we got top of the show what on earth you're doing up at this hour. john tower, what you got? >> we've got molly on twitter writing my love for willie geist just faded when he threw bill karins under the bus on the air. >> i didn't mean to throw him under the bus. but we were told late last night. this was a historic storm. i don't know, that looks historic, no? and bill karins comes out and goes, it's not that big of a deal, they shouldn't have closed the schools. i'm still calling that historic. what else you got? >> we got kevin in south carolina saying i'm awake packing my bags for the trip to charleston to see willie and the crew. >> we'll be there tomorrow and friday ahead of saturday's primary in south carolina.

"way too early," 5:30 a.m., you can sit behind me, hold up funny signs, make funny faces, stay through "morning joe," we'll be there from 5:30 in the morning until 9:00. if you're in charleston, come see us, if you're awake, watch us. "morning joe" starts right now. if i had to vote in south carolina, in order to keep this thing going, i'd vote for newt and i would want this to continue more debates, more vetting of candidates, because we know the mistake made in our country four years ago was having a candidate that was not vetted to the degree that he should have been so that we know -- knew what his associations and his pals represented and went into his thinking, the shaping of who our president today is. that vetting did not take place. i want to see that taking place this time because it's that

important. we need this process to continue. >> now, who wasn't vetted? i don't get it. is she talking about mccain and palin? >> good morning, it's wednesday, january 18th. we're live from washington. with us onset, we've got the political writer for the huffington post sam stein, and the host of "andrea mitchell reports," andrea mitchell. and we've got msnbc and "time" magazine senior editor mark haleprin. and the great willie geist is up in new york. >> adorable. >> i don't know if you knew this or not, willie was once a ship captain. >> well -- >> and hit a wave and he just jumped off the ship. >> that's just -- we're not going to make light of this. >> i'm not making light of it. i'm talking about this candidate. >> joe, check out the -- >> i mean, willie geist, what this captain what a -- >> there you go right there. >> always count on the "new york post" calling him the chicken of

the sea. we're going to play these later. we have audio recordings of the coast guard screaming at this guy as he made off in a lifeboat to get back with the ship to help the coast guard figure out how many people were onboard, how many needed help as he floated away in his lifeboat. it's remarkable. we'll play it later. >> he ran out of there. and by the way, that sarah palin news is pretty big. sarah palin has come out and looks like she's endorsing newt. there's some chatter among conservatives online. red state this morning, that rick perry should get out of the race before south carolina. and if he doesn't, red state suggests that rick perry would be responsible for the election of mitt. so you've got conservatives starting to try to come together and challenge mitt romney who had a bad day yesterday. >> she's endorsing newt because sh she wants the primary squabbling to go on, not because she thinks

he's a good candidate. and she thinks the vetting should go on. i'm going to leave it there because i know we don't win by going after her. but come on. that is ridiculous. >> what's your -- tax rank? >> let's talk about mitt because he's going to be releasing his tax, as well. we're going to talk about that. we'll start in south carolina and also we're going to get to chris dodd is going to be on. >> chris christie's going to be on too. >> and chris christie's going to be on. i can't wait, i have so much to talk to him about. but on the front page of the "washington post," what's going to be happening today. >> yep. >> all the websites going dark in protest at this point dodd might have a reason why this is a good idea. >> chris dodd's coming up. and willie geist, wikipedia is shutting down because of this

legislation to stop pirating on the internet. >> google has a nod to it, as well, blacked out their name, craigslist, wikipedia, as well, talking about this antipiracy act. you'll see those all day long if you're trying to use some of those big sites. >> very interesting. >> it's a big battle. let's get to the news with the south carolina primary. three days away, mitt romney is trying to hold on to his front-runner status over his wealth and tax records. after days of prodding by his republican rivals, the former massachusetts governor who is worth an estimated $250 million revealed that he is paying a lower tax rate than most middle class americans. >> what's the effective rate i've been paying? it's probably closer to the 15% rate than anything because my last ten years i've -- my income comes overwelmingly from investments made in the past rather than ordinary income

rather than earned annual income. i got a little bit of income from my book, but i gave that all away. and then i get speakers fees from time to time, but not very much. >> 15% capital gains tax rate. >> yeah, this is -- this is a problem on a lot of levels. mark haleprin, campaigns are sometimes defined in a moment that the candidate doesn't realize. we can go back -- i don't overstate this, but we can go back to michael dukakis and the tank. we can go back to 1980 and ronald reagan saying, mr. green, i paid for this mike in nashua. in this case you've got a guy worth $250 million talking about how he's paying a lower tax rate than most secretaries, something we talk about all the time. one of the most damning part of this when mitt said he didn't make much money on speakers fees

and his definition was -- >> $360,000. >> $360,000. this is -- yesterday is a day that i suspect the romney campaign is going to be regretting for some time now. >> it was a 1% day. >> mark? >> well, the -- this was an unforced error, an -- i would ask him the question about what differentiated him from newt gingrich on foreign policy and he gave an answer and i asked him what his effective tax rate was. i was surprised he answered. and adding on as you've pointed out as the speakers' fee not being much money. we've said all along for the republican party if they win a general election, the election must be be about president obama and his economic record if it's about the republican nominee, the republican would have a hard time winning. yesterday's moment not only as a moment, but as a sign of romney's ability to get through a long campaign was a real eye

opener for a lot of republicans and a lot of journalists to say does he have the ability to present himself, whatever the facts in a whey that won't make him a target. what he said yesterday makes him a big target in the short-term and if he's the nominee, a big target in the long-term. >> andrea, this past week i have been carrying the bloody banner of free market capitalism and free markets. and -- >> you're a brave soul. >> i am a brave soul. i have been alone around this marxist team set. >> unbelievable. >> but i've been doing it. and i think most republicans would agree with me, but there are a lot of republicans that make $70,000, $80,000, $90,000 that are suddenly feeling disconnected again from a guy that pays a 15% tax rate. hey, that's not fair. first of all, but secondly, let's say a guy that's making $80,000, $90,000, and his wife making -- maybe making money. they've got four kids, they're

struggling to get -- >> it's tight. >> every dime counts. it hurts every time they go to fill up their truck. and they -- and they have to pay that much to have mitt romney dismiss a $360,000 -- >> it wasn't that much. >> saying it wasn't that much. this is deadly serious for mitt romney now. not only in the general, but i think in the primary. >> well, in the primary, you're talking about south carolina. you've got an unemployment rate basically twice as high as it is in new hampshire. and he's shown as mark was just saying the propensity for unforced errors for sort of stepping in it. >> right. >> as he did in new hampshire, you know, briefly with i like firing people, when taken out of context, that's the sound bite already ricochetting around. this does cause concern among republicans, and except along the coast in south carolina where you've got more people who have moved on, retired there, may have more money, across the state, this could be a potential

problem. he is far ahead, no question. not only in the nomination, which he's basically locked up, but also the south carolina primary. but it does cause concern. this is a guy who went to such great lengths to say he's not going to release his tax returns until april when presumably he had everything locked up. and now he's raised the issue just before this critical vote. >> i don't understand. all the unforced errors over the past 24, 48 hours. there have been a lot. and sam stein, despite the caricature about republican primaries, i can tell you in south carolina, in my republican primaries i always ran, i didn't win with votes from people that lived in big houses on water. >> yeah. >> they always voted for the other guy. i won by getting all the votes from the people that lived in the ranch houses with the pickup truck out front and proudly made anywhere from $40,000 to $80,000. i mean this is -- i can't overstate this enough.

this is a serious disconnect from mitt romney in a south carolina republican primary. >> yeah. well, you know, the "new york times" did the math on the speeches, i think it came out to something like $41,000 a speech. that was a bit more than the medium household income in south carolina. >> which willie says is the fifth poorest state in america. >> and you know, obviously, that contrast -- it's telling in many ways. but you know, in romney's defense, you know, the april tax release is something that john mccain did. he shouldn't have talked about it. he should've said i'm not going to answer questions until i release in april. that was the unforced error. >> and obviously just to be fair because i know people might be yelling at their tv set, barack obama is also in the 1%. he made millions and millions of dollars off of his book. he -- >> but the difference is that the effective tax rate. >> well -- >> because if you look at his tax returns and stuff in the first couple of years of office, it's not millions and millions -- >> he made millions of dollars with his books --

>> believe it was $1 million -- >> but. >> can i make my -- >> it's a big difference. >> i'd like to make my point. >> i'm sorry to interrupt. >> three times. i would never do that to you, and it hurts me. >> he would never interrupt you. the point i've been trying to make for the past 15 minutes is barack obama can get away with that because americans don't resent other americans and politicians that make a lot of money. but if barack obama were to say, yeah, you know, i made some money on books and paperback, it wasn't that much. it's not the money that mitt made is the problem, it's his attitude. >> the other images that mitt romney has basically been doing, you know, sitting around and running for public office for the past three or four years and he's made money basically by doing nothing except for collecting on his tax returns. and that image of him basically not working, making millions of dollars and paying 15% on it contrasted with, you know, your

average south carolina worker who has to go and pay 35% tax rate on hard labor, that's the contrast that comes out here. hep hasn't been taking risk, he's been basically sitting back and profiting off of the investments that he made and the money he had in bain capital. it's not real work. >> here's the wall street journal's take on mitt romney's 15%. when he recently visited the journal, mr. romney all but said he didn't think he could propose a tax reform with lower rates because he'd be attacked as a rich guy. well, governor, you are a rich guy. >> this is coming from the "wall street journal," by the way. >> and you're going to be attacked anyway. what matters is how you respond. and i think you'd agree with that. newt gingrich jumped on the news yesterday and called it mitt romney's flat tax in mock homage to the former speaker's proposal for a 15% voluntary flat tax. team obama won't be so witty or kind and they'll spend money assailing the republican as a

morally obtuse fat cat. if mr. romney doesn't want to spend the campaign defending his 15% tax rate, he'll get out in front and propose serious tax reform. i would agree with that. >> he actually wants to eliminate that 15% rate for families making under $200,000. he wants to put it down to zero. >> how does he do it? >> you do it. pass legislation. and that's the idea, even he acknowledges there's some sort of disparity here because it should be lower for people of lower income. but, you know, comprehensive tax reform in light of this would make it seem like he's actually making it more favorable to the wealthy. >> makes it harder for him to talk about tax reform. every time he talks about tax reform, his critics or opponents, adversaries will bring up his own effective tax rate. >> it's not like he's broken the law. >> no. >> it's what you pay, i guess, if your income comes from business in a political context,

it just sounds awful. >> and we need to see how much of it is offshore. there's analysis he has money in bain funds operating in the cayman islands and bermuda and other countries across the globe. >> is willie back up online? he had come back from the ship. willie, this is really the problem we've been talking about for a very long time where we talk about ge's paying 0% in taxes, corporate taxes, and we talk about warren buffett paying 17%, 18% in taxes, which actually he's paying a lot less than that if you look at how much money he actually makes per year. that's just on taxable income. >> which he himself complains about. >> which he himself complains about to feel good about himself but he never writes a check to the federal government. >> isn't that convenient? >> listen, mitt romney may have just become an unwitting poster child for serious tax reform that will make the tax code

flatter and make the tax code fairer and get rid of these loopholes that have investment income at 15% and -- and personal income taxes up in the 30s. >> this is the heart of the conversation the country's been having for more than a year now, and it's about fairness, whether you like that term or not talking about taxes. should a guy like mitt romney who is worth $250 million have these loopholes, have these work arounds, the ways he can pay less than middle class americans do? and what happened yesterday just feeds again into this caricature of him as the guy with the top hat, the rich guy who's totally out of touch. it was funny yesterday, gingrich who has proposed the 15% flat tax said this is great, we're going to rename my flat tax the romney tax. everybody should pay 15%, pay what mitt romney pays. he was caught flat footed at the debate monday night about his tax returns and yesterday too.

mark haleprin, asked him where this income is coming from and when he said, you know, i didn't make very much, it was just speaking stuff. when you make $41,000 per speech, which is $8,000 more than the average income per person in the state of south carolina, it's hard for voters there to say, yeah, that guy's one of us. >> you know, mark haleprin, this is -- and again, people don't mind that he's not one of them. people don't mind roosevelts and kennedys, and even, you know, reagans who made some money in hollywood running. but they have to be connected with the voters. and, mark haleprin, mitt romney has made one mistake after the other over the past couple of weeks. really tone deaf mistakes. and i guess even his own people are starting to roll their eyes going, my god, you've got to lead, sit on it. the question is, who is there to take advantage of it? is this an opportunity for newt

to possibly win south carolina? >> i still think romney will win the primary. but if there's one point who can beat him at this point, it is gingrich. gingrich, i saw him yesterday on the stump. he's much more focused, moving away as best he can from the bain capital argument. and on the question of whether he's too much like the president. you know the romney people are at least mildly worried about gingrich. they're having a press conference call today with two of their top surrogates, the former senator, former congresswoman to go back after gingrich on this theme that they used very effectively a few weeks ago that he's unreliable, his record as a leader is one not of consistency, but erratic behavior. and this 15% thing, although it'd be nice to know the effective rate the speaker is paying, we're getting his returns this week, this is an issue he can drive and dovetail as part of what he wants the message to be about romney.

>> and he certainly is. we have some sound bites of newt gingrich going after the 15% issue. but mitt romney's still got an edge in the polls, andrea. >> a big edge in the polls, but gingrich already said before this unforced error yesterday by romney he was releasing his returns tomorrow. it remains to be seen how much we learn from those returns because he's had all of these very complex washington institutions -- >> right. relationships. but it's not lobbying. all right. so -- really. tomorrow and friday, we invite you to join us live at the mills house in charleston, south carolina. >> that'll be great. >> for our primary coverage there. we'll be starting at 6:00 eastern time. come join us, have a cup of coffee. and speaking of south carolina, later in the show, we're going to talk to governor chris christie about whether he thinks mitt romney will take a win home on saturday. also joining us, dr. brzezinski and the obama administration's new head of consumer protection,

richard cordray. looking forward to meeting him. >> should we ask him questions? let's do jeopardy. >> we'll set that up. >> recess appointments for $500 -- >> exactly. up next in this morning's political playbook, we'll have that after the break, but first, bill karins for a check on the weather. the big weather story of the day is the well advertised snowstorm in the pacific northwest. the snowstorm has arrived, but a little further south than was predicted yesterday. our friends in seattle aren't getting quite the block buster event they may have been expecting to wake up to. possibly 3 to 6 inches of snow, but that'll be no foot of snow for you. coming in, snowing pretty good. very difficult travel day through the pacific northwest, a lot of snow mixed with sleet in portland. the mountains are who is going to get the jackpot out of this. the first significant snows. they need it for the water and also for the ski resorts. in the east, very windy conditions. what a windy night it was upstate new york last night. it's still windy this morning.

snow showers in eastern portions of the lakes, especially around buffalo, cleveland, and syracuse. you may get some squalls today, but it's windy. temperatures will be plunging during the day. you're watching "morning joe" brewed by starbucks. is it fast? it's got 10 speeds, my friend. ♪ is it fast? it's got a lightning bolt on it, doesn't it? ♪ is it fast? i don't even know if it's street-legal. ♪ is it safe? oh, yeah. it's a volkswagen. [ male announcer ] the security of a jetta. one of nine volkswagen models named a 2012 iihs top safety pick. ♪ got you in a stranglehold, baby ♪ my high school science teacher made me what i am today.

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newt gingrich has been promising he's going to stay positive. that's his new promise. but i don't know if he's keeping that promise. check him out in last night's debate. >> speaker gingrich the "wall street journal" editorial page calls your attacks crude and damagi damaging caricatures of capitalism and write that you're embarrassing yourself taking the obama line. how do you respond to that? >> kill them.

>> wow. that was kind of tough. >> that's a little harsh. >> just a little harsh. maybe that helps with swing voters down state. i don't know. >> i guess sometimes it feels good to be a little harsh. time now to take a look at morning papers. "new york times" websites including wikipedia's home page are going dark this morning in protest of proposed antipiracy laws being debated by congress. opponents argue the bills would allow the government to shut down portions of the internet and restrict free speech. we'll have chris dodd on later to talk about these blackouts why these are in his words "irresponsible." in the "wall street journal," newly released audio suggests the captain of the capsized cruise ship off the coast of italy was already in a lifeboat as thousands of panicked passengers were left to fend for themselves. listen to this --

>> wow. holy cow. it's dark. it's like the germans, they say we can't patrol afghanistan in the dark because it's dangerous. this guy's like it's dark out. i'm not going back to that ship. it's dark. >> it's unbelievable. >> is that a crime? >> and you see the reports with survivors describing, you know, the chaos. and the fact that they have the audio recording with him saying, this is the captain, there's nothing wrong, we just lost some power when they knew. >> it's amazing one person can cause this much damage.

millions of dollars and lives and showing off -- >> he'll go to prison. >> yeah -- >> it's a crime, right? >> yeah, it's a crime in italy for sure. >> holy cow. should go for a very long time. mike allen is right here. and let's do that. chief white house correspondent for "politico" on the set with us, and there is news about "politico" the paper version. please tell us. >> "politico" on paper -- >> we've had it? >> andrea, do you love this on a plane? look, so easy, clean. >> or -- >> oh, yeah. >> scandyly clad women on page 3. >> so -- >> on page 4. >> it's fabulous. >> next week we have our fifth anniversary, our fifth birthday. but starting this week, "politico" in print is also available in new york. >> so your column will be all over the big apple.

>> willie geist, this is huge! you are going to wake up in your park avenue penthouse and be able to read "politico." >> i've already seen it. i was walking down park avenue the other day surveying my real estate holdings on that wonderful boulevard, and there are boxes right on the street where you can get a paper copy of "politico." >> very cool. >> "politico" on the boulevard of dreams, or the 1%. this is exciting. >> it's a big step for us. because, you know, in congress they love their paper, they love the stack. >> they do. >> and now in new york, people in media business are able to read the -- >> good subway reading, basically. >> well, i come from the world of online, so. >> so let's get to the headline in "politico," and you're starting with obama's super pac and i put that in quotes. tell us about it. >> yeah, ken voeg l calling it

obama's not so super pac. started by two former white house officials shawn sweeney, bill burton, they've had a terrible time raising money, way behind, not just -- we knew they were way behind american cross roads, also way behind the romney super pac. that's the part of it that has really woken up the obama folks. the president has said that neither he nor senior officials will raise money for this. but they're finding their ways for the first time the story reveals obama bundlers are going to be allowed to also ask for a check for the super pac and said the president's senior officials won't raise money. but they have a new format where priorities usa, other democratic groups give a presentation and then the vice president drops by. so it's a way to say they're in the family. >> yeah. >> but they're not allowed to coordinate. we know that. it's like colbert and stewart. >> so the question is, obviously

there is a growing disconnect between the president and wall street. could this be one area where the president has a little more trouble raising money in 2012 than say 2008? if you won $1 million for a super pac, it seems like wall street's a great place to start. >> well, there's wall street, there's also this fight you mentioned earlier between silicon valley and the tech industry and hollywood over internet privacy and piracy. that fight could already -- is already having an impact on the president's ability to raise money from big donors and the allied super pacs. it's clear to me if mitt romney's the nominee, there's going to be big checks written on his behalf. and under the new rules, that is likely to equalize the money. it's always hard to count. of you got labor money and everything else, but republicans are going to have a lot of money. and the president's going to have to get some of those big checks to have a level playing field. last time he had significantly more resources than senator

mccain did. >> all right. >> you think it's going to be, mike, you think it's going to be much, much closer. the president -- because i guess was it messina that said the $1 billion figure is a bunch of b.s. >> well, he can say that, but it's very real. last cycle if you count how much barack obama raised counting parties when he wasn't the president, of course it's going to be more than $1 billion. >> do you agree with that? >> yeah, i tend to agree with mike. but you have to consider the other outside groups aligned with the president. this election's going to see so much money. it's unbelievable how much will be thrown into the political process and the fact we're so far away from actual campaign finance reform is sad. >> and what happened four years ago? i remember i was in northern virginia at the time and you saw this too. you would see -- one weekend there were 200 obama commercials for every one john mccain commercial. with the super pacs now, that's not going to happen regardless of who wins the nomination. >> it's a completely different

environment. just last night, mitt romney was at the park avenue apartment, so the romney juggernaut moving through new york in terms of a financial world. there really is a disconnect between the president and a lot of the wall streeters who backed him last time. >> and the president wants to stick to his principle of getting big money out of politics, but the campaign says we can't unilaterally disarm. >> thanks so much. >> thanks for having me. >> good luck with "politico" on paper in new york. coming up woodward and david ignatius will be here on "morning joe." ♪ we were skipping stones and letting go ♪ [ female announcer ] nature valley granola bars,

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all right. time for a little sports. the indianapolis colts fired head coach jim caldwell yesterday after 2-14 season in indy. the colts, though, will have the first pick in april's nfl draft. on the other end of the spectrum, the world champion st. louis cardinals at the white

house yesterday greeted by president obama and the first lady. they got a baseball bat, jerseys from the team, president obama calling the cardinals the greatest comeback team in the history of baseball. albert pujols who signed with anaheim in the off season was not there, neither was tony louisia larusso. carl crawford going to miss the beginning of the season for the red sox. >> thank god. >> seven years, $240 million. >> number two, jacoby ellsbury signed a one-year deal. he signed second, one year, $8 million. back with the red sox. >> that's good news. >> and this one's for you, drey kirkpatrick, left early to go to the nfl, arrested in florida manatee county in a vehicle with a little bit of weed in the car. so those -- >> well, it was -- i can tell you as his -- i'm going to do pro bono work for him. >> you are not. >> he was framed.

it was -- it was not his weed. >> it wasn't his car. >> it's funny you should say that, joe, he has said that. another guy was driving the car, the guy went into a house came out with a bag of some kind. he didn't know what he was doing. >> willie, as is the case in slander law and also lawsuits involving weed, truth still is the ultimate defense. he was framed. it's right out of a cheech and chong movie. >> by the way, willie, carl crawford, the guy needs eye surgery. forget the wrist surgery. no, he -- he went after so many pitches down in the dirt last year, it was just horrific. >> then you get that lasik, it's out-patient, out in an hour. in and out. coming up wikipedia

protesting an antipiracy bill. chris dodd is coming up, he calls the move "dangerous gimmick and abuse of power." senator dodd joins the crew in d.c. when "morning joe" comes back.

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42 past the hour. a lot to talk about with the next guest. here with us now, we have the chairman -- >> are debates breaking out onset --

>> can it. >> we can talk about this stuff whatever, i never use it. i just rinse off with water. but we started talking about ricky gervais offset. and the whole thing last year was great. this year it was so self-congratulatory. and he wasn't that funny. he was like, everybody look at me, i'm sorry dangerous. i'm dangerous, my middle name. >> dirty. >> i find him generally to be outrageously funny, i found the lead-up where he said it's going to be the worst thing you've ever seen, here i come again, america, you can't handle me. i think he built himself up too much. >> danger is my middle name. >> too much. it's just too much. here with us now, chairman of the motion picture association of america, democratic senator of the great state of connecticut. >> thank you, mika. >> chris dodd. good to have you onboard. >> thank you for having me. >> richard cordray's going to be on the show today. i'm so excited about this.

this obviously happened under your watch, the consumer protection bureau. it was a long, hard slog. how do you think he's going to do? it had to be done through a recess appointment because there was apparently no other way. >> well, i regret that. this is -- in fact, a lot of the ideas in the consumer financial protection bureau were ones done in a bipartisan basis. the idea of putting it in the federal reserve as a republican idea. unfortunately the bill has two names on it, mine and barney frank's. it's the only bill that has my name on it in 37 years and i didn't want this one on it. when they first did it they thought, why don't we call it frank/dodd. and they said, no. so in a sense, this bureau's necessary. i can't imagine a world -- you have a consumer product safety commission, you buy a bad lawn mower, television set, there's a place you can go to get some redress if you've been abused or deceived in a practice. and as we now know there are millions of people who were

lured into mortgages, they should have been more responsible, you can argue. but when you're sitting across that table and that person's saying, listen, you can do this. that fully indexed mortgage, you can pay that, we know you can. >> you have the money. >> the first hearing i ever did -- >> i'm sorry, though, wasn't it continue in part? and even the president -- >> it was -- >> that was pushing the banks to -- no, no, no, let me get my point out. was it -- >> every day -- >> was it people like you -- let me get the point out. people like you and barney frank and yes, even republicans that talked about the opportunity society that were pushing banks to make reckless loans? >> no, no, quite the contrary. there were hearings in '06 and so forth that talked about -- the first hearings we held in '07 were talking about the potential problems. >> what about 2002, 2003? >> the first site we put up was a website of the real estate brokers. and the first advice they gave the association of real estate brokers. and this was their web page

convinced the home buyer you are their financial adviser, and they were anything but their financial adviser in many ways. >> i'm not debating the fact there were massive abuses, and there were. but the environment was set up going all the way back to 1999 by members of congress, by the clinton and bush administration. this didn't just start in 2006. >> encouraging people -- home ownership, i still believe is a very valuable asset in this country. it improves neighborhoods, it gives people a wealth creation they never otherwise would have. it's obviously been expanded far beyond what most people could afford to do, but the idea of having home ownership i think is very laudable goal still. to have some place where consumers of financial products can go where they have been abused and deceived. in 1994, we passed the hopa legislation. to protect against abusive and

deceptive real estate practices. not a single regulation was ever even proposed on that legislation. >> senator, we have a lot to get -- we've got a lot to get to including asking you -- giving you our address to where you can send tickets to see openings now. because you've got a really cool job now. but i've got one recommendation. >> yeah. >> don't go online today. they don't like you online. >> it won't help you. >> so let's explain this battle. because obviously people that are engaged in online business are really engaged in it as well as content providers like the motion picture association. but there are a lot of people online that are accusing you and others that support this legislation of censorship. what do you say to your critics on the left and on the right? >> totally false. totally false. 14 years ago we passed the digital millennium copyright act. they were stealing content.

1/4 of the bandwidth today traffics in infringed properties and goods as it is. "avatar" was stolen 21 million times, carl levin has had hearings on putting our national security at risk. pocketbooks, brake pads, bulletproof vests. it's a growing, huge problem in this country. this bill is designed to do something that the domestic bill allowed us to do. and that is go after domestic sites. >> so if my website steals a five-minute clip of a movie, the government can shut it down? >> no, it cannot. it's got to be the justice department only. >> the justice department. >> not individual companies doing it. it has to be primarily engaged in this. how many actions can they bring in a given year? it's not a private right of action you can jump in and do this. the sites have gone offshore now. so as they're offshore, our ability to reach them jurisdictionally is very limited. >> what is, of course, you have

heard all of the attacks against this legislation. what would -- what would you say to those that would say, well, eric holder can unilaterally shut down a website if the content is offensive or a republican attorney general. >> you cannot do that. >> what's the due process? >> you have to get an injunction, go to court, only the justice department can. they have to make a case in the court of law. this is a very elaborate process. google yesterday announced that it last year took 5 million pages and declassified them unilaterally because of infringement and other reasons. i'm not asking about the other good things they did. they made the decision to shut down. every day sites are blocked all across the globe for various reasons. they do it. and the internet has not suffered. consider this, this industry that i'm now working with employs 2.2 million people in this country who get up every morning and go to work in that

business. the average salary according to the department of labor of statistics is $55,000 a year. these pensions and benefits. most people who see people walking a red carpet assume that's the industry. for every face you see there, there's someone who built or laid down that red carpet. as we do this show this morning, they're looking at us sitting here. but we know there are dozens of people in this building that make this show happen. >> the camera men get paid more money than we do. >> the point i want to make -- >> one of your former colleagues running for the exits? why do you have senators abandoning this legislation? >> we're getting a lot of misinformation and sending it to websites and obviously e-mails are being sent flooding people. and it's new, and -- >> something has to be done. >> and everyone gets up in the morning. no one has said even the most severe critics we need to do something about online piracy. everyone has said that. here's a bill, it's taken out the most onerous positions

people have been talking about. that's gone out of the bill. why can't we sit down and do -- get this job done. wikipedia and others, this is the height of irresponsible. >> they've proposed something different, basically attacking the finances of the piracy sites rather than going on the system. what's wrong with his approach? >> well, first of all, it's the international trade commission, you'd have to come to washington. it's a long and elaborate process. you talk about creating more bureaucracy. the federal courts since the 1790s have protected copyright and done a good job of it. your payments can go offshore just as quickly as the site has. you can go after it here. this doesn't require brain surgery in how to move offshore and insulate yourself against the legal actions taken by the justice department. you shut things down. yesterday was jobs, jobs, jobs. we heard all about that. here's an industry that actually employs people. you can be a high school graduate, have a year or two of

technical training and get a very good job in this business and industry. and those jobs are at risk. it seems to me, everyone agrees we've got to do something about this, and i've got young children and when they get upset they scream and hold their breath -- >> this will make it harder for companies to sell websites. >> that was the argument 14 years ago with the digital millennium copyright act, and yet all of the explosion of new ideas happened in the last 14 years. >> chris dodd, great to have you you back. former senator chris dodd, thank you very much. up next, willie's news you can't use. ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 let's talk about how some companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available ttd#: 1-800-345-2550 to you whenever and wherever you want.

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time for a little news you can't use. jon stewart and stephen colbert continue their takedown of our super pac system. colbert handed over his super pac to stewart last week after he announced he's running for president. he's not running because he can't get on the ballot, but who's counting? here they are last night. >> i feel like i've got to call the lawyer for my super pac. >> not before i call the lawyer for the exploratory committee. >> who should we call first? >> well, since they are the same person, why don't we just call at the same time.

i am sitting here with jon stewart. >> but don't worry, we're not coordinating. >> i don't know if i'm doing the right thing with this super pac money, trevor. can i just tell steven what i've done with it? >> yes. >> just speak up if we cross the line. >> will do. >> last weekend i bought five 60-second ad slots on channel 5. >> charleston's news leader. >> the air time cost $3,600 and in it i accuse mitt romney of being a serial killer. is that okay, stephen? >> i cannot coordinate with you in any way. >> ran another ad in south carolina and a total production cost of $15,000 equating a vote with herman cain a vote for stephen colbert, any thoughts on that, stephen? >> i cannot coordinate with you

in any way. and i haven't seen the ad, but when i watched it, i thought that the final shot of a handsome man smiling could have been a little bit longer. >> trevor, i think we lost him, are you still there? >> yes, i am. >> holy [ bleep ]. this is still legal? >> that should be okay so far. >> thank you. >> nobody i can think of has gone to jail solely for coordinating, so that should make you feel better. you might get fined. >> fined? how much? >> well, four to six figures. >> four to six figures, where am i going to get that kind of -- no. if i get fined, could i pay that with super pac money? >> yes, probably. >> this is awesome. >> stewart and colbert last

