>> eliot: if mitt romney witness to win, he has got to build a coalition that goes beyond a party of angry white men. so far he's not doing so well. the ginger gap is yawning and another critical voting bloc latinos seem not to be in his camp. the g.o.p. platform adopts a hard-line approach on immigration and calls for the completion of a border fence and end to sanctuary cities and nationwide e-verification system that makes it harder for undocumented workers to gets jobs. and it was the republican party to that blocked panels of the dream act this year. he is has consistently lagged behind the president far hyped. the latest poll has obama leading romney of latino voters 68% to 27%. as the republican party convenes in hurricane-bound tampa, it's

hard to see that hispanic voters will be pulled in theory catch. joining me now luis guttierrez, democrat of illinois and member of the congressional hispanic caucus. >> thank you for hair having me on your show. >> thank you for being here. what does he need to rain. >> when they pulled back proposition 1070 in arizona and alabama immigrant law said that he's listening well. what does the platform do. look at the juxtaposition right? the democrat, the president said to dreamers, 1.5 million of them. you came here as children.

we're not going to punish you any more. you studied hard. let's let the paperwork catch up to you. tens of thousands of them lined up. and tens of thousands of them continue to fill out their paperwork to incorporate themselves. the republican party we support 1070 in arizona. wait it gets peter. even if you're in illinois, california new york, as mr. perry understands out in texas, past laws says young people who graduate from our system can go to college and pay instate tuition. no they're saying an end to all of that. >> eliot: even rick perry did that. which shows you that there used to be one or two thinking republicans who understood inclusiveness was a good thing. >> you know what rick perry said? i come from a border state. i understand this community. i understand what needs to happen. he was the leading charge against him and saying you're providing taxpayer assistance to

illegal aliens. >> eliot: the republican platform seems angry at every term. there is nothing positive or uplifting. last week when you were on the show when you were beaming and looking at so many kids signing up to take advantage of what the president has done, it was an affirmation of what was great in this country. the republican party and their platform just the opposite. >> look at the l.a. times. polled, a question of the dreamers, 66% of of the american population not only thinks that we should pass the dream act to keep these kids permanently. they believe they should become american citizens. the american people are just not mean. >> eliot: 44%. that's the percentage of the latino vote that george w. bush got. 27% the percentage that the mitt romney is polling right now. that trendline spells disaster for the republican party. and put aside the political outcome, it speaks to the lack of understanding of what the

public really wants. >> well, number one on the issue of immigration when it came to george bush, he sent two of his cabinet members down to the congress of the united states to pass comprehensive--we have to give him that. and mccain while he reversed his position, he had progressive position. this is the most extreme republican nominee that we have had in our modern history. the most extreme is this one and he expects to do better. he's going to do bad because if you want to open to the mind of the latino immigrant community first you have to open their hearts so they'll live to you. but if you're going to be mean to immigrants, they shut you down on economic issues and a whole host of other issues. they're not going to listen. permanently shutting down the door. >> eliot: some of the difference that you alluded to, rick perry he did a heart. george w. bush, there was a decency to him and on this issue

in picker he reached out and showed leadership. mitt romney has not shown onions of leadership on any issue. any vocal minority or majority within the republican party he has caved to them in a moment. not one ounce of leadership. i think that's what the public is seeing. >> and you think--we understand primaries, right? usually they move to the center. they try to bring in some of those positions. i really didn't say that. this is what i really meant. they're not doing that. they're doubling down. but they understand everyone--just about any political analyst or pundit will say if you want to win the election you got to get a certain percentage of latino votes or arizona new mexico, colorado florida, come outside of your reach. >> eliot: the romney campaign itself has said they need to get 38% of the latino vote. they're at 27% right now. these numbers move, but there is no way they're getting a significant jump in latino

voters given what they're articulating. let's talk about politics local to local representatives, is there a way to get the democratic party back to the majority given the dynamics. >> it's going to be very very difficult. we have advances, i know, in california. we have advances here in the state of illinois. there are going to be more democrats. you're going to see more democrats out of texas. but it will be rather difficult. but, hey you know, i'm going to do everything i can. >> eliot: you're the eternal optimist. >> and nancy pelosi is doing her job. i was talking to my colleague in cal. she suggested luis, why don't you and i do events on the dream act and on this deferred action and we go to four democratic districts where there are non-hispanics running for seats that we can help by improving the latino turnout in those areas. i think we're going to improve the latino turnouts. >> eliot: i take it as a given right now president obama will be re-elected. i don't see any path of victory

