know. -- no. guest:no, absolutely not. caller: you have a police report from the perspective of the officer on why he was arrested.

, if you are putting handcuffs and a police report is written on you and you are taken to a jail and booked, why aren't those charges taken to court or they can be reviewed? why were charges dropped over something -- if it was justifiable to prevent cuts and taken down and put him, why did it charges disappear when it looks like the report may have been falsified? guest: i am not a lawyer so i am on dangerous ground, but i believe -- there is a 1976 decision, commonwealth verses richards. in which it states the supreme court of massachusetts states that an individual cannot be arrested for verbal abuse of a

police officer. it says the jury instructions used by the massachusetts court spell out three very important elements that must be proven beyond a reasonable doubt in order to get a guilty verdict of disorderly conduct. i believe, i do not know this for a fact, but based on lawyers i have talked to andy superior -- and a superior court judge said that this prosecutor knew that this was not a good a rest. -- arrest. that is why the charges were dropped. as professor gates said, one of the reasons he did not come outside was there was no search warrant for the officer to come

in, and his soon as he stepped outside there would be possible, probable cause to arrest him under disorderly conduct. it would not have held up in court. guest: i actually think i answered the question i was trying to get my colleague to answer. while we're hearing is that this is not over. there may be charges filed further. that what i do predict that is what i was trying to get at. -- that is what i was trying to get at. guest: herve -- there may be a review. i talked with police officers. one said that he suspects that the sergeant might end up resigning. i do not know. host: this is our democrats

lined p and. caller: i do not think it is a race issue, it is more of the constitutional rights issue. a lot of people assume that you have to cooperate with the police officers if you are asked a question by a police officer. that is not true. i think the fifth amendment protection from self- incrimination. the burden of proof relies upon law enforcement and the court system. the burden of proof lies in them. the professor did not have to prove anything. there had to be no evidence of a break in. he did not have to prove it was his house because he did not have to prove anything. this relies upon the official. the fourth amendment protection from illegal search and seizure. you have to have probable cause and the search warrant to enter

someone's home. when the sergeant arahead enterd his home, she was -- he was going against the constitution. guest: the bottom line is that the only way the officer could have been assured that it was not a burglary was to actually communicate with mr. gates and that was only possible by going into his house. guest: as i listen to all of this, i am convinced now beyond a shadow of a doubt we need to get into cambridge, and begin to address this issue and a very honest way. i am convinced that all we have

to do in this country now is get rid of these little from its, these little pockets that keep bubbling up -- we have to get rid of these little pockets that keep bubbling up. our children are there. they are there. i think we have too many issues. i would say one thing about president obama. what he did was a brilliant political move. host: you are talking about the beer summit? guest: i am going to put it in very simple terms. he stepped in dog poop, and he had to figure at a way to clean this up when he made the comment stupid. he needed police union support. he has eric holder dealing with

issues of racial profiling. he had to find a way to get out of it petted it was not president obama who invited crawley to the white house. he had to get himself out of this so that he could focus on the health-care issue. he had had his summit. he had this photo opportunity. he has wiped his hands of it, and now we're sitting here discussing it and he is not going to address it anymore. guest: this will damage the president and the long run. -- in the long run i like the way joe explains this. i know many people who would love to say to the white house

said they would love to come to the white house. the president wanted him at the white house. it was his idea. guest: the president seized on this. he said immediately, i am going to have it -- what came out of it? we do not know what joe biden did but gates did not apologize. the biggest thing out of it was that the president did not have an american beer. guest: i cannot believe we had a beer discussion when we are dealing with health care in this economy. do you think this kind of -- do you think this had this kind of importance? guest: i just said the opposite.

we will not care of of this. come labor day, this will not be on the radar. i am glad to talk about health care and afghanistan. i am going to be talking about the economy. do you know what has remove this issue right now? the clunker legislation. people are wondering, should we put to more billion dollars in the? has this stimulated the auto industry? i guarantee you that on labor day we will not be invited back to discuss the beer summit. guest: the american people did not care about it, but the white house did. host: anthony on our republican line. caller: the morning. i was born in 1942 and married in 1961 to a beautiful black

woman. what bothers me is these republican friends and people like clint backed -- and people like glen beck. i am still a republican, and if it keeps going like this, armstrong -- let me say this to you. you talk about the sergeant and the professor. the sergeant had to a known the professor. he has been around a long time. he had to a known that face. he was in his house. how can you say that he could just arrest him like that when

he is in his own house? guest: i think joe and i might agree on this. there are people in this country who might not recognize barack obama. it is true. you might find this hard to believe. [laughter] it is very possible in the cambridge police -- of the cambridge -- it is very possible that on the cambridge campus they might not know the professor. guest: i laughed because there is a guess that said if barack obama's came to a particular place, the difficulty of getting a cab the sewe sometimes have, s that if he did not come with his bodyguard, he might be -- he

might not be able to get a cab. we have to appreciate and learn each other's cultures. ani pride myself in knowing different culture and wanting to know and learning about different cultures. i too often think we are culturally conditioned in this country, not to really appreciate each other's cultures as much as we should, but i agree with you. i do not think sergeant crawley new kreuz he was. it may not have made a difference. sometimes african americans who have status are often more profile than those who do not. there is such things.

