>> no one's ever asked to see my birth certificate. they know this is the place. >> mr. romney has joined the community of conspiracy. and now swims in the same sewer as donald trump. well done. thanks so much for watching, "hardball" is next. tonight, a conversation about race, president obama, and birtherism. frankly, a conversation that i'm a little nervous about having on national television. let's play "hardball." good evening, i'm ezra klein in for chris matthews and leading off tonight. you remember this? >> i barack obama do solemnly swear. >> that was barack obama's

inauguration less than four years ago now and it seemed for a shining moment like america had opened a new chapter in its difficult and frequently shameful history with race. but it wasn't true. even as obama took that oath, researchers were going back through the 2008 election, running through the numbers, running through the polls and finding that far from being a postracial election, it was an usually racial election. tested this in an interesting way. first he ranked areas of the country based on how often they entered racist search terms into google. then compared obama's share of the vote in those areas with john kerry's's share of the vote from the '04 election. just an election cycle before. he found that obama had lost 3% to 5% of the popular vote compared to what you would have expected from kerry's results or as he put it, obama's race, "gave his opponent the equivalent of a home-state advantage country-wide." the racialization of politics

continued after the election too. political scientist michael tessler and david spears looked at how it affected his approval ratings. found that to a degree completely unprecedented. approval of obama was driven by the individual's attitudes on race. this was a set of graphs published in the book, the dream of a post racial america. what you're seeing here is presidential approval broken down by racial attitude. here's approval for reagan. not a straight line, but not seeing a huge difference. here's approval for george h.w. bush, looks a lot like reagan. here's disapproval for bill clinton. here's approval for george w. bush. again, no straight lines exactly. there's some evidence it's more conservative opinions on race. and disapproval of democratic presidents. but it's not a huge gap until you get to obama. that, that is a huge gap. and it doesn't look like any

other graph for any other president. they found something else worth remarking on. "president obama continued to be evaluated, not just as an african-american but as someone who is distinctly other." >> i love being in this home in this place where ann and i were raised where both of us were born. anne was born at henry ford hospital i was born at harper hospital. no one's ever asked to see my birth certificate, they know this is the place, that we were born and raised. >> now, i want to stop here for a moment. this is tough to talk about. this is dangerous, frankly, to talk about. and i'm honestly a bit nervous to be on national television talking about it at all. race is a hard subject, particularly when it intersects with politics and needs to be handled with care. i want to say this as clearly as i can. i don't think mitt romney's

racist and i'm not accusing him of being racist, not even a little bit. he says, he believes, by the way, that obama was born in the united states. he's not a birther either, he's not. what romney has done, though, is indulged birther sentiments throughout the campaign. for instance, he's embraced donald trump as he's become the nation's most prominent birther and the joke he told today. the point of that joke really wasn't, as i read it, anyway, that obama was born somewhere else in reality. it's that mitt romney wasn't. it's that romney gets to go through this campaign and go through public life without anyone raising questions as to whether he's really person. that is not racism on his part. but it is privilege. at least a kind of privilege. and it is not a privilege romney has used very responsibly. compare him to john mccain in 2008. who stepped on the stage and specifically attacked those who wanted to paint obama as something other.

>> i have read about him, he's not -- he's arab. he's not -- >> no, ma'am. no, ma'am. he's a decent, family man citizen that i just happen to have disagreements with on fundamental issues. and that's what this campaign is all about. >> this was an option open to romney too. an option open even today. he could've come back out and said, look, i was making a joke. i think the birther controversy is ridiculous and funny and it deserves to be joked about. but if there was any doubt at all, let me dispel it, i believe president obama was born in this country, i believe he's a loyal and good and decent american who loves his country. we have deep and real policy disagreements, but that is it. it's not really what romney has done, though. romney has fed this kind of thing, he himself has said he doesn't personally believe it.

it's not racist, but it's not admirable. this is not even about romney. primarily about romney. this would be happening no matter who the republican nominee for president was. it was happening before the campaign. beyond romney, while there's nothing about birtherism that is necessarily about race, you can think another politician born in canada. there is at this point an enormous amount of evidence that some of what's going on in the reaction both positive and negative is, in fact, about race. and yet, this is the one topic that obama frankly can't talk about anymore. he talked about race in the '08 campaign when he had to. when he was forced to by the jeremiah wright scandal. but since then, not so much. daniel gillian, a political scientist at the university of pennsylvania looked at nearly all public presidential remarks for recent presidents and found that in his first two years as president, obama talked less about race than any other democratic president since 1961.

in this month's issue of the atlantic, a remarkable and brave piece. it contains a lot and written long before romney's comments. it's really not about romney, republicans, and how they talk about race at all, it's about president obama and how he doesn't. even if obama would prefer to ignore race, it won't ignore him, "race is not simply a portion of the obama story. it is the lens through which many americans view all of his politics." joining me now is ta-nehisi coates and one of my favorite writers. it's that pleasure to have you here today. >> thank you so much. >> so i have to be honest, i am somewhat petrified about this whole segment. >> don't be scared. it's okay. it's all right. >> and for me, i can't imagine what it's like for politicians and particularly for president obama as he writes this piece to walk this very delicate line between, you know, what needs to be said and what is safe to say.

>> yeah. i think that's a big problem and i think it's something that he had to be thinking about when he decided he was going to run for president. early in the piece, i quote one of his polls says basically -- in an interview saying the fact of the matter is a black man cannot be president of the united states given the racial politics and the history of this country. but a young man who happens to be intelligent, but happens to be smart, nice-looking, reasonably quote unquote articulate who just so happens to be black can be. and i think that's exactly how candidate barack obama tried to pitch himself and how president barack obama has tried to present himself to the country. >> so you have a really remarkable affection in the piece where you sort of run through the sort of explicitly and some ways more importantly the implicitly racialized controversies of the last couple of years. and i really hadn't thought about it as coherently until i

read your piece when you put it all together. it was surprising to back up. and in that section, you go through sort of a back context of birtherism and the role it's played, the things like that have played in american politics. walk me through that a bit. >> the interesting take on mitt romney's quote unquote joke today, i'm sure it was a joke, i'm sure he didn't mean it racially, but the birther critique is a questioning of citizenship. and the questioning of african-american citizenship is a long, old, and deeply disgraceful and often violent tradition that stretches back literally from the beginning of this country. you could take it from 1790 when congress first defines what citizenship is and strictly and right out says it's only for white people, stretches up until the end of the civil war until after the tragic death of

president lincoln out and out says there's no way that the country can be based on the african-american franchise. it runs into the mid-20th century where you see the future senator robert byrd objecting to serve in the military because it mean he might have to serve next to african-americans. william f. buckley arguing that african-americans in the south don't even want to vote much less should be granted to vote. so that's a very, very long tradition of questioning african-american citizenship. the highest right of any citizen, be he or she white or black or yellow, red, whatever, is to serve as president. president is a different sort of power. when you're president, you're head of the american military. you're head of enforcement in this country. it's the highest aspect. and the notion that given our particular history that we would have a black president and there would be no blowback, we would take this in stride that it would end in 2008, is leudicrol,

and i didn't realize how ludicrous myself until i got into the piece. >> and people wished for that. >> we all wished for it. and i feel that's been one of the blockages. every time people bring up race, it's almost treated in the political session as a betrayal of the last election. and one of the things you've wrote a lot about, you don't get to say explicitly in the piece, but obama arguably needed to say more or at least more -- there was more to say. but politically it was probably a good idea not to take race on more directly after being elected president. so where do you -- what do you think could have been done in recent years that would have been constructive? or do you just think this is kind of we can't come to a constructive place at the moment? >> well, i think two things. obviously i would like the president to say more about race or be more explicit. and particularly, i think if you're going to go before black

audiences and talk about personal responsibility, which, you know, i think any person would endorse talk about good parenting. and that's a very explicit message that obama makes before the african-american community. he doesn't go before other communities and generally say that. and i think you have an obligation to talk about the other side of the equation too. i personally would prefer him to do either one or not at all. and at the same time, though, i think it's wrong to put this entirely on the president. there's a reason why president obama doesn't talk about race, and a democracy, you get the government you deserve. when you have an opposition party in which half of the entire party believes the president of the united states was not born in america and that half just so happens not to be too fond of blacks, not to be too fond of people who weren't born here, i'm not sure how much you can ask from them. a president represents the people. mitt romney, you know, by the same token as a presidential candidate represents a group of people. the real question is, why do so many americans believe this. why are we still having this

discussion with such a broad swath of our country. >> thank you very much. i cannot recommend enough that people read your piece in the latest edition of the "atlantic." thank you very much for being here today. >> thank you so much. here is what happens when you run on your business record and financial success but refuse to release your tax returns. what do we learn? also, republicans in pennsylvania accuse the justice department politicizing the fight after they voted to limit access to hundreds of thousands of voters, most of them democrats. plus, democrats have often accused republicans of offering revisions from the 1950s, and now they're talking about the 19th century. who are these kids talking about? >> you're the most vile, vile, despicable -- >> member of the --

>> communist -- >> communist party. >> that is a new democratic ad targeting and quoting republican alan west. check it out in the side show. this is "hardball." place for politics. nah. [ dennis' voice ] i bet he's got an allstate agent. they can save you up to 30% more by bundling your policies. well, his dog's stupid. [ dennis' voice ] poodles are one of the world's smartest breeds. are you in good hands?

we are expecting missouri senate candidate todd akin to hold a news conference in a few minutes. akin has been under intense pressure to drop out of the race after his remarks about abortion and "legitimate rape." when akin speaks, we'll bring that to you live. back after this. all multivitamins give me the basics. they claim to be complete. only centrum goes beyond. providing more than just the essential nutrients, so i'm at my best. centrum. always your most complete.

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welcome back to "hardball." yesterday, not for the first time i found myself on gawker. usually my bosses aren't super happy to see me doing that. a lot of headlines like this one from today. "tom cruise's child support to katie holmes is barely enough to cover suri's handbags." to which i say, really? tell me more.

gawker got its hands on pages of financial statements and private investor letters for 21 bain vehicles that romney was invested in. together gawker wrote, they revealed the mind-numbing deeply opaque complexity with which romney's handled his wealth. that includes the use of the shady tax trick known as an equity swap, which is used to help offshore clients dodge payments, certain kinds of taxes, includes the use of "blocker corporations" which typically set in tax havens like the cayman islands. of course, it isn't exactly news that mitt romney holds investments in tax havens like the caymans. "vanity fair" looked into it this summer. reported romney is between $7 million and $32 million offshore investments. now you can't learn anything here from this gawker document because these files are incomplete. like looking through a fogged window trying to say what's

written inside of every book on his book shelf. but the latest illustrates what happens when a major candidate for a political party says over and over again that if we want to know about his financial history, we'll have to trust him because he'll not hand over more than two years of tax returns. turns out when you do that, journalists are going to go on the hunt and going to keep hunting until they find something. and it also turns out that the american people doesn't like it when you do that. it's clear from the latest poll. when asked about whether news about romney's tax returns changed their views. for more on the bain document dump, the tax dodges and what it means for the election, we're joined by debra soliman, reporter for bloomberg. and a writer for the "new yorker." deborah, let me begin with you here. why does it matter? why should we care what's in the bain documents? what's in romney's tax returns? at this point, we've given you

two years, isn't that sufficient? why should we be trying to piece it together? >> for a few reasons. first of all, he's running on his record as bain. he had an op-ed in the "wall street journal" says bain is the reason he would be a great commander in chief. and what these documents make clear that, yes, he's made a lot of money, a successful businessman, but he's also invested in these pirate equity funds not open to ordinary investors and ordinary americans and these funds have used some shady tax-dodging schemes to avoid paying income taxes. one of the funds said specifically the reason it was set up was to avoid paying income taxes in the u.s. and that flies from the face of what he said previously. >> excuse me, i'm sorry, u.s. congressman todd akin is about to hold his first news conference since his remarks about abortion, pregnancy, and "legitimate rape." we're going to go live.

>> well, good afternoon, and thank you all for coming out. apparently, there are some people who are having trouble understanding our message. i'd like to be clear on that today. and that we're going to be here through the november election, and we're going to be here to win. now, there may be some negotiations, but they don't include me. we have essentially before us a choice of two americas. the america i represent is an america that has more freedom and more jobs. an america with less bureaucracy, big government, and less taxes and a bright hope for the future. the america that claire mccaskill has given us is an america that has less freedom, less jobs, more big government,

more taxes, and the same stalled economy that we've observed for the last three plus years. thank you all so very much. >> missouri senate candidate todd akin telling us that nothing has changed, he's staying in the race and he would like more people to listen to his political message. that is not brand new news, we're not going to continue covering it, instead, we're going to go to the brilliant john cassidy of "the new yorker" who is going to tell me what we actually know about mitt romney's finances, about his taxes. what is the overall picture that has emerged in the aggregate even if we can't fill in every detail? >> well, what we know is that when he left bain, he got a very complicated retirement package, which allows him to invest in bain capital funds. bain capital like many other hedge fund and private equity firms organizes a lot of its funds through the cayman islands. so gawker, the website, got ahold of 21 of these fund's

documents, put them online, and we can see how a lot of bain's investments and therefore romney's investments because that's where he gets a lot of his money are channeled through the cayman islands. now, is that illegal? no. is it necessarily tax evasion? no either. romney says that the reason they channel things through the cayman islands is to allow foreign investors, not american investors to dodge taxes, not pay taxes that they otherwise would have to pay. but if you look closely at some of these documents, you find that there are various sort of complicated financial machinations and tax dodges which are used to shelter u.s. income, as well. there's nothing criminal here. but given that romney doesn't want to know very much about his finances, it's just another embarrassment on the eve of the convention. >> deborah, romney made a comment the other night. i was surprised to hear, he said big business was doing fine. comments president obama got in trouble for making.

but it's actually true, actually. big business has been healthy hiring in recent years and their profits have been near record levels. now, he sort of said, and you need lower taxes and small businesses need lower taxes and smaller regulations. but every time i look at the evidence on the small businesses like the surveys done by the nfib, they say the problem is sales. and that suggests that we need to boost demand, get more money in the pockets of people who would spend it. it seems like an economic case at odds with mitt romney's economic platform. >> right. well, you're right. continues to say it's demand that's the problem. it's no the that they, you know, need more tax cuts. if you ask, they'll say we don't need more tax cuts, we need more customers. if his whole platform is he's going to grow the economy by cutting taxes for businesses but it's not going to help. >> deborah soloman, thank you very much, john cassidy, thank you for being here. up next, kids say the da

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back to "hardball." this is the "side show." first off, florida republican congressman alan west -- blasting his rivals with over the top remarks. any of these ring a bell calling dnc chair vile and despicable saying obama supporters are "a threat to the gene pool." what if you heard all that and more from the mouths of kids on a playground. the new ad from democratic challenger patrick murphy. >> you are not a lady. >> you are the most vile. >> vile. >> despicable. >> member of the communist -- >> communist -- >> communist --

>> party. >> get the beep out of the united states. >> you're a threat to the gene pool. >> allen west said all these things and worse, but bullying and name calling has no place on the playground or in congress. >> you need a time-out. >> along the old saying of don't say anything you wouldn't want your grandmother to hear. next, the latest from congressman steven king raised eyebrows for defending legality of dog fighting and saying it's not against the law to impregnate a 13-year-old girl and bring her across state lines for an abortion. take a look. >> as america, we decided we're going to process everybody the same. that means the 75-year-old grandmother gets the spread eagle search. and while that happens, maybe the 20-year-old middle eastern male walks through with a smirk on his face. i'm not making that up, i've seen it.

we're so squeamish about making judgment calls that we put everybody through a form formulative process that everyone gets searched. >> he's the sheriff joe of airport security, i guess. for the next week or so at least when you think tampa, you'll think republican, right? well, a pro-choice group in florida sponsored this billboard as a reminder to the incoming gopers. can't be entirely unwelcome, though. the rnc is expected to flood $175 million into the city's economy. not bad. up next, after making it tougher for hundreds of thousands of voters, republicans in pennsylvania are accusing the justice department of politicizing the fight over voting rights. that is ahead. you're watching "hardball." the place for politics. he shed! no! no! no! ♪ were you guys just making out in here? what? no! really, cold cuts from a package? yes. [ male announcer ] it's nice to finally say "yes."

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i'm sue herrera with your market wrap. modest gains on wall street. the dow finished up 100 points at the close, the s&p up nine, and the nasdaq gained 16. why the boost? well, in part because fed chairman ben bernanke set the record straight saying despite conflicting rumors, it is possible he will take further action to spur the economy. meantime, apple edged lower amid a ruling that the samsung galaxy phone may look like an iphone, but it doesn't violate the design. and that's it from cnbc, we are first in business worldwide and now back to "hardball."

when the pennsylvania governor introduced the new photo voter i.d. law, his office said 9% of voters already had an accessible form of i.d. but a comparison between the list of registered voters, the most common form of i.d. to vote showed a wider gap, 9% of the electorate, over 750,000 don't have i.d. it's a widespread problem, but not an evenly spread problem. the vast majority live in philadelphia county to the east and allegheny county, pittsburgh to the west. and the funny thing about those two counties, they prove to be democratic strongholds in the '08 election. so if your goal was to limit democratic voter turnout this election, how would you go about it? well, you could pass a law making it harder for these people to vote if they don't have i.d. so let's show you what happened. >> we are focused on making sure

we meet our obligations that we've talked about for years. pro second amendment, first pro-life legislation, done. voter i.d., which is going to allow governor romney to win the state of pennsylvania, done. >> you're supposed to say that last part to yourself. the law's under fire from voters rights groups like the aclu and the advancement project, they filed a lawsuit. but a commonwealth judge ruled against him refusing to halt the implementation of the law. the plaintiffs appealed to the state supreme court which agreed yesterday to expedite the case, set a new date for september 13th. meanwhile, the department of justice is taking a hard look at the law's constitutionality. and this week, governor corbett's administration blasted them for interfering where they have no business. i question whether your inquiry is truly motivated by desire to

assess compliance with federal voting rights laws or rather fueled by political motivation. pot, meet kettle. joining me now is the co-director of the advancement project and jim burn, thank you, both. >> thank you. >> so, judith, the words in the statement from corbett to general counsel was what authority. what authority does doj have here? >> well, clearly, the state of pennsylvania has a lot of nerve talking about partisan politics behind the motivation. the department of justice has the authority under the voting rights act 1965, they are on the side of voters trying to make sure that pennsylvania's law, which is a clear partisan manipulation of our voting laws does not stand in the way of the right to vote for african-americans, latinos, elderly voters, and veterans who are the hardest hit by this law.

>> now, jim, let's say the legal challenges don't work, what sort of preparations has your organization made to, for one thing, make sure people know about it? i assume almost everybody watches "hardball," but there might be some that have slipped through our cracks. >> it's possible. and in the event someone has missed your program, we've been working for months on the ground. >> unlikely. >> we've been working for months on the ground to recruit, identify, and outreach those who may be affected. there are many folks in pennsylvania who, a, don't know about this law and, b, if they do, they're making an assumption that they have proper i.d. so as we're going door-to-door with a variety of groups on the ground to have the same interests we do to ensure pennsylvanians can exercise their constitutional right to vote, we're not assuming and taking their word at face value even if they genuinely think they have what they need. ask to see it and if it is not in conformity, we'll make sure they can vote this fall.

>> judith, the supreme court, the pennsylvania state supreme court will hear the case on september 13th, which is 64 days before the election. if they rule against your organization and yois there any further recourse? is that the end of the line? >> we are the attorneys in that case. and if we lose, at that point, the law will be implemented. and, unfortunately, what's at stake is hundreds of thousands of votes, of people, voters who want to participate because, you know, this is an important election. and clearly, the state gop knew what it was doing when they put in place this law that would hit democratic strongholds. they knew that they were suppressing the vote. i mean, our case shows there's evidence of voter suppression, but there was no evidence, and we know that the state is not ready to put an i.d. in the hands of the 760,000 registered voters that don't have the idea.

>> we played a clip, jim, from the pennsylvania house majority leader saying really unusually explicitly that this voter i.d. law is there to help mitt romney win. now, i have to assume his answer for that is he's saying there would be so much voter fraud, there's no evidence of this being a factor. but has that statement captured on video, has it been much of an earthquake in pennsylvania? or has it mainly been written off? every time i've seen it, i've seen it a number of times. i'm kind of shocked. >> it has had an effect. he has been known for his off-the-cuff remarks and inappropriate statements. this time, we appreciate the appropriateness of it through his party. it is, in fact, the truth. it is unprofessional and ridiculous and hypocritical for the corbett administration say and write what they did about politics.

look what he said, the numbers as you indicated were more like 750,000, and they hired a mitt romney fundraiser to do the pr here in pennsylvania. so like you said, pot, meet kettle. and tom corbett was attorney general, what would he have said? how would he have reacted to that type of response to one of his requests for information? it ups the hypocrisy. >> judith brown-dianni and jim burn, thank you for being here. wanting to return america to some version of the standard, and that is not a good idea. we'll get into it next. this is "hardball." the place for politics. forest fresh full tank brain freeze cake donettes rolling hot dogs bag of ice anti-freeze wash and dry diesel self-serve fix a flat jumper cables 5% cashback signup for 5% cashback at gas stations through september. it pays to discover.

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we're committed to safely and responsibly producing natural gas. it's not a dream. america's natural gas... putting us in control of our energy future, now. new poll in some key senate races around the country. and for that we check the "hardball" score board. in virginia, a new poll finds a dead heat between tim kaine and former senator george allen. 46% to 46%. the poll has sherrod brown up by seven points of josh mandel. bill nelson with a nine-point lead over republican challenger connie mack. and in wisconsin, tommy thompson, former governor of the state has a six-point lead over democrat tammy baldwin. we will be right back. [ male aou eligle for m

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with two times the points on dining in restaurants,? you may find yourself asking why not, a lot. chase sapphire preferred. there's more to enjoy. welcome back to "hardball." in 1981, president ronald reagan created the gold commission. the commission was there for one reason, to figure out if america should go back to a gold standard in order to beat the dreaded inflation monster. the conclusion of the commiss n commission, no, bad idea, do not do that thing. and that was ronald reagan's commission. and it came at a time when inflation was really high. you couldn't have picked a more sympathetic president or more sympathetic moment to look at the gold standard. and they still rejected it. so, fast forward 30 years we're

here in the present now, no inflation problem, the head of the federal reserve was originally appointed by george w. bush and credited with having headed off a potential great depression in '08. and so what does the republican party want to do? well, according to a draft of the party's platform, they want another gold commission. to study whether or not we should go back to gold. you might dismiss this as meaningless capitulation to the delegates, but that's not what marcia blackburn says. she says, "these were adopted because they are things that republicans agree on." this is something we think needs to be done. one of those house republicans who helped pass that bill is paul ryan. to my knowledge ryan has not, in fact, endorsed an actual gold standard. he's too smart for that. instead, he endorsed something that sounds better than a gold standard but is basically the same and perhaps even a little bit worse. hep wants to tie the dollar to,

"a basket of commodities." and nothing gets the ratings up like a basket of commodities, but we do need to explain this for a second because it's very important. a gold standard means it's dollars backed by gold. but problems with the gold standard are legion, but our currency would fluctuate with the global price of gold as opposed to the needs of our economy. south africa finds a new gold mine, currency's all different. pegging the dollar to a basket of commodities works the same way. the currency fluctuates along gold, soybeans, oil, whatever else we choose to put in the basket. and like with a gold standard, those commodities don't care about the needs of the american economy. it means, "if a drought devastates a corn crop or war disrupts persian gulf oil supplies, we automatically respond with tight money and demand-induced recession. alternatively if someone discovers a way of generating

electricity in which we'd end up with a ton of inflation." the other weird thing about this is in 1981 the country really was facing an inflation problem. it made sense that people would be looking for radical alternatives to help control inflation. today inflation is about as low as it's ever been and we've come through a financial crisis in which the entire global economy might well have collapsed if the federal reserve hadn't stepped in after the credit markets froze. across the sea, we've been watching as the eurozone dissolves and the fears of the european central bank won't act over there. as the economist writes and he's the expert, a gold standard could mean, quote the kind of liquidity injections that could prevent the financial system from collapsing in the autumn of '08 would become impossible. unlike in '81 when the gold standard made a superficial sense in response to our problems 2012 is a moment where

it would have worsened our problems dramatically, hugely, made them super bad. as he says, the proponents paints the gold standard as a guarantee of financial stability. in practice, it would be precisely the opposite. and yet exactly what some republicans say they want to do. joining me now jared bernstein is an msnbc contributor and former chief economic policy adviser to vice president joe biden. and david wycal. why does gold have this alluring idea on the republican side? milton friedman, one of the most -- he hated the gold standard. the government setting the price of gold. but that hasn't seemed to really take and conservatives seem to be gold bugs again. >> i guess the simplest explanation is one of the guys

on that gold commission with me minority members with ron paul who said we should return to it, he wrote about this in 2007. basically if you brought the government back to a gold standard, it doesn't have the ability to inflate. and thus wouldn't have the ability to spend. and this when you hear rick perry talk about it, republicans who are not ron paul talk about it, they look at that. they look what the government has been able to do during the recession. they said openly for a long time they want to liquidate. because the fed can create money, they don't have to cut back. i think that's the heart of their newfound love for the gold standard. >> and yet, jared, at the beginning of the recession, they had stimulus proposals. bigger permanent tax cut. a gold standard in theory if you weren't able to expand the

currency to do that kind of thing, you wouldn't be able to do that kind of thing. >> you quoted barry icahn green, that gets to the heart of this. if you think about the housing bubble when it burst, you had a financial sector that desperately needed eed liquidit infectio infections -- injections. it would have shut down. and recession would have morphed into great depression. no question about it. >> david, paul ryan says when he thinks of monetary policy, he goes back to the work of ayn rand. which surprised me. i didn't know she had a lot of monetary policy in her books. >> he said this in a speech in 2005. he goes back to francisco who gives a speech about money. one -- >> in?

>> in atlas shrug. that's one of the most powerful one he goes back -- republicans go back to. what he said was that basically -- i'm going back to the quote. the problem with paper money is it's counterfeit. and the problem with using that instead of gold it it killed all objective standards. instead of a commodity you can trust, it allows people to make money out of nothing. you hear the phrase counterfeit, paul ryan doesn't take everything from that. you hear that often. you can't trust bureaucrats to make that decision. you should trust gold miners. >> this goes to something which is important which is this concern fiat currency confuses people. i want you to explain it to me as soon as we come back.

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welcome back to "hardball." we're back with jared bernstein and dave weigel. i have a question for you, jared. it is this. people get concerned that bankers are controlling our money. under gold who controls our money? >> the supply of gold controls the money and the federal reserve is out of the picture. you lose monetary policy if you

move to a gold standard. again what does that mean? it means you no longer control your interest rates. you can't raise interest rates if inflation is a threat. you can't bring interest rates down if you need to boost the economy. here's an historical fact that economists think of. the gold standard. there's a strong correlation between when companies got off the gold standard and recovered. they had the freedom then to use interest rate policy as the federal reserve does today to boost gold. >> quickly, dave, what is the politics behind this? does this placate the ron paul folks? why is this in the platform? >> paul ryan voted to get rid of the federal reserve's mandate to decrease unemployment. it has two mandates. it has the currency mandate and employment mandate. he wants to get rid of that. that all comes from the belief

that the federal reserve should not be intervening in markets that way and the employment market that way. that has gone far beyond ron paul. i think ron paul's particular reasons for wanting this is at a molecular level got to the rest of the republican party. when you hear rick perry say something like ben bernanke should be lynched if he comes to texas, the reason he was against that was he felt like bernanke was creating money that was going to inflate -- maybe create inflation down the lines but create jobs that would help barack obama. that what republicans want to get rid of. get back to exactly what the people in the economy are creating. >> the federal reserve are doing its job. it's not to fire ben bernanke. thank you guys so much. i'm ezra klein sitting in for chris matthews. he'll be back monday from tampa, florida. you can read more of my work at