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evangelical and others are not supporting romney, at least not yet. because they don't think he's going to win. so they're like why should we compromise who we are? let's be for who we want to be and get ready for four years from now. if the far right thought romney could win, they might be more enthusiastic about him. but they don't share -- the question what he stands for. and they don't think he's going to win. >> so they're not getting behind him. but, joe, on the heels as we look at a beautiful shot of capitol hill of nancy pelosi's comments, newt gingrich, and we're going to have that -- >> by the way, is nancy sponsored now by bank of america? >> no, she's not. >> because i may have left congress too early. if you can get sponsorships like this. >> stop. >> maybe goldman sachs behind me

when i'm representing north florida. that would be awesome. >> newt is saying the party should coalesce around him in south carolina. >> listen, i think -- hold on, though -- >> delicious. >> don't you think, though, over the past week or so, you can go back to mitt saying -- and a lot of these things are sort of off the cuff mistakes are actually he's telling the truth, but he talks about paying 15% and he -- but making a mistake of i like to fire people, you cut that out, even though it's taken out of context and then, i think, as sam said earlier, the most damaging part of yesterday's flub was when he said that he didn't make a lot of money in speeches. and he ended up making around $350,000? >> which is so much money compared to the average american. >> and the average person in south carolina. so the point is that newt may have a point. we may not want to end this race quite yet. >> oh. okay. he may have a point.

i don't see it myself. sarah palin -- >> you want it all over? you want to be able to vote for romney? >> we'll get to it in a moment. i think newt's doing what newt does. and -- but first you have an update, sam. >> big update. >> on the captain of that cruise liner. >> this is my first breaking news update. >> abandon ship. >> yeah, richard engel reporting the captain of the cruise liner employing the defense he tripped and fell into the lifeboat and that's how he ended up in that. >> so he fell into escaping and leaving the entire ship. >> he couldn't find the lifeboats but tripped and fell into the lifeboat. >> it might seem unlikely but it's a hazard of being on the ship, i guess. >> we have, of course, sam stein and andrea mitchell. >> and look who's with us. bob woodward, and we are very, very honored to have you here this morning. let's get to the news as mitt romney maintains a slight lead

in the latest south carolina polls. the former massachusetts governor also leading in the upcoming primary state of florida. according to public policy polling, romney tops the republican field in the sunshine state with 41% support. that is a 24 point jump from the end of november. newt gingrich comes in second despite plunging 21 points. rick santorum is in third followed by ron paul who is still within the margin of error. >> by the way i suspect, mika, as we look at these numbers, i suspect -- and gingrich has plunged in all of these states from his highs. i suspect after this past week that gingrich plunge is over. newt's probably solidified there in the mid-20s in florida. and now you may see if he does well in south carolina those numbers come together. i think this race may be lining up to be a battle between mitt romney and newt gingrich. >> unless -- unless the other candidates follow newt gingrich's advice. in an effort to make it a

one-on-one fight fwens the front-runner, newt gingrich is suggesting that perry and santorum should consider stepping aside to unite the conservative vote. but rick santorum says he will not be bullied into dropping out of the race. here's gingrich and then santorum. >> you look at the polling, i'm the only conservative who realistically has a chance to be the nominee. any vote for santorum and perry in effect is a vote to allow romney to become the nominee. because we've got to bring conservatives together in order to stop him. if you consolidate the three conservative candidates, we clearly would have a huge margin over romney. and the challenge to me is to convince conservatives to come home and have a single candidate on saturday. >> let me see, who won -- who finished ahead of who in iowa? that would be me. new hampshire, let me see, oh, yeah, i finished fourth ahead of congress and gingrich who was fifth who has spent millions of

dollars in new hampshire. and i campaigned there for five days and spent $25,000. i think it's an enormous amou-- who thinks enough of themselves that they should now because a couple of polls have him at this moment in time ahead of me that everybody should step aside and let him who hasn't won -- who hasn't defeated me in two of the elections so far to let him, you know, have a wide birterth. i wouldn't be so air cant to suggest anybody get out of this race. and i won't suggest anybody get out of this race. these are character issues. >> okay. >> wow. >> while they duke it out, we have the south carolina primary three days away. there's another issue with mitt romney as he tries to hold on to his front-runner status amid sharpening attacks over his wealth and tax records. after days of prodding by miss republican rivals, the former massachusetts governor who is worth an estimated $250 million

revealed he's paying a lower tax rate than most middle class americans. >> what was the effective rate i've been paying? probably closer to the 15% rate than anything because the last ten years i've -- my income comes overwhelmingly from investments made in the past rather than ordinary income or rather than earned annual income. i -- i got a little bit of income from my book, but i gave that all away. and then i get speakers fees from time to time, but not very much. >> bob woodward, i suspect that yesterday will be a day that a lot of people in mitt romney's campaign are going to remember for some time. because if he does win the primary, the obamas -- team obama is not going to let him forget that he said $350,000 isn't a bunch of money and i'm paying 15%. >> yes, it may be a thunder clap. 15% is quite low, but it's not surprising because he does not

have earned income, it's all investments. but one of the lessons of about four or five decades of scandal and examination and in depth reporting is when you have your tax returns, when you have a problem, get it out. don't dribble it out. what he's done is said, well, it's about 15%, now he's going to have to release the details, those tax returns are probably going to be about that thick if not thicker because there are all kinds of old deals where he had tax breaks or tax payments and so forth and so people are going to take it apart. in all the tax debate. last year, 2011, the discussion never was let's raise this dividend and capital gains rate, but it now is going to be part of the discussion. and i suspect the white house and obama are going to land on it with their cleats. >> well, they're probably watching very comfortably because he's made it more

difficult than it should be. he's made it look like this had to be prodded out of him and cranked out of him. it'll all be looked at with deeper scrutiny if that's possible. >> he didn't have to really admit at this point that he was paying 15%. this was an unforced error. it would come out eventually, it's just strange the way talking about dribbling out. the way it dribbled out yesterday before south carolina. >> he should've put the tax returns out probably a long time ago. anyone looking at this -- and then everyone would say, okay, he's rich, he's paying the capital gains dividends rate, no the surprising, now it's going to be surprising in the disparity as you point out with the middle class taxpayer or even with president obama. >> in fact, i asked him about it in new hampshire, why won't you release your taxes? and he was very defensive and said he wouldn't release it and wouldn't say when he might or would reconsider that. so, you know, you're right, bob. if he had done it in new

hampshire, it would have been a lot better than south carolina. >> but tax returns are a character issue. it tells you a lot about somebody who they are, where their money comes from -- >> where it goes. >> one of the things -- the tax issue for presidents and presidential candidates is just a ticking time bomb. >> can you remember a presidential candidate that just said no, i'm not going to release my tax records? >> i think richard nixon refused for a long time. and finally they were leaked and it turned out on income of $260,000, you know what he paid? $1,000. then it turned out there was the big scandal about the donation of his vice presidential papers, that he took a mammoth deduction on -- >> to the archives? >> well, to the government, yeah. and that was ruled illegal and he had a $500,000 tax bill and it was part of the --

>> my point, my point was, andrea. it seems you can either say i'm going to release my tax records and release them or a, no, i'm not going to release my tax records. it's just like, there are candidates that draw lines in the sand. and choose one of them. >> this is one you can't draw. i don't think. >> jay carney pointed out, bob, yesterday, that perhaps the first candidate who released his tax returns as a candidate was george romney in 1968. >> he released 12 years of them. and let me say something. everyone assumed, properly assumed that mitt romney was paying 15%. so this wasn't exactly a shock to the system, but it allowed us to actually realize or at least visualize -- to change the carried interest rate to regular income. it was never talked about really. and that's the problem. now it's going to be talked about and going to become a theme. it fits nicely with the 1%. >> that's just part of -- there has not been a serious proposal

or discussion to increase the dividend or capital gains rate across the board. and i think now there will be. >> the republicans want to slash it. they want to make it lower. >> you know, and when you have the "wall street journal" writing an editorial saying mitt romney better get ahead of this issue. obviously the "wall street journal" which supports a 15% capital gains tax rate but said he better get ahead of this because he'll be paying it as a rich guy he is, this may be an opportunity for romney to come forward with a tax reform plan that flattens out the tax code, that gets rid of a lot of these deductions and that makes the system seem a bit fairer. >> i think that would've made more sense on the reporting on this, andrea, sam, and bob. i see no other reason that he gave not to release the tax returns except we've looked at when other campaigns have done it in the past. and we want to match the timing. i mean, that's just not a --

that's not a reason. >> it's like he's waiting until he has the nomination sewed up. >> initially he didn't even say he would release it in april. that's only in the last. >> and the more explosive history -- >> i don't understand, bob. he's been running for five, six years. this is an issue he knew was going to come up at some point. why would he be surprised in south carolina? why didn't his team? >> i would say his team. >> why didn't his team come to him six months ago and say, you know, you're probably going to win the nomination. the odds on favorite. and they're going to ask about your tax records. governor, let's get ahead of it. and let's have the -- why didn't they have him ready for this even for iowa? >> well, and i think and andrea's right, there was a lot of resistance on his part. this is -- this is entering into my zone of privacy. it's not when you run for president if you remember the clintons wouldn't release their

tax returns for a long time. and when they finally did, it turned out there was a bit of a problem namely hillary clinton's investment in the cattle futures market. i think it was $1,000, $1,200 that all of a sudden turned into $100,000. and that created -- >> she's the master. she's astute when it comes to cattle futures. >> well, maybe there's some cattle futures in romney's tax returns too, or the equivalent or something that people are going to focus on. >> it's the big guess here and obviously he could've managed this better. but short of putting out his tax returns during the primary season, i'm not sure what he could've done. i'm curious what you would have done if you would have advised him. >> well, you know this is coming. and you either say we're going to release our -- my tax returns on april the 15th before the process starts, or you're going to say i'm not going to release my tax returns, that's my business and if you don't want

to vote for me because of that, that's fine, it's none of your business -- but choose one of them. i guess what i'm saying here is the fact he's being surprised now and he's making an off the cuff comment in south carolina. >> awkward. >> and it's coming out in dribs and drabs, this is remarkably undisciplined for the most disciplined candidate in the republican field. >> and the terms of the debate rather than he being in charge of it. >> like you said, choose one and be comfortable with it. he looks terribly uncomfortable. >> i should underscore, in this era, you can't not release your tax returns. it's just -- >> not since bob woodward and richard nixon. coming up in just a few minutes, we're going to talk to new jersey governor chris christie is going to be on the show. and later, dad, dr. brzezinski and david ignatius join us. and up next, richard cordray joins us right here onset in washington. you're watching "morning joe"

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today i'm appointing richard as america's consumer watchdog. i nominated richard for this job last summer. so you may be wondering why am i appointing him today? it would be a good question. for almost half a year, republicans in the senate have blocked richard's confirmation. now, i'm not going to standby while a minority in the senate puts party ideology ahead of the people we were elected to serve. not with so much at stake, not

at this make or break moment for middle class americans, we're not going to let that happen. >> and joining us now on the set, the director of the consumer financial protection bureau, richard cordray. very good to have you on the show this morning. should we take a trip back in time? >> let's do it. >> 1987. yeah. that was a big year. >> it was a big year. >> that's when richard really -- >> i think you graduated from high school that year. >> it was something like that. here he is. i believe it was "jeopardy" take a look. >> codes of honor it is. today's final jeopardy answer is this. as bushido was to 16th century samurai, this was to 12th century knights. good luck. ♪ we move down to our four-time champion richard cordray had 4,902 coming into this match. did he get the right response? what is chivalry. he did indeed. and that means he's going to add to that $4200 by $1,201 taking

you to a five-day total of $40,303. nice going, you're a super champ. we'll see you next week return of champion. >> holy cow. he was a precursor -- >> see, now he needs to protect that money. >> what was the tax rate you paid? >> exactly. we want to know. >> 115%. >> so if we were playing jeopardy today and republicans were in charge of it, they would have recess appointments for 500 and they would ask who was illegally put in his position -- there's a big battle about whether you were legally appointed or not because you may not have been a recess appointment. what is your bottom line on that issue? >> look, i'm going to leave that to others. there are lawyers who are digging into that. my job is to be the director of the consumer bureau. it feels to me that director position was long overdue to be filled. we've got a lot of work to do

for the public, to help these markets function more effectively, and that's what i'm focused on. >> conservatives would ask whether we need -- why do we need another federal agency? yet another federal agency to "make markets function effectively?" >> well, we never had a federal agency that had that job. it was kind of broken out among 7, 8 agencies, which meant nobody focused on it. we had the mortgage market which led to the financial meltdown. we know how badly that hurt so many americans, many of whom had nothing to do with it but lost jobs, lost homes, had their communities affected. so if we can make sure these markets function in a fair and transparent manner, i think businesses, the responsible businesses are going to welcome that. and i think it's good for them and good for consumers. >> so you have two years to try and make a difference because this was a recess appointment. what are your priorities? what can you do to protect the consumer and perhaps even convince republicans who say there's nothing wrong with you but clearly didn't want you there? >> well, and i -- i take that at

face value. i think that the members of congress both houses, both sides of the aisle, they hear the same things from their constituents that we hear from the people that we're working to help around the country. they hear about people who are struggling, losing their homes. they hear about people who are drowning in debt. we have markets where people have not necessarily had the clear and simple information that helps them make better informed choices. we're going to work on that. that's our project. we're going to hold accountable that everybody in the marketplace is subject to the same rules of the road. we had banks subject to certain standards and principles, others that were subject to no standards and principles competing in the same market. that's never going to work. the bad practices drive out the good, and they certainly did in the mortgage market. >> can't the justice department do this? do we really -- again, the president is making a big deal about bringing agencies together and trying to make them more

efficient federal government, consolidating. and seems while he's doing this, we're creating another agency to overlap what the justice department and other agencies have done in the past. why -- why is it necessary to create yet another department that overlaps the priorities of other agencies? >> i think the difference is that congress made a judgment that we need someone with a singular focus on consumer finance. we've never had that at the federal level. it's been broken out among 50 state attorneys general, 50 banking regulators, very patchwork quilt, none of them with authority to address the national issues. we've had very scattered responsibility with this among a number of banking agencies who also had to have it as safety and soundness. so somebody with a singular focus on this is going to do a better job. and i think we can show that and we hope to do that over time. >> well, one of the things the air waves are filled with are these ads about banks with cash back. get our credit card, you get 1% back, 2%, 3% back, is this real?

is that a gimmick, is that something consumers can believe in? >> well, i don't want to pre-judge any particular offer or deal, but we did see in the run-up to the financial crisis lots of mortgage dealings that were fast and loose. and a lot of them involve for consumers the attraction was you can get some cash in your pocket on your way to this terrible deal that you're not going to be live with one, three, five years down the road. >> you're issuing a warning to consumers this idea of cash back look closely? >> we think generally, and this has been true across markets, anything that involves cash up front where you don't yet get the services and you don't know the terms of the deal, that is a warning sign and you should be very careful. >> what about the housing crisis? and people trying to buy homes and the foreclosure situation? what specifically will you do to protect people who want to buy homes who are currently owning homes are in a bad situation? >> there's three ways in particular that we will affect

the mortgage market going forward. and i think frankly we firmly believe that had this authority been in place ten years ago, we might have averted the meltdown we had. we have rule writing authority to impose rules like ability to repay. making sure the appraisals are appropriate, clarifying and simplifying a lot of the jargony forms that go with real estate transactions, that's one area. enforcing the law. making sure there's a real focus that people are held accountable to the principles and standards already in the law but really weren't enforced effectively. and third, we have the ability. this is very important, to examine these institutions to go in to look at their documents, look at their books, ask tough questions and fix and correct a lot of problems before we ever get farther down the road. and they -- >> they're not going to like that you going in and -- >> i think that responsible businesses embrace rules of the road that are clear and straightforward and that apply to all.

the thing that really hurt our good community banks and credit unions was they were held to certain standards and maintained certain standards in their community and had nonbank firms, mortgage brokers, financed by investors that would come in. and they would be asked to offer loan to someone, long time customer, wasn't going to work. they knew that. those folks would get it from somebody else. they lost market share to people who are not being responsible in the market. that worked for a while. but ultimately, it doesn't work in the long run. it broke the markets, broke the whole financial system. and we're now digging out from that and many people have been hurt. >> i know you've only been in this current position for a short time, but you've been studying these issues for a while. i'm curious, what is the most predatory practice you've uncovered that personifies for you why there's that need for a consumer financial protection board to begin with? >> well, my background was at the state and local level. and at that level, i saw lots of fraudulent schemes. lots of scams, flipping scams, you know, fraudulent schemes

that took people's life savings, lots of them with offers for cash back. that kind of fraud cannot be tolerated in the markets. very important that we take that on. but also, i think that if you make the markets clearer and more transparent, consumers are the ones that have to make decisions for themselves. they can bear responsibility for those decisions, but they have to know what their choices are, compare products, that's what we're going to have to try to make things clearer for them. >> so nice to meet you. good luck. looks like it's going to be a blast, isn't it? like you're so excited. it's going to be tough. coming up here on "morning joe," we have new jersey governor chris christie. he'll join us live in a few minutes. >> look --

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you have to have like a gimmick. and it was proven last night again in spades. you know what i'm talking about? rick perry i don't even know where he is in the polls is now trying -- he wants to be the guy -- watch. >> well, i will suggest to you it's unconstitutional, and when i'm the president of the united states, the states are going to

have substantially more rights to take care of their business and not be forced by the epa or the justice department for that matter to do anything against the will of the people. >> do you see that? this guy's fantastic. >> newt gingrich has been promising he's going to stay positive. that's been his new promise. and he's going to stay positive. but i don't know. i don't know if he's keeping that promise. check him out in last night's debate. >> speaker gingrich, the "wall street journal" editorial page calls your attacks crude and damaging caricatures of modern business and capitalism. and they write that you are embarrassing yourself by taking the obama line. how do you respond to that? >> kill them. >> around 5:00 i think. >> the interview, believe it or not, has already begun. governor chris christie is on the phone right now with mika in washington. we'll talk to him on the air

without phones when we come back on "morning joe." ♪

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today i'm proud to report that the new jersey comeback has begun. in these last two years, new jersey has set the standard for governance in america. be honest, don't mince words, do the big and difficult things, not only because it's right but because it lays the foundation for future greatness. now it's our job to finish the task. >> that was the republican governor of new jersey delivering his state of the state address in trenton, new jersey. and the joins us now in studio.

governor chris christie of course has been out campaigning for mitt romney in iowa and new hampshire and will move on to south carolina. governor, it's good to see you. >> good to be here. is this like "home alone," did mika and joe forget you? where's the luggage? where's willie. >> sometimes i come into work and no one's here and i go about my business. >> you and i, let's just hijack the whole thing. cut it off, fellas, we've got it handled here. >> cut off the mikes. let me ask you, i want to talk about romney for a second. the state of the state. the 10% across the board income tax cut. you got a lot of heat from that. democrats even who praised other parts of your speech said it's a bad idea. said it drains the government coffers of $1 billion. the ledger called it a breathtakingly bad idea. >> i take a deep bow for that. because anything they don't like has got to be good policy. >> take your colleagues, take "star ledger" out of it.

>> first of all, gets phased in over three years. we're not taking $1 billion hit to revenue in the first year. we're phasing it in over three years. because we're going it in a responsible way. but what we are is the most overtaxed state in america and we need to bring those rates down so we can be competitive with our neighbors. we have an opportunity with new york raising its rates, connecticut raising its rates. we have a chance to be competitive. 115 tax and fee increases in the ten years before i became governor. it's time to start lowering those taxes and democrats only complain about worrying about how you pay for something. if i'm giving you your money back in ridgewood, then they're worried about it. but if they want to increase spending, they don't worry about how they pay for that. >> don't they write it's a tax break for guys in saddle river and not guys in newark? >> it's a tax break for everyone -- >> it's a small one. >> well 10% for everybody, willie. and if you're paying in, you get 10% back. but we're also increasing the earned income tax credit.

which means for the working poor in new jersey, if you pay no taxes, you're going to get more of a credit or refunds from the government. everybody wins in this tax cut. everybody who made the sacrifice is now getting benefit, as well, and the problem with the democrats is all they want to do is make government bigger and spend more money. there are less people on the state payroll than there was when christy wittman left office in january of 2001. we're going to cut their income taxes 10% over the next three years, let the democrats try to stand in the way of giving people their money back. >> do you expect those democrats will work with you to get that 10% through? >> i hope so. we have shown an ability to act in a bipartisan way. i've tried through the proposal i made to not only deal with cutting income taxes, but even for the people who don't pay taxes to give them some more money back, to try to help them through this difficult time. and i would hope they would see that for the compromise it is so everybody benefits.

and i think when they have time to let the political heat cool down, they're not going to look at their constituents and say, no, we're not going to give you back your money. >> mika wants in. mika? >> i just want to say, though. i want to jump in first, mika, because i'm listening to this. and as a conservative -- >> yes. >> and i'm looking at the field. and there's no real conservative. i'm like why couldn't we have a guy like this -- >> right. >> -- on the national ticket. being a champion of less taxes, being a champion of smaller government. i mean -- >> yeah. >> it's a shame, isn't it, mika? >> well, he still could. >> what do you mean? >> isn't he sounding vice presidential? >> yes, it would be a great offset. >> wait a second. am i sounding like i should go to a funeral? how do you sound vice presidential? >> that's -- >> that's what vice presidents do, mika, they go to funerals. i like being governor of new jersey. >> they also propose 10% tax

cuts in the middle of a presidential campaign. governor, mika has a new poll out -- >> a poll showing 55% of new jersey voters say it's very likely or somewhat likely that governor chris christie will be selected by the republican presidential nominee to be his running mate. those are your people. >> see, i'm not good in math -- >> 68% -- how does that work? >> it doesn't add up. >> doesn't make sense at all. >> it's like democratic math. >> that's jersey math? >> 55% to 68%, that's like -- >> can't count that high. it's over 100, though, i know that much. >> would you be interested in being a vice presidential candidate? >> there's only one person who makes that decision and that's the presidential nominee. i don't expect to be asked. i've said this over and over again. i don't think i'm the type of personality who is going to be asked to be vice president by anybody. they'd have to hire a food taster, joe.

they wouldn't want that. >> yeah. >> what i think is i'm going to be able to help governor romney by being the governor of new jersey, doing the best i can to try to help him get elected as president of the united states. i haven't been asked. >> you've been graded also by the people of your great state, the garden state as willie and i like to call it. this is grading your performance half way through your term. look at these grades. if only i had these type of grades in high school. 20% say you got an "a," 31% say you have a "b," over 50% said you got an "a" or "b," 20% with a "c." and this is what mika and i are more comfortable with. "ds" and "fs." and it is amazing how your numbers went up when you sat down with democrats and both

sides made some really tough choices to pass new jersey's budget. >> listen, the budget, pension, and benefit reform where we saved over $120 billion. two budgets that we've balanced now without raising taxes on the people of new jersey. the person in charge has to drag these people into a room and say, listen, we're not leaving until we settle this. and everyone has to make some compromises. and that's what i've done, but i've never compromised my principles. and that's the difference. you don't compromise your principles, but there's usually a boulevard, sometimes wide, sometimes more narrow between getting everything you want and compromising your principles. that's that we're trying to do. >> sir, what is the art of making a deal? in other words, if you were to sit down and have dinner with president obama and say this is how you cut deals with the political opposition which is quite mobilized and passionate, what would you say? >> first is you have to develop relationships, and that ship has sailed for the president now

because he paid no attention to that over the first few years. i mean, you know, the republicans were in the minority, he paid no attention to them. and now you need them because they run one of the houses of the congress and you don't have a relationship. i had an old boss who used to be the deputy attorney general. and he told me he was going to the "new york times" editorial board and i said, jim, you're going to the "new york times" editorial board? and he said, chris, it's a lot harder to hate up close. i have lived by those words since he told them to me. you need to get in the room and not just when you need something, but over the course of time so they feel like they can trust you and you can trust them. so when they give you their word, you can count on it and vice versa. it takes time, bob, to do this. when i first got into office, they were not clambering to cooperate with me. and i would keep my word. when i gave them my word on something, i would keep it. >> if i can ask one more quick question, what is your reaction

to governor romney saying that he paid only 15% effective tax rate? >> as an adviser, how do you handle that? >> first of all, the way i've conducted myself all along, i've released all my tax returns, and i did it in the campaign, went back a number of years and i released them every year after i file them, rifgt after i file them to the public of new jersey so they can see everything. he says hooest going to release them in april, i hope he does. and in terms of the 15% effective rate. for people who know this, i don't think it comes as any great shock because the guy hasn't been having a job where he's been getting income over the last number of years. and so he's been getting money from investment income which is taxed at a different rate. the fact is, let's get all the facts out there, see what the tax returns say, and i think everybody will know the story is probably much ado about nothing.

>> that's the point you made earlier, that anybody that has followed mitt romney's professional career and political career is not going to be surprised by this 15%. what we're talking about around the table, he's done nothing illegal, nothing wrong, it's politically awkward for him right now. >> yeah, and part of it has to do with the way he handled the debate where he was talking about releasing his tax returns and you never got a sense -- you got a sense there was something to hide. and mike, i guess the governor's probably right is the best thing to do trite now is probably let it all out. and the surprise is because he's been running for five years why this stuff hasn't -- and also, of course, the stuff with his father which creates a bizarre contrast. >> so on a final note, chris, it is good to have you on the show. we hope we -- >> wait, can i ask you to call him governor? let's be respectful of the position. look at him, when he's vice president are you going to call him chris? >> i call joe, joe.

>> but maybe he's going to want to be called mr. vice president. >> i'm not all hung up on that stuff. >> okay. >> so, chris, i watched you on the own network, the interview with oprah about your weight. and i have to tell you on a very serious level, i really -- i don't agree with you at all pretty much ideological and in terms of politics but i really appreciate your speaking out about this. you will identify with so many americans who are dealing with this crisis firsthand like you are. i know that must have been difficult and for your family as well, to do all out like that and talk to someone like oprah winfrey who has had her own struggles but also has a huge platform for this issue. i really appreciate it and that's all i wanted to say. >> thank you. it wasn't hard for me. the fact is she asked me questions and i told the truth and how i feel. it is a struggle and has been a struggle for me a lot of years.

i hope other people in the country understand. i hope you all understand when ignore ramuses like eugene robinson get on your show when they talk about weight and someone should have a salad and take a walk. as far as i'm concerned, guys like that shouldn't have a platform to speak because they're so ignorant. this is a struggle people have, a lot of people have in life. i will be honest about the challenge to me. if that helps other people, i'm thrilled about it. all i did was answer the questions oprah asked about my life. if you go on one of those shows, you have to be honest and answer those questions. >> willie and i have our own struggles. >> talking about ignoramu srss, thought you were going to say. talking about that, i thought

that wasn't his finest moment. two days away from the south carolina primary, reading about chris christie should get in the race and jeb bush should get in the race. what does that say about the state of the party? >> i don't think it says anything. hopefully there are people who like the policies i'm taking that george bush took during his term as president. that's what it is about. it doesn't diminish any who says about other folks who decided at this time, i don't want to run for president of the united states. what it says about me not bad about the field. >> and doesn't say anything about the status of the party when he's won two races? >> i don't think so. there's always a searching and longing until somebody wraps it up. when they do, the party unites around them and gets excited about the presidency. that's what it will say about governor romney when he wraps it up which i hope he does in the

next few months. >> and now, your next project is to turn around the new york mets. >> i'm in physical pain about that. >> even you couldn't turn around the mets? don't say that, willie. mr. wilpon, my number, you call, general manager, christie. >> you would give up your job? >> let me tell you something, the people of new jersey, i got to go. general manager of mehmetts. >> he won't run for president but he will run for general manager of the new york mets. [ monica ] i'm away on a movie shoot and it hasn't been going exactly as planned. cut. cut! [ monica ] i thought we'd be on location for 3 days -- it's been 3 weeks. so i had to pick up some more things. good thing i've got the citi simplicity card. i don't get hit with a fee if i'm late with a payment... which is good because on this job,

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tomorrow morning and friday morning, "morning joe" will be live at the mills house for special coverage of the south carolina primary. we'll get started at 5:30 a.m. on way too early. come join us, have a cup of coffee. later tomorrow, thursday, joe and mika, holding a town hall discussion at the river area theater. 225 king street in charleston. doors open at noon tomorrow. go to joe.msnbc.com for more information. whoa!

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if i had to vote in south carolina, in order to keep this thing going, i'd vote for newt and keep this thing going because we know the mistake made in our country four years ago was having a candidate that was not vetted, to the degree that he should have been so we knew what his associations and his pals represented and what went into his thinking, the shaping of who our president today is. that vetting did not take place.

i want to see that taking place this time because america is on that precipice because it's that important. we need this process to continue. >> good morning. it's 8:00 on the east coast, as you take a live look at washington d.c., back with us on set, we have sam stein, andrea mitchell. in columbia, south carolina, mark halperin. also in new york, of course, willie geist. let's get to the news with the south carolina primary just three days away. mitt romney is trying to hold on to his front-runner status amid sharpening attacks over his wealth and tax records after days of producing by his republican rival, the former massachusetts governor, who is worth and estimated $250 million, revealed that he is paying a lower tax rate than most middle class americans. >> what's the effective rate i've been pay iining, it's closo the 15% than anything, because my last 10 years, my income comes overwhelmingly from

investments made in the past rather than ordinary income or earned annual income. i get a little bit of income from my book, but i gave that all away. then i get speakers' fees from time-to-time but not very much. >> 15%, capital gains tax rate. >> this is a problem on a lot of levels. mark halperin, campaigns are sometimes defined in a moment, that the candidate doesn't realize. we can go back. i don't want to overstate this. we can go back to michael dukakis and the tank. we can go back to 1980 and reagan saying, mr. green, i paid for this mike in nashville. in this case, you have a guy worth $250 million, talking about how he's paying a lower tax rate than most secretaries, something we talk about on this set all the time. one of the most damming parts of this is when mitt said he didn't

make much money on speakers' fees. his definition of not much money -- >> $360,000. >> $360,000. yesterday is a day i suspect the romney campaign is going to be regretting for some time. >> a 1% day. >> mark. >> well, this was an unforced error. i actually asked him the question about what differe differentiated him from rick santorum and newt gingrich on policy and he gave an answer and mentioned effective tax rates and i asked him what his effective tax rate was. i was surprised he answered. adding on, as you pointed out, the speakers' fees not being very much money. we said all along for the republican party, if they're going to win a general election, it must be about president obama and his economic record or the republican would have a hard time running. yesterday's moment but a sign of

romney's ability to get through a long campaign was a real eye opener for a lot of republicans and a lot of journalists to say, does he have the ability to present himself, whatever the facts, in a way that doesn't make him a target. what he said yesterday, makes him a big target in the short term and if he's the nominee, a big target in the long term. >> in this past week, i have been carrying the bloody banner of free market capitalism and free markets. >> you are a brave soul. >> i am a brave soul. i have been along around this marxist tin set. i have been doing it. i think most republicans would agree with me. there are a lot of republicans that make 70, 80, $90,000 that are suddenly feeling disconnected again from a guy that pays 50% tax rate. that cuts -- that's not fair. first of all. but secondly, let's say a guy that's making 80, $90,000, and his wife maybe making money,

they've got four kids, they're struggling. >> it's tight. >> every dime counts. it hurts every time they go to fill up their truck, and they have to pay that much to have mi mitt romney dismiss a $360,000 -- >> wasn't that much. >> thuchunk. saying it wasn't that much. this is deadly serious for mitt romney now, not only in this general but primary. >> in the primary, you're talking south carolina. you have an unemployment rate basically twice as high as it is in new hampshire. he's shown, as mark was just saying, the propensity for unforced error, for sort of stepping in it, as he did in new hampshire briefly with, i like firing people, when taken out of context, that is the sound bite that is already ricochetting around. this does cause concern among republicans, except along the coast of south carolina, where you have more people who retired