there is resentment on the part of people. you look at me like you were surprised. resentment against the fact that you are and it's cheaper. there could be a combination of both. there can be, and these are pockets we're talking about. i also heard people and officers have called me up and i heard a talk-show hosts say this, that he said had been arrested for something called, content of cop. i said, what is that? it is not a law, but if a police officer feels that a person is being contentious, we will arrest you and then we will deal with that later on when we get you down at the station. that often happens.

unfortunately, not only to black people but sometimes to white. guest: i think a huge disservice has been done to officers of the law. in terms of making people believe they cannot trust police officers they may get a wrong sometimes, but there is never a police officers and tension in most cases, it is to shoot unarmed citizens that they wear the badge to protect. i think we have done a disservice by saying this. there are people that do not trust police officers because they do not know them, they do not want to get to know them and when they are interacting with and they are already precondition. they are insecure. that is not good. guest: i agree 100% with everything you are saying. what you do not do is when you

have officers who do break the law, food to file false police reports -- puente to file false police reports, -- who do file false police reports, it needs to be dealt with. i have a list here in new york city -- i would be reading for the rest of the at work. -- reading for the rest of the hour. a lot of people's trust is based on these experiences with a small number of police. a rotten apple and a barrel can ruin the entire barrel. what you have to do is we've the rotten apples out of any department. host: date on our independent

line. go ahead. -- dave on all our independent line. caller: i hate to use cops as an example to show cops, but they had said that in the black culture a lot of times the kids are raised that the cops are going to get you one day and stuff like that day. so it is in a self-fulfilling prophecy -- so is it a self of billing prophecy? guest: this is why we need to know each other. there may be some families that might do this type of thing. i think those families do a disservice to their children.

but i remind, when he brought up o.j., the person that came to my mind was mark ferman. he filed a disability because he did not like black people. he wanted to be paid disability. here was a police officer who had years in the police force and supported by his fellow police officers that did not like interracial couples. he would plant weapons on them. these are the experiences we have to do well when with. we are a lot better than we used to be, but again, i think armstrong would agree -- i would never -- i was put never taught to disrespect police officers. they would come to my elementary school and teach us.

maybe that is what needs to be done more. there needs to be more community policing and all of our communities where people get to know the jobs of police officers. guest: he certainly does not need any more beer summits. it has to be worked out where people are. it is being worked out every day. most people get along and understand this. if you will always have the pockets of racist and ignorance in this society. that will never change. host: does the president have a role to play in a race going forward? guest: the president has played this right, every since the jeremiah wright fiasco during the campaign and his race speech, which many felt was brilliant. the president is president of

all people. when you speak about injustice, you speak about it to all people. i do not believe there is such a thing as a black problem, a white problem. there are problems that affect people in different ways. they are just problems. the president is there to address the concerns of the american people, whether it is crime, health care, all americans are directly affected by it. he has to speak to issues. he cannot put them in categories of race and gender. these are american issues, and we must address them as americans. guest: i want to stand up and salute, but the reality is we have disparity in health care. we have individuals in these pockets that sometimes find themselves in position of power

and responsibility. when those kids, for example, and the suburb of philadelphia got thrown at the cool, they got thrown out because they were the little black kids. -- got thrown out of tehe pool, they got thrown out because they were little black kids. thank god those people were held accountable. yes, we have a race problem in america. the question is, how do we eliminate it? that is the real issue. we also have a very general problems. wb deploys was right -- w.b. duboise was right. we are americans and we strive to be american. that is why my grandfather served in world war one and my father in world war two.

what was that is that when my father came back, he could not vote in mississippi. he could not vote until he was an older man. so we had to correct those situations. we have now progressed tremendously. there is an ongoing correction that we must always be conscious of in order to get to the perfect union that we want. host: one more call. caller: thank you for taking my call. i appreciate it. good morning to everyone. the only individual i am familiar with is joe. my concern is the opportunity for adults discussion over race

was lost with the whole beer summit due to the immaturity of adults to talk about race. i will give you an example. talk radio and rhode island, one of the commentators joked that we spent 3.5 hours talking about the kind of beer. it is like are you serious? if you should be embarrassed at 3.5 hours went by with the opportunity to talk about race relations or nationally and you talk about beer. many made fun of the president. question who was paying for this? all of the typical chatter that you get from the fringe right -- host: