but he's got such sensitive skin that you worry about what you use in the laundry. my tide, downy, and bounce all come in free & gentle. so we get a cleaner, softer blankie. [ gasps ] [ female announcer ] tide, downy, and bounce free & gentle. this morning, my question. did bobby jindal forget the whole stupid party thing? and president obama goes bull with a surprise move. and 15%, 18%, or 20%? how big should you tip? and is it connected to race? first, if you're excited for christmas this year, imagine if you were having your first one as the pope. george.

i'm in for melissa harris-perry. this year he'll mark his first christmas as pope francis with a masses and a christmas address in st. peter's square. last week he sent christmas gifts to 2,000 impoverished immigrants living in shaelter near the vatican. they included prepaid phone cards and postage stamps to help the immigrants get in touch with their families. he also delivered a christmas message urging christians to treat the holiday as an occasion for humility and to serve the poor. in other words, the pope has been busy. and it's not all about christmas. on monday, pope francis shook up the vatican's important congregation of bishops which determines who will be named as the leaders of regional and local diocese around the world. he removed card nald raymond l. burke, a conservative who's been outspoken in condemning abortion and same-sex marriage and recently criticized the pope for saying the church's focus should move away from those issues. the pope replaced him with a

more mod cerate catholic, donal whorl of washington, d.c., who has more on the groupd experience with parishioners, yet another signal that pope francis wants to change the tone of the church. on tuesday the pope celebrated his 77th birthday and invited a small group of homeless men and one homeless dog to his birthday party. they shared breakfast and a mass with the pope along with his household staff. and on wednesday, he celebrated his favorite argentine soccer team's tournament win accepting their trophy and a jersey in st. peter's square where he continues to hold his weekly audiences outdoors despite the cold. he does that in order to accommodate the massive crowds that come to see him. more than 1.5 million tickets have been distributed to audiences this year. we seem to be fascinated with this pope more and more every day. i don't mean just we at "nerdland" but the much bigger "we." pran has been celebrated on u.s. magazine covers. he was named time's person of the year last week and was even

the advocate's person of the year, quite a feat for leader of a church that considers homosexuality to be a sin. his approval rates are high in the u.s., about 62% among non-catholics and 92% among catholics catholicss, higher than pope benedict and even pope john paul ii. even president obama has expressed pope love. >> you know, i think pope francis is showing himself to e be -- of peace and justice. >> now, the relationship between popes and u.s. presidents has been long and complicated and a lot more interesting than you might think. when new york governor al smith ran for president in 1928 on the democratic ticket, he was the first-ever presidential nominee who was a catholic. and the campaign against him was

virulent, saying smith would be beholden to the pope and that he was, according to a leading protestant magazine of the time, a representative of the medieval latin mentality of an u.n. democratic hierarchy and a foreign poeten tate. he lost. john f. kennedy faced similar claims, but kennedy pushed back. in a speech to a group of property tant ministers in september of 1960 he said something that sounds extraordinary today, that, quote, i believe in an america that is officially neither catholic, protestant, nor jewish, where no public official either requests or accepts instructions on public policy from the pope, the national council of churches, or any other ecclesiastical source. and lucky for kennedy, the roman catholic church was changing. pope john xxi2xxiii had announce would convene a council to reform the church and let fresh air in and restore unity between protestants and catholics. he invited non-catholic

christians, including protestants to attend. after kennedy's presidency it became a matter of course that u.s. presidents would meet the pope. presidents johnson, nixon, ford, both bushes, clinton, and obama have all met with the reigning popes. and president ronald reagan may have had the most interesting papal relationship of all. in 1982 reagan and pope john paul ii formed a secret alliance to fight communism in the pope's native poland. together the church and the united states funded and provided resources to solidarity, poland's underground anti-communist group. reagan and john paul believed if poland became democratic other eastern european countries would follow, undoing the influence of the soviet union. president obama has not met with pope francis yet, and although i doubt we'll see any secret alliances, they have a public alliance of sorts on the subject of fighting poverty and inequality and spreading the wealth around a little bit. as the pope wrote recently, not to share one's wealth with is

poor is to steal from them and take away their livelihood. it is not our own goods which we hold but theirs. joining me now our senior religion editor for "the huffington post," the reverend paul roushenbush, anthea butler, professor of theology at fordham, michael pepper, and columnist for renew america, michael c. abbott. thanks for being here. i want to start by throwing out that we've heard a lot of pope francis' documents sound very compassionate and is kind of a fre freshing change for a lot of people who watch the catholic church become sort of the scold on issues of morality. but can we actually expect this pope to change policy within the church? >> that's the question we've been asking since his election. i'd like to say a change in style, when we think about how we understand leadership, whether it's a teacher or a coach or a pastor, that, you

know, you don't a teacher just as curriculum, a coach as a playbook, you don't think of a pastor as a set of doctrines. i think the style is very important for the changes that might happen in the future. the gifts to the immigrants are a great example because here is someone who didn't just give let's say a handout of food or water, although that is a great thing, but specifically gave thoughtful gifts that come out of his street smarts. what do immigrants want to encounter people? right? they want phone cards. they want foreign stamps. they want a metro-card to get around. they want mobility that gives them a human dignity of someone who can live there in rome. so i thought this very well into a culture of encounter, which is one of this pope's biggest phrases, that he was giving a gift that would enable people to encounter their loved ones and have some sense of family stability even though they'd immigrated to rome. in short i think the style changes are very, very real changes when it's a pos to recall leader. >> and there's been some concern

about this pope perhaps moving away from some of the conservative doctrines that are comfortable to conservative catholics. be that notion of family stability is at the core of the conservative doctrines of the church, keeping the family together. i mean, families breaking apart is the root of all other problems in society. >> that's true. very true. and i do think that this pope recognizes the importance of the family, of being able to reach out, being able to preach the gospel in a simple yet thoughtful manner. and i really think he is not dismising the moral issues or their importance but i think he's really trying to say, you know, we really should put an emphasis on this time of mercy, if you will, divine mercy, this time of compassion, and i think that is something that's very appealing to many kath lings, including many young catholics, many young catholics were very drawn to john paul ii because i also think he had, you know, a

very similar emphasis. clearly pope francis has a certain charisma that many religious leaders don't have. >> right. >> and i think that's something that's been noticeable in these past few months. >> paul, but, you know, the style changes are obviously important and the tone of the church, attracting more people, but there are some substantive changes too. talk about the significant of switching out the bishops in the congress of bishops chashgs what that means for church policy. >> it's important on who is appointing bishops, how it happens and the tone they thems are taking. i don't think there's a lot of difference in the positions that perhaps cardinal whorl and cardinal burke have. the one has suggested withholding communion from those who disagree with him, the other opposed that idea. i think it's about, like, okay, how can we be more inclusive in this church and acknowledge that people need to come in and feel this healing message. he wants to be out in the streets. he doesn't want to keep people at the door. i think that's the difference.

we should think about this. four times more people are coming to see this pope than the previous pope. he's the most talked-about person on the internet of anybody. not just on twitter but the internet. the most talked about person on facebook. so this is -- he's saying things that people need to hear. catholics and non-catholics alike. he has been a voice for many people around the world, and that's exciting. >> he's saying things people can hear but that do challenge a lot of social doctrine and conservative doctrine and are sort of in your face in the sense of inequality, the sense of poverty, in the sense of challenging capitalism. >> exactly. what's so interesting to me about this pope is that basically what he's talking about is traditional catholic doctrine, about poverty. when you have rush limbaugh saying this is marxist and everybody confusing him with socialism, i laugh because the problem has been what we've heard from the conference of

catholic bishops is nothing but protestant evangelical doctrines about what not to do with your body and we haven't talked about what we're going to do with people's souls and their everyday lives. that's what makes pope francis different. >> that is the reality, that he is causing discomfort by challenging. i mean, you had the u.s. conference of bishops as paul was mentioning, you had intimations that catholic politicians who don't toe the line on certain political policies should not receive communion. this feels like it's going to be a different church from that. >> it does. i know certainly cardinal buc was someone who did take that position that abortion politicians should be denied communion. cardinal whorl has taken a different approach and basically has said the eucharist should not be used as a weapon. that would appear to be pope francis' position as well. >> yep. >> although, you know, we haven't heard him explicitly say so. but clearly the move of removing

cardinal burke from that position and replacing him with cardinal whorl, it is significant. >> absolutely. >> and i think one can certainly draw that conclusion. >> we're going the start to draw some conclusions in just a moment. up next, i want to know up on what anthea and matt were talking about on rush limbaugh and how conservatives are receiving this pope. why does the pontiff have a problem -- not have a problem with being called a marxist? ♪

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not everyone is as enamored of the pope as we are. here's rush limbaugh on his holiness.

>> the pope has gone beyond catholicism and this is purely political. i want to share some of this stuff. pope francis attacked unfettered capitalism as a new tyranny. he beseeched global leaders to fight poverty and growing inequality. this is just pure marxism coming out of the mouth of the pope. there's no such unfettered capitalism that doesn't exist anywhere. >> the pope responded with his characteristic good will. asked by an italian newspaper about how he felt about being called a marxist by ultraconservatives in the u.s., france says the marxist ideology is wrong, but i have met many markists in my life who are good people, so i don't feel offended. anthea, you brought up rush earlier. the interesting thing about calling the pope a marxist, besides the fact it probably isn't a good idea to go after the lord, is there actually is a

history to marxism in the latin-american church that kind of relates a little bit to pope francis. can you explain? >> we talk about liberation theology. i want to go back to a father who talked about the preferential option for poor. and later in the early '70s, what you have is this whole lifting out of that to create liberation theology, gu ta voe gutierrez. but what rush limbaugh doesn't understand is this option for the poor has always been there in the catholic church. it's not marxism. he knew the history of card know who became pope francis, you would know he didn't guy bye sb into the marxist piece of liberation theology. first of all, rush is just wrong. second of all, chief amongst the sinners he should not cast stones against the holy man who would probably still embrace him if he came to the vatican. third, what's so wrong about going after capitalism and saying we should give something to the poor? this has been part of catholic

theology, part of protestant theology, and somehow something has happened with these tea party folks and everybody else who have created this other kind of jesus, a prosperity jesus, looking for a capitalist idea, if you're not rich, you don't have the blessings of god. what pope francis is doing is drawing us back to what traditional teachings of jesus christ are all about. >> absolutely. and i think that is what sort of throws people off about people who are professed conservative christians who seem to be saying that jesus sided with the money changers. and so what is wrong with the pope saying, no, actually, he overturned the table of the money changers? >> i don't think he's incorrect at all about it in his economic outlook as it relates to the church. in fact, the church of course, you know, has always condemned communism, socialism as wrong but also -- and this is something that john paul ii pointed out -- >> he actually tried to root out a lot of those elements in terms

of fighting against -- >> absolutely. that and also the aspect of unbridled capitalism and the problems with unbridled capitalism and therefore the need to kind of find a middle way. and i think really that is something that pope francis is trying to put out. >> why do you suppose he is getting such a fight from the right? if what he is saying is sort of doctrine and common to the catholic church, what is it and the margin for supposedly religious people to attack the pope for being on the side of the poor? >> well, i think it hasn't been heard for a while and it hasn't been heard in such a relentless way. he talks about it just about every week and he points the finger at capitalism and says you have to look at this. what i think is interesting is you don't have to be a marxist to critique capitalism. in some ways we're seeing -- and with rush limbaugh and others -- an idolatry of capitalism. i think what pope francis is looking at is saying we have to do better. we all as a nation, as a world have to do better because the

poorest among us are suffering. 30,000 people will die today of starvation, extreme poverty. that's a failure. and pope francis is naming it. and a lot of rus saying thank you. no one is naming it. and i would say certainly not president obama and no other religious leader is talking like this at such a high platform. it's refreshing for many of us who are trying to say this is what we should be focusing on. he is a separate le rely jous figure, he can bring us back to the doctrine of inequality and resetting jesus as the guy who is not on the side of the capitalists but on the side of the underprivileged. >> that's right. absolutely. those of us who study the new testament and teach it like myself, we see an awful lot of jesus in what's being done here. i don't personally think rush is worth engaging. seriously. what pope francis has taken is

the core marxist critique, which is an excessive concentrations of capital lead to exploitation and dehumanization. that's what he's taking and saying that's accurate, that happens. we can see it. i'm watching it happen my whole life. that critique does need to be heard. getting back to john paul ii, the ideology that john paul ii saw consuming the world was communism. francis sees the ideology consuming the world as being a free market capitalist idea that is becoming a mind-set that governs everything. so the catholic world view he's trying to put forward is people are more than the sum total of their economic indicators. they're more than a sum total of market forces. he's trying to lead to humanization. >> that sounds like a direct challenge, sort of the capitalism is a religion in this country. up next, the pope's quest to save the planet.

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the pope has connected his crusade to help the poor with another call -- to protect the environment. he's met with anti-fracking activists and posed for photographs holding one of their t-shirts. in his apostolic exhortation released last month where he wrote that our groebl financial system is creating a growing gap between the wealth of the few and the poverty of the many, he also wrote this -- in this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before interests of a defied market which becomes the only rule. this is another interesting sort of area in which the pope, michael, is diverging from sort of the conservative i guess you could call it political theology of the u.s. and there actually have been some hints that the first

encyclical the pope issues will be on the environment. >> you stole one of my lines. you're exactly right. we can see this going back to john paul ii with the gospel of life. there's a hint of a consistent life et that i can starts to come out in the 1990s about environmental awareness and fighting environmental degradation. what's happened with pope francis from his first inaugural homily, we start to hear care for the poor, care for creation. it was this refrain. i wrote a blog post saying i couldn't believe the amount of times the word creation and environment kept coming up. and then when folks were asking about what will the first encyclical be, the first single authored encyclical by pope francis, people were saying is it going to be this blessd are the poor enlickly cal we've heard -- >> explain what an encyclical is. >> a very long letter that is intended to be read foremost by bishops of the church but really by everyone. and it's the highest teaching function that's not a council of

the church, really. it's what we tend to look back over time to look at how papal thought develops. people asked the spokesman and the spokesman said, look, the teachings on poverty are pretty well known in the catholic church and pope benedict xvi just wrote this thing about it. but where there's ap opening is ecology because environmental d degradation disproportionately affects the poor. >> i picture conservative heads exploding at seeing this photo of the pope with an ant anti-fracking t-shirt. is this another thing that's making conservative catholics uncomfortable with this pope? >> i do. personally i think he has the common good at heart and that's something he is trying to promote and it's something he should promote. but definitely i think there are a number of conservative catholics that are looking at this as, well, he's paying a lot of attention to these liberal causes. >> is the requirement a liberal cause?

that's what i think is strange to people, right, this idea that protecting the poor, protecting the environment is somehow a liberal pause rather than sort of a human cause. it does seem odd i think when people look at it. >> it is. it's one of those thing where is i think it has been kind of lumped in, if you will, to the number of progressive or liberal causes. however, with pope francis trying to look at the big picture of things and, you know, really trying to show that it isn't necessarily, if you, will something for liberals or something for conservatives, that this is something that, you know, is important for society as a whole and important for christians, important for the church. >> i think it is interesting that this is not something that's a radical departure. pope benedict also talked about this a lot. what's maybe a little different is the way pope francis is out

there talking to people who are involved in the issues and really kind of lending his support to them. >> right. >> and also really, going back to connecting it to if you waste food, you are stealing from the poor. if you don't recycle you are -- and it's this idea of what do we do with this idea that things are expendable, are only there for consumption? i think that goes directly to concern for the earth. so i think it really is this culture of life you talked about. but again it's not at all a departure. what is different is he's finding himself out in the people more. pope bep dictator was not out with the people so that's where the difference is. he's in the mix. >> last word. >> i want to say something about reading this from an american conservative protestant lens. what has happened, and this is the reason why, we read this as conservative evangelicals don't like the ecology, they don't want to think about the earth or creation. when you hear him say this stuff you think this can't be right because the voices on the right

have been so loud about this stuff. even evangelicals care about the earth. i think this is completely unbalanced in a certain kind of way and that we have to retip our ears to hear what truka thol schism is in this country. we can't hear what it is because it's been so tainted by the bishops and everybody else sort of buying into sort of the evangelical mind-set of what we needed to say the last 20 or 30 years. that's been the problem. >> going to end that with an amen. paul, michael, and matt, thank you very much. an theeia,ly see you next hour. up next, my letter of the week is date line, louisiana. but the recipient does not have a beard.

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different version of "duck hunters" with "duck dynasty." hot knot the highly edited portrayal of a family eating squirrels and shooting ducks. the gq interview with phil robertson gave us all the stuff that gets left on the cutting-room floor, raw and uncut. like this gem on growing up in jim crow, louisiana. i never weather my eye, saw the mistreatment of any black person. they're singing and happy. preentitlement, prewelfare, you say, were they happy? they were godly. they were happy. no one was singing the blues. or his equating homosexuality to a sin on par with bestiality and any manner of, quote, adulters, idolaters, male prostitutes, greedy, drunkards slanderers and swindlers. a reality stars saying or doing off-the-wall things shouldn't come as much of a surprise, but an elected official jumping in and high fiving him? that is political dynamite. this week i'm sending a letter

to a guy who just blew himself to smithereens. dear governor bobby jindal, it's me, joy. mind if i call you bobby? we've kor responded with you so much here on the mhp show i feel like we could be familiar. we've become pretty well aquainted so i'll level with you. you've changed. weren't you the guy who after the gop shellacking in the 2012 election issued this mandate to your party going forward? >> we've got to stop being the stupid party. there's no secret we had a number of republicans that damaged the brand this year with offensive and bizarre comments. i'm here to say we've had enough of that. >> okay. stop being stupid. your words, bobby, not mine. but then this week you went and dived right into the stupid when you felt the need to issue a statement about any decision to suspend phil robertson saying, "the politically correct crowd is tolerant of all viewpoints except those they disagree with. this is a free country and everyone is entitled to express their views. in fact, i remember when tv

networks believed in the first amendment. it is a messed up situation when miley cyrus gets a laugh and phil robertson gets suspended." bobby, you do know that the first amendment to the constitution does not guarantee the inail yes nabl right to be on a reality tv show, right? it's meant to protect the free speech of american citizens from being silenced by an act of congress. and a&e as a company, owned in part by other larger, publicly traded companies, does not in any way qualify as congress or the government or an agency of the state. look it up. it's right there in the bill of right, right at the top. but you know who does count at the government, bobby? you. and you just used your position as governor of louisiana to condemn a corporation for making a business decision it deemed to be in the best interest of its bottom line. and here i thought republicans were supposed to be against big government telling businesses what to do. or is there an exception when you're the one doing the telling? besides, freedom of speech does

not mean freedom from consequences. phil robertson learned that lesson this week. and my guess is should you run for president, round about two years from now, you will too. see, just because we won't ever hear robertson's comments on duck dynasty doesn't mean we haven't heard them. let's be clear, you spoke out in support of the guy who fondly recalls happy black people singing while working in the louisiana fields and who equate lgbt americans with people who have sex with animals. so don't be surprised if your words and his words come back to haunt you in an opposition ad in 2016. but, hey, maybe you can convince the american voter you were just expressing your views. once those voters are at the ballot box i'm sure they'll be more than happy pi to express that same right and express their views about you too. sincerely, joy. ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david.

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senate speak is complicated but we know when federal reserve chairman ben bernanke speaks, wall street listens. here he is from wednesday. >> the federal market committee concluded a two-day meeting earlier today. as you already know from your statement, the committee decided starting next month to modestly reduce the pace at which it is increasing the size of the federal reserve balance sheet. >> yes. to modestly reduce the pace of blah, blah, blah blash, blah. ben bernanke was trying to say the beginning of january the federal reserve will cut back on the stimulus money it's been pumping out to prop up the economy but gradually. really, really gradually. no one knew how traders on wall street were going to react to this idea that bernanke was taking away part of their security blanket. but wall street actually liked what it heard, a lot. the dow jones industrial average skyrocketed 150 points immediately after the policy announcement and then closed to around 293 points up for the day. the s&p 500 gained nearly 30

points. and the nasdaq finished 46 points higher on wednesday. all of this is great news, particularly for stockholders and as a result of the fed's belief that our economy is doing better, the fed is taking a very, very slow approach when it comes to weaning our fragile economy off the stimulus bottle. so what does this move say about where the fed thinks our economy is now and more importantly where it is going? at the table, carmen wong ulrich, host of "marketplace money" on apm, lawrence michelle, president of the economic policy institute, ovik roy, senior fellow at the manhattan institute, and lisa cook, associate professor of economics and international relations at michigan state university. lisa, i mean, carmen, since i mangled your job description, i'm going to you first. explain to us in real people term what is the fed did. >> i'll explain what they did, basically pull lg back, right, on buying our own bonds, which kept interest rates low. but the reason why wall street

reacted, one of the reasons, is the uncertainty aversion. we don't like to do things or take risks when we don't have enough information. so what wall street's been doing is sitting back and waiting for the fed to say we're going raise rates, keep them low, what are we going to do? there was no blueprint. now bernanke says we're going parse back and here's the schedule so now wall street can plan around this schedule, and that makes them happy so there's no more aversion to uncertainty to take more risks, and that's exactly what the fed wants people to do, wants people to take risks, businesses and wall street. >> lisa, what does that mean for the economy? >> banks have been holding on to their reserves. it's almost as if they were given these gift cards, right, and they could use these gift cards and they haven't been using these gift cards, and that's why you haven't seen inflation raiising. had they been using the gift cards there would have been money generated in the economy but we haven't seen that yet. this is where the latent inflationary fears are coming from.

if everybody used their gift cards, you can imagine what happens. see what happens with the credit cards at target. everybody uses them, something bad is going to happen. but i think that this is a gradual way to set expectations and to minimize the urn certainty that business people don't like. so the small businesses, medium sized businesses, all businesses need the lending that banks haven't been doing. we should anticipate there should be greater growth going forward. they've seen these signals. they wouldn't do it unless they've seen these signals. >> i think it's a mistake to interpret this as a pulling back or about the stock market. this is about we have enormous unemployment, way too high unemployment, and the federal reserve board has many tools. it has said we are going to do everything we can until we see unemployment drop. the fact they've actually said called forward guidance, they're going to hold on to low interest rates even longer than they said before. this is maybe good for the stock market but even more it's good

for working families where we really need to get jobs, get unemployment down. what's unfortunate in my view, speaking about economic policy, all this focus on the federal reserve board. but that is actually the weaker institution for getting jobs and lowering unemployment rate. what we have on the sideline is congress and the president who are not offering budget policy, which can actually move the dial a lot. the federal reserve board will move it a little. what we really have on the sidelines is the ability to spend money by the government, to create jobs and rapidly get unemployment down because as you know we're not going to see full employment for five to seven years. that's outrageous. >> let me -- bernanke does talk about where he thinks unemployment will go. let's play his forecast for 2015 and 2016. then we'll get reaction. >> participants in the unemployment rate has continued to decline.

the central tendency of the projections has the unemployment rate falling to between 6.3% and 6.6% in the fourth quarter of 2013 and then to between 5.3% and 5.8% by the final quarter of 2016. >> it's in the right direction, but to larry's point, what's now holding back the economy is not so much fed policy, because fed policy is pushing in the direction of lower unemployment, it's now a political problem where we cannot get stimulus into the economy and that's because conservatives in congress are refusing to do their part. so can you explain why, given all the statistics, everything that the fed is doing, pushing the pedal to the metal slowly or pulling it off slowly, why can't we have the political will to have congress do its part and stimulate the economy? >> larry made the key point, which is the tapering is getting all the headlines but the key thing and the reason why wall street was so ham pi was because bernanke said we're going to keep the discount rate, the interest rates really low for a long time even when unemployment goes to 6.5% eventually. the thing is it's not clear that

the fed policy has had that much impact on unemployment. it's more of the fiscal issues that will have more of an impact. the banks are making enormous amounts of money. if you own a house, have real estate holdings, own a stock, bonds, you're doing really well. >> all that's happening while the affordable care act exists? how can that be? it was supposed to destroy and kill the economy. it sounds like you're saying the economy is improving despite the president's obamacare. >> i'm saying the investor class is happy. what's happening with people at the lower oend tf scale is a different story. they'll hopefully have better health care, but the impact on hiring is a different matter because of things like the employer mandate. there are things we can do to actually improve degree to which employers have an incentive to hire low-skilled workers. >> what is holding back businesses from using those gift cards? because it seems to be a disconnect. businesses have more and more profit, but they're not spending that in terms of hiring. >> right. there are a couple things. if i can get back to one thing. one clip that wasn't played was

ben bernanke saying this is extraordinarily tight fiscal policy for a recovery. this is unheard of. this is undermining what would typically happen. larry put it in a polite way, but he was saying this isn't our job. it's an extraordinary experiment, of course, macrox m macroeconomists like me are excited, elated, decades of papers to right. but that's not the point. we need to get employment going and the economy going again. to your point, why aren't businesses lending? why would you lend if you can just sit still, wait for everything to happen, your money is there, your gift card is there, when you think the recovery is really happening, is picking up steam, then you take out the gift card and you use it. but until then, you know, why do anything else? >> until the political will is there. hold on. we'll keep going with this. up next, of the 14 federal reserve policymaker who is all give their predictions and forecasts of where the economy

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janet yellin will have to wait just a little bit longer. while the senate voted yesterday to end the debate over her nomination, that came after the body decided to move the final confirmation vote for yellin as the next chair of the federal reserve to january 6th. she still expects to be confirmed, which means she'll become the first woman chair of the federal reserve when she succeeds ben bernanke on february 1st. and when she does, the future of the u.s. economy will be in good hands or at least forecasting that future will be. check out this fun fact. according to "the wall street journal," which ran a study analyzing 14 federal policymakers on their accuracy when it comes to economic forecasts, the person who ranked

highest on that list for predictions made between 2009 and 2012 is none other than our very own janet yellin. the interesting thing about that was her rate of being correct was about 52%, so it's a low bar for being right all the time, but she was right more often than not. lisa, she was a mentor of yours. tell us, what is so great about janet yellin? why should we be excited that she'll be the next fed chair? >> everything is great about janet yellin. that's what i said last time. i'll say it again. she is the person who is most prepared, the most prepared person in history to be chair of the fed. she's had more experience. 14 years at the fed in the federal reserve system. and she's had different positions. a research economist from 1977. then she was president of the san francisco fed. and then she was vice chair. so she's helped to shape the current policy. and of course her academic

record is absolutely stellar and she was creating that academic record when i knew her at berkeley. so i think that this is a person who is more prepared than any other person when he've had in fed history. and i really appreciate the fact that this may happen one day. >> she's very human. and this is the very thing i think has been missing. you say the divide between wall street and employment, a lot of her research is focused on economics but the human reality of economics, especially wages, right? and not having high wages and the damage that does. so i'm just so excited to have somebody there who has studied this and what it does to the economy is not just looking to wall street. >> larry, before, you were saying that, you know, there is this sort of elephant in the room in american economic policy called us a thor ti. and what having a fed chair who does care more about high wages means for that debate, what do you think it means for that debate? >> well, one, let's talk about what she's going to do, not who

she is, and what she's going to do is going to be good for working people. the federal reserve board historically had done a lot for bonks and bond holders. what's good about janet yellin is she's going to focus on unemployment. she's going to use all the tools she has and she's also going to try to limit bubbles through regulation, and she's going to be a truth teller. she already has been. i went to a speech she made at the afl-cio earlier this year. that's unusual in and of it. but she's going to call out just like bernanke has about the fiscal policy being austere and that's not correct. let's talk about that for a second. the one reason the economy grew slowly in 2013 is because we've had this austerity. it hurt growth by about 1.5 percentage points. one reason people are optimistic about 2014, austerity will only

hurt 0.4%. the austerity is going to stop beating up the economy as much. therefore, we'll do a little bit better. but in fact we should have a situation where we're actually helping -- >> we have a short time. i want ovik to answer for every single conservative. what is this obsession with austerity? it has hurt the british economy. it has held back the u.s. economy. why are we still even talking about pursuing an austerity strategy, paul ryan and others in congress? >> there's different kinds. there's a tax increase based austerity and a spending cut based austerity. the more it's driven by tax increases the economic performance is harmed. back to a point larry said -- >> i want to stay with that point for a second. we've been focusing on -- >> we have been. our economic performance has been better. we've had a recovery. we disagree. one thing about what larry said, janet yellin is going to tackle bubbles through regulation. the federal reserve policy has been creating the bubble. the reason why the stock market

and the bond market have been doing so well, real estate has been doing well is because of monetary policy. unfortunately, janet yellin's philosophy is to extend that. i think that's what's disappointing. >> i'm sure there's a lot of debate with that point. but we have to go to a break. coming up, the president's bold surprise move that's already changing lives. another sign of his inner progressive coming through. more "nerdland" at the top of the hour. [ male announcer ] here's a question for you:

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does, something he's been criticized by some in the progressive community for not doing often enough. until this week he'd only done it once before in the five years of his presidency. on thursday, president obama commuted the sentences of eight federal inmate, all of whom were imprisoned thanks to mandatory drug sentencing laws, which made crack cocaine offenses 100 times more punishable than powder cocaine offenses. the president narrowed that gap by signing the fair sentencing act of 2010, but as he noted on thursday the law only affects new cases. so for thousands of inmates it came too late because of a disparity in the law that is now recognized as unjust, they remain in prison. perhaps no case is more indicative of just how unjust that law was than case of one of those eight inmates who now gets to leave prison early. regular viewers of this show will recognize his name. it's clarence aaron. aaron, a one-time student-athlete at southern university, was convicted and sentenced in 1993 at age 24 for

his nonviolent role in a drug deal involving nine kilograms of cocaine and one kilogram of crack. it was his first offense and he was neither the dealer, the supplier, nor the buyer of the drugs. but he received three life sentences without parole from the judge. >> i think to myself, what in the world was i supposed to doing three life sentences about? i just couldn't believe that this was occurring to me. >> aaron first applied for commutation two years after that interview. it was a good case, but it grew even better in 2008 when both the new u.s. attorney for southern alabama and even the judge who sentenced aaron started to advocate for commutation. the person who could make that happen, however, was this guy, the u.s. pardon attorney, ronald rodgers. but according to a report last

year, aaron's case was mishandled by rodgers who failed to accurately convey the views of the u.s. attorney and the judge. it drew national attention including on this program to aaron's case. it also earned the attention of president obama, who in july of 2012 called for aaron's case to be reviewed again. then this thursday, just over a week after the 20th anniversary of aaron's conviction, the white house announced that he was one of eight nonviolent drug offenders, seven black and one latino, whose sentences would be commuted. aaron can go home in april. in his official statement, the president said, "commuting the sentences of these eight americans is an important step toward restoring fundamental ideals of justice and fairness but it must not be the last." that's notable give than president obama has the lowest clemency record in recent history. this week's decision to commute the sentences of eight inmates brings the total number of commutations to nine. arguably this move won't win the

president any political capital, it won't boost his sagging approval ratings or help the democrats in the midterms. in other words, there's really no political margin in it for this president. but this is one of those case where is we get to see the progressive president barack obama shining through. joining me this morning daf that linser, managing editor for msn msnbc.com and the reporter who broke this story about aaron's botched commutation case in 2012. with her are anthea butler from the university of pennsylvania, ovik roy, senior fellow at the manhattan institute, and lisa cook, economic professor at michigan state university. thanks for coming in. you really did break this story and have been all over this story. walk us through how clarence aaron's case came up again and how this happened. >> sure. i love the way you introduced him because he was a wonderful case regardless. his sentence was so shocking to so many people when it happened, and this was at the height of the drug war when prosecutors

were very eager to make examples of young black men across the country, especially in places like mobile, alabama, baton rouge, louisiana. he was caught up in a conspiracy. yet as you said not the buyer, the user, the seller, the dealer, the supplier -- >> he introduced people to each other. >> he had two friends who were involved in the conspiracy. he refused to snitch. that was a device prosecutors were getting people to turn against one another. everyone in the conspiracy turned against him. he got three life sentence, which as i said was appalling. people saw immediately this is a good case for commutation. this was early on. he applied, he waited, the white house didn't make any decision, the case went back and forth, then a big turn in the kals for him. in 2008 the federal judge who sentenced him who was a reagan appointee who had seen years and years of the drug war failing in his court changed his mind and said this guy needs to get out now. it's been 15 years. it's enough. >> can you explain ronald

rodgers' role in this? he is the u.s. pardon attorney. what was his role in stopping that from happeninging? >> right. his role was to actually try to prevent all this from occurring and he was incredibly successful. regardless of the sentencing judge, regardless of the support of the u.s. prosecutor, the u.s. attorney who was a bush appointee, ron rodgers made a decision to withhold that information from the white house to write that there was not the support from the judge or from the u.s. attorney for an immediate commutation, and recommended that aaron stay in prison for longer. he needed longer to be in a maximum security or a medium security facility. he needed to grow older behind bars. >> are there any consequences for that? i mean, it's extraordinary when you're saying he essentially -- withholding information by a prosecutor in a normal criminal case, there are potential consequences for that. are there any for mr. rodgers? >> absolutely. the inspector general's office

did an investigation of the story, confirmed all the findings, and wrote a scathing report last year that said ron rodgers had failed in his duties to inform the president of the united states. that's a devastating thing to say to somebody who is a government employee. >> exactly. >> the white house ordered a new review of the case of clarence aaron. ron rodgers recused himself from the case and was not fired and remains there today. although president obama has commuted the sentences of "people" this week, rodgers has said no to 5,000 others during this president. >> extraordinary, anthea, because there is the elephant in this particular room is race. seven of the eight people commuted were african-american, one latino, crack cocaine sentences, which are extraordinarily long compared to powder cocaine, which is also a racial issue. talk about what this means about the president diving back into this thorny issue of race and disparity. >> i hit the it means two things. one, i think it means he is very concerned about that.

i think between him and the justice department, i think that hopefully by the time we see the end of the second term, he will commute even more sentences because i think this is one place where he could make, you know, a sea change. and you can't ignore this with like michelle alexander, the new jim crow, books like that. we have massive incarceration issues of people who shouldn't even be in the prison in the first place because they had one rock, you know, and it didn't make any sense. when we talk about rodgers, this is a chain of command. if this is supposed to be the one thing that the president does have as his total power and we have this little underling person who has decide head wants to be judge and jury and that he can lie to the president of the united states and have no consequences for it? that is troubling to me. so that means already that we have somebody in the pipeline who's preventing the president from making the kinds of choices he wants to make because he has deemed that these people should not be in the pool to get --

>> is there any movement around having consequences, having rodgers held to account? it seems to me if you're saying he's holding 5,000 additional people's cases from, you know, coming up for a pardon, it does seem incredible that there's no outside pressure being brought to bear against him. >> the inspector general had recommended that the attorney general's office take some sort of action, some sort of action to reprimand him to review his case. the justice department has not told me what that is, so i don't know where that stands. but he's still there. and i do think that there is, you know, a lot of problems in that office. you know, the reason i got to clarence aaron's case in the first place was because i embarked on sort of an attempt to look at race and the effects of race in awarding presidential pardons across the board. presidents really only get their information from this pardon offense. they don't know the race of any candidate they pardon but the pardon's office does. it turns out that the pardon's office, because based on their recommendations, presidents are

pardoning whites by a factor of four. if you are a white candidate, your chances of getting a pardon are four times as likely than all minorities combined. ? that is because of the information -- the pardon's office is the one who actually knows that and knows those statistics. >> that's correct. >> and the president does not. >> that's correct. >> it would be great to see the president champion mandatory minimum sentencing reforms. i bet you could get a lot of republican support from that. there's been thawing around the inflexible sentencing laws that create the cases. >> there's only bipartisan support for this. i think you see just the results of these small moves this week, there's no backlash, no political price the president has paid for any of this. i think this is something that makes presidents feel good. >> and it would help the economy. 60% of those incarcerated are in for nonviolent offenses. this is costing california $45,000 a year. it's costing them $8,000 to

support a college student -- >> per person. >> per person. $9.6 billion a year for just incarceration. this is a dead weight loss. these are human beings we're losing to the prison system. what are they learning? what are the skills they're coming out with? they can't work, vote, participate in society once they've come out. this is a problem that has to be fixed. it's a problem related to lack of productivity in our economy. >> the incalculable cost in wasted lives. read more of dafna's reporting on msnbc.com. you'll want to do that. anthea, i will see you later in the hour. when we come back, more signs that the president's inner progressive flexing some muscle. it came at the top of this year in his press conference on friday. i will show you that next. [ male announcer ] if you're taking multiple medications,

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we don't have to speculate about president obama's priorities next year. he laid out at least one of them at the very start of his last press conference of the year yesterday -- the need to restore the jobless benefits of the long-term unemployed that will expire next week. >> because congress didn't act more than 1 million of their constituents will lose a vital economic lifeline at christmastime, leaving a lot of job seekers without any source of income at all. i think we're a better country than that. we don't abandon each other when times are tough. so when congress comes back to work, their first order of business should be making this right. >> and back with the panel,

carmen wong ulrich, host of "marketplace money" -- i did it wrong twice! and lawrence, president of economic policy. i have to keep going because i keep mangling your job description. make for us the case for extending unemployment, the economic case. >> here's the economic case. the case against it is, oh, it costs $25 billion. here's the case for it. the trouble is that all these folks will not have income not only just to pay bills but basically to put into the economy. it supports the economy. think about it this way. through 2014 another 5 million people will lose these benefits. what are they going to do? what are they going to spend money on if they're not? the economic policy institute, rah-rah there, is projecting that we'll lose another 300,000 jobs because there's just a simple economic theory at work here when we put money into people's hands. they're part of the economy. they spend it. they're in there. so that disappearing is is huge. to add to all those who are

long-term unemployed, millions, to add to people who can't find work, and don't forget for one job there are three applicants. if the jobs existed, well, then of course they'd get the work. they're not sitting on their butts. people are trying to get some income and it's not there. >> isn't it the case the lower the income the more of your discretionary income you spend? you pretty much spend it all? >> that's why some of the topics we're going to talk about right now are a healthier economy than most when the government spends money on unemployment insurance and food stamps. let's describe the situation these unemployed people find themselves in. yes, there's three applicants for every job opening. we have 7% unemployment, 12.5% if you're black, 1 out of 5 black workers are unemployed or underemployed. we have the fact that 7% unemployment is higher than the worst moment of the last recession. this ratio, the 3-1 ratio of job

openings to the unemployed, of unemployed to the job openings, is worse at any point during the last recession in the early 2000s. and we have roughly 2.5% of the workforce unemployed more than 27 weeks, which is some of the highest on record. and far double the rate at which -- at any other point we've ever suspended having extended unemployment ben if i wants. it's cruel, lack of compassion, and as my colleague here says, really economically stupid. >> and the thing is, because once you've been unemployed far long time, it's actually harder and harder to find a job, the longer those weeks tick out. you are on long-term unemployment. by default it's harder to find a job. >> exactly. when you show up at an employer, the employer knows you've e been out of work for some time. the employer is going to think your skills have atrophied. you've been at home watching the flintstones. what do you know about your job? so it's really hard to convince an employer that you're up to

date, you're in the game, that you have the will to work. i mean, it's pervasive. and this is just -- it's probably going to be a problem for some time. >> and yet, avik, at these moments i turn to you, this is what rand paul, i guess a libertarian, tea party conservative, had to say about this very issue about long-term unemployment benefits. he said, "i do support unemployment benefits for the 26 weeks they're paid for. if you extend it beyond that, you do a disservice to these workers. when you allow people to be on unemployment insurance for 99 weeks you're causing them to become part of this perpetual unemployed group in our economy." huh? >> that's true. just like you were talking act, the longer people are on unemployment benefits and out of the workforce, the less the employers are likely to hire them. surveys show this. >> the answer is to cut off their entire income? how does that help them find a job? >> there are other federal

programs who help people besides unemployment benefits. >> welfare rather than -- >> there are 32 anti-poverty programs in the government. >> i want to back up. conservative doctrine is to pose those programs, too. right hand paul and others, they're not in favor of what they consider welfare, but you're saying take people off unemployment insurance and put them on welfare. >> give them a better incentive to seek work and decrease the barriers to hiring that prevent people from actually hiring people who are unemployed. >> how does putting somebody on a federal welfare program give them more incentive to work than having them on unemployment insurance? >> you can only get the checks if you prove that you're looking far job. if you don't have -- >> prove is a strong word. >> yes. you have to check a box. but i'll tell you this, if they don't, say the benefits go out, they ear not accountable to anybody, right? it actually encourages them to

look for work. the simple fact and common sense is you have one job for every three people, either they're going on welfare -- where are they going to go? >> let's get back to the economic point here. if you were on unemployment insurance then you get a job, you lose that benefit. that creates the disincentive. if the benefit is consistent, regardless of whether you have a job or not, you have more of an incentive to seek work. >> that doesn't make rational sense. go on. >> it makes logical sense. the only thing that i would argue is that this flies in the face of the facts. jesse rothstein has this great paper on -- at berkeley -- has this great paper that shows that unemployment benefit extension does not lead to unemployment. these people are not lazy. it drives me crazy. whatever it is. >> a lot of words of -- >> with the latest data, with the latest data, the best work done, flies in the face of empiricists. >> we have to go to break, but

back to the question of what you are essentially saying is in order to incentivize somebody to seek work you have to cut off their entire income or put them on welfare. that doesn't make sense. we'll keep talking. up next, things you can't believe get said out loud. the congressman who suggested that poor children, wait for it, should be made to sweep the floors to earn their lunch. [ male announcer ] this is jim,

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avo: thesales event "sis back. drive for more information and savings options, which means it's never been easier to get a new passat, awarded j.d. power's most appealing midsize car, two years in a row. and right now you can drive one home for practically just your signature. get zero due at signing, zero down, zero deposit, and zero first month's payment on any new 2014 volkswagen. hurry, this offer ends january 2nd. for details, visit vwdealer.com today meet jack kingston of georgia. he sat on the house agricultural committee until 2012, which does among other things the national school lunch program. that program offers free lunches to children and families at or below 130% of the federal poverty line and reduced price lunches to children and families

with income between 130% and 185% of the poverty level. according to the u.s. department of agriculture, 18.9 million free lunches were served in the 2013 fiscal year and another 2.6 million lunches were served at a reduced cost. and it is that program that seeks to feed some of the neediest in america that congressman kingston referred to when he addressed the jackson republican party last saturday and said this. >> one of the things -- >> get the myth out of their

heads that there's such a thing as a free lunch. the congressman then defended his comments on cnn. >> this was not an indictment on anybody in a particular socioeconomic group. this would be good for all children. i never did say "poor kids." >> hear that, "everyone has a stor story" -- even though the only kids eligible for that lunch program are poor kids. it is view points like that that make it so difficult to enact policies to help poor people because far too many republicans, believe that people who need help, even little kids, are just looking for a free lunch. the moocher theory of economics. >> i understand it. i know where jackson is. i grew up in the county next no to jackson. this guy ought to be shocked and appalled. if you want to teach children that there is something else they can do, why not teach them how to set up a lemonade stand?

teach them to be entrepreneurs. so, i mean, i think it's ridiculous that this was even proposed. but i think even better would be to teach them, if you're going to teach them something, teach them how to be entrepreneurs and open up a lemonade stand. now, that's not going to support their free lunch. but i understand his principle. but this is absolutely extreme -- >> what about creating -- what about programs that help get their families out of poverty so they didn't need a free lunch? >> that would be optimal. that would be optimal. but to make his point, doing it this way is just absurd. >> i have to ask you this, avik, because isn't the reality that the whole idea of child labor, there used to be legal child labor in this country and the point of it wasn't to teach kids entrepreneurship and there wasn't a free lunch, it was so businesses could save money by employing chirp, they didn't have to pay a lot, they could put them in the factory and have them work and it was cheaper. newt gingrich brought this up in

the 2012 election cycle about kids sweeping the floor for their lunch. this is about not wanting to pay unionized adult janitors. correct? >> i don't think there's anything wrong with children mowing the lawn and -- >> exchange for their lunch? >> no. i'm not agreeing with him at all. i'm saying in general the idea of kids having some, you know, job like delivering the paper in order to have allowance, that's not sweatshops. that's not what he's talk about and i'm not defending what he's talking about. the general principle that kids can learn about work is great. i'm not sure the school lunch program is the way to do it. he admitted it would cost more. it would be crazy. >> this ties into the unemployment we were talking act, that whole idea that a certain part of this country really thinks that poor people are just sitting on their butts and they should be working and we're tired of supporting these people. we know that's not necessarily the case. we know that we need the unemployment benefits and these kids need their lunch because what's really much worse is an uneducated population and those

kids don't eat, they don't learn, and it really makes things worse. >> one of the best economic studies that has been done recently on poverty suggests that iq is lower when you don't have enough to eat, where there's food insecurity. this suggests that, you know, so what if they can't come up with that nickel? that means that both society and those individuals are going to be worse off because their iqs are going to be lower, they'll be less productive. ? also the fact they're watching the rich kids getting to eat while they have to sweep the floor for them and are their pea i don't knows. i have to get larry in here. >> why don't we make sure their parents are have a job? have the government guarantee everybody who wants to work a job? but i want to go back to the unemployment thing. we had an expert in north carolina, which is ground zero for stupid, cruel, economic policy. they recently suspended a lot of unemployment benefits. they were kicked out of the federal program.

what happened to their unemployment rate? what happened to their job growth? well, the fact is a lot of people don't show up as unemployed anymore, basically dropped out of the labor force. their unemployment rate, if you include the people that left the labor force, went dramatically up. their job growth is way below average for the country. so the fact is that, you know, getting people off of the unemployment benefits is is not going to get them employed. it may just get people to give up. >> but isn't the point of this, i think, at the end of the day for conservatives who are for cutting back these kind of benefit, it isn't about necessarily incentivizing work. it's about wealthier people not wanting to pay for this anymore. and it really doesn't matter what happens to the unemployed. >> i think you've hit on one thing you've said before, there's two kinds of conservatives, the more libertarian brand, hostility to welfare programs on principle, and there a different kind of conservativism, reformist conservative, where people say let's have a safety net, make sure it's a lot more efficient

than the system we have, which is frites completely tangled with a lot of waste and -- >> where are those conservatives? i only hear the ones -- >> read forbes. you'll be hearing about it in the next year. >> it is interesting, carmen, because it does seem bad because the economic -- it doesn't work when it's put in practice, as larry just demonstrated. when you actually practice this core of austerity, you don't get the result. so how do we get away from what i think is the fact that this is just about not wanting to fund the programs come what may? >> well, absolutely. that is the whole fact. i mean, the idea of starving people more, austerity, or the economy, it does not work and the idea of where will these people go? what will they do? because we have to accept that as a society at the level that we are, this country, that we need to support our people. if we do not, it is bad for us in the long run. and to think you can just say sweep the floor, take these benefits away, because you have to get a job. really?

one for every three applicants. it's not there. and no one seems to be really grasping that. add to these folks by the way, who are going to lose benefit, all the people that are making incredibly low poverty-level incomes as full-time workers, tell me that isn't a complete split of our society. >> it sounds like the hunger games. i'm just saying. all right. lawrence michelle, thank you so much. up next, to tip or not to tip tip? and what that has to do with the race. [ male announcer ] this duracell truck has some very special power. ♪ [ toys chattering ] it's filled with new duracell quantum batteries. [ toy meows ] [ dog whines ] [ toy meows ] these red batteries are so powerful... that this year they'll power all the hasbro toys donated to toys for tots. want to help power some smiles? duracell. trusted everywhere.

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♪ hey, that's the last crescent! oh, did you want it? yeah. we'll split it. [ female announcer ] made fresh, so light, buttery and flakey. that's half. that's not half! guys, i have more. thanks, mom. [ female announcer ] do you have enough pillsbury crescents? it sounds exactly like what it is -- a care package. a little parcel full of whatever you think might show your loved one away in the military or at college or anywhere else that you care. make sense, right? except that's not why we have that phrase. it exists because a group of

american aid organizations banded together in the aftermath of world war ii to send supplies and food to the hungry people of germany and other parts of war-torn europe. that group called itself the cooperative for american remittances for europe. hence the boxes they delivered were c-a-r-e, care packages. while the charity group clearly chose its name for the acronym, making it more of a word interpreted as an acronym, a few common words and phrases start off their lives as acronyms. like the word laser. it begn as an acronym for lightweight amplification by stimulated emission of radiation. and the word scuba. it began as an acronym for self-contained underwater breathing apparatus. because those are rare. the debunking website snoeps.com takes pains to point out only a few common words have pedigrees

harkening back from the 20th century and later. but that doesn't stop the recurring rumors about words that sound like they could be an acronym, especially when the rumored acronym seems to make sense. like the rumor that golf stands for gentlemen only, ladies forbidd forbidden. it doesn't. or the rumor that cop stands for constable on patrol. it doesn't. or the rumor that newsstands for northeast southwest. nope. not true. probably one of the most prevalent rumors of all d -- >> one theory is that the word tip is an acronym for the phrase to insure promptness. >> to insure prompt service. right? isn't that what it stands for? >> the year was 1754. the scene, a fleet street coffeehouse in london where a bowl tastefully set in the middle of the table read "to insure promptitude," t.i.

. >> it is an acronym for treasury inflation protected securities and for technical information and processing system and for transjug lu yar intrahepatic shunlt. but one thing tips is not is an acronym for to insure prompt service. or to insure promptitude despite the fact i used to think it was and really wanted it to be so. it was not born in a coffeehouse in 1754. it had been around far while before then making an appearance in print in 1707 in the comedy "the bow stratagem" with one of the protagonists while sharing his pickup techniques makes a reference to tipping the usher in order to get a good poc when woos women in a country church. back then it was more of a bribe, kind of an up-front payment to get what you want. now in modern-day america it's a ubiquitous extra payment for

almost every service, after every meal, drink, cabdrivers and doormen and of course at the barbershop and the hair salon. we are expected to tip. to add a gratuity for services rendered. but why do we do that? and is it actually a bad thing? the argument for a ban on gratuities and tips is next. this is for you. ♪ [ male announcer ] bob's heart attack

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stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. other side effects include dry mouth and constipation. nothing can reverse copd. spiriva helps me breathe better. does breathing with copd weigh you down? don't wait to ask your doctor about spiriva. across the country this week newspapers and magazined offered readers solutions to one of most pressing problems of the holiday season. tipping. who should you tip, how much, and when? it's a conundrum. of course the holiday tip is more like a gift, something you do once a year, like a bonus or thank you to people who work hard for you all year. the kind of everyday tipping that goes on in bars and restaurants, those places across america, that's a big business.

more than $40 billion worth of business every year. and that just might be a terrible thing. joining me now from ithaca, new york, is a man who has spent the last 30 years of his life studying exactly why and how we tip. dr. michael lin, professor of consumer behavior at the cornell university school of hotel administration. michael, thank you for joining us. i really do want to sort of have you explain to us right off the bat kind of what are the biggest factors in how we tip and why we tip? how big we tip and why? >> okay. first off, thank you for inviting me. the biggest factor -- the biggest predictor of tipping in restaurant settings is build sites. it explains 70% of the variance or differences in tips left by different dining parties. what that means is bill size explains twice as much as everything else combined. why does bill size explain so much? because of the social norm that says you're supposed to tip 15% to 20% of the bill.

so the single by far overwhelming factor underlying people's tipping are social expectations and a desire to live up to those expectations. >> and so given the fact it is a social norm, that essentially the server is expecting a 15% to 20% tip, is there any kind of real correlation between the size of the tip, how much you tip, and the quality of the service you receive? >> yes. there is a kor ligs. it's statistically reliable but it's very small. other studies have found, for example, that -- how sunny it is outside has as big an impact on tips as the customers' own ratings of service quality. >> and, you know, i have to get into a little bit of the topic of race because i know there is an anxiety with a lot of african-americans that a you're going to be perceive as a small tipper or b, if you are the person providing the service that maybe you might not get as big a tip. there are statistics that bear that out, that african-americans

are tipped less whether they're a cabdriver or server than nonafrican-americans. black cabdrivers receive smaller tims on average than white cabdrivers, true regardless of the race of the tipper, meaning both black and white tippers give white drivers larger tips than they do black drivers. why is that? >> wow. i'm not 100% sure. certainly it may be that you have different explanations for this depending upon the race of the tipper. whites may tip other white service providers, not just cabdrivers, white warts get better tips than black waiters also. it could be that quite customers simply feel a greater social rapport in identifying with white servers better and leave a larger tip for that reason. obviously that doesn't explain why black customers would also tip a white server better. i'm really going well beyond the data here and speculating, but

certainly one of the ideas that has occurred to me is blacks in this country on average tip less than whites. there's simply a lower standard of tipping in the black community than in the white community. and i wonder if when black customers are waited upon by black servers they believe that that's an okay to use a black standard of tipping, that simply the community is more accepting of lower tips. and so they think it's more acceptable okay to leave a smaller tip if they have a black server, whereas when they have a white server, they know this white server's going to expect a whole lot more. >> wow. >> again, that's speculation. >> it's speculation. we actually have a couple african-american people at the table and we'll talk to everybody on the panel. but anthea, this is something that produces a lot of anxiety for a lot-people. i do tip very well, right? and i tip in part because you have this perception that the

person in a restaurant at the salon, this is part of their income, it's my obligation to do it. i think that's a little bit too of saying i'm not just tipping for me but for the next black person that comes in so, they won't have that expectation that here comes a bad tipper. >> i think there's a lot of unconscious bias that happens in all of this. unconscious bias happens for african-americans and whites alike. when you see somebody, maybe i don't have to give them so much. i tip a lot because i have friends and relative who is work in the hospitality industry and when you make $2 an hour and the rest of that you've got to put up with your tips and everything, you realize how hard it is for people and you start to tip out a lot more. plus you don't want people to do things to your food, okay? this is why i tip. i don't want anything happening to my food. i tip my bar tenders really well. i want to make sure i get the right drink. but i think there's a sense in which you see this unconscious bias when you see a black person sit down in front of you at the

table and think my tip will be less, i'm going to jack this up and not care. that's the thing you have to work with, the unconscious bias. >> it's not just a black thing. it's a la tee no thing, too, right? the asum sgs that i will tip less. it really is. the doorman in my building, we come from the same tribe, dominion puerto ricans of all colors. i know they're expecting a small tip. you better believe i grease people's palms all the time because there is some social utility to the sense that i want to break a stereotype which i've done all my life to break those stereotypes. i put myself through school waiting tables. i know how hard that work is and how much people need that money. if you work for it, of course you'll get a big tip. trust me, who am i going to tip and how much, i want to make sure they realize i will tip them well. i'm much more likely to tip them well because i want them to think better of my people. >> i worked in the banquet service as well. there is this other component of

tipping where it is prevalent in industries where people are paid very little, their actual wages, particularly in the restaurant industry. has tipping become a crutch for the restaurant industry or businesses to be able to get away with lower wages? bifurcat respect to the minimum wage. it's $2.16 for the federal minimum wage where there also tipping. so this is i agree with anthea. when i look at these people i'm tipping, i'm thinking $2.16. they've got to make up the rest. and they haven't recovered yet from the financial crisis and economic christmas. people still are not flocking to restaurants except in washington where they never stopped going, it seems. but you're making up for that. so you're doing both the racial investment for the next person as you were saying, but you're also in my view, you're making up for lost time. >> for lost wages. >> and in real terms, that really hasn't grown. we talk about 1010 not having

been raised or the 7/25 not having been raised but there's been real deterioration. >> i could talk about this all day. all right. thank you very much, michael lynn of ithaca, coming from ithaca, car mon wong ulrich, lisa cook, thank you all. up next, the pink helmet posse. three little girls shredding just like the boys. ♪ by the end of december, we'll be delivering ♪

♪ through 12 blizzards blowing ♪ 6 snowballs flying ♪ 5 packages addressed by toddlers ♪ ♪ that's a q ♪ 4 lightning bolts ♪ 3 creepy gnomes ♪ 2 angry geese ♪ and a giant blow-up snowman ♪ that kind of freaks me out [ beep ] [ female announcer ] no one delivers the holidays like the u.s. postal service. priority mail flat rate is more reliable than ever. and with improved tracking up to 11 scans, you can even watch us get it there. and look for our limited edition holiday stamps. you can even watch us get it there. ...are the hands that do good things for the whole community: the environment, seniors, kids, and animals. that's why we created the share the love event. by the end of this year, the total donated by subaru could reach 35 million dollars. you get a great deal on a new subaru. we'll donate 250 dollars to a choice of charities that benefit your community. it feels good to be a helping hand.

is the christmas pressure getting to you? do you have some last minute shopping to do for a young girl? say one in the first or second grade? do you feed that perfect idea for a present? well, how about a pink helmet and a skate board. meet 6-year-old sierra and 7-year-olds bella and rels known as the pink helmet posse. they're taking skate boarding -- taking the skate boarding scene

by storm and proving that young girls can be do everything the boys do. with the help of their parents, this trio wearing this -- i'm sorry, this tutu wearing trio have launched a blog and account to the spread their message. on that instagram account, other skaters can check out the girls in action and on their website, pint size the skateboarders can purchase boards that fit them. smaller gear can be hard to come by. perhaps the potential for the pink helmet posse will have changed when they're teens. they face a much tougher time getting air at the competitive levels. at the x games, 19 skate boarding events were held for men with three for women. the who iscy is doing their part tore inspire young girls to pick up skate boarding to help out of the playing field or the half pipe. we know it can be intimidating but we're here to show you that skate boarding is not just for boyce. come skate with us.

you don't have to have a pink helmet, but which think it looks pretty cute. for promoting the inclusion of girls in skate boarding, sierra, bella and rels are our foot soldiers for the week. we've got our helmet. maybe next time nerveland comes to california, we'll join you. that's our show for today. in more melissa harris-perry, i'll see you tomorrow at 10:00 a.m. eastern and we're going to rage against the machine. we're going to go dean on the minimum wage issue set up as one of the defining issues for the 2014 elections and its an a political device that can an can be weaponized. we'll get into the that tomorrow on mhp. now it's time for a preview of weekends with alex witt. >> i would join the pink posse a couple decades ago but now i'm too smart to do that. anyway, good story. thank you so much. the standard argument against raising the minimum wage is that it is a job killer.

but now a new article raises new questions about whether it in fact creates jobs. i'm talking to its author. as the white house considers reforming the nsa is, new reports the agency targeted the israeli prime minister. what is the fallout from one of our closest allies? christmas is only four days away and our award winning today show moms with advice on that hard to buy person in your life. here's a hint it, a ferrari for 99 bucks. yep. and look at all these people in their festive santa hats. we'll reveal our favorite holiday tv shows and they might be yours, as well. ♪

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