from washington, "the mclaughlin group," the american original. for over three decades, you by

this latest report is a reminder of just what a deep mess the american public is in. it's three years ago allegedly that this recession ended. for most americans it doesn't feel like it's over, and this is a reminder, 40% of net wealth gone. >> 40% of wealth. that's how much the average american household hemorrhaged over three three years. 2007 to 2010. the federal reserve's s s s s s consumer finances is released every three years. this year's survey details how middle-class families' net wealth is tied to the value of their homes. middle-class wealth took a big hit during the first three years of the recession with the collapse of the housing market. in dollar terms, says the fed, the overall wealth of the median household five years

ago, 2007, was $126,000. that's overall wealth. income. financial assets and home worth. three years later, 2010, the $126,000 overall wealth had dropped to $77,000, almost a 40% drop in three years. $7 trillion in home equity was lost between 2007 and 20 10, says the fed. the housing bust with its accompanying mortgage defaults mostly did the deed. okay, fast-forward, march 2011 to march 2012. a one-year spread. housing prices dropped more, almost 2%. 1.9%. rob shapiro, bill clinton's undersecretary of commerce, tells us why the bottom keeps falling. >> we spent $1.2 trillion directly stabilizing the financial markets and another

$2 trillion indirectly through the fed stabilizing those markets. it worked. we spent virtually nothing to stabilize the housing market. those values continue to go down, and so we have increased inequality significantly through this event. >> question. have you connected these dots, pat, and if so trace them for us. >> first off, take all your stocks and bonds. 90s% of those are owned by the top 10% in terms of income. those folks can go down the roller coaster and come back up. but you take, with the housing market, that is the one big asset, take $250,000 for each person. when they lose it, they lose everything, john. and what continues to hold housing prices down is millions of houses sitting out there on the market. secondly, the people that got wiped out, you no longer can have no documents and no money down and all these benefits to get back into housing. you are out of that, and so that was the number one asset basically of the middle class,

and i think the people who have been saved in this recession are, frankly, it's not the top 1% but it's the top 10%. >> eleanor. >> the recent drop in wealth does have a lot to do with the loss in value in people's homes and that affects the middle class the most but, in fact, this inequality between the top 1%, 10%, and everybody sells the result of policies put in place really since 1980, and it has to do with tax policy that generally favors the rich, takes a bigger bite out of the middle class and the overall decline wages. president obama wasn't in the white house for most of the period that this report acknowledges. but the report does set up the dueling economic visions between the president and his challenger, mitt romney, and they have begun to put flesh on that this week. i think it's pretty hard for romney to talk about loss of wealth since's worth so much. i don't think he likes to remind people of that. he pointedly doesn't use the

word wealth. i think the president's policies really do respond to what this report seems to call for. >> vote for obama. >> well, yes, if you're in the middle class, vote for obama, absolutely. couldn't say it better myself. >> i don't think you are going to hear romney talking about it for the exact same reason that you just described. he's wealthy. but i think you will hear republicans talk about the fact that the median income has dropped $50,000. that's a lot of money, a lot of loss. everybody knows someone, not only have they seen housing prices crash but everybody knows someone who has had to take a pay cut, lose wealth, not just the housing mark. that falls on obama's shoulders. i do think you will hear republicans talk about that. >> i would take the opposite view on talking about wealth. if you're wealthy, you know what wealth is, and you can evaluate it better, and it's personal to you, and it would make sense. i don't think the american

people think any less of you as a historian of wealth or a categorizer of wealth or a definer of wealth or the tax components of it or the public good connected with it. i would think you think more. you're a billionaire. this is very true. >> look, i do think this country has always been a symbol of an opportunity to do whatever you can with your life, and people have -- a lot of people have made money, and that has always been a part of the american tradition. a lot of people have made a lot of money for many years in the middle class. the biggest store house of their wealth was their homes, and those homes have gone down and continue to go down well past the numbers you saw here, so it's well over 40%. it was the largest asset on the balance sheet of the average american family. but if you combine that with the fact that we have close to 30 million people who are either unemployed, underemployed or have given up looking for a job, you realize what dire circumstances have affected so many of the middle-

class people of american. >> the average american income has been stagnant, has been stagnant since about 1973. no real rise in wages. there's a number of problems, john. one of them is mass immigration by poor folks and folks that don't make much money coming in and competing with americans. secondly, globalization where 50,000 factories left the united states, went to asia, places like that, and exports to the united jobs. let me tell you, there's an active economic tree son, in my judgment, going on in this country from both parties for the last 30 years where the transnational corporation is the one for whom everything is done for its benefit including just what your introduction was all about. >> let's take a look and see whether this next gentleman puts anything in focus. jeb bush has been around, back in the united states, if he was not here, former governor of florida, and he's the brother of the former president. he has a sobering view.