for mitt romney. >> i'm with you. >> eliot: the senate, i don't think the republicans can take it back. i think with what has happened with missouri and one or two other states they've eliminated their chances. if we could get the house. who would have thunk this two week ago then we could be in a position to push this through. >> i think we support non-hispanic democrats for congress. a lot of times people say, well, go here. i say look, my fellow they don't need my help. they're going get there. we need to take the non-hispanic nominees and make sure that the hispanic constituency is there. but even in the democratic party they are beginning to understand i know candidates who lost primaries but they said they were going to go soft--and harry

reid the more me beat him up, the more he doubled down on immigration and the better did he. >> eliot: let's stay in the house. speaker boehner has been held hostage by the tea party republicans. at a certain point will he say to them you have now destroyed the national party. you know speaker boehner far better than i and will he reach across the aisle to get things done. >> as difficult as he is, then his speakership then comes at risk and he might not have the votes. we know we have republicans who on the one hand almost caused an international crash of our monitory banking system only to skinny dip out in the sea of galilee. they did that the next week. >> eliot: you're not suggesting a lack of reason or rationality? >> i get it, that they come with this strong religious belief and christian and up right and you know we don't take any nonsense.

then they take a trip where jesus christ walked am? >> eliot: if you're saying that theology does not lead to good legislation. >> i don't think so. >> eliot: luis guttoris gutierrez thank you for joining us from your home city. >> thank you. >> eliot: judge richard pose near talks about why ceos

so, you guys grew up together. yes, since third grade... what are you lookin' at? not looking at i anything... we're not good enough for you. must be supermodels? what do you model gloves? brad, eat a snickers. why? 'cause you get a little angry when you're hungry. better? [ male announcer ] you're not you when you're hungry™. better. [ male announcer ] snickers satisfies. >> eliot: judge richard pose near laid the intellectual foundation for an era of deregulation but he has widely (vo) every news network will cover the convention. but only current coverage will put you at the collision of tv and social media. we'll provide unsurpassed insight into the most buzz worthy tweets, posts and pontifications, from the entire social stratosphere

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fruit just got cooler. fruit on one side, cool on the other. new ice breakers duo. a fruity, cool way to break the ice. >> eliot: few judges and legal thinkers are as prolific and persuasive as judge richard pose near. a sheer didn't of intellectual actual firepower he shifted the entire debate about law and economics providing the entire foundation for what became a movement of supporting deregulation and less government intervention in the market. but in recent years he has written and spoken a surprisingly different language. i had a chance to sit down with this brilliant and fascinating your rest. we explored his thoughts about what brought down the world economy and creating a class of untouchable ceos. >> the economic cataclysm of 2008 made many of us lay our world-view of finance, the economy, what did you learn from

it and what do you think we should all learn from it? >> one thing i learned is that macroeconomists know very little about the financial industry. that was shocking. the problem is economics has become heightly mathmetized. they don't have experience with the actual economic system, and they don't have that kind of interest. that's been a very serious problem. it's hugely complicated and brilliant professor, still, if they haven't worked in the business it's very hard for them to understand. >> eliot: in terms of government role regulators, did we have to step back in '08 and say something we were doing is fundamentally wrong. advocate of the deregulation movement, and i

made a lot of smart people a fundamental mistake, which is that deregulation works fine in industries which do not pervade the economy and consequences. the financial industry under girds the entire economy. if it is made riskier by deregulation and collapses in in bankruptcies the entire economy freezes because its runs on credit. that was a basic misunderstanding. >> eliot: you've written and it's fascinateing to understand these sectors they work because the consequences of the failure are acceptable or unacceptable requiring huge public investment. was the notion a flawed notion in terms of expecting people in the sector to behave in ways