there and may have some more money, across the state, is the a potential problem. he is far ahead, no question, not only in the nomination he has basically locked up but the south carolina primary. it does cause concern. this is a guy who went to such great lengths to say he would not release his tax returns until april and now raised the issue. >> i just don't understand all the unforced errors over the past 24, 48 hours. there have been a lot and despite the carriicature of the south carolina primaries. in my republican primaries i always ran, i didn't win with votes from people that lived in big houses on water. they always voted for the other guy. i won by getting all the votes from the people in ranch houses and pickup truck out front and

made anywhere from 40 to $80,000. i can't overstate this enough. this is a serious disconnect from mitt romney in a south carolina republican primary. >> the "new york times" did the math on the speeches. i think it came out to something like $41,000 a peaspeech. a bit more than the median income in south carolina. obviously, that contrasts, telling in many ways. in romney's defense, the april tax release is something that john mccain did. he shouldn't have talked about it, said i won't answer questions until it's released. that was the unforced error. >> and so people don't have to adjust their tv set. barack obama is in the 1% set. he made millions and millions of dollars off his book. make the difference. >> if you look at his tax return

in office, it's not millions and millions. >> he made millions of dollars on his books. >> a million. i'm just saying. it's a big difference. >> i would like to make my point. >> sorry to interrupt. >> three times. >> i would never do that to you. and it hurts me. >> my point that i've been trying to make for the past 15 minutes is barack obama can get away with that. >> yeah. >> because americans don't resent other americans and politicians that make a lot of money. but if barack obama were to say, yeah, i made some money on books and the paperback and it wasn't that much, that's when it becomes -- it's not the money mitt made that's the problem, it's his attitude. >> the other image is mitt romney has basically been sitting around running for public office the past three or four years and made money basically for doing nothing but collecting on his tax returns. that image of him not working,

making millions of dollars and paying 15%, contrasted to your average south carolina worker who has to go and pay 35% on hard labor, that's the contrast. he hasn't been taking risks, he's been basically sitting back and profiting off the investments and money he made in bain capital. it's not real work. >> here's what the paper says. when he recently visited the journal, mr. romney all but said he didn't think he could propose a tax reform with lower rates because he would be attacked as a rich guy. governor, you are a rich guy. >> this is the "wall street journal." >> with the 15% news, you will be attacked anyway. what matters is how you respond. newt gingrich jumped on it yesterday and called it mitt romney's flat tax for a 15% voluntary flat tax. team obama won't be so witty or kind and will spend $1 billion

assailing the republican as a morally obtuse fat cat who doesn't understand the problems of average americans. if mr. romney doesn't want to spend the campaign defending his 15% tax rate, he'll get out front and propose serious tax reform. i would agree with that. >> he actually wants to eliminate that 15% rate for families making under $200,000. he wants to put it down to zero. >> how does he do that? >> you just do it. >> how does he say it? >> even he acknowledges there is a disparity here because it should be lower for people of lower income. comprehensive tax reform, in light of this, i would guess, would just make it seem like he's making it more favorable to the wealthy. >> it makes it much harder for him to talk about tax reform. every time he talks about tax reform, his critics or opponents will talk about his effective tax rate. there's nothing wrong with that tax rate. >> not like he's broken a law.

>> that's what you pay if your income comes from -- >> we have to see how much is offshore. there's reuters analysis that he has money in bain funds operating in the cayman islands and bermuda and different countries across the globe. that's what people want to see. >> really, the problem we've been talking about a very long time, we talk about g.e. paying 10% in corporate taxes and warren buffet paying 17, 18% in taxes, which actually, he's paying a lot less than that, if you look at how much money he actually makes per year. that's just on taxable income. >> which he himself complains about. >> he himself complains about to feel good about himself but hasn't written a check to the federal government. >> isn't that convenient. >> mitt romney may have just become a poster child for serious tax reform that will make the tax code flatter and

fairer and get rid of these loopholes that have investment income at 15% and personal income taxes up in the 30s. >> this is the heart of the conversation the country's been having for more than a year now. it's about fairness, whether you like that term or not talking about tax, should a guy like mitt romney, whose worth a quarter of a billion dollars have these loopholes to pay less than middle class americans do. it feeds again into this caricature of him as the guy with the top hat, the rich guy totally out of touch. >> funny yesterday, gingrich proposed the 15% flat tax, is the great. we will rename my flat tax the romney tax. everybody should pay 15%, pay what mitt romney pays. it's remarkable. he was cat flatfooted at the debate monday night and our friend mark halperin asked him where this income was coming from. he said, i didn't make very

much, just speaking stuff. when you made $41,000 per speech, $8,000 more than the average income per person in south carolina, it's hard for voters to say, yeah, that guy is one of us. >> because he's not. >> again, people don't mind that he's not one of them. people don't mind roosevelts and kennedys and even, you know, reagans, who made some money in hollywood running. they have to be connected with the voters. mitt romney has made one mistake after the other over the past couple of weeks, really tone deaf mistakes. i guess even his own people are starting to roll their eyes, going, my god, just, you've got a lead, sit on it. the question is, who is there to take advantage of it? is this an opportunity for newt to possibly win south carolina?

>> i still think romney will win the primary. if there's one person who can beat him at this point, it is gingrich. i saw him yesterday on the stump. much more focused, moving away as best he can from the bain capital argument, going after romney on these electability issues and the question whether he's too much like the president. you know the gingrich people are mildly worried. they're having a conference to go back on gingrich on this theme they used a few weeks ago he's unreliable. his record as a leader is not one of constancy but erratic behavior. they seem threatened by gingrich and gingrich is the only one who can take advantage of it. this 15% thing, it would be nice to know what effective rate the speaker is paying, we're getting his returns this week. is the an issue he can drive and dove tail with the message about romney. coming up next, dr.

brzezinski and david ignatius are here. they have a lot to talk about the situation in iran and ongoing war in afghanistan and the dangers of america's declining middle class. that should be good but first, bill karins. >> you're not talking about me, talking about the weather. is the what it looks like live in seattle. they don't get a lot of snow. all the air flights are canceled and there's a coating on the ground. as far as snow, we're watching snow primarily outside of portland and picked up 2 inches outside portland, oregon. they're done. a mix of snow and rain at the current time. and nasty day with thunderstorms, even tornadoes yesterday. right now, just plain old windy as temperatures begin to plummet. warm this morning. windchills will be a little

cold, especially later on today. snow showers coming off the lates, that will be the worst of it. as far as new england goes, looking good, midwest, plain old cold for you. if you're in south carolina, down by the coast, tomorrow, "morning joe," we will be at the mills house in charleston, south carolina for the primary coming up saturday, join us there, should be a good time, as always. look at this guy. in seattle, going down to a crash, buddy. there you go. good times in seattle. you're watching morni"morning j" is it fast?

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welcome back. the search for survivors off the coast of italy is on hold right now. its high seas threaten to shift the crippled cruise liner that ran aground on friday. this story gets more astounding. we're looking at live pictures right now. the ship's captain is under house arrest and much scrutiny, accused of manslaughter and abandoning his vessel. prosecutors say the 52-year-old smashed a massive vessel into a reef and then left thousands of panicked passengers to fend for themself. 28 others are still listed as missing and 11 people confirmed dead. divers plan to blow holes in the

liner to give passengers access. the captain says he didn't do anything wrong but evidence shows he was already in a lifeboat as the ship and its victims were sinking into the water. [ speaking foreign language ] wow. bob woodward is a navy guy. a little out of the ordinary to say the least, bob. >> the maiden voyage, the skipper should have looked at

the charts eight times and made sure he knew where he was going. in a situation like that, there should be panic. >> the communication officer wasn't even supposed to -- >> when i was communications officer, the thought -- not the rule but the thought was the captain is the last to leave the ship and the one before him is the communications officer, because there's a communications problem to tell people what to do and organize them. >> wow. >> just awful. we have much more ahead on "morning joe." coming up next, david ignatius is here. also -- i better study. >> your dad is here. >> mika is studying dr. brzezinski's book. dr. brzezinski and david ignatius, bob woodward on "morning joe." >> i'm in trouble. this is an rc robotic claw.

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iranians for the last two weeks have been running exercises in the straits of hormuz, running exercises to intimidate the west and convince us if we try to do anything

serious about sanctions, they will close the straits. the obama administration this morning announced that they were canceling an exercise with the israelis to avoid irritating the iranians. i believe this is the biggest act of weak ness by any america president in my lifetime. >> all right. here we go. i think we're going to get some reaction to newt's comments. >> this is like the mt. rushmore of washington d.c. >> joe, what are we doing here? joining us now, former national security advisor for president carter, dr. brzezinski, dad, the author of the upcoming book, i have it here, "strategic vision." i've been reading it, studying.

>> didn't you say he was testing you on vacation? >> he tested me on vacation and said, mika, you might want to read the cliff notes. anyhow, i don't know why he said that. the associate editor and columnist for the "washington post," david ignatius joins us as well, and bob woodward back at the table. >> big guns are out. >> he was reacting to newt. >> you were reacting to newt gingrich's statement that the president was showing weakness towards iran. what's your response? >> i'm trying to be charitable so i have to think of something decent to say of mr. gingrich. his statements' action crasscy and truth are somewhat dubious. >> david are you going to be -- >> that was very tactical. you can tell he has a book coming out next week. >> i've read the book and it's terrific. i've been really astonished to see the republican candidates lining up in these debates

almost promising to go to war against iran as soon as they get elected. quite apart from the policies they're proposing. this extreme rhetoric, you wonder what people think in iran, that our politics is a joke or they're really worried. my own sense is the obama's administration policy on iran, i wouldn't say this about many other areas of foreign policy is actually working about just right, the iranians are really nervous, there's panic in iran about availability of dollars, where the money is going. i have a column this morning, talks about significant shifts away from purchases of iranian oil, including by china, their best friend. they're facing a really tough year, exactly what the administration wants. i don't frankly know what gingrich is talking about. >> isn't there a danger in the obama administration policy here of sticking -- putting their

fingers in that hornet's nest all of the time and that the leadership is going to feel und und under siege, beleaguered, pinned down. >> who? >> in iran. >> i'm surprised, you're worried about what teran is thinking about our government, that our republican candidates are crazy when dealing with ahmadinejad. this is a president that came in, in 2008 came in saying unlike all those other presidents, i am going to engage and be reasonable with the iranians. i think it's fair for republicans and independents alike saying, three years later, what has that gotten us? >> david rightly atrk lates trte policy. very aggressive on sanctions and administration figures have given speeches saying we have them pinned. you have to think for the moment the danger of pinning somebody