"we're in very difficult times right now, very different times than we've been in. we're in decline. that distinguishes us where we are. we're in decline." now, decline is usually interpreted as irreversible, like rome in decline and just evaporated. >> it doesn't have to be irreversible to be a serious concern that he is raising. the fact is we have been in decline in certain ways. we've lost in part because of our processes of manufacturing. we've lost a lot of manufacturing jobs to other countries for global i will saismghts we have not kept up with the technology that has also replaced a lot of jobs. the blue collar jobs that we have lost, 6 million of them, have not come back. this has been not a recession but a man-cession. >> this is loaded with pessimism. we are not a pessimistic nation. >> that's correct.

>> we are an optimistic nation. have we lost that? >> no, we have a dysfunctional government that has not been able to address the key issues, like tax policy, like education. these are the kinds of things that we haven't addressed. >> that's where government policy becomes really critical. do we want to be a country where the government is going to support everybody and be the answer to all things or do we want the private businesses and private world to get our economy going again? which side is going to be more successful? >> first of all, it's not either/or. it's not no government or the private sector. i'd like to point out that george bush's brother -- jeb bush's brother george bush presided over this country for eight years where there was negative job growth. mitt romney's challenge is to say what he would do differently from george w. bush. his policies mirror bush's, which is lower taxes for the rich, less regulations. >> are you forgetting something in your acrimony against jeb

bush? not jeb bush. have his brother. that he lerred your tax rates and my tax rates and everybody's tax rates, personal income tax rates? are you forgetting that? >> john owe. >> it didn't translate into jobs, and that's what we're talking about. >> how can you look at the country and not think we're in decline? look at europe! >> decline means an irreversible, continuous state that leads to ruin. spangler. >> oh come on, you think we're there? >> it's a long-term process. >> it took rome about 500 years to actually evaporate. 500. >> a couple hundred. did the soviet union evaporated in, what, two years? >> you're comparing us to the former soviet union? >> i think europe and the united states are in inexocible decline. >> the united states is still

the best government. we have an open society, a functional society. and we do need a functional government. and we have not. >> for how long? >> a good decade. >> that carries us back to clinton. >> no, it doesn't. >> 2002 would be bush ii. >> all i'm saying here is that it's not over, this game, okay. >> right. >> we need a different kind of leadership in this country than we've had, including, if i may say so in the last four years, which has been a disaster, if i may say so. >> it carries us back to clinton, but not into clinton. to clinton. we're at the borderline. >> optimism always carries the day, and both the president and mitt romney are going to put forward an economic vision that will be optimistic, and, you know -- >> my optimistic content -- >> optimism didn't carry the day for rome. >> dream on. >> the question. can the middle class recover, yes or no? >> not with current policies,

no. >> yes, definitely, and with current policies it can, if the policies can be put in place. >> not under these current policies, no way. >> so a change in presidency might do in the. >> a change in the policies. >> don't we need to change presidents? >> in this case, definitely we do. >> by the way, i think romney wears his wealth with great modesty. >> actually, i think does he. >> he's a modest i go. >> absolutely. i really think he does. i knew him when he was governor of massachusetts, and he was a very -- >> what was that like? give me about a minute on it, half a minute. >> bain capital was one of the best companies to reinvigorate a lot of companies that were going down and he did that successfully and created a lot of wealth and a lot of jobs, i might say. >> he didn't create a jobs. >> i'm not going to average. i know about bain capital. >> he's got about $250 millionh

>> john, even clinton said his record at pain, eleanor, was sterling. sterling record. >> sterling, yes, did he. >> when did he say that? >> billa fine businessman with a fine record. >> when we come back -- >> his policies that he's advocating, it doesn't mean they're going to create that kind of job for the rest of us. check out that garage he's building in california. >> at least he's -- >> an elevator ?ee.'s got five boys. are they still living at issue political ad wars. first, romney. >> the private sector's doing fine.

the private sector's doing fine. the private sector's doing fine. doing fine. doing fine. >> i'm mitt romney, and i approved this message. >> is that ad effective? i ask you, susan. >> absolutely. not only does it bring in some of the things we were talking about, but the decline in wealth, some things saddling the obama administration but the private sector doing fine comment i think highlights what a lot of opponents of obama believe, the theory that the public sector needs to be elevated over the private sector. >> do you think this is unfair to obama? because he acknowledges there was a gaffe, meaning that it was an unintended sequence of words. he doesn't believe that the private sector is doing fine. >> i think most people believe that he really does think the private sector needs less help. >> so it was not a gaffe. >> he's going around saying, of course he knows that the economy needs help. >> it was plucked out of

context, but political campaigns do that. but i must say this last week, thanks to modern technology, i was able to witness a focus group in denver of independent voters. he screened a couple of ads, not this one, but the reaction was totally underwhelmed. they look at it, they think it's just more political trash talk and they want to hear, what are they going to do. it's fun for us to sit around and judge it, but that's not going to -- >> i mean, the press has noticed this. >> yeah, but? and the press is -- >> but it underscores, john, an impression of obama, that the guy is out of touch with the private sector, working folks, that he's a man of government, and he doesn't know how people get jobs and lose jobs and go back to work. he's spent his whole life in tax supported institutions. >> let me clarify this more. i said it was a gaffe. it's more probably described as

a lapse, a slip of the tongue, meaning the tongue was in error, it wasn't my thinking, i just used the wrong worse. now, is there any defense of that? >> there is a defense of that if that's exactly what happened. this is not a man who generally uses the wrong words, if i may say so. >> right. >> what pat is going to anybody who knows what's going on in the economy, and does he, knows that we are not doing well. we are not even creating enough jobs every month to deal with the number of people entering the labor force every month. we're at 150,000 people enter the labor force every month. we're creating 69. you can't make that statement if you're the president of the united states. >> one final question before we go to the next one. that is obama is spending a lot of time talking about the euro zone, and he's talking about competition from europe. i think his last press conference was, almost all of it devoted to that. he's talking about the economy but he's talking about how can i handle it, because what's going on in europe is affecting

our economy. >> without question. >> therefore i am dealing with heads of state. >> without question. that is going to have an effect on the u.s. economy, but the u.s. economy has been hurting -- >> but it moves away from the domestic. >> it enables you to do what he does very well, which is always to blame it on some other party. but the fact is that is certainly going to have an impact on the economy, but so, too, have been the perfectlies that this administration has put politics. >> okay, now obama revs it up. >> i'm barack obama and i approved this message. >> we're still fighting our way back from the worst economic crisis since the great depression. our businesses have created almost 4.3ly million new jobs over the last 27 months but we're still not creating them as fast as we want. >> the president's jobs plan would put teachers, firefighters, police officers, and construction workers back to work right now. and it's paid for by asking the wealthiest americans to pay a little more, but congress tell congress we can't wait. >> president obama says jo

growing at 6%. something is wrong with his policies. >> jobs weren't being created for at least the first year because we were still -- i think we were losing 800,000 jobs a month when he first took office. he does point out that under previous presidents, when republicans were in office, that state and local government grew because traditionally the congress sent money to aid higher police officers -- to hire police officers. remember, bill clinton, 100,000 cops on the streets, teachers and so forth. the fact that congress is sitting on this money and thinks it's perfetaxes? the people who create jobs. that's going to again weigh on the economy. >> we're talking about ads, john. when he says the public sector is doing fine it's like, i was for it before i was against it. it reinforces an impression of the guy that is very negative, and with obama, it's that he's out of touch.