that humans simply can't or won't? >> yes, going back to the 60s 60s the assumption was whenever there was a market failure the government could step in and remedy is, and conservative economists pointed out correctly that there were plenty of government failures. the fact that we had a market failure did not automatically justify government intervention. that was very sensible. but then as conservatism expanded there was a reverse. now it's assumes that government always fails and market failures are trivial. so the market was self regulating, and it would take care of all the problem--maybe not all problems, but most problems. it turned out, of course, that that wasn't true of the financial industry. the profit, motive, competitive pressures drive

financiers to take enormous risk. risk and return are possibly correlated, take risk, you have the large expected return. you may have disaster, but especially if you have very large short-term profits you can forget about it. >> i think it's fair to say over the past number of years we could get an agreement that our corporate governance structure has not fared well. there has been a general breakdown whether you look at ceo compensation or the failure of boards to know what is going on within their own organizations. why is that--how do we need to think about this, and how do we need to change corporate governance. >> i think the problem is that the directors are basically basically--they're appointed they really serve at the pleasure basically at the ceo. the ceo wants his pals, tokens, and

he wants people who are not going to rock the boat. these directors are compensateed for very little. i don't know how you deal with that. >> eliot: it seems to me analogous to the problems of voters and elected leadership in government. we have shareholders who theoretically have the power to shift corporate governance who have been disenfranchised or lacking in motivation to overcome a board that does nothing. how can we empower shareholders? what can be done to get them to be more activists? >> i don't think--i'm not sure there is anything that could be done. the problem with the shareholder is if you're dissatisfied with a company, the best thing is just to sell and sell your shares and go somewhere else because if you invest a lot in trying to change the company the gains are speculative and

is the problem. also if you have dispersed shareholder ownership coordination is a problem. so i don't what the answer is. maybe the best you can hope for is really vigorous competition in the product and service that force them to be efficient. but i don't think you're going to get much from the shareholders. >> eliot: a brilliant book that diagnosed the problem you just talked about exiting is the easiest root for a shareholder. voice is very expensive, and under taken by very few and loyalty sitting there passively is what we get. it has bred passivity which allows ceos to become imperial. does this mean we have an entrenchinged problem with the way with think about our corporate governance. >> i don't know, do other

countries have some answer. do. >> eliot: in an odd way the answer may have been private equity in the sense of what it has led to is displacement of corporate leadership by owners who don't actually own the company. maybe there is something to be said for it. >> yes yes. well, the takeover, yes. this has always been the possibility of hostile takeover. private equity is not hostile. it facilitates takeovers. that's a good point. >> eliot: reaction to my interview with judge richard pose near from stephanie mcclane. she joins me [ male announcer ] peppermint that cools as you chew. stimulate your senses. 5 gum. now in micro pack. admitted that that look, we were able to keep a lot of the folks because of the stimulus. >> bill: absolutely. again, do you great

work, judd. thank you. we'll see you again next

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hershey's drops. a lot of hershey's happiness in little drops of milk chocolate. and cookies n creme. pure hershey's. >> eliot: we're back live from chicago. you just saw a portion of my conversation with judge richard posner. where we discussed the current state of corporate governance. here to weigh in on this and other economic issues is reuters columnist beth mcclean. right here or somewhere else.

>> still right here. >> eliot: we'll figure that out. >> all the devils are right here. >> eliot: let's go through the points that judge posner made. one, deregulation failed. yet, he was to a certain extent the intellectual actor architect of deregulation. >> well, you have to give huge kudos for him to be willing to rethink his previous position. that's a definition of brilliance, to change your mind when the facts change. many are not willing to do so. that's impressive, i think. in ways that capitalism was supposed to function was a race to the stop. if you were producing a battered defective oh were duct then you were supposed to be squeezed out of the market. but when you look at mortgage lending to investment banks and credit rating it was an opposite, a race to the bottom. i don't pretend to understand why the reality was so different than the theory. but the evidence is undeniable,