who's crazy, which the leadership is. >> that is a more accurate approach than worrying about whether tehran thinks we're crazy. >> no. >> no. i will keep repeating this and newt gingrich will pick it up tonight. dr. brzezinski, i've been reading the "wall street journal" editorial in 2008 say ing george w. bush administration had drawn one line in the sand after another and the iranians kept kicking dust. it has seemed to me foreign policy officials, whether they say it or not for the past three years, even in the bush administration suggested an anywhere iran may be a fete accompli. they say it off-camera but not on camera. >> do you hear this in washington d.c.? >> i hear it from some people. the question is how accurate is it? >> that's my question, how accurate is that? >> it seems to me a possible outcome and outcome we can live with is an iran that is developing its anywhere

capability but doesn't cross the threshold and actually does what north korea has done. we have incidentally not paid much attention to the fact north korea has gone much further and we're not threatening north korea, we're isolating it, os stra sizing it and we can do the same towards the iranians. i've not read david's column this morning and do it religi s religiously at breakfast but have not had breakfast yet and i read another column that warns against us a sterria and it is not yet the case. we could have circumstances if we narrow down the options for the iranians so narrowly the choice is total capitulation, abject capitulation or starvation and so forth, they could overreact and unleash

something and the victims of that would be primarily the united states, second, the global economy, thirdly, our principle friends and the beneficiaries are going to be the russians, whose oil will>>will skyrocket to $200 a barrel. >> i was going to ask what are the implications of tough sanctions and shutting down iranian shipment of oil. would the united states not suffer as much as anybody else on the dploeb? >> that, joe, has been one of the most delicate things the administration has been working on. how do you take out iran's roughly 2.2 million barrels a day of exports without seeing a price spike that at this time in the world economy could be disastrous. they have been working with the saudis -- >> certainly something this administration doesn't want to happen in the summer? the best oil experts i've been able to talk to, i quote this morning, say there appears to be a buffer of about 3 million

barrels a day, extra 2 million barrels from saudi arabia, extra 500,000 from more libyan iraqi production plus another 500,000. you have a cushion over and above, if you took out all iranian oil, you'd still have a margin to satisfy customers. if that's so -- obviously, there's some risk here -- this period of confrontation bob is describing doesn't need to result. the catastrophic situation of the world's economy. >> it may not be a catastrophic situation if the iranians don't overreact. the risk of that scircumstance, the iranians might overreact. there is the straight but that is dubious and there may be options but there is a risk this could get out of hand and the iranians can destabilize iraq,

they can complicate our situation in afghanistan. they can destabilize others. they have options. i agree with you. i think the administration is striving to be delicate. what makes me fearful is not the administration but the external pressures. from the israelis on the right wing. the israel establishment is strongly against military reaction and so is public opinion and so is the defense minister. there is the prime minister and for ren minister. >> this is one of the hardest foreign policies to get right. the hardest of hardest cases. if i look at history like world war ii, a lot of work has been done over the years about why did japan attack pearl harbor? there is a lot of data to show that the japanese felt pinned. they felt we were cutting off their oil and their rubber. we were.

and so they responded. so you can wind up -- >> iran paul thing. no. i'm just saying -- >> just joking. ron paul blames america for 9/11. >> this is a very delicate situation. you have to be careful your policy does not trigger the response you dread. >> the republican candidates chiming in, joe, on this. >> let me ask, let me ask you, dr. brzezinski, we've asked this question about every six months. i talk about the iranians, iranians, who are the iranians leading right now? is it a little less murky than six months ago or do we still have internal facts or do we have ahmadinejad or khomeini? the revolutionary guard? where does the real center of power in that country lie right now? >> we have to realize the fact that the iranian system from the very beginning has been a very

complicated system. our notion is very simplistic. the i yo toll las on top and it's a crayszy system the centr power is centralized and somewhat competitive and that h has, to what we can gauge, has gotten more acute including domestic policy including religion and so forth. we're dealing with a complicated system to some extent paralyzed, to some extent central to great emotions, there is a great deal of opposition to the regime being reduced by the sense of being surrounded and beleaguered because nationalism, even those who oppose this regime still favor some acquisition of anywhere capability. >> were you surprised the president reached out using back channels to warn? sn>> no. i think that's exactly what the president should be doing.

more to the point. >> could you explain to people how unusual that is for a president. it hasn't happened very often since '79, has it? >> back channels, intelligence channels are used to convey messages all the time. more secret letters carried to foreign heads of state than we know. in this case, there has been an effort as the crisis has deepened to avoid precisely what bob woodward is talking about, that iran feels cornered and has no other choice but to strike out. we have said, you have a choice. here are our lines, what we regard as impermissible. if you are prepared to negotiate seriously a limit that keeps your program this side of being an anywhere weapons program, we're prepared to sit down and talk about it. i think there's some evidence that that's get through to iran. will they follow through and go with a real negotiations, we don't know that. they're sending signals and

suggests the policy is working out about right. >> this is pressure increases, they begin to yelp and then say -- >> that's the real problem for us. >> let's look at iran and how iran has impacted american politics and how you can talk about '79 and '80, how it haunt ed -- >> you remember well. >> the carter administration, six years later, you have the reagan administration supposedly tough on terror, sending birthday cakes shaped like keys and bibles, and selling arms. now, here we are 31 years later, after the 1980 election, where iran played a central role, we may be seeing that yet again in 2012. it's just fascinating. this country continues to be a thorn in the side of american presidents. >> it certainly does. that's why it is a hard case. if you look at him, tom donilon,

the national security advisor gave that speech about six weeks ago he publicly at brooks saying, we are winning the propaganda war. we have this country pinned and so forth. if you read that speech and you're somebody in iran, you're going to say, wow, they have declared a kind of war against us, at least a war of words. you have all of this covert activity going on, whoever is responsible, where scientists are being assassinated on the streets of tehran. you need to at least get in their shoes and say, how does this look? that assassination program, whoever is doing it, you're an expert on this, david, isn't that really wild and off the charts? >> it's extreme covert action. every source i've talked to in the u.s. government has said, we're not doing this.

there may be a lot of things we are doing but we're not going out with motorcycles attaching bombs to the sides of cars in tehran. >> we are not doing it but someone is doing it. we have to face the fact and i think the secretary of state, clinton, came close to facing it, that this really is a degd r degrdation of international affairs. we're not doing it, but someone is doing it. i think we know who is doing it and i think we have influence and capacity to make it clear it should not be done, point number one. point number two -- >> are you suggesting israel, the israelis are doing it? >> we haven't said it openly. >> no, we have not. >> the press have speculated to that effect. >> most people -- if that's the case, that runs counter to what david said. what david said is the israeli intelligence community --

>> i haven't said that. the israel -- but someone is doing this. the second fact we have to factor, very complicated, the u.s. congress has intruded itself massively into the management of our policy towards iran. the legislation is being passed, quotas being set, the stringency of demands being pressed. >> on the economic sanctions. >> yes. all are the products of congressional influence produced by lobbies and money and by the atmosphere in this country. what i am afraid of, despite the best intentions of the administration, i support, the situation may get out of hand. that's the concern that i have. >> that legislation the president signed december 31st, is part of this process that is creating effects now in the oil market that are hurting iran that make it more likely iran will come to the table. i don't have a problem with

that. >> more likely they will come to the table or do something extreme, perhaps. it's not a given when you put these economic pressures on a country, you're going to get, oh, okay, now, i'll sit down and -- >> bob, you said something more extreme. the iranians obviously have -- i think most americans have seen them, as the epicenter of international terrorism since 1979. we have, as dr. brzezinski said, perhaps an oversimplistic view of the way they run their government but it is not a mistake this iranian regime is still in power 31 years later and still a thorn in the side of american presidents. >> more than that. a real threat. >> my point is, they're a bit more pragmatic, actually, and a bit wiser, i think, in how to use their power than say saddam hussein, who allowed himself to be put in a position -- >> let's hope you're right.

>> it means a great deal what kind of accommodation we can reach. we may push them towards an accommodation but means a great deal if we're demanding an accommodation and if too great, humiliating concession by them we won't get an agreement and domestic pressures unfortunately make it more difficult to negotiate intelligently. >> david, what's the latest assessment from the american intelligence community? and intelligence communities around the world about the anywhere program? the old saying we are always fighting the last war. in a sense, there's a danger we are fighting a last war with iraq where all the in tell on the wmds was faulty. >> we need to be clear. the iranians have not crossed that line to building an anywhere weapon. they are assembling all the pieces they need to build an anywhere weapon. the estimates are typically one plus years out to assemble a weapon. the problem with brinkmanship is you have go to the brink. we're all talking about the

fact, gee, this looks like the brink. that's the way these negotiations work. >> dr. brzezinski, did i hear you say three? 1 to 3 years estimate? >> yeah. 1 to 3 years. >> that's an estimate. they don't know. if it turns out we discover there are other facilities in iran they didn't know about working on these programs, it's up in the air. >> the guy from columbia so well informed on the subject has tabulated it since 1984 and since 1984, every year they predicted it would be the next year. >> thank you very much. what a fascinating conversation. >> one of these years, they're going to be right. >> exactly. wanted to ask you about the middle class and politics of resentment. we'll do that when we unveil your book next week here on "morning joe." >> we can talk about the 15% rate. >> we'll talk about it. i have it here ready for you. it's really good to let these conversations breathe.

thank you very much. we'll be right back with much more "morning joe."

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let's get a check on business before the bell with brian shactman live with the snonew york stock exchange. >> we have mortgage applications up, data on financial institutions. financials are the story of the day. goldman sachs beat expectation, stock is up but in perspective, basically cut in half year-over-year. from all the banks we hear from, profits are okay but not making as much revenue because

investment banks is down and loan growth spotty. the other thing i want to touch on -- >> sorry. somebody was talking in my ear. did you say goldman sachs beat expectations? >> they beat expectations but expectations have dropped through the floor, joe. they were making on an annual basis, $22 a share two years ago. they're now looking at $4 a share. >> so, brian, what are we to take from the fact that the two giants of wall street, jpmorgan chase and goldman sachs both over this past week, have announ announced disappointing earnings? what does that mean to the rest of us? >> it basically means in this environment, whether religigulas or whatever the environment is, it's harder to make me on the way they used to. not a lot of mergers and acquisition money and not getting those kind of fees and loan growth kind of tepid. a couple of regional banks said their loan growth is up. big boys struggling, region al

boys doing okay. >> thank you so much. we will be back on "morning joe," brewed by starbucks. [ male announcer ] let's level the playing field. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up $600 when you open an account.

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