>> maybe there's fofofofofofofo with five months until election day, barack obama, watch the screen, faces a grim new reality. republicans now believe that mitt romney can win. can win. and democrats believe that obama can lose, unquote. that's marc halparin, senior analyst for "time" magazine in this week's issue. what do you think about that basic observation? >> i think it's absolutely true. it certainly has changed the level of confidence on both teams. we'll see how it plays out. >> he's talking about the level of belief. >> that's another word for confidence. each side has a different -- >> it is june of this year, and i think mort's word, confidence, a lot of republicans are saying, we don't know if we can do it with

mitt, we had a bad can't date. do you think they now agree with halparin? >> you travel a lot with romney. do you think that we are now reaching an obama reaction to obama, for this crowd, of course, it's different, but do you think, already done the obama thing, in other words this is now a referendum on obama? >> it's ing to be a referendum -- depends what the economy is looking like in the months right before the election but people are feeling a real sense of anxiety about the economy, that it's just not getting any better, and they're looking to who is going to help get us out of this. they're losing faith in obama. >> we crossed the point a weak or ten days ago when that very weak jobs report came out and it looked like the economy was going into another stall.

the focus group that i attended, nine of those 12 people voted for obama in '08 and only three of them would say they were leaning toward him. so the president has got a lot of ground to regain, and there's an opening for romney. >> was it a democratic group? >> no, these are self-declared independents. >> do you think they've become disillusioned with obama? >> actually, they were all saying the economy is getting better but they do not give him credit because they measure him against the expectations he set for himself, but they know so little about romney, all they know is he's a rich guy. >> so it's the phase of been there, done that? >> look, people are ready to move away from obama but mitt romney has not closed this sale yet. >> why? >> he just has not quite done it yet. people are looking at him, but he hasn't closed the sale. >> they say he doesn't have

enough personality, he's not warm enough. hey, he can run businesses. >> look, did he good in the republican primaries. he came through them fine. >> what about that wife of his? >> running against one of the most charismatic campaigners this country has ever seen. obama is who he will be running against but luckily does he have ann romney, and she has really been a great help to him on the campaign trail. she gets up, warms up the crowd. she softens the edge of romney, because he is not as freight of a campaigner as barack obama. nobody would argue thament but she's a real asset. but people are going to ultimately look to him when he's up there talking. what's he going to do to help the country? >> he went through a very, very bitter primary in which everybody got cut up. we'll see how he does on his own. >> you know him from bain issue three. white house leaking?

>> i can't think of any time that i have seen such breaches of ongoing national securithe c here. >> we are five months from a presidential election. president obama is seeking a second term as president and commander in chief. therefore, he and the white house have been leaking national security secrets to the press. so that mr. obama will look better at protecting our national security. that's the bad rap that obama has been presented. eric holder was questioned about that bad rap at a senate judiciary committee hearing. watch. >> at the holder hearing republican senator lindsey graham voiced his frustration on another front. namely, the attorney general's decision to appoint two of his own d.o.j. lawyers to investigate the

origin of recent national security leaks. lindsey graham believes the leaks may originate in the white house. graham wants a special counsel, independent of the obama administration, to investigate the leaks, instead of holder's own hand-picked lawyers. >> you're not willing to embrace the idea that it would be better off for the country if you would pick somebody that we all could buy into from the get-go rather than picking somebody, two people that you say are great that i don't know anything about. so at the end of the day, i can't believe that this is even a debate, given the national security implications of these leaks. >> question. why won't holder appoint a special counsel? eleanor. >> look at the recent history with special counsels, from ken starr to patrick -- >> fitzgerald. >> fitzgerald. it's not been a happy one on

either side of the political aisle. these are two u.s. attorneys that attorney general holder has appear poifnltd one was appointed by george w. bush, the other is an obama appointee. they have specific expertise in the kind of investigation that this requires, and i think it's perfectly legitimate, and that the white house and the justice department tries to sit on their findings, i think we'd hear about it pretty fast. >> is this as bad as she's described, the special counsel? sat on what the impeachment of bill clinton? >> this is enormously big. you've got the killing of bin lapped, the siege credits have been leaked to hollywood. you've got the kill list right there in the situation room. bless the third one? the thing that you talked about last year, how it got into the iranian centrifuges and how it got out. >> namely, we did it. >> but this is extraordinary. all the details.

it came right out of the situation room. >> the situation room? >> where is the situation room? >> the situation room is on the basement floor of the white house west wing. >> so obama leaked it. >> these leaks are terrible but they clearly came right out of his own entourage. >> to make obama look good. >> that's what everybody says. i don't know where else could you get material like. that such, you cover the >> wait a minute, eleanor. >> obama says it's coming from beurre crates, lower level beurre crates. but this is very likely coming from people high up, because some of the sources cited were crielted out of time. happy father's day. bye-bye.