and in order to continue to produce profits and please shareholders who demand quarter earnings, companies relax and relax and relax their standards. it happens in industry across industry. >> eliot: at a certain level there are many dimensions of this race to the bottom ethical and in terms of the underlying quality of the product and sometimes the two on the course were merged. maybe it's what we created we were comforted by moral hazard. we bailed out those who created these grievous errors and said we'll forgive you your sins. the short-term gain they got was so enormous even though they began to understand that there was risk, but because they knew there was a bailout coming, and an in fact, it was there they there there was a price to be paid and we encouraged that behavior. >> they said if i hadn't made these loans, i would have been

kicked out of my position as ceo because analysts would have said and investors would have said, why respect aren't you keeping up? why aren't you doing what everybody else is doing. in the push for more and more profits the question of what is right has gotten lost. >> i encountered this when i was ag and i spoke with folks who came in and said we did everything that we charged them with but they said we're not as bad as our competitors. they thought it was a defense. judge posner said it didn't work. we need to retry rethink it in certain sectors. they call it crony capitalism. which is true. is there a way to resolve that? >> i don't know if there is a resolution. if you're board of directors you believe in the company right? and like executives, you're serving as member of a board but you're also supposed to be

skeptical. i remember someone said to me, they had no problem finding smart people. but they had a really hard time finding skeptical people who would stand their grounds when everybody else said that they were crazy. how do you find enough of those people. >> eliot: group think is a problem. boards of directors who have been hand picked by the ceos as the judge pointed out are receiving a nice salary and often don't know what is going on inside the company. it's too easy to say yes. >> i come in as a journalist. you're presented by corporate pr and these beautiful presentations that make everything look rosy and completely understandable. getting under that even as a journalist when your job is to get underneath that is really hard. as a board member you're one stepped removed from the executive. you're coming in and getting their beautiful presentations. the idea that ail understand enough to get underneath that when the person giving the

presentation does not understand enough to get underneath it. that's a difficult task. >> eliot: the job we can't directors to perform is to be the skunk of the garden party. there is something impolite about it, but no one wants to do that. >> i don't know why, but as the world has gotten less and less civil, the business world has gotten so polite to the point of dysfunction. in that world if you can't say anything nice don't say anything at all it seems to apply across the board. i wish we could bring the essence of the political debate into the business board. that would be a good idea. >> eliot: the third domain that he talked talked about in this piece of clip is shareholders. it's their company. in a way we've gone through historic unfortunate transformation where ceos give themselves the privileges of ownership and shareholders are

losing those rights. how do we recoupe that for shareholders. >> it's a really tough issue. as you and i talked about before, most of the companies that are big money managers who own the stakes in these companies because it's no longer individuals, right. you hold your stock through the mutual fund and they're not going to take an activist position because they don't want to lose the company's 401k business. >> eliot: stop right there. you said something so important. the companies that the institutional investors that determine what to do and how to vote as proxies depend upon the ceo toss determine those company investments, mutual funds in particular, will be the beneficiaries of the 401k lists that the ceos make. they're bought. >> blatant conflict of interest. too much politeness prevails in spades and i'm not sure how you get around that to be honest. >> eliot: there has been renewed disclosure thankfully, of how

mutual funds vote their proxies. but what you're saying if i'm running--i don't want to pick on fidelity, but if i'm running fidelity, and i want to be the one listed for the 401k money so i make a ton of money i'm not going to do anything to get people upset. >> if you're trying to get honest commentary on a company you have to find a hedge fund manager who might be skeptical. you need to know people who will talk to you or you're out of luck. you're not going to get a money manager to say something. they don't want to lose their access. they don't want their firm to be hurt by the retribution that will be inflicted upon them. >> eliot: you think the justice department made the right decision on goldman. explain why in 20 seconds. >> because i think there is a huge difference between horribly unethical behavior and criminal behavior and i think unethical

behavior is worse than criminal behavior and i have yet to have anyone layout a convincing path of how you would layout criminal charges against goldman sachs. i think at a junior level inflicting agony on low-level people of the firm when it won't go any higher. >> you don't bring a criminal case at the low level people. the people at the top get off. i think you can bring a civil case against the entire country for inutahcal behavior. a conversation we'll have later. always brilliant, beth mcclean, reuters columnist thank you for your time. >> thank you. >> eliot: richard (vo) every news network will cover the convention. but only current coverage will put you at the collision of tv and social media. we'll provide unsurpassed insight into the most buzz worthy tweets, posts and pontifications, from the entire social stratosphere including you. join in, tweet us, and you could be a part of our on-air and

online coverage. >>now that is politically direct. >> eliot: we're in chicago, and we will continue with my talk with a legal giant, judge richard posner. our next topic of c c c c c c c c c c c c c c c c c c c c c c c c c c c c (vo) every news network will cover the convention. but only current coverage will put you at the collision of tv and social media. we'll provide unsurpassed insight into the most buzz worthy tweets, posts and pontifications, from the entire social stratosphere including you. join in, tweet us, and you could be a part of our on-air and online coverage. >>now that is politically direct.

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did today with judge richard posner the intellectual force who adopted moderate and even keynesian views in the crisis and rice t to power. judge posner took on originalism, the idea that the constitution can only be interpreted as it was first understood by the founders. the idea that provides the intellectual framework for the conservative faction that dominates our current supreme court. >> it's not in the order lexicon of public discourse but help me to understand how to interprets interpret the constitution. there are those who say the words must mean what they meant way back when. how do you look at it, and how do you think we as citizens should look at it? >> first to recognize it's very old. it's very old. it's basically an 18th century

document. the founders, the framers, these were very able people. that's all they were, very able people. their real ingenuity was creating a structure although probably has outlived its usefulness. the portion of of it no longer makes any sense. that was a screw up. but the basic structure very closely modeled on the 18th century english system. but with important innovations like having a limited term for the monarch the head of state another ingenius things like that having religious qualifications, it's a very important provision to the constitution. so it was good.

but they made it almost impossible to amendment the constitution not not impossible but almost impossible. as a result of the limited foresight of the framers and the difficulty of the amendment it has to be interpreted loosely. otherwise it becomes a straight jacket. so you can interpret it literally. you can pretend and go digging around in 18th century dictionaries what cruel and unusual meant and the right to bear arms meant. that's all fake, really. it has to be interpreted in light of modern needs. that's what they do, i think despite all their apparatus of historical investigation. >> eliot: you're right certainly the document has been interpreted to evolve with modern society. yet, there is still a very vocal

core who reject that. is there academic foundation weak or does this hide some other agenda, do you think? >> i think it--i have a very cynical view of it. if you want to change the law you don't want to as a judge or supreme court judge say i don't like the way the law is. i want to change it. i want to say that the law is actually different from what they thought. historical investigation has shown there have been big misunderstandings. i'm just an analyst. i'm not a politician. i'm just discovering the truth. so conservative justices and judges and academics who are dissatisfied with the law in court realize they couldn't just say we're going to get in power we're going to be like the war in court. we're going to be free wheeling,

but it's going to be in a conservative direction. instead, they say we're going to go back to the real meaning of the constitution. so we're going to be ultra restrained because we're texturallists. we read whatever the dictionary says, that's the law. no political persons involved. that has proven to be an extremely powerful rhetoric, very effective. it's blown the liberals out of the water. out of the water. you see the great failure of liberals in the second amendment right to bear arms because justice scalia majority opinion along historical stuff very learned--i don't think it's right--but very learned really, esoteric citations and then

justice stevens, the same historical stuff. he draws a different con clause, probably the correct conclusion, but we liberals fight on the conservative's turf. you can't win that because these historical controversies are indeterminate. people say yes scalia and stevens disagree. we don't really know who's right, but they're both doing what judges are supposed to do. they're just trying to find out what those words meant. not one of them wants civilians to be disarmed-- >> eliot: what should the counter argument be to originalism? >> i think a degree of candor would be refreshing. in which the judges said, look, we have to, we can't let the constitution be a straight jacket. we have to be candid and say, of

course we're departing from the historical understanding. >> cenk: and your view is not only would it resonate with the public, but would ultimately prevail because the intellectual integrity of it would be the better argument, the more persuasive argument than simply trying to play the historical game. it would be at best, as you say indeterminate. >> i'm paraphrasing, i think it's better to let the occasion occasional criminal run wild--let the occasional criminal run off than be complicity in violation of the law. that really all about you can say on many constitution am issues. >> eliot: we'll have more of